In a detailed judgment, the Bombay High Court has ruled that third-party flat purchasers in a Kurla (East) redevelopment project cannot claim any rights against the housing society or its new developer once the original developer’s appointment has been validly terminated.
Justice Kamal Khata delivered the verdict on November 4, 2025, while dismissing multiple appeals filed by Satish Inamdar and Swapna Inamdar, who had purchased flats in a redevelopment project at Nehru Nagar, Kurla (East), initiated by developer Amogh Sawant.
Background of the Case
The case revolved around redevelopment of a MHADA-leased plot (Survey No. 229 & 267, CTS No. 6 part) belonging to Nehru Nagar Vidyut Vilas Co-operative Housing Society Ltd. The Society had earlier appointed Amogh Sawant, sole proprietor of M/s Adit Enterprises, as its developer under a 2008 development agreement.
Over time, several third-party buyers entered into agreements, MoUs, or allotment letters with Sawant for the free-sale flats in the project. However, in 2015, the Society terminated his development rights and subsequently appointed Kabra Infrastructure and Developers LLP as the new developer. The arbitration award in 2022 upheld the termination and dismissed Sawant’s counterclaim.
The flat purchasers then approached the court, arguing that they had paid substantial amounts and held valid sale agreements executed when the earlier development agreement and power of attorney were still in force. They sought to restrain the Society and the new developer from demolishing or constructing the building without recognizing their rights.
Court’s Findings
Justice Khata observed that the question before the Court was whether third-party purchasers could assert rights through a developer whose appointment was lawfully terminated.
The Court held that the issue was no longer res integra and had been settled through a series of prior judgments including:
- Vaidehi Akash Housing Pvt. Ltd. vs. D.N. Nagar CHS Union Ltd. (2014)
- Goregaon Pearl CHS vs. Dr. Seema Mahadev Paryekar (2019)
- Deepak Prabhakar Thakoor vs. MHADA (2023)
- Kapilkunj CHS vs. State of Maharashtra (2023)
- Tuvin Constructions LLP vs. State of Maharashtra (2025)
All these cases reaffirmed that once a society terminates a development agreement, flat purchasers claiming through that developer lose all derivative rights. The Society cannot be treated as a “promoter” under the Maharashtra Ownership Flats Act (MOFA), nor can the new developer be held liable for sales made by the terminated developer.
The Court clarified that such buyers’ remedies, if any, lie only against the erstwhile developer, not the Society or the new developer.
Key Legal Principles Highlighted
- No Privity of Contract: Purchasers of flats through the terminated developer have no direct contractual relationship with the Society.
- Society Not a Promoter: As the landowner, the Society cannot be saddled with statutory promoter obligations under MOFA.
- Developer’s Termination Valid: Once the arbitration award upholding the termination becomes final, it binds all parties claiming through that developer.
- Buyers’ Remedies Limited to Damages: The only legal recourse available to such buyers is to seek damages or recovery from the original developer.
Conclusion
The Bombay High Court reaffirmed that homebuyers purchasing from a developer whose contract is later terminated cannot claim rights in the Society’s property. The Court emphasized that redevelopment primarily exists to rehabilitate society members and cannot be obstructed by third-party claims arising from the terminated developer’s actions.
Also Read: Renewal of Lease = New Lease, Attracts Stamp Duty Bombay High Court
