MahaRERA Ends Developer’s Contract, Clears Chembur Society For Self-Redevelopment

Tribunal Orders Refund, Compensation, And Approves Member-Led Redevelopment Plan After Fund Diversion Breach

In a landmark order dated October 9, 2025, the Maharashtra Real Estate Regulatory Authority (MahaRERA) ruled in favor of Anand Nagar Co-operative Housing Society Ltd., Chembur, Mumbai, in marking a major victory for residents pursuing self-redevelopment under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The 42-year-old society had entered into a redevelopment agreement in 2021 with M/s. Reliable Developers for a RERA-registered project promising 72 rehabilitated flats, a ₹3.5 crore corpus fund, and completion by March 2024. However, by mid-2025, only 10% of work was done, rent payments had stopped for 18 months, and the developer had diverted ₹2.8 crore from the project’s escrow account — a serious violation of Section 4(2)(l)(D) of RERA.

Holding deemed conveyance since 2019, the society’s members passed an 88% majority resolution to terminate the contract and pursue self-redevelopment through a licensed contractor and a ₹4 crore bank loan. They approached MahaRERA seeking termination, refund of diverted funds, and approval for their new plan.

The developer attributed delays to market disruptions and alleged lack of consultation with third-party flat buyers, but the tribunal found no merit in these claims.

MahaRERA’s Findings

MahaRERA found repeated breaches of Sections 4, 7, and 19 of RERA by the developer, including fund mismanagement, timeline failures, and rent defaults, all of which caused financial and emotional strain on members.

Citing Siddhivinayak Co-operative Housing Society vs. Horizon Builders (2025), the Authority reaffirmed that fund diversion and prolonged project stagnation justify immediate termination and empower societies — especially those with deemed conveyance — to proceed independently under state-approved self-redevelopment schemes.

The tribunal praised the society’s detailed feasibility plan, third-party audit, and bank funding approval, which satisfied RERA and 2019 Maharashtra GR requirements for self-redevelopment projects.

On the issue of third-party flat buyers, MahaRERA directed the society to honor valid bookings in the new project under RERA supervision, ensuring no rights of genuine purchasers are compromised during the transition.

Orders

1. Agreement Terminated: The redevelopment agreement with M/s. Reliable Developers stands terminated with immediate effect.
2. Refund Ordered: The developer must refund ₹2.8 crore to the society’s RERA account within 45 days.
3. Compensation Awarded: The society will receive ₹5 lakh for rent arrears and member hardship.
4. Self-Redevelopment Approved: The society’s self-redevelopment plan is formally approved, subject to RERA registration and municipal sanctions within 90 days.

Broader Impact

This ruling reaffirms MahaRERA’s proactive role in protecting cooperative housing societies from developer negligence and financial misconduct. By enabling societies with deemed conveyance to directly undertake redevelopment, it accelerates resident-led renewal across Mumbai’s aging housing stock.

Experts say this order sets a strong precedent for transparency and accountability in stalled projects while maintaining a balance between member rights and third-party buyer protections. It also illustrates the increasing confidence in self-redevelopment models, now critical for over 20,000 old societies in Mumbai seeking control over their future.

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