Bombay High Court
SATTVA NEW HEIGHTS PRIVATE LIMITEDversusSHRI. MUKUND VAMAN PATANKAR AND OTHERS
- Decided
- Disposal
- Allowed
Holding
The Court held that the majority resolutions of the co‑operative society are binding, there is no prima facie case of suppression or non‑qualification, and therefore the interim injunction is unwarranted.
Summary
The Bombay High Court heard appeals by the co‑operative society, its developer and the project‑management consultant against an interim injunction that restrained the society from proceeding with its redevelopment plan. The plaintiffs, two senior members of the society, alleged that the land was classified as Eco‑Sensitive Zone‑II (ESZ‑II) at the time of the tender, that this classification was suppressed, and that the appointed developer did not meet the pre‑qualification financial criteria. The respondents argued that the tender disclosed the ESZ status, that the majority of members had duly approved the tender, the developer’s creditworthiness was secured by a corporate guarantee from its parent company, and that the resolutions of the General Body are binding on all members. The Court examined the applicability of the Maharashtra Co‑operative Societies Act, the Companies Act, and Section 79A of the MCS Act, and considered precedents on majority‑minority rights in co‑operative societies. Finding no prima facie case of suppression or non‑qualification and emphasizing the binding nature of the majority resolutions, the Court set aside the trial court’s injunction and dismissed the interim applications. The appeals were allowed and the redevelopment process may proceed.
Issues considered
- Whether the land’s classification as Eco‑Sensitive Zone‑II at the time of the tender required disclosure and bars development under DCR 33(19).
- Whether Defendant No. 3 (the developer) satisfied the tender’s pre‑qualification criteria, including net‑worth and the use of its parent company’s financials.
- Whether the appointment of the Project Management Consultant and the developer can be restrained by an interim injunction.
- Whether the resolutions passed by the majority of the co‑operative society are binding on the minority members.
- Whether the balance of convenience favours maintaining the injunction or allowing the redevelopment to proceed.
Legislation cited
- Companies Act, 2013 — s. Section 129(3), Section 2(87)
- Maharashtra Co-operative Societies Act, 1960 — s. Section 79A, Section 91
- Maharashtra Regional and Town Planning Act
Subjects
- co‑operative society redevelopment
- eco‑sensitive zone
- tender qualification criteria
- majority vs minority rights
- interim injunction
- project management consultant
- parent‑subsidiary company
- corporate guarantee
- Section 79A MCS Act
- Regulation 33(9) and 33(19) DCR
Judgment
Digitally signed
by SHAGUFTA
SHAGUFTA QUTBUDDIN
QUTBUDDIN PATHAN
PATHAN Date:
2026.08.24 AO-676-2026.doc
17:52:02 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO.676 OF 2026
WITH
INTERIM APPLICATION (STAMP) NO.19005 OF 2026
IN
APPEAL FROM ORDER NO.676 OF 2026
Sattva New Heights Private Limited,
a company incorporated under the provisions of
Companies Act, 2013 having its registered office at
C-1411, 14th Floor, One BKC, Bandra Kurla Complex, …Appellant/
Mumbai, Maharashtra 400051. Applicant
Versus
1. Shri Mukund Vaman Patankar,
aged 89 years, adult Indian Inhabitant,
residing at Kisan Nagar, Kameri Road,
Islampur, Sangli District - 415 109.
2. Shri. Shekhar Jayant Malihalli,
aged 60, adult Indian Inhabitant,
residing at Flat No. 12, Wing B - 9/1,
Dudhsagar Cooperative Housing Society
Limited, Ciba Road, Goregaon (East),
Mumbai 400 065.
3. Dudhsagar Co-operative Housing Society
Limited, a co-operative society registered
under Maharashtra Co-operative Societies Act,
1960 having its address at
Dudhsagar Co-operative Housing Society Ltd,
Ciba Road, Goregaon (East),
Mumbai 400 065.
4. Space Design and Development Private
Limited, a company incorporated under the
provisions of Companies Act, 2013, having its
SQ Pathan 1/60
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registered office at 801, Bhushan CHSL,
R.M. Bhattad Marg, Kalpana Chawla Chowk,
Haridas Nagar, Borivali West, Mumbai-400092.
5. Nilesh Prabhakar Pandit,
Director of Space Design and Development
Private Limited, having his registered office at
801, Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar, Borivali
West, Mumbai-400092.
6. Anagha Nilesh Pandit, Director of Space
Design and Development Private Limited,
having his registered office at 801, Bhushan
CHSL, R.M. Bhattad Marg, Kalpana Chawla
Chowk, Haridas Nagar, Borivali West,
Mumbai - 400092.
7. Sandeep Isore, Employee of Space Design and
Development Private Limited, having his
registered office at 801, Bhushan CHSL,
R.M. Bhattad Marg, Kalpana Chawla Chowk,
Haridas Nagar, Borivali, West,
Mumbai – 400092.
WITH
INTERIM APPLICATION (STAMP) NO.19996 OF 2026
IN
APPEAL FROM ORDER NO.676 OF 2026
Mukund Vaman Patankar,
Age: 89 years, Occupation : Retired,
R/at Kissan Nagar, Kameri Road,
Islampur, Sangli District – 415109
Through Power of Attorney Holder - …Applicant
Shamkant Mukund Patankar [Orig.Respondent
Age : 60 years, Occu: Self employed No.1]
Having address as above.
IN THE MATTER BETWEEN :
Sattva New Heights Private Limited,
a company incorporated under the provisions of
SQ Pathan 2/60
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Companies Act, 2013 having its registered office at
C-1411, 14th Floor, One BKC, Bandra Kurla Complex,
Mumbai, Maharashtra 400051. ...Appellant
Versus
1. Shri Mukund Vaman Patankar,
aged 89 years, adult Indian Inhabitant,
residing at Kisan Nagar, Kameri Road,
Islampur, Sangli District - 415 109.
2. Shri. Shekhar Jayant Malihalli,
aged 60, adult Indian Inhabitant,
residing at Flat No. 12, Wing B - 9/1,
Dudhsagar Cooperative Housing Society
Limited, Ciba Road, Goregaon (East),
Mumbai 400 065.
3. Dudhsagar Co-operative Housing Society
Limited, a co-operative society registered
under Maharashtra Co-operative Societies Act,
1960 having its address at
Dudhsagar Co-operative Housing Society Ltd,
Ciba Road, Goregaon (East),
Mumbai 065. 400
4. Space Design and Development Private
Limited, a company incorporated under the
provisions of Companies Act, 2013, having its
registered office at 801, Bhushan CHSL,
R.M. Bhattad Marg, Kalpana Chawla Chowk,
Haridas Nagar, Borivali West, Mumbai-400092.
5. Nilesh Prabhakar Pandit,
Director of Space Design and Development
Private Limited, having his registered office
at 801, Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai-400092.
6. Anagha Nilesh Pandit, Director of Space
Design and Development Private Limited,
SQ Pathan 3/60
AO-676-2026.doc
having his registered office at 801, Bhushan
CHSL, R.M. Bhattad Marg, Kalpana Chawla
Chowk, Haridas Nagar, Borivali West,
Mumbai - 400092.
7. Sandeep Isore, Employee of Space Design and
Development Private Limited, having his
registered office at 801, Bhushan CHSL,
R.M. Bhattad Marg, Kalpana Chawla Chowk,
Haridas Nagar, Borivali, West,
Mumbai – 400092. ...Respondents
WITH
APPEAL FROM ORDER (STAMP) NO.18996 OF 2026
WITH
INTERIM APPLICATION (STAMP) NO.19103 OF 2026
IN
APPEAL FROM ORDER (STAMP) NO.18996 OF 2026
Dudhsagar Co-Operative Housing Society Limited,
a co-operative society registered under
Maharashtra Co-operative Societies Act, 1960
having its address at Dudhsagar Co-operative …Appellant/
Housing Society Ltd., Ciba Road, Applicant
Goregaon (East), Mumbai – 400 065.
Versus
1. Shri Mukund Vaman Patankar,
aged 89 years, adult Indian Inhabitant,
residing at Kisan Nagar, Kameri Road,
Islampur, Sangli District-415 109.
2. Shri. Shekhar Jayant Malihalli,
aged 60, adult Indian Inhabitant,
residing at Flat No. 12, Wing B-9/1,
Dudhsagar Cooperative Housing Society
Limited, Ciba Road, Goregaon (East),
Mumbai 400 065.
3. Space Design and Development Private
Limited, a company incorporated under the
provisions of Companies Act, 2013,
SQ Pathan 4/60
AO-676-2026.doc
having its registered office at 801,
Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai-400 092.
4. Sattva New Heights Private Limited,
a company incorporated under the
provisions of Companies Act, 2013
having its registered office at C-1411,
14th Floor, One BKC, Bandra Kurla Complex,
Mumbai, Maharashtra 400051.
5. Nilesh Prabhakar Pandit,
Director of Space Design and Development
Private Limited, having his registered office
at 801, Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai-400092.
6. Anagha Nilesh Pandit, Director of Space
Design and Development Private Limited,
having her registered office at 801,
Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai - 400092.
7. Sandeep Isore, Employee of Space Design and
Development Private Limited,
having his registered office at 801,
Bhushan CHSL, R.M. Bhattad Marg,
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai 400092. … Respondents
WITH
APPEAL FROM ORDER (STAMP) NO.19074 OF 2026
WITH
INTERIM APPLICATION (STAMP) NO.19302 OF 2026
IN
APPEAL FROM ORDER (STAMP) NO.19074 OF 2026
SQ Pathan 5/60
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1. SDAD Space Design and) Development
Private Limited, a provisions of Companies
Act, 2013, having its registered office at 801,
company incorporated under the Bhushan
CHSL, R.M. Bhattad Marg, Kalpana Chawla
Chowk, Haridas Nagar, Borivali West,
Mumbai-400 092.
