The order in A.O. No. 89 of 2025, passed by Member-2 A.S. Wanve, upholds the 31 October 2025 decision of Co-operative Court No. IV, Mumbai, which had rejected the member’s interim injunction application.

The ₹21 lakh bill that triggered the case

Akshay Agarwal, member of Mayfair Marvel Co-operative Housing Society Ltd. at Ahinsa Marg, off Chincholi Bunder Road, holds Flat A-203. In his dispute he said two bills changed the fight from a routine society quarrel into a high-stakes recovery:

• Bill dated 1 April 2024 (April–June 2024): ₹20,34,511
• Bill dated 10 July 2024 (July–September 2024): ₹21,79,825

Those figures, he said, bundled legal charges of ₹1,28,784 and continuing, cumulative encroachment penalties of ₹18,98,270 and continuing, and delayed interest of ₹1,34,891 and continuing.

He told the court he bought the flat in January 2010 with a 100 sq.ft. terrace that the previous owner had already taken from the developer in April 2007. He claimed he made no alteration, that the society raised no objection for about 15 years, and that copies of the resolutions levying legal costs and penalties were never given to him. He also said there was no BMC inspection or demolition order.

The interim prayer was narrow on paper but wide in effect: restrain the society, pending the dispute, from levying further legal expenses, court fees, advocate fees, encroachment penalty and interest in his monthly maintenance bill.

What the society told the court

Mayfair Marvel CHS said the amounts were not arbitrary. It relied on Bye-law 169(a), under which it said it could charge a penalty equal to five times the maintenance charges for encroachment. Penal action, it said, was approved in the Annual General Meeting of 27 March 2022. A managing committee meeting of 3 February 2024 was also cited in connection with charging the penalty.

The society’s allegations went beyond a closed terrace. It said the member had made structural changes in the balcony and adjacent structure, covered staircase landing used as an emergency fire evacuation route, covered the 100 sq.ft. open area meant to remain open, built a side wall, changed the building elevation, and installed a metal grill that obstructed common space and created a safety hazard. Legal notices dated 20 December 2022 and 15 March 2024 asked him to remove the alleged encroachments. He did not, the society said.

The point both courts treated as fatal

The Appellate Court accepted that the member had pleaded that the resolutions and the billing were illegal. The problem was the relief column.

In the main dispute he had not prayed to set aside the AGM resolution of 27 March 2022 or the managing committee resolution of 3 February 2024. In the interim application he had not asked for a stay of those resolutions either. The injunction sought was a general restraint on future levies.

Once the society placed the resolutions on record in the trial court, the Appellate Court said the member was expected to challenge them after gaining knowledge of them. Counsel submitted that an amendment to incorporate pleadings and prayers against the resolutions was in process. That amendment had not been carried out when the appeal was heard.

The trial court had already held that the society was debiting penalty and legal charges on the basis of the 27 March 2022 resolution, that the member had not specifically challenged that resolution, that the interim pleadings and prayers were vague, and that a blanket injunction on a future event could not be granted without challenging the maintenance bill and the parent resolutions.

The Appellate Court agreed. It called the interim relief “vague in nature” and held that such a blanket injunction cannot be granted while the resolutions stand unchallenged and unstayed.

Why the three injunction tests went against the member

The member relied on the Supreme Court ruling in Dalpat Kumar v. Prahlad Singh (1992), which restates the three tests: prima facie case, irreparable injury if the injunction is refused, and balance of convenience.

The Appellate Court said the principle is binding but did not help him on these facts. Penalty and legal charges were being recovered on the strength of AGM and committee resolutions that he had not asked the court to set aside or stay. On that pleading, it answered:

• Prima facie case — no
• Balance of convenience — not in the member’s favour
• Irreparable loss if stay is refused — no
• Whether the trial court order was in accordance with law — yes
• Whether interference was required — no

The appeal was dismissed with costs.

What this order does not decide

The Appellate Court has not given a final finding on whether Agarwal actually encroached, whether the 100 sq.ft. terrace sold with the flat in 2007/2010 was always meant to stay open, whether Bye-law 169(a) was correctly applied, whether five-times maintenance as a running penalty is sustainable, whether similar alleged encroachments by office-bearers were ignored, or whether the absence of a BMC order is decisive.

Those issues remain for the main dispute before the Co-operative Court, after evidence, and after any amendment of the dispute to put the resolutions themselves in issue.

The only holding at this stage is procedural and interim: a member who wants to stop further penalty and legal-cost recoveries through maintenance bills must, as a rule, challenge and seek stay of the AGM/committee resolutions that created those charges. Suing only the bill entries is treated as incomplete.

Why the “challenge the AGM” lesson matters for other societies

Mumbai housing societies routinely fight enclosed balconies, terraces, grills on landings and elevation changes. Members equally routinely receive sudden, large “penalty plus legal cost” bills years after the structure has stood.

This order tells both sides how the Co-operative Court and the Appellate Court are likely to treat the first hearing.

For members: if the society produces an AGM resolution under Bye-law 169(a), the court will often treat that resolution as the source of the charge. Unless that resolution is specifically attacked and stayed, a request to freeze future bills can be called a blanket and vague injunction.

For managing committees: an AGM resolution plus the bye-law, coupled with notices to remove alleged encroachment, gave this society a strong interim shield. The court did not require a BMC demolition order before allowing the society to continue debiting the disputed amounts at the stay stage.

The amounts will keep running unless the member now amends the dispute, puts the 27 March 2022 AGM and 3 February 2024 committee resolutions under challenge, and obtains a stay of those resolutions. Until then, the society’s bills are not frozen.

Also Read: Unhappy with allotted flats after redevelopment? Members can sue society in Co-op Court

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