In a recent decision, the Bombay High Court ruled against people who bought apartments from a developer whose contract was canceled. These buyers tried to claim rights in a redevelopment project, but the court clarified that they have no rights against the housing society or the new developer.
The case involved Mr. Satish and Mrs. Swapna Inamdar, who bought apartments in a redevelopment project started by the Nehru Nagar Vidyut Vilas Co-operative Housing Society in Mumbai. The society initially chose Mr. Amogh Sawant as the developer. However, when the society ended Mr. Sawant's contract, the Inamdars found themselves in a difficult situation.
"The Appellants had sought a temporary order stopping Respondent Nos. 2 to 5 from doing any demolition or construction work on the property without the Appellants' clear permission."
A major question was whether the society itself could be seen as a "promoter" under the Maharashtra Ownership Flats Act (MOFA). The appellants argued that since the society signed a development agreement, it should be treated as a promoter. However, the court referred to past cases, stating that the society, as a landowner, does not automatically become a promoter.
Judge Kamal Khata stressed that the rights of third-party buyers depend entirely on the developer's rights. Once the developer's contract was canceled, any rights the buyers had also disappeared.
"The consistent view of this Court is that buyers claiming through a canceled developer cannot assert or enforce any rights against the Society or the newly appointed developer."
This decision is important because it reinforces the legal position that third-party buyers cannot claim rights against a housing society or a new developer once the original developer's contract is canceled. The court highlighted that the main goal of redevelopment projects is to provide permanent housing for society members, not third-party buyers.
The court dismissed the appeals, meaning the buyers did not get the legal protection they were seeking, and there were no additional costs ordered. This case shows how complicated real estate deals can be in redevelopment projects and the importance of careful research for potential buyers.