2. Nilesh Prabhakar Pandit, Director of SDAD
Space Design and Development Private
Limited, having his registered office at 801,
Bhushan CHSL, R.M. Bhattad Marg, Kalpana
Chawla Chowk, Haridas Nagar, Borivali West,
Mumbai 400092.
3. Anagha Nilesh Pandit, Director of SDAD
Space Design and Development Private
Limited, having her registered office at 801,
Bhushan CHSL, R.M. Bhattad Marg, Kalpana
Chawla Chowk, Haridas Nagar, Borivali West,
Mumbai 400092.
4. Sandeep Isore, Employee of SDAD
Space Design and Development
Private Limited, having his registered office …Appellants/
at 801, Bhushan CHSL, R.M. Bhattad Marg,
(Org. Defendant
Kalpana Chawla Chowk, Haridas Nagar,
Borivali West, Mumbai-400092. Nos. 2 & 4 to 6)
Versus
1. Shri Mukund Vaman Patankar,
aged 89 years, adult Indian
Inhabitant, residing at Kisan Nagar,
Kameri Road, Islampur, Sangli
District 415 109.
2. Shri. Shekhar Jayant Malihalli,
aged 60, adult Indian Inhabitant,
residing at Flat No. 12, Wing B-9/1,
Dudhsagar Cooperative Housing
SQ Pathan 6/60
AO-676-2026.doc
Society Limited, Ciba Road, Goregaon (East),
Mumbai-400065.
3. Dudhsagar Co-operative Housing Society
Limited, a co-operative society registered
under Maharashtra Co-operative Societies
Act, 1960, having its address at Dudhsagar
Co-operative Housing Society Ltd, Ciba Road,
Goregaon (East), Mumbai 400 065.
4. Sattva New Heights Private Limited, a
company incorporated under the provisions ...Respondents
of Companies Act, 2013 having its registered (Org. Plaintiffs &
office at C-1411, 14th Floor, One BKC, Bandra
Defendant Nos.
Kurla Complex, Mumbai, Maharashtra-
400051. 1 & 3)
——————
Mr. Zal Andhyarujina, Senior Advocate a/w Mr. Rohaan Cama, Ms.
Jasmine Kachalia, Mr. Karan Bhide, Mr. Viren Mandhle, Mr. Brian Noronha
i/b Wadia Ghandy and Co. for the Appellant in AO/676/2026 and for
Applicant in IA(ST) No. 19005 of 2026
Mr. Virag Tulzapurkar, Senior Advocate a/w Mr. Pankaj Thatte, Mr. Amit
Sharma, Ms. Renu More, Ms. Karishma Nadar, Ms. Sucheta Dongre for the
Appellant in AO (ST)/18996/2026, for Applicant in IA(ST)/19103/2026
and for the Respondent No. 3 in AO/676/2026, AO(ST)/19074 of 2026
and IA(L)/19005/2026 and IA(L)/19302 of 2026
Mr. Karl Tamboly a/w Mr. Shanay Shah, Mr. Suraj Iyer, and Ms. Gauri Joshi
i/b Ganesh and Co. for the Appellant in AO(ST)/19074/2026 and for the
Applicant in IA(ST)/19302/2026
Mr. Mayur Khandeparkar i/b Ms. Vaishnavi M. Gujarathi and Mr. Abhishek
S. Matkar for the Respondent Nos. 1 and 2 in AO/676/2026
Mr. Aseem Naphade a/w Mr. Sanket Donugade i/b Ms. Vaishnavi Gujarathi
for the Respondent No. 1
Mr. Aseem Naphade i/b Mr. Abhishek Matkar for the Respondent No. 2
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Mr. Rajeev Matkar a/w Mr. Pradeep Wagh i/b Ms. Vaishnavi M. Gujarathi
and Mr. Abhishek S. Matkar for Respondent Nos. 1 and 2 in
AO(ST)/18996/2026
——————
CORAM : SHARMILA U. DESHMUKH, J.
RESERVED ON : AUGUST 6, 2026
PRONOUNCED ON : AUGUST 24, 2026
JUDGMENT :
1. Heard. Admit. With consent taken up for final hearing.
2. The captioned group of Appeals is filed at the instance of the
original Defendants viz the Society, the Developer and the Project
Management Consultant being aggrieved by the order dated 25 th June,
2026, passed by the Trial Court in Notice of Motion No. 1112 of 2026,
in S.C. Suit No. 594 of 2026, granting interim relief in terms of prayer
clauses (A) to (C) of the Notice of Motion.
3. The Plaintiffs are two members of the Defendant No 1 Co-
operative Housing Society. The Defendant No 2 is the Project
Management Consultant (“PMC”) and Defendant No 3 is the
Developer, who are appointed for re-development of Defendant No 1
Society. The Defendant No 4 and 5 are the Directors of PMC and the
Defendant No 6 is stated to be an employee of the PMC.
4. Prayer clauses (A) to (C) of the Notice of Motion seeks injunctive
reliefs against the Defendants from acting upon the tender floated by
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Defendant Nos. 1 and 2, to restrain Defendant Nos. 2, 4 and 5 from
acting as PMC, and to restrain Defendant No. 1 from entering into any
Development Agreement and/or Power of Attorney in favour of
Defendant No. 3 in respect of development of the suit land. For sake of
clarity, the parties are referred to by their status before the Trial Court.
5. The plaint sets out the details of the SGBM’s held from the first
meeting resolving to redevelop the property to the meetings held for
appointment of PMC and the Developer. The suppression is pleaded on
the ground that the members were informed about two schemes for
re-development under DCPR 33(19) and 33 (9) by the Defendant No 1
and 2, whereas re-development under Regulation 33(19) was not
permissible in Eco Sensitive Zone II. It is pleaded that the commercial
offers received from 9 developers were first scrutinised by the PMC
and were informed to the members by presenting comparative chart of
commercial offers. In the SGBM of 20th July, 2025, it was revealed that
instead of providing annual turnover of PMC, the annual turnover of
group companies was provided and decision was taken to consult legal
adviser and in the event there is violation of terms and condition, the
PMC to be replaced in third phase.
6. The five shortlisted bidders were asked to submit “no regret
offer/final offer” on or before 12th September, 2025, in sealed
envelopes, which were opened in presence of members on 13th/14th
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September, 2025 and that the “no regret offer” was only to cover up
fraud and suppression of ESZ II category in the general body meetings
and in tender document.
7. It is pleaded that for the first time, by circular dated 18 th
September, 2025, the Defendant No. 1 informed the members about
the visit of the committee members to the office of Corporation on
15th September, 2025, where they were informed that the suit land falls
within the Eco-Sensitive Zone (`ESZ’) since the year 2016 and now it is
classified as ESZ-II in draft plan, and therefore, it would not be possible
to construct a completely separate commercial tower, office, etc., in
the redevelopment project.
8. In the SGBM of 21st September, 2025, the members were called
upon to select one developer as preferred developer, which came to
be postponed, and on 28th September, 2025, the SGBM selected the
Defendant No. 3 as the preferred developer. On 12 th October, 2025, a
draft Letter of Intent (`LOI’) was issued by Defendant No. 1. The
appointment of Defendant No 3 is assailed on the ground that
Defendant No 3 did not fulfill the registration and financial criteria as it
is a five year old company and has not done any development work in
Mumbai. Its financials are shown by collecting figures of sister concern
and associates.
9. The interim application sought reliefs aimed at preventing
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further process of redevelopment pursuant to the appointment of
Defendant No. 2 as PMC and Defendant No. 3 as the developer. In the
additional affidavit filed by the Plaintiffs in support of Notice of
Motion, it was pleaded that, in the meantime, on 23rd March, 2026, the
Defendant No. 1 had circulated a message that the land of the Society
does not fall in ESZ-II, but falls in ESZ-I, which development goes to the
root of the matter because the entire process was done on a
completely faulty footing.
10. The affidavit of Defendant No. 1 Society sets out the resolutions
passed in the SGBMs as regards the appointment of PMC, approval of
the tender, inviting of bids, and approval of Defendant No. 3 as the
developer. The action by Plaintiffs, being miniscule minority, cannot be
sustained as will of majority will prevail. It is pleaded that there is no
challenge to the SGBMs and the PMC's agreement. It was pleaded that
the LOI was issued on 12th October, 2025, and the Plaintiffs have
acquiesced in the entire process while third-party rights had been
created.
11. The Defendant No. 3, by its affidavit in reply, while reiterating
the stand taken by the Defendant No. 1 Society, further stated that the
tender categorically provided that all costs, premiums, fees, and
charges for conversion of the land to freehold would be borne and paid
by the developer. Annexure-4 of the tender categorically mentions that
SQ Pathan 11/60
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the subject land falls in ESZ, as notified under the Notification of 5 th
December 2016, which is also part of DP remarks. The subsequent
categorization into ESZ-I and ESZ-II was pursuant to a Government
decision dated 20th March, 2026, much after issuance of tender and
appointment and selection of the developer, and which has no bearing,
as the categorization is with regard to the use and nature of
development that can be undertaken.
12. It was pleaded that Defendant No. 3 is subsidiary company of
Sattva Developers Private Limited (`SDPL’), which is part of the Sattva
Group, a reputed real estate Company, and has completed several
residential and commercial projects. The Defendant No. 3 has been
specially constituted as a Special Purpose Vehicle to undertake
development of real estate projects under the aegis of its parent
company, SDPL, and therefore fulfills the requisite criteria provided in
the tender. It is further pleaded that the LOI dated 27 th November,
2025 records that SDPL and Vijay Agarwal, being the promoter of the
Sattva Group, will maintain a minimum 75% equity stake in Defendant
No. 3 throughout the redevelopment process and has agreed to be a
confirming party and sign the Development Agreement to be executed
between Defendant Nos. 1 and 3.
