In a recent decision, the Bombay High Court confirmed that the agreements (MoUs) between a housing society and a member are valid, even though the society tried to cancel them. This case is about using extra building space and development rights in the Linking Road Housing Society.
The disagreement started when the society, which has two buildings with a total of 30 apartments, decided to use extra building space given by the city government in 1977. Dr. Harshad Pandya, one of the original members, was the highest bidder in a bidding process open only to society members. Even though several agreements were made, the society later tried to cancel them.
Judge Amit Borkar decided that the agreements were valid and must be followed. The court found that the society's managing group had the power to make decisions about using the extra space, and that the agreements were made honestly. The court pointed out that the society's actions over the years, like accepting payments and signing agreements, supported the validity of the agreements.
"The transaction arose entirely from rights and obligations connected with membership," the court noted.
The society argued that the agreements were not allowed and that the extra space rights had expired. They claimed there were procedural mistakes and suggested that Dr. Pandya and some leaders were working together unfairly. However, the court found no proof of these claims. It was noted that the society continued to act on the agreements by allowing the use of development rights when government policies changed.
The court stressed that the transaction was an internal matter according to the society's rules, meant to benefit its members. The bidding process, although announced publicly, was limited to members, showing that the dispute was about membership rights.
An order in 2003 required both parties to keep things as they were. Despite this, the society tried to cancel the agreements, which the court said was not allowed. The court emphasized the importance of following court orders to ensure fairness and justice.
The judgment confirms that society resolutions and agreements made under the authority of the general body are binding. It highlights the importance of following society rules, so members can trust their rights and agreements. The court's decision requires the society to follow through with the agreements within three months, ensuring the smooth operation of cooperative societies.
