Society can boot out erring bldr from redevpt deal: HC

Mumbai: A housing society cannot be forced to go with a builder who has repeatedly failed to stick to the agreement and delayed the redevelopment project, the Bombay high court ruled on Monday. 
    "The work of redevelopment of a housing society is such that a society must have confidence in its developers," said Justice Shahrukh J Kathawalla. "Once the members of the society have expressed loss of trust, faith and confidence in the developer on account of various deviations and violations... the society cannot be forced to get the redevelopment work done through the builder." 
    The court dismissed an application filed by the developer, Gorwani Builders, seeking an interim order to stop Ideal Cooperative Housing Society at Juhu Circle from issuing fresh tenders to invite bids from other developers for the building's redevelopment. The court noted that Ideal housing society had been "waiting for the last four years for redevelopment of its property," but the "conduct of the builder shows that he was not ready and willing to abide by the agreement". 
    The society had invited proposals for redevelopment and selected Gorwani Builders in March 2010. No MoU or development agreement was signed. The developer had deposited Rs 50 lakh with the society which asked it to go ahead with the redevelopment work on the basis of the expression of interest (EoI) terms.
    Despite specific instructions that the new building should be a residential-plus-commercial structure with flats only for the existing 24 tenants, Gorwani proposed commercial space in the basement and the ground floor, two-level parking, seven floors for existing residents and flats on the 11th floor for sale in the open market. The court noted that the builder also sought to deviate from the terms which related to security deposit of Rs 50 lakh, bank guarantee of Rs 3 crore and the corpus fund. 
    In 2011, when Gorwani learnt Ideal was planning to invite fresh tenders for the redevelopment, it issued a notice to the society. Subsequently, Gorwani filed a suit, asking the court to order Ideal to execute a development agreement or pay Rs 15 crore in damages. It also filed an application seeking to stop the society from calling for fresh proposals. The court dismissed the plea saying Gorwani "repeatedly deviated from EoI terms''.