13. In the affidavit of Defendant Nos. 2, 4, and 5, i.e., the PMC, it was
pleaded that after following due process of law, the PMC has been
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appointed, which appointment was approved unanimously in the
SGBM dated 17th December, 2023 and agreement was executed on 7 th
July, 2025. It was pleaded that PMC does not have a vote in the
Society's decision-making process and, therefore, cannot be held liable
for the will of the majority expressed in the tender or the SGBM. There
is no challenge either to the minutes of the SGBM dated 17 th
December, 2023 or to the PMC's agreement.
14. The Defendant No. 6, i.e. Sandeep Isore, filed a reply affidavit
pleading that Defendant No. 6 is the sole proprietor of one M/s. Planet
E Consultants and has been engaged by the Defendant No.1 Society in
an advisory role, and his involvement is strictly circumscribed by the
professional mandate of PMC’s agreement, which is not in challenge.
15. In the rejoinder affidavit, it is pleaded that in the meeting held
on 30th July, 2023, there was mis-representation that Defendant No. 4
is the director of Defendant No. 2, and Defendant No. 6 being
associate partner of Defendant No. 4. The Defendant No. 6
represented that he was qualified architect working on a proposed
project at Bhendi Bazaar, whereas the profile of the said Bhendi Bazaar
project from the official website shows some other person as a
principal architect and associate architect. In the SGBM of 20 th July,
2025, serious objections were raised to the appointment of Defendant
No. 2 as PMC, and it was resolved that the matter should be referred to
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the advocate of the Society and a reply given to the members, and no
General Body was required for that purpose.
16. It was further pleaded that the Defendant No. 3 is proxy of a
Bengaluru-based Company SDPL and the draft development
agreement shows that the agreement is sought to be executed with
SDPL, who is not a bidder, and the non-bidder is shown to be
responsible for the performance guarantee in respect of the work
done by Defendant No. 3. It is further pleaded that the qualified
architect gave presentations in all other permissible categories except
Regulation 33(19), which is impermissible for ESZ-II, and it is
improbable that he had not advised Defendant No. 1 Society about
ESZ-II not permitting independent commercial complexes under
Regulation 33(19).
17. The mandate of the Government Resolution (`G.R.’) dated 4th
July, 2019 has been violated inasmuch as the appointment of
Defendant No. 2 as PMC is contrary to the G.R. As the very tender itself
is sought to be challenged, it takes within its sweep all the resolutions
involved in the process. The tender was floated for the project under
Regulation 33(19) and purported selection was done under Regulation
33(9), which was an unfair tender process.
18. The prima facie findings of the Trial Court in the impugned
judgment dated 25th June, 2026, can be summarised as under:
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(I) The suit land is located in ESZ, and there can be no
development of residential and commercial buildings in ESZ;
(II) Defendant No 3 is not qualified as per the tender criteria.
(III) Members were not informed about suit land being classified
as ESZ II and were misled about permissible development
regulations.
(IV) Tender does not disclose about ESZ II, conversion from
leasehold into free hold and pendency of stamp duty appeal.
(V) Three reputed builders have not shown their willingness
under DCPR 33(19) and in respect of construction of commercial
unit, evidence is required to be led.
(VI) Objections were raised as to appointment of Defendant
No 2.
19. At the outset, Mr. Khandeparkar, learned Counsel appearing for
the Plaintiffs in A.O. 676 of 2026 submits that he does not press the
issue of non-disclosure of the land conversion and stamp duty and
confines his argument only to the ESZ issue and the financial
credentials of Defendant No. 3.
20. Mr. Tulzapurkar, learned Senior Advocate appearing for the
Defendant No. 1 Society, would submit that, in the SGBM, the majority
of the members passed the resolution for redevelopment of the
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Society, appointment of PMC, approval of the tender terms, and
appointment of the developers. He submits that it is settled position in
law that minority members of the Society cannot interfere with the
redevelopment process undertaken by a Society on behalf of its
members and the resolutions, unless overturned, are binding. He
submits that the Trial Court could not have substituted its wisdom for
the collective wisdom of the members of the Society.
21. He has taken this Court in detail through the findings of the Trial
Court to contend that the Trial Court has erroneously held that the suit
land falls in ESZ but the Defendant No 3 wants to develop residential
and commercial buildings, that no explanation was given in SGBM
about construction of commercial units and that the same was not
disclosed in the tender.
22. He submits that the Notification dated 5 th December 2016
permits construction of commercial building and commercial
redevelopment to the extent allowed under the MRTP Act subject to
sanctioned Rules and Regulations. He submits that, as the ESZ
Notification of 5th December 2016 did not classify the property into
ESZ-I and ESZ-II, there was no question of disclosure of such
classification, which came later in the year 2026.
23. He would further point out that the tender mentions about the
plot under reference being in Sanjay Gandhi National Park ESZ under
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the Notification dated 5th December, 2016 and that the tender
mentions about ESZ NOC. He submits that in the SGBM convened on
13th October, 2024, the draft tender document was approved, which
provided for two options: one under DCPR Regulation 33(19),
pertaining to construction of residential complex for 300 existing
members including a commercial component, and the other option was
redevelopment under DCPR Regulations other than 33(19), such as
those falling under 33(9) cluster development scheme, pertaining to
construction of a fully residential complex or a residential-cum-
commercial complex for both existing members and new members.
24. He would submit that, based on the terms of the tender, nine
developers submitted bids, out of which six developers submitted bids
under Regulation 33(9) and 33(19) of DCPR. He would further point
out the comparative chart prepared by PMC comparing the offers
submitted under Regulation 33(9) and Regulation 33(19) of DCPR, and
the intimation about the same to the members vide letter dated 15 th
March 2025.
25. He would further point out that the commercial proposal
submitted by the developers under Regulation 33(9) and 33(19) of
DCPR was also discussed in the SGBM held on 27 th April 2025 and
points out the extract of the deliberation. He would submit that the
minutes of the SGBM would clearly indicate that the issue as regards
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development under Regulation 33(9), 33(19), and permissibility of
commercial construction was discussed and deliberated in detail by the
members of the General Body of the Appellant.
26. He would further submit that subsequently, by a Notification of
9th September 2025, MoEF invited suggestions and objections to the
draft Zonal Plan of ESZ for Sanjay Gandhi National Park, where the
classification was introduced for the first time. He submits that the
subsequent regulatory change cannot be construed as a ground of
non-disclosure in the tender, nor can it vitiate the tender. He would
further submit that, as the land was wrongly classified as ESZ-II instead
of ESZ-I, the PMC objected to the classification and sought rectification
of the same. He would submit that there was no prohibition for
commercial development even under the draft Zonal Plan in ESZ-II
classified properties. He submits that immediately upon the draft
Zonal Plan being published for inviting objections and suggestions, the
Society, by letter dated 18th September 2025, informed the same to its
members and that a formal objection would be lodged with the
Government as regards the classification. He submits that, there has
been a full and complete disclosure to all the members of the Society,
and an informed decision has been taken in the SGBM.
27. He submits that the Defendant No 3 was selected as a developer
during the SGBM held on 28th September 2025, and accordingly LOI was
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issued on 12th October 2025, and the letter of 17 th December 2025
stated that development of the land will be undertaken under
Regulation 33(9) of DCPR. He submits thereafter, by a Government
decision of 20th March 2026, the property was classified as ESZ-I.
28. Mr. Tulzapurkar submits that there is no question of any non-
disclosure as the LOI issued to Defendant No. 3 clearly specified
Regulation 33(9) under which the redevelopment is proposed. He
submits that the tender documents make it clear, and it was
understood by the bidders, that the redevelopment can be undertaken
under Regulation 33(9) or 33(19), with the only difference being that in
33(19), a separate commercial structure can be constructed. In support,
he relies on the following decisions :
i. Bengal Secretariat co-operative Land Mortgage Bank &
Housing Society Limited v. Aloke Kumar & Anr.1
ii. Margaret Almeida & Ors. v. Bombay Catholic co-
operative Housing Society Ltd. & Ors.2
iii. Devyani Gulabsi v. Saidale Co-operative Housing Society
Limited & Ors.3
29. Mr. Andhyarujina, learned Senior Advocate appearing for the
Defendant No. 3, submits that the Trial Court has held against
Defendant No. 3 on the ground that the Special Purpose Vehicle is at a
1 (2024) 14 SCC 466
2 (2013) 6 SCC 538
3 2025 SCC OnLine 3622
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loss and there is non-disclosure of the financials of the parent
company. He points out Clause (4) of Section 6 of the General
Conditions of Development of the tender, which clearly provides that
the developer can execute the project only through its parent
company. He points out that the finding of the Trial Court is factually
erroneous as it holds that Defendant No. 3 seeks to carry out the
redevelopment project through its sister company.
30. He would further submit that the pre-qualification criteria
required a consolidated net worth of not less than Rs. 800 crores.
Drawing attention to the provisions of Section 129(3) of the Companies
Act, he submits that the use of the words “consolidated net worth”
means the consolidated net worth of the parent company and the
subsidiary company. He has further taken this Court through the
definition of subsidiary company under Section 2(87) of the Companies
Act. He submits that there is specific pleading in reply affidavit that the
parent company of Defendant No. 3 is Sattva Developers Private
Limited, which has not been rebutted by rejoinder and has not been
considered by the Trial Court.
31. He submits that in the meeting held on 27 th April 2025, it was
clarified by the PMC that SDPL is the parent company and they were
found to be developers of excellent standard. He submits that the
SGBM considered the issue of the negative net worth of Defendant No.
