MREAT Upholds Society’s Right to Self-Redevelopment After Developer Default

Minority Objections Rejected; Tribunal Backs Resident-Led Redevelopment Post-Deemed Conveyance

In a significant boost to resident-led redevelopment in Mumbai, the Maharashtra Real Estate Appellate Tribunal (MREAT) has upheld the decision of Om Shanti Co-operative Housing Society Ltd. in Vile Parle to terminate its developer and proceed with self-redevelopment following persistent project delays and financial breaches. The order, passed on October 15, 2025, in dismisses the appeal filed by a minority group of 12 members challenging the move.

The society, a 45-year-old cooperative, had secured deemed conveyance in 2020 under MOFA Section 11 after the promoter’s long default. In 2022, it signed a redevelopment agreement with M/s. Blue Horizon Developers with 82% member consent, promising rehab flats, ₹2.5 crore corpus, and a 32-month deadline. However, by mid-2025, only 10% of work was done, and the developer defaulted on ₹60 lakh in rent payments and failed to comply with RERA escrow requirements. With 80% majority approval, the society terminated the contract and opted for self-redevelopment, backed by a ₹14 crore bank loan secured against its conveyed title.

The minority members, representing 18% of the society, contested the move before MahaRERA, claiming inadequate consultation and financial risk. MahaRERA rejected the plea, prompting the appeal to MREAT.

MREAT, however, sided firmly with the society. Citing RERA Section 7(1)(a) and the 2019 Maharashtra Self-Redevelopment Guidelines, the tribunal noted that termination for non-performance with majority consent is legally sound. The ruling referenced Neelkamal Realtors vs. RERA (2024) and Shiv Shakti Co-operative Housing Society (Supreme Court, 2025), reinforcing that deemed conveyance empowers societies as landowners, giving them autonomy to redevelop without developer interference.

The tribunal clarified that minority objections cannot override majority will unless fraud or material prejudice is proven. Concerns about financial viability were found “speculative,” as the society’s bank-approved plan and RERA oversight ensured accountability.

Instead of overturning the project, MREAT introduced safeguards to protect minority interests:

Appointment of an independent project management consultant within 30 days.
Quarterly progress reports to both RERA and minority members.
Refund of ₹1.8 crore escrow shortfall and ₹60 lakh rent arrears by the developer within 60 days, with 10% interest for delays.
₹1 lakh cost imposed on minority appellants, payable to the society.

This order fortifies the legal legitimacy of self-redevelopment in Maharashtra, sending a strong message that developer non-performance cannot paralyze collective resident action. It offers a pragmatic framework for 3,500+ Mumbai societies grappling with internal dissent and stalled projects, emphasizing transparency, majority democracy, and structured oversight.