Quick Summary: The Bombay High Court has turned down Green Garden Apartments Co-operative Housing Society's request to temporarily stop developers from using Transferable Development Rights (TDR) they had sold. The society claimed the sales were unauthorized and fraudulent, and at low prices. However, the court found no basis for these claims.
Who’s Involved?
Green Garden Apartments Co-operative Housing Society Limited filed a case against Nitin Chaudhari and others, including several developers who bought TDR from the society.
What’s the Issue?
The society argued that selling the TDRs was unauthorized, fraudulent, and at prices lower than they should have been. They wanted to stop developers from using these rights and demanded the return of the TDRs.
Society's Claims: - Unauthorized Sale: The society claimed the TDRs were sold without proper permission. - Fraud Allegations: They accused certain members and consultants of fraud. - Low Pricing: The TDRs were allegedly sold for much less than their actual value.
Developers' Defense: - Proper Permission: Developers argued that the sale was approved by the society's decisions. - Good Faith: Developers claimed they acted honestly, based on the society's internal decisions. - Market Rates: They argued that TDR prices change based on market conditions, and there was no fixed price.
Permission and Fraud:
The court found that the society had indeed decided to sell the TDRs, and the developers acted based on those decisions. Claims of fraud were not strong enough to cancel the sales.
Nature of TDR:
The court noted that TDR is like a negotiable instrument and doesn't need to be registered as property. The agreements were properly stamped according to the law.
Pricing Concerns:
The court emphasized that market conditions determine TDR pricing, and just because the price was low isn't a reason to cancel the sale.
Delay in Filing:
The society's delay in challenging the transactions was significant, as the sales happened two years ago, and most developers had already used the TDRs.
No Temporary Stop:
Justice Sandeep V. Marne decided not to grant the temporary stop, allowing developers to continue using the TDRs as planned.
Reasoning:
- The society did not have a strong enough case.
- Developers acted honestly.
- The delay in filing the case hurt the society's argument.
- The society kept the money from the sale without offering to return it.
The court's decision highlights the need for timely legal action and the complexities involved in TDR transactions. It also underscores the legal principles surrounding the sale and use of TDRs in Mumbai's real estate market.