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3. He would point out the discussion in the said meeting and also that
a decision was taken that the Sattva Group will remain the major
stakeholder and controller and have control in the developer entity and
will not create any lien on the land or the flats of the members. He
submits that in the said meeting, a detailed discussion had taken place
as regards the pre-qualification of Defendant No. 3 at the time of
tender, the views expressed by the consultants, the ED case against the
parent company, and Defendant No. 3's Mumbai project status. He
submits that after a detailed deliberation, a total of 133 members
present in the meeting, including those attending virtually, gave their
assent to the proposal of appointing Defendant No. 3 as the preferred
developer. He submits that the conclusion was reconsidered and the
proposal submitted by some of the members of obtaining further
opinion of independent experts came to be rejected, and approval was
granted to the Managing Committee of the Society to take further
decisions or steps in relation to further negotiations with the
developer. He submits that the Plaintiffs were present for the said
meeting and have not challenged the resolutions.
32. He would further submit that the LOI came to be issued, which
includes the condition of a corporate guarantee-cum-performance
guarantee from the parent company, SDPL, which is to remain valid
and enforceable from the date of execution of the Development
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Agreement until the completion of the project. He submits that a
specific condition has been incorporated in the LOI that SDPL and Mr.
Vijay Agarwal and his family shall maintain a minimum 75% equity stake
in Defendant No. 3 which secures the financial creditworthiness of
Defendant No. 3. He submits that in the meeting held on 7 th December
2025, the resolution was passed appointing the Defendant No. 3 as
developer, which was approved by 194 members present physically and
46 members present online. In support, he relies on the following
decisions:
i. Rajesh Mishra & Beena R. Mishra v. Shree Ahuja Properties
(P) Ltd.4,
ii. Nirmala A. Pillai & Ors. v. Shubham Builders5
iii. New Horizons Ltd. & Anr. v. Union of India & Ors.6
iv. Vodafone International Holdings BV v. Union of India & Anr. 7
33. Mr. Tamboly, learned counsel appearing for PMC in Appeal from
Order No. 19074 of 2026 would submit that the resolution approving
the appointment of PMC, has not been challenged. He submits that
the challenge in the present case is to the tender floated by Defendant
Nos. 1 and 2 and there are no pleadings qua the PMC and despite
thereof, the Trial Court has held that the appointment of PMC is illegal.
4 2021 SCC OnLine Bom 2945
5 CAAL/12654/2024 dated 07/05/2024 (Bom.)
6 (1995) 1 SCC 478
7 (2012) 6 SCC 613
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He would further point out that the pleading in the plaint is that the
suit has been filed for enforcement and protection of the Plaintiffs’
statutory rights under Section 79-A of the Maharashtra Co-operative
Societies Act, 1960 (`MCS Act’), which have been held to be directory.
He submits that as the final relief sought was in the context of the
tender being illegal, no interim relief could be granted qua the
appointment of PMC.
34. Mr. Khandeparkar, learned counsel appearing for the Plaintiffs,
submits that before the Trial Court, after the hearing of the Plaintiffs
was concluded, the resolutions were produced by the developer, which
did not form part of the pleading. He submits that the Society does
not refer to this resolution, and the resolution appears to be a forged
and fabricated document, as the resolution starts with page No. 3 and
there are no preceding pages annexed to the resolution. He would
further point out that the Trial Court has, therefore, rightly not taken
note of these documents. He submits that the resolutions of the
Society, if any, ought to have been produced by the Society and not by
the developer and cannot be considered in support of appointment of
Defendant No 3.
35. He has taken this Court through the essential tender conditions,
which require the preferred developer to have completed at least
three projects in MMR in the last 6 years, construction worth Rs. 500
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crores and a net worth of minimum Rs. 800 crores. He would submit
that 20 developers had purchased the tender documents by 9 th of
November, 2024, and 9 developers had submitted their bids. He would
point out that the tender document defines the developer and
tenderer, which is an individual entity. He submits that Clause (8A),
specifically providing for the pre-qualification criteria, excludes joint
venture agreements. He submits that the clause in the tender provides
that if the tenderer does not disclose the full name and address of all
its partners, directors in case of a company, and joint venture
agreements in case of a Special Purpose Vehicle, which is the case
where there are more than two entities, the tender is liable to be
rejected. He would further point out that there is a restriction under
the tender from transferring the rights under the contract and against
assignment.
36. He submits that the general conditions of development under
the tender provide that a developer can execute the project only
through its parent company. He would further point out Form No.
AOC-4, which is the form filed with the Registrar of Companies (`ROC’)
for filing financial statements and other documents, and would point
out that the same shows the date of incorporation is 16 th November,
2022, and that no consolidated financial statements are prepared. He
would further point out that the balance sheet shows a negative worth.
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He submits that with such financial credentials, the Defendant No. 3
did not meet the tender criteria and, therefore, could not be appointed
as the preferred developer. He has taken this Court through the
subsequent forms filed with the ROC, which also show that the
business activity is shown as zero and the net worth is also zero. He
would further point out the directors of the Company and would
submit that none of the directors have any participation in the parent
company. He submits that the Defendant No 3 cannot qualify as
subsidiary company of SDPL as per the Companies Act. He would
further point out that it was specifically pleaded about the negative
financial status of the Defendant No. 3 Company in the suit. He submits
that the reply of the Defendant No. 3 is that it is a subsidiary of SDPL,
is factually incorrect and no documents have been produced to
substantiate the same. He would further point out the affidavit in
rejoinder, where it was specifically pleaded that SDPL is not a builder
and, therefore, there is no question of the corporate guarantee being
executed by SDPL.
37. He would further point out the draft Re-development
Agreement, which was to be executed not only with the Defendant No.
3, but also with SDPL, and the covenant by SDPL for observing all
obligations. He would submit that the tender documents do not
provide for such a course to be adopted. He would further submit that
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the resolution on which reliance was placed by the Defendant No. 3
states that the reason as to why SDPL did not bid in the tender is that
the registered office of Sattva Developers Pvt Ltd is in Bengaluru and
not in Mumbai, and, would be ineligible, which reason is unacceptable.
38. He would further submit that the 2016 Notification provided for
the measures to be taken by the State Government in respect of the
land falling under ESZ. He submits that it is only on 18 th of September,
2025, that the Defendant No. 1 issued a circular to its members
claiming that the suit land falls in ESZ-II, and it would not be possible to
construct a completely separate commercial tower. He submits that by
virtue of the same, they curtailed the pool of bidders. He would further
submit that a novel no-regret letter procedure was adopted by the
Defendant No. 3 in the SGBM of 21st of September, 2025, by which only
4 shortlisted developers were granted 48 hours to submit their final
revised bids and the remaining bidders were completely excluded from
any fair opportunity.
39. He would submit that around 82 members have approached the
co-operative Court, and some of the Managing Committee members
have resigned on the same issue. He would submit that in the SGBM of
28th September, 2025, no questions were permitted to be raised, and
82 members of the Society had written a protest letter to the Society
on 9th November 2025. He submits that on 23 rd November, 2025, the
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Society's financial advisor for the first time disclosed to the members
that while evaluating Defendant No. 3's credentials, the credentials of
the Sattva Group of Companies were taken into consideration, which
was accepted by the General Body.
40. Mr. Khandeparkar would submit that the additional affidavit filed
by the Plaintiff, annexing the Society's new Circular dated 23 rd March
2026, would show that the Managing Committee had suggested
conversion of Society's land into ESZ-I, thereby permitting commercial
construction, which was earlier not possible in ESZ-II, as per its own
circular dated 18th September 2025. He would submit that the Plaintiffs
have willingly supported the redevelopment till disclosure circular
dated 18th September 2025, thereby stating inapplicability of
Regulation 33(19) and calling for voting within four days thereafter.
41. He would further point out that the disclosure Circular dated 18 th
September 2025, when read with the Circular of 23 rd March 2026,
shows that even as per the Managing Committee, it was not
permissible to contemplate redevelopment under Regulation 33(19)
due to ESZ-II category, and, therefore, the embargo of ESZ-II category
to Society's land is an admitted position. He submits that despite
thereof, the tender was proceeded primarily under Regulation 33(19).
42. He would point out that firstly it was informed that it would not
be possible to do the redevelopment by construction of independent
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commercial building, and, secondly, objections would be raised with
the Government. He submits that this sudden disclosure is falsified on
account of the fact that the presentation of comparative chart of
various schemes shows that the senior and registered architect had left
the column of Regulation 33(19) completely blank, and it is impossible
that the Managing Committee did not notice the omission of
Regulation 33(19) by the senior architect. He would submit that,
secondly, the Minutes of SGBM held on 21 st September 2025 clearly
demonstrate that this sub-classification of ESZ category started in
2016 and its completion was within two years, and, therefore, it cannot
be said by the Defendant No 1 and the PMC’s, which have vast
experience and background of Building Proposal Department of BMC,
were unaware of such ESZ categorization process, which would be
completed within two years in 2018. He would submit that, therefore,
it cannot be accepted that the process between 2016 to 2018 was not
in contemplation of the PMCs before going in for comparative charts of
proposal, feasibility report, and tender.
43. He submits that the Defendant No 1 ought to have gone for re-
bidding or could have issued an addendum to all bidders in terms of
Clause No. 25 of Section 3 of the tender. He submits that the said
situation has damaged the prospects of bids of the tender of prime
land and only nine bids were received. He submits that the
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categorization of ESZ-II permits construction of separate commercial
building covering about 60% of the land, enhancing the commercial
potential of the entire project, and the whole process is now grossly
prejudicial to the members of the Society and discriminatory towards
most of the potential bidders.
44. Mr. Naphade, learned counsel appearing for the Respondent No.
3 in Appeal from Order (Lodging) No.19074 of 2026, would submit that
despite the resolution passed in the SGBM held on 9 th October, 2022 to
adhere to G.R. of 4th July 2019, the same has not been complied with.
