The Bombay High Court has cleared the way for the redevelopment of the Kher Nagar Sukhsadan Co-operative Housing Society in Bandra (East), ending a 19-year-long deadlock. The court directed the Maharashtra Housing and Area Development Authority (MHADA) and other relevant bodies to grant the necessary permissions to Tristar Development, the new developer appointed for the project.
The high court’s decision comes after years of legal entanglements involving the previous developer, AA Estates Private Limited, a company of the RNA Group. The society’s rights to terminate the development agreement (DA) with AA Estates were upheld by the court, following the developer’s failure to initiate the redevelopment process, despite holding these rights since 2005. The dispute began when the society, facing dilapidation, entered into a DA with AA Estates on October 16, 2005. The agreement granted redevelopment rights to the developer, but over the next seven years, AA Estates made no substantial progress beyond obtaining a no-objection certificate (NOC) from MHADA in January 2012. Frustrated by the developer’s inaction, the society terminated the agreement on June 9, 2019.
Complicating matters, AA Estates entered the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, following an order from the National Company Law Tribunal (NCLT), Mumbai Bench, in November 2019. During this period, the Interim Resolution Professional appointed for AA Estates issued a moratorium notice to prevent any coercive action against the developer. However, the NCLT vacated this moratorium in June 2020. Despite this, AA Estates requested the society to rescind the termination, which the society refused, leading to further arbitration that proved unsuccessful for AA Estates.
Amidst these disputes, the society appointed Tristar Development as the new developer on November 7, 2021, following a series of proposals and deliberations. Tristar committed approximately Rs 11.80 crore towards the redevelopment project. However, in December 2022, the NCLT reinstated a Resolution Professional for AA Estates, who promptly requested MHADA and other authorities to withhold redevelopment permissions, prompting the society to seek relief from the Bombay High Court. A bench comprising Justices M.S. Sonak and Kamal Khata expressed concerns over the impasse faced by the society, attributing it to the “infamous RNA Group company AA Estates Private Limited.
” The court underscored that AA Estates had failed to fulfil its obligations under the DA and that the redevelopment rights of the society were not considered an asset of AA Estates under the CIRP. The court declared the actions taken by the resolution professional, including letters sent to MHADA, as “ex-facie illegal.” The court noted that the members of the housing society should not be deprived of their fundamental right to shelter and ordered the authorities to grant the necessary permissions to Tristar Development for the redevelopment. This landmark decision marks the end of nearly two decades of delay and legal hurdles, paving the way for a much-needed transformation of the Bandra society. The decision provides a much-needed resolution for the residents of Kher Nagar Sukhsadan Co-operative Housing Society, who have been waiting nearly two decades for the redevelopment of their homes.