He submits that the minutes of the meeting of 17 th December, 2023
record that Sandeep Isore, i.e. Defendant No. 6, has assured that in the
event the redevelopment work is allotted, he will personally supervise
the same. He would further point out that the said Sandeep Isore
represented himself as qualified architect working on the Bhendi
Bazaar Cluster Redevelopment Project, whereas the website extract
of the said redevelopment project shows a different principal architect
and associate architect, and there is no mention of Sandeep Isore.
45. He would further point out the minutes of the meeting of 6 th
September, 2025, in which a question was raised on the appointment
of PMC. He would submit that the Defendant No. 1 Society has entered
into an agreement with the PMC and M/s. Planet E Consulting, which is
not as per the terms of the tender. He submits that the Defendant No.
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1 had specifically resolved to take legal advice as the Defendant No. 2,
instead of giving its financials, gave the financials of the group
Company.
46. Mr. Matkar, learned counsel appearing for Respondent Nos. 1
and 2 in Appeal from Order No. 18996 of 2026 points out that in the
SGBM held on 21st of September 2025, after the ESZ revelation, the
Defendant No. 6, explained the provisions relating to ESZ and that the
Society's plot falls in ESZ-II. He would further point out that though
Regulation 33(19) was not permissible in ESZ-II, the tender was issued
for 33(19). He submits that the Defendant No. 1 Society was aware of
the said position as many of the members are retired officers of
MCGM. He would point out that the Plaintiffs had appointed experts,
and therefore, now cannot be heard to say that they were not aware
about the Society's plot falling in ESZ-II.
47. In rejoinder, Mr. Tulzapurkar submits that the draft Notification
was finalized on 9th September 2025, and immediately on 18 th
September 2025, the Defendant No. 3 issued a circular to its members
about the plot falling in ESZ-II. He submits that the tender was issued
on 13th October 2024, and therefore, there was no question of
disclosure of ESZ-I or ESZ-II. He submits that the final notification
under ESZ was issued on 20th March 2026.
48. He submits that by the first LOI which was issued, the Society
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had resolved the development under 33(9), and thereafter there was a
revised LOI issued on 27th November, 2025, incorporating a corporate
guarantee in order to secure the project. He submits that SDPL, which
was the parent company of Defendant No. 3, could not have submitted
the bid as the tender bid was restricted to developers who had their
registered office in Thane and Mumbai. He submits that under the
draft Development Agreement, the parent company has agreed to
provide the financial support and strength to the Defendant No. 3, and
has also undertaken that in the event of default by the developer, the
confirming party shall step into the place and stead of the developer.
He submits that the contentions raised by Mr. Khandeparkar as regards
the definitions of subsidiary company and holding company do not
require a strict interpretation in a project of this nature. He submits
that the tender was prepared under the guidance of the PMC and was
approved by the Society. He submits that the Society has taken all
these decisions through the SGBM. He would further submit that the
submission that the minutes were tendered after the conclusion of the
Plaintiffs' hearing can also harm the case of the Plaintiffs, as the
Plaintiffs, being members of the Society, were aware of the resolutions
and despite that, did not produce the same. He would further submit
that there is no case of the Plaintiffs that the minutes are fabricated,
and only a technical objection has been raised.
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49. Mr. Naphade would interject and would submit that in the
rejoinder it is specifically stated that the minutes of the meeting are
fabricated.
50. Mr. Andhyarujina, in rejoinder, would submit that the case of
SDPL not being the holding company of Defendant No. 3 is not their
pleaded case and was not argued before the Trial Court. He submits
that the Plaintiffs were aware of the minutes of the meeting of 23 rd
November 2025, and when the same were tendered before the Trial
Court, no objection was taken, and the Roznama records the same. He
submits that the minutes were duly received by them on 2 nd January
2026, and the plaint had been filed on 7 th February 2026 and despite
the contention now raised that the minutes are fabricated, there is no
explanation as to why the same was not made part of the plaint.
51. He would further submit that the case of the Plaintiffs was that
the five-year registration criteria and financial criteria were not fulfilled
by Defendant No. 3 and financials were shown by collecting figures of
sister concerns and so-called associates and not that SDPL was not the
parent company of Defendant No. 3. He submits that the Form No.
AOC-4 does not require any information to be given about the holding
company. He submits that the consolidated financials have to be filed
by the parent company and not by the holding company. He submits
that in the affidavit in reply, it is repeated and reiterated that SDPL is
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the parent company and despite thereof, in the rejoinder, there is no
challenge. He submits that the resolution of 23 rd November, 2025, puts
the controversy to rest as everything has been considered by the SGBM
and an additional safeguard is also incorporated.
52. Mr. Shanay Shah, learned counsel appearing for the Appellant in
Appeal from Order (Lodging) No. 19074 of 2026, would submit that the
impugned order does not give any reasons for grant of prayer clause
(B) as regards the appointment of the PMC. He submits that the
Respondent Nos. 1 and 2, being individual members, can speak only
through Respondent No. 3, and the appointment of PMC is valid,
binding, and subsisting till date and is therefore binding on Plaintiffs.
He submits that neither the 2023 resolution nor the agreement dated
7th July, 2025, executed by the PMC and the Society were challenged by
the Plaintiffs, and therefore, the prayer ought not to have been
granted. He would further submit that the 2019 G.R. is neither
mandatory nor a concrete policy, and it was perfectly open to the
Society under the resolutions passed in the SGBM to deviate from the
same. He would submit that the challenge to the appointment of the
PMC on the basis of the G.R. of 2019 is neither the pleaded case nor
were any submissions canvassed before the Trial Court. He submits
that the Defendant No. 3, by an email of 31 st December, 2023, to
Sandeep Isore, confirmed the PMC's appointment, and hence, is in
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compliance with Directive No. 13 of the 2019 G.R., and subsequent
thereto, the agreement dated 7th July 2025 was executed. He would
further submit that in the SGBM held on 17 th December 2023, it was
stated that Mr. Sandeep Isore is serving as liasoning architect and not
the principal architect. He submits that during the SGBM of 20 th July
2025, certain issues relating to the PMC were discussed, pursuant to
which legal advice was sought. He submits that the annual turnover of
PMC is not an eligibility criterion for the PMC's appointment. He
submits that the apprehensions, whether expressed, did not result in
ousting the PMC.
53. He submits that the Plaintiff’s case is based on Sandeep Isore
being added to the agreement dated 7th July, 2025. He submits that
Sandeep Isore is his associate, and the agreement was entered into
after the Society approved the same. He submits that there is no
question of grant of interim relief as the PMC's appointment was not in
question. He would further point out that the Trial Court has, on the
basis of the objections raised in the SGBM held on 20 th July, 2025, held
that there are serious objections raised to the appointment of PMC
without considering that there is no resolution passed terminating the
appointment of PMC.
54. After the conclusion of arguments, the parties tendered the
written submissions. The learned counsel for the parties again argued
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on the contents of the written submissions tendered by the other party
alleging that documents not part of the record were being tendered
and submissions not canvassed were included. This Court has noted the
arguments canvassed during the hearing and has adjudicated the
dispute accordingly.
55. Mr. Khandeparkar has restricted the grounds for seeking
injunctive reliefs only on the issue of ESZ and the financial credibility of
Defendant No. 3.
56. On the issue of ESZ, the conspectus of Plaintiff’s case is of
suppression of the fact of the suit land falling in ESZ II category at the
time of issuing tender, invitation of bids and permitting consideration
of development under Regulation 33(19), which is impermissible in ESZ
II. To substantiate the case of suppression, reliance is placed on the
presentation of comparative chart, where the senior architect left
column of Regulation 33(19) blank imputing knowledge to the
managing committee of the suit land falling in ESZ II and the circular
dated 18th September, 2025 of Defendant No 1 intimating the
members about the draft zonal plan. Based on this allegation, the
contention is that pool of developers have been curtailed and that nine
bidders were not informed about application for conversion from ESZ II
to ESZ I.
57. The pleading in paragraph 7(A) of the plaint is as under:
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“ Under the DCR-1991, the Suit Land was shown as a “No Development
Zone (NDZ)” as it falls near the sensitive area of the “Aarey Colony”.
Later on it was removed from the “No Development Zone (NDZ)” and
now it is included in “R Zone”. However, in the year 2016, the Central
Government included the present land in Eco Sensitive Zone-II (ESZ-II)
and now it is obligatory that the present land continues to remain in the
ESZ (Eco Sensitive Zone II). Due to the said ESZ II classification of the
suit land, there are certain restrictions which do not permit the
construction of a completely separate commercial tower, commercial
offices, mall, cinema hall or any similar standalone commercial building
on the Suit Land. Hereto annexed and marked as Exhibit “K-1” is the
copy of the Circular dated 18.09.2025 issued by the Defendant No 1
declaring that the land of the Society falls under “Eco-SensitivieZone-II)
(ESZ-II)”
58. The tender came to be floated on 13 th October, 2024. Annexure
4 of tender specifically describes the plot as falling in Sanjay Gandhi
National Park Eco-Sensitive Zone under Notification dated 5th
December, 2016, and that ESZ NOC will be required. There is no
suppression in the tender about the location of the subject land being
in Eco Sensitive Zone. The tender conditions were approved by
majority of members and therefore the members and by reason of
disclosure in the tender even the bidders were aware of the location of
the subject land in Eco Sensitive Zone.
59. Perusal of the notification dated 5th December, 2016 issued by
MOEF would indicate that the notification sets out the extent and
boundaries of ESZ, which includes the suit land. Clause 2 of the ESZ
Notification provides for preparation of a Zonal Master Plan for the
ESZ within a period of two years for regulating development in the
ESZ. There is no clause in the notification classifying the lands falling
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within ESZ as ESZ I, II or otherwise. Item No 11 of Clause 4 of the
notification under the heading “Regulated Activities” lists out
Construction activities and provides that the construction activities
shall be permitted within the ESZ as per the provisions of the
approved Development Plan and other applications rules and
regulations under the Maharashtra Regional and Town Planning Act.
60. In the absence of the final zonal plan prepared under the
notification of 2016, the development was permissible as per the
applicable development regulations including Regulation 33(19). The
Defendants therefore rightly called for bids giving the option of
development under Regulation 33(19) and Regulations other than
33(19).
61. It is only on 9th September, 2025, that the plan, which was draft
zonal plan, came to be published in which the subject land was
classified as ESZ II and objections and suggestions to the draft plan
were invited. Therefore even on 9th September, 2025, the classification
of the suit land as ESZ II was a proposed classification. It is only on 23 rd
March, 2026, during the pendency of the proceedings before the Trial
Court, that the Defendant No 1 Society informed the members that the
suit land has been categorised as ESZ-I.
62. The Plaintiffs rushed to the Court under an erroneous belief
that under the notification of 2016 itself, the suit land was categorised
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as ESZ II, which was suppressed and fraud was played on the members
and the developers by deliberating on development under Regulation
33(19). There is no material placed by the Plaintiffs on record, on the
basis of which, it can be prima facie demonstrated that at the time of
submission of feasibility report by PMC, publishing of tender and
bidding by developers the suit plot was categorised as ESZ II and hence
Regulation 33(19) was impermissible. It is far fetched to accept that
because the Senior Architect Anil Patil had left the column of
Regulation 33(19) blank in the comparative chart produced with
communication dated 10th August, 2023, the suit land was categorised
as ESZ II and was within the knowledge of the managing committee.
The fact that six reputed developers out of the nine developers had
submitted offers for both Regulation 33(19) as well as Regulation 33(9)
prima facie shows that at the time of submission of bids, there was no
categorisation of the suit land as ESZ II. The feasibility reports and
comparative charts were discussed in detail in the SGBM and no
questions were put to the Senior Architect Anil Patil on the blank in
column of Regulation 33(19).
63. It is claimed that the allotment of the bid in favour of Defendant
No. 3 as the highest bidder for the project is under Regulation 33(19),
which is completely barred in ESZ-II. The last date for submission of the
bids was 15th December, 2024, and it is only on 9th September, 2025
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that the plot was categorized as ESZ-II in the draft zonal plan. The
Plaintiff’s case of the suit land being categorised as ESZ II is based on
the Defendant No 1’s circular dated 18th September, 2025 informing
the members that their plot has been classified as ESZ II. The circular
makes a clear reference to the plan being draft plan and without
verifying as to whether the suit land has been finally categorised as
ESZ II and the date on which it was so categorised, the Plaintiffs have
assumed that the categorisation took place under the notification of
2016 and there is suppression.
64. The tender invited bids and the pre-qualification criteria
required that a minimum annual sale of a tenderer shall not be less
than Rs. 500 crores in the last 5 years, and the minimum consolidated
net worth of the tenderer should not be less than Rs. 800 crores, which
shows that the bids could have been submitted only by reputed,
renowned developers having expertise in the construction activities.
Prima facie, it is difficult to accept that developers of such repute
would be unaware of the development regulations permissible in ESZ
or that draft zonal plan is under contemplation.
65. The ESZ Notification of 2016 provides for preparation of zonal
plan within a period of two years and till the year 2025, there was not
even a draft zonal plan published. Upon the final zonal plan being
notified by the Central Government on 20th March, 2026, the suit land
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was classified as ESZ I with the consequence that commercial
development and reconstruction of land is permissible, which was the
position existing even in the year 2016. There was no necessity of
inviting fresh bids or informing bidders about the application for
conversion as there was never any final classification of subject land as
ESZ II. The re-development at the inception of the process permitted
development under Regulation 33(19), and the intervening event of
publication of draft zonal plan did not change the situation. It is also
unacceptable that with every subsequent change in regulatory regime,
the Society should commence the re-development process de-novo.
66. Prima facie, there is no case of suppression made out, as after
the circular of 18th September, 2025, in the SGBM held on 21 st
September, 2025, the members were apprised of the draft plan
classifying the subject land as ESZ II and it was informed that
restrictions apply primarily to commercial activities. The majority of
members resolved that the shortlisted developers shall be granted
period of 48 hours to submit their final revised offers in sealed
envelopers. In the SGBM held on 28th September, 2025, revised
commercial offers were opened and were explained to the members.
The offers were then put to vote and the Defendant No 3 was selected
as preferred developers by the majority of members.
67. The members of the Defendant No 1 were apprised of the
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comparative benefits as the shortlisted PMCs submitted the feasibility
report in the SGBM held on 29th/30th July, 2023 giving the brief
presentation about the comparative benefits under the relevant
development regulations 33(7), 33(9), 33(11), and 33(19). The tender
conditions were approved by the majority of the members in the
meeting held on 13th October, 2024 which deliberated on Regulation
33(19) and regulations other than Regulation 33(9). The bids were
submitted by nine developers and out of them, six developers
submitted offers under Regulation 33(9) and Regulation 33(19),
whereas three developers submitted offers only under DCR 33(9). In
the SGBM held on 27th April, 2025, the commercial proposals submitted
by the developers under Regulation 33(19) and 33(9) were discussed by
the members of Defendant No 1.
68. The LOI dated 12th October, 2025 was thereafter issued, and the
redevelopment was proposed under Regulation 33(9). One of the
conditions of the LOI was to provide a corporate guarantee from its
parent company, M/s. Sattva Developers Private Limited. The minutes
of the meeting would indicate that the members present were given a
detailed presentation of the comparative offers submitted by the
developers shortlisted, and by a democratic process of voting by ballot
papers, the Defendant No. 3 was elected as the preferred developer.
Thereafter, there was another meeting which was held to discuss the
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opinion received from the consultants about the involvement of the
developer in the offence of money laundering. The minutes of the
meeting indicate that one day prior to the meeting in which the
Defendant No. 3 was elected as the preferred developer, certain
members of the Society had informed that the Defendant No. 3 may
not be technically qualified as its net worth was negative. A detailed
discussion was held, and the Chairman had provided a clarification with
regard to the corporate guarantee, and that the Defendant No. 3
would not be creating any encumbrance on the land or the area of the
Society. After these detailed discussions on the issue as to whether the
appointment of Defendant No. 3 ought to be treated as disqualified, a
total of 133 members present at the meeting resolved that the
Defendant No. 3 had complied with the tender qualification criteria
and tender guidelines, and that the entire process had been conducted
in a transparent manner.
69. An objection has been taken by Mr. Khandeparkar to the
resolutions which were handed over in the trial court proceedings after
the hearing was held, and that there is no pleading to that effect. The
resolutions are part of the record and would demonstrate that every
aspect was presented for consideration of the members of Defendant
No. 1 Society. It cannot be said that the Plaintiffs were unaware of the
said resolutions or were taken by surprise by the production of the said
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resolutions. A dispute is sought to be raised that these minutes of the
meeting are fabricated. The resolution of 23rd November, 2025 were
circulated on 2nd January, 2026 and Mr. Naphade, would, submit that in
the rejoinder a specific case was set up that the resolutions were
fabricated. As it is not disputed that the minutes of the meeting were
circulated on 2nd January 2026, no explanation is given for absence of
pleading about the resolution being fabricated. There is no explanation
for failure to challenge the resolutions in the Co-operative Court.
70. The contention that the pool of developers was restricted is
premised on the subject land being categorised as ESZ II, which is an
erroneous assumption as the subject land was available for
development as per the applicable development regulations. As there
is no material to prima facie demonstrate the classification of suit land
as ESZ II at the time of publishing tender and inviting bids, which issue
is now set to rest by the final zonal plan in March, 2026, the question of
ESZ II classification does not arise for trial.
71. Upon perusal of the detailed minutes of meeting produced on
record, it is evident that all aspects including the draft zonal plan were
discussed and deliberated in detail and the resolutions were passed
with approval of majority of members. The majority of members in
their collective wisdom decided to accept the no regret procedure and
permitted the short listed developers to submit revised offers. The
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decision taken by the majority cannot be vitiated for the reason that
they did not elect the option of going for re-bidding or did not issue an
addendum. It is the collective decision of the majority of members,
which would bind the minority members of the Society. It was open for
the majority to decide the course to be adopted in best interest of the
Society, which has been decided and deserves no interference.
72. The appointment of Defendant No 3 is challenged on the ground
of failure to meet the qualification criteria. Going back to the
conditions of the tender, Part I containing Section 1 invites sealed
tenders from developers having registered office in Mumbai/Thane.
Section 2(pp) defines “Tenderer” to mean any entity/developer who
submits a bid in pursuance to this tender. Clause 8 of Section 3 sets out
the pre-qualification criteria as under:
“8. PRE-QUALIFICATION CRITERIA : -
A. Bids from Proprietorship Firm. Hindu Undivided Family. Trusts, Co-
operative Societies. AOP's or any form of IV other unregistered firms or
unincorporated entities shall not be considered.
B. The Tenderer should have completed and procured occupation
certificate from the planning authority for at least three (3)
residential / residential cum commercial projects in last 6 (six) years
ending on 31st March 2024 with the following parameter -
(i) At least one of such residential / residential cum commercial
projects should be developed by consumption of a minimum FSI of not
less than 60,000 SQM. The Tenderer should submit the necessary
evidence of the same.
(ii) The construction cost of each of such residential / residential cum
commercial projects should have been minimum Rs.500,00,00,000/-
Only (Rupees Five Hundred Crores Only).
The Tenderer shall submit the necessary documentary evidence of
the above.
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C. The minimum annual sales of the Tenderer shall not be less than
Rs.500,00,00,000/- (Rupees Five Hundred Crores Only) in the last 5
years ending 31/03/2024. The Tenderer shall submit the necessary
documentary evidence of the above.
D. The minimum consolidated net worth of the Tenderer should not be
less than Rs. 800,00,00,000/- Only [Rupees Eight Hundred Crores
Only].
E. The Tenderer shall submit the necessary documentary evidence for
the above.”
73. Section 4 deals with special conditions of development and
Clause (ggg) prohibits the developer from transferring benefits of the
tender or development proposal or development agreement to any
other company, any other third party or any other entity. Clause (sss)
prohibits assignment/transfer/sub-contract to another developer.
74. Clause (4) of Section 6 of the General Conditions of Development
provided that the developer can execute the project only through its
parent company and cannot assign or sublet the project or enter into a
joint venture or partnership with any other developer/third party
before or after their selection by the Society.
75. The tender conditions permitted the developer to execute the
project through its parent company. The pre-qualification criteria
provided that the tenderer shall submit documentary evidence of
annual sales of the tenderer, which shall not be less than Rs. 500 crores
in the last 5 years ending 31st March 2024, and the minimum
consolidated net worth of the tenderer shall not be less than Rs. 800
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crores. The tender document defines a tenderer to mean any
entity/developer who submits its bid in pursuance of this tender. The
General Conditions of Development permitting the developer to
execute the project through its parent company indicates that the pre-
qualification criteria can be met by the parent company, which is also
substantiated by the requirement of “Consolidated net worth”.
76. In the SGBM held on 23 rd November, 2025, the issue of
involvement of Defendant No 3 and its Director in money laundering
offence was discussed. The minutes record the discussion about the
Defendant No 3 not being technically qualified as its net worth was in
the negative. It was clarified that the principal promoters of the
company are (1) Sattva Real Estate (the flagship company established
in 1976) and (2) LLP’s of the Agarwal family. It was also clarified that no
revenue has been recorded of the said company as of date and as a
group entity, the group’s sales and net worth have been taken into
consideration. It was suggested that as measure of precaution and to
ensure adequate security, while finalising the definitive documents
with the shortlisted developer, a corporate guarantee of the principal
holding company would be obtained. The comparative statements of
the four developers were presented and it was noticed that Defendant
No 3 had offered the highest percentage of land allocation and that
the proposal submitted was higher. The contents of the draft LOI as
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regards the corporate guarantee was read out to the members. The
minutes record that one of the members Shri Paresh Kokate made a
presentation on Defendant No 3 not conforming to the tender
conditions and the disagreement with the written opinion of the
consultants. The members considered Clause 4 of Section 6 of tender
which permitted the project to be executed through the parent
company. It was also clarified that the registered office of Sattva
Developers was in Bengaluru and not Mumbai and accordingly the
tender has been submitted in name of Defendant No 3, which is
subsidiary company of Sattva Group. It was clarified that during the
financial year 2024-2025 more than 80% shareholding in Defendant No
3 is held by Sattva Group, Mr. Vijay Agarwal.
77. A total of 133 members present in the meeting signified their
assent to the committee’s proposal that while appointing Defendant
No 3 as preferred developer, there was due compliance of tender
qualification criteria and tender guidelines. The other agenda of
seeking opinion of two or more experts as regards the eligibility of
Defendant No 3 was rejected by the majority. The minutes assumes
significance as the contention of Mr. Khandeparkar as regards the
Defendant No 3 not meeting the qualification criteria was discussed
threadbare in the SGBM and a conscious decision was taken by the
majority of members present and voting that Defendant No 3 satisfied
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the tender qualification. The LOI containing the clause of corporate
guarantee was in accordance with the decision taken in the SGBM.
78. In the plaint, there is no pleading about SDPL not being the
parent company of the Defendant No 3 and the only pleading is that
the Defendant No 3 does not meet the registration and financial
criteria and that financials of sister concerns was produced. Before this
Court, extensive arguments are canvassed by Mr. Khandepakar on the
definition of a holding company and subsidiary company under the
Companies Act to contend that SDPL was not the holding company of
Defendant No 3. At the appellate stage, for the first time a new case
cannot be permitted to be canvassed. Mr. Andhyarujina has pointed out
that in the reply affidavit there are specific pleadings about SDPL being
the parent company and there is no rejoinder in rebuttal.
79. The tender was issued by the Defendant No 1 and the terms of
the tender were interpreted by the majority of members to accept the
financial creditworthiness of parent company as satisfying the
qualification criteria. In the SGBM, the majority of members approved
the draft LOI which incorporated the corporate guarantee of SDPL.
Even considering the arguments of Mr. Khandeparkar, the submission
of Mr. Tulzapurkar that there cannot be any strict interpretation of the
holding company and the subsidiary company has substance. What is
required to be considered is whether there are sufficient safeguards in
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place in order to ensure that the development is not impeded and
whether it is the decision of the majority of members. The draft
Development Agreement also incorporates the parent company as a
confirming party, with acceptance of the liability of the Defendant No.
3 in the event of any default. Such course has been approved by the
majority of members and the resolutions bind the Plaintiffs.
80. The members of the Defendant No. 1 Society have, in their
collective wisdom, taken a conscious decision permitting the
Defendant No. 3 to carry out the work of redevelopment. Even
assuming, without accepting, that there has been any deviation from
the tender condition, the tender, has been floated by the Defendant
No. 1 Society, and with the approval of majority of members and in
consonance with the tender condition permitted the Defendant No 3
to execute the development through its parent company, The pre-
qualification criteria required that the consolidated net worth of the
tenderer shall not be less than Rs. 800 crores, which has been accepted
by the majority of members to mean the consolidated net worth of the
parent company along with its subsidiary companies. The project,
which was to be executed by the Defendant No. 3, was backed by the
parent company, which was approved by the SGBM after detailed
discussion.
81. One of the contentions raised is that the project should have
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been bid by the parent company instead of the Defendant No. 3, which
is a Special Purpose Vehicle of the parent company. Mr. Tulzapurkar has
pointed out the condition in the tender which invited tenders from
experienced and reputed builders and developers having registered
offices in Mumbai/Thane for carrying out the work of redevelopment.
It is because of this reason that, in the meeting held to discuss the
Defendant No. 3's eligibility, it was pointed out to the members of the
Defendant No. 3 Company that the registered office of the parent
company is in Bengaluru, and therefore the parent company could not
have bid for the project.
82. In the case of Bengal Secretariat co-operative Land Mortgage
Bank & Housing Society Limited (supra), the Hon'ble Apex Court held,
in paragraphs 53, 54 and 55, as under:
“53. It is not in dispute that the General Body of the Appellant
society, which is supreme, has taken up a conscious decision to
redevelop the administrative building. The General Body of the
Appellant Society has also resolved to appoint the Hi-Rise as the
developer. Those decisions having not been challenged at all, the
Respondent No. 1 being a member of the Appellant Society is
bound by the said decisions. The General Body of the Appellant
Society has approved the terms and conditions of the
development agreement by overwhelming majority.
Merely because the terms and conditions of the development
agreement are not acceptable to the Respondent No. 1, who
could be said to be in minuscule minority cannot be the basis of
not to abide by the decision of the overwhelming majority of the
General Body of the Appellant Society. The redevelopment of
the property is necessitated in view of the fact that the building
is in a dilapidated condition with passage of time. The
redevelopment thus, in our view, would be a requirement and a
necessity and cannot be termed as business. The Appellant
Society in such circumstances did not even require to carry out
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any amendment to the bye-laws or to include the
“redevelopment of the buildings” as one of the objects of the
Society before taking any decision to redevelop its property.
54. By now it is well established position that once a person
becomes a member of the Co-operative Society, he loses his
individuality with the Society and he has no independent rights
except those given to him by the statute and bye-laws. The
member has to speak through the Society or rather the Society
alone can act and speaks for him qua the rights and duties of the
Society as a body (see : Daman Singh v. State of Punjab, reported
in (1985) 2 SCC 670 : AIR 1985 SC 973). This view has been
followed in the subsequent decision of this Court in the case of
State of U.P v. Chheoki Employees Co-operative Society Ltd.,
reported in (1997) 3 SCC 681 : AIR 1997 SC 1413. In this decision,
this Court further observed that the member of a Society has no
independent right qua the Society and it is the Society that is
entitled to represent as the corporate aggregate. This Court also
observed that the stream cannot rise higher than the source.
Suffice it to observe that so long as the Resolutions passed by
the General Body of the Appellant Society are in force and not
overturned by a forum of competent jurisdiction, the said
decisions would bind the Respondent No. 1. He cannot be
permitted to take a stand alone position but is bound by the
majority decision of the General Body. Notably, the Respondent
No. 1 has not challenged the Resolutions passed by the General
Body of the Appellant Society to redevelop the property and
more so, to appoint the Hi-Rise as the Developer to give him all
the redevelopment rights.
55. It was also argued on behalf of the Respondent No. 1 that
the property is in a good condition and there is no need to
redevelop the existing building. In the first place, as noted
earlier, the decision of the General Body of the Society to
redevelop the subject property has not been challenged at all.
Besides, no provision in the Co-operative Societies Act or the
rules or any other legal provision has been brought to our notice
which would curtail the right of the Society to redevelop the
property when the General Body of the Society intends to do so.
Essentially, that is the commercial wisdom of the General Body
of the Society. It is not open to the Court to sit over the said
wisdom of the General Body as an Appellate Authority. Merely
because one single member in minority disapproves of the
decision, that cannot be the basis to negate the decision of the
General Body, unless it is shown that the decision was the
product of fraud or misrepresentation or was opposed to some
statutory prohibition. That is not the grievance made before us.
In the present case, the General Body took a conscious decision
after due deliberations for many years to redevelop its property.
Even with regard to the appointment of the “Hi-Rise” as the
Developer, the record shows that it was decided by the General
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Body of the Society after examining the relative merits of the
proposals received from the developers.”
83. Prima facie the decision of majority of members accepts the
financial creditworthiness of the parent company and resultantly the
Defendant No 3. The appointment of the Defendant No 3 as
preferred developer was taken by the majority of members upon
due deliberation of the issues as regards its negative net worth,
the consideration of the parent company creditworthiness and
informed decision was taken in the SGBM to incorporate the
corporate guarantee of the parent company. These resolutions
are subsisting and have not been overturned by competent court
and would therefore bind the Plaintiffs. There is no challenge to
the resolutions and the validity of resolutions would not be an issue
at trial requiring investigation. Consequently, the issues raised as
regards the ESZ II and satisfaction of pre-qualification by the
Defendant No 3 would not be an issue requiring trial till the
subsistence of resolutions.. This Court cannot substitute its view for
the collective wisdom of majority of members, who have taken a
conscious decision to proceed with the redevelopment project along
with the Defendant No. 3.
84. In the case of Rajesh Mishra & Beena R. Mishra (supra), the
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Hon’ble Division Bench of this Court, in the context of re-development
project noted the contention qua the financial capacity of the
developer and held that the developer enjoys the support of the
society and the resolution of the society in that regard have not been
challenged. It opined that it is not for the Court to go behind the
commercial wisdom of the society, merely because some members in
the minority disapprove of the decision of the general body, unless it is
shown that the decision was the product of fraud or misrepresentation
or opposed to some statutory prohibition.
85. Dealing next with the injunctive reliefs granted against the PMC,
the final relief sought in the plaint was injunction against the
Defendants from acting upon the tender, and the ancillary relief was
sought to restrain the Defendant Nos. 2, 4, 5 and 6 from acting as the
project consultants. In the plaint, the pleading to challenge the
appointment of the PMC is that in the meeting of 20 th July, 2025,
questions were raised regarding the selection, appointment, and
conduct of the PMC, as the PMC, instead of providing the annual
turnover of the Company, had provided the annual turnover of the
group Company, and the decision was taken to obtain legal advice. It is
pleaded that the directives have been issued under Section 79A of the
MCS Act for redevelopment of the properties by way of the G.R. dated
4th July, 2019, which is mandatory. It has been held in the case of
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Devendra Kumar Jain v. State of Maharashtra & Ors8, and Vilas
Vishnu & Another v. State of Maharashtra & Ors. 9 that the 2019 G.R. is
neither mandatory nor a concrete policy. In view of the said position,
even assuming that there is a procedural lapse in appointment of the
PMC, the same does not constitute a violation of the G.R. The
resolution dated 20th July, 2025 is not shown to have culminated into
ouster of the PMC by the SGBM. The ground that is pleaded in the
plaint is that the PMC has submitted the annual turnover of the group
company, which was not the qualification criteria for appointment of
PMC.
86. The G.R. of 4th July 2019 provides standard guidelines in the
context of redevelopment. Three quotations are required to be called
for preparing project report from the PMC and the secretary of the
Society is required to give an appointment letter to the Architect/PMC
selected in the Special General Body Meeting within 30 days from the
date of the meeting, and an agreement is required to be executed. The
Plaintiff has not pleaded as to how the appointment of the PMC is
contrary to the G.R. of 4th July 2019, and there is no challenge to the
agreement of appointment executed with the PMC or the resolution of
2023 appointing the PMC. The agenda of the SGBM to be held on
29th /30th July 2023 records that an email was sent to 4 PMCs calling for
8 Writ Petition (L) No. 7356 of 2025.
9 Writ Petition No. 8732 of 2021
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commercial proposals, which were submitted. The SGBM considered
the commercial proposals received and, in view of the discrepancies in
the commercial proposals, consulted an expert Dr. Vinod Bhanwari.
There was visit to the redevelopment projects undertaken by
Defendant No 2. The detailed information as regards the opinion of Dr.
Bhanwari, discussions held with the PMC, and the site visits, etc., were
presented to the members during the SGBM. The committee
deliberated on various issues and resolved to appoint the Defendant
No. 2 as the PMC of the Society.
87. The flaw in the appointment of the PMC is premised on the
Defendant No 6 Sandeep Isore not being demonstrated to be the
architect of the Bhendi Bazaar cluster redevelopment. The association
of Sandeep Isore with the Bhendi Bazaar cluster redevelopment is
stated to be of a laisoning architect and not principal architect or an
associate architect. The association of Sandeep Isore was deliberated
by the members in SGBM, and resolution was passed appointing the
PMC.
88. In so far as the resolution of 20th July 2025 is concerned, legal
advice was sought, and in August, 2025, the legal advisor opined that
the selection and appointment of PMC was valid. In any event, the
annual turnover of the PMC was never an eligibility criterion, and
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without any challenge either to the resolution or to the agreement, the
interim relief of injunction against the Defendant No. 1 from acting as
PMC could not have been granted. The aspect of the appointment of
the PMC under the agreement dated 7th July, 2025 along with one
Planet E Consultants as PMC is not the pleaded case, and the legal
advice obtained by the Defendant No. 1 opined that the selection and
appointment of the PMC with M/s Planet E Consultant was valid. The
Defendant No 1 being author of the tender, is empowered to take
decisions with approval of majority of members. It is required to be
shown that the deviation, if any, by reason of appointing Planet E
Consultants along with the PMC, is fraud or misrepresentation, and
without any such case being demonstrated no injunction could have
been granted, as there is no resolution of the SGBM ousting the PMC.
89. The Defendant No. 1 Society, through its majority of members,
had entered into an agreement with the PMC, and the Trial Court,
while granting the injunctive relief against the PMC, has not rendered
any finding as to why the appointment of the PMC is flawed. The only
observation is of the objections were raised in the SGBM of 20 th July
2025. The consequence of the objections not having culminated in any
ouster or termination of the PMC was not noticed by the Trial Court.
90. The discussion above would indicate that the Plaintiff has not
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brought any material on record to substantiate a prima facie case of
the suit land being classified as ESZ II under the 2016 notification and
resultantly no prima facie case of suppression or fraud or
misrepresentation is made out requiring trial. In so far as the credit
worthiness of the Defendant No 3 is concerned, the issue of the
Defendant No 3 meeting the tender qualifications was considered
extensively by the members in the SGBM and collective decision was
taken by majority of members that the Defendant No 3 met the tender
qualification and was appointed as preferred developer. The
resolutions are subsisting and would bind the Plaintiffs, who are two
out of 300 members of the Defendant No 1 Society. Without the
resolutions being challenged and binding upon the Plaintiffs, no prima
facie case is made out for trial.
91. In so far as balance of convenience is concerned, the majority of
members of Defendant No 1 Society have taken a conscious decision to
appoint Defendant No 3 as developer and to proceed with the re-
development. The LOI has been issued to Defendant No 3 and the
Defendant No 1 Society represents the majority of members. The
process of re-development commenced in the year 2022 and
substantial efforts and funds have been expended in appointment of
PMC, holding SGBM, and appointment of Defendant No 3 as developer.
The edifice of Plaintiff’s case of loss of better offers as reputed
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developers did not bid due to the ESZ II classification, which was
suppressed by the Defendant No 1 Society, is prima facie not
demonstrated from the record. There were nine reputed developers
who bid for the project under Regulation 33(9) and 33(19) and their
commercial offers were duly considered in the SGBM. The vague plea
of prospect being damaged by suppression of ESZ II is prima facie
found to be without substance. To stop the re-development at this
stage would cause irreparable loss and injury to the majority of
members who are awaiting re-development and the balance of
convenience tilts in the favour of the majority of members of
Defendant No 1 Society.
92. At the appellate stage, the substitution of the Court’s discretion
for that of the Trial Court is an exception, where the discretion of the
Trial Court has been exercised arbitrarily or perversely. The Trial Court
has opined that though the land is Eco Sensitive Zone, the Defendant
No 3 seeks to redevelop residential as well as commercial, without any
discussion on the 2016 notification, which did not prohibit construction
in accordance with the applicable development regulations. The Trial
Court proceeded on the basis that in Eco Sensitive Zone, no commercial
construction is permitted, which finding is perverse as the notification
of 5th December, 2016 does not place any embargo on commercial
construction. The subject land falling under Eco Sensitive Zone is an
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admitted position and no evidence is required to be led on the issue of
construction in Eco Sensitive Zone. The Trial Court factually erred in
holding that there is no disclosure in the tender about the subject land
falling in Eco Sensitive Zone.
93. The Trial Court erred in holding that the Defendant No 3 seeks to
take assistance of the financials of its sister concerns, whereas the
parent company’s creditworthiness was deliberated and accepted by
majority of members in SGBM. As there was no case pleaded about
SDPL not being the parent company of Defendant No 3, there is no
discussion by the Trial Court on the said aspect and it has erroneously
held that assistance of financials of sister concerns is taken by the
Defendant No 3.
94. The Trial Court failed to consider the aspect of irreparable injury
which will be caused to majority of members who are awaiting re-
development and have opted development with Defendant No 3. The
Trial Court ignored that the stalling of re-development at the instance
of two members out of 300 members amounts to over-riding the will of
majority of members, who have signified their assent to re-
development with the Defendant No 3, without any challenge to the
resolutions. The injunction indirectly operates as stay on the
resolutions of the Defendant No 1 Society, which would be within the
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domain of the Co-operative Court under Section 91 of Maharashtra Co-
operative Societies Act, 1960.
95. In light of the above discussion, the Appeals are allowed. The
impugned order dated 25th June, 2026 passed in Notice of Motion
No.1112 of 2026 in S.C. Suit No.594 of 2026 is hereby quashed and set
aside.
96. Interim Applications do not survive for consideration and stand
disposed of.
[SHARMILA U. DESHMUKH, J.]
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