📖 View in Flipbook All editions
DEVELOPER CANNOT RESILE AFTER TAKING POSSESSION: SUPREME COURT
In Mahabanoo Contractor and Anr. v. M/s Kalikund Developers and Ors. (2026 INSC 737), decided 23 July 2026, the Supreme Court has restored MHADA's power to enforce a developer's redevelopment obligations — a ruling with direct relevance for MMR societies negotiating PAAAs with private developers. The appellants, occupants of a cessed building redeveloped under MHADA's framework, held a Permanent Alternate Accommodation Agreement (PAAA) dated 17 October 2019 for three flats. After the developer, M/s Kalikund Developers, took possession of the old premises for redevelopment, it did not hand over the promised flats, citing a reduction in sanctioned floors from 34 to 30 and disputing the appellants' occupant status. MHADA had passed orders on 28 May 2025 and 27 June 2025 directing the developer to execute the PAAA and hand over possession, followed by a show-cause notice on 10 July 2025 for non-compliance, threatening action under Section 91A of the MHAD Act. The developer challenged these orders before the Bombay High Court instead of complying. The Bombay High Court had restrained MHADA from taking coercive action against the developer, holding the PAAA to be a private arrangement outside writ jurisdiction, and left the parties to a civil suit — one that did not exist at the time and which the developer filed only on 6 February 2026, after the High Court's judgment. A bench of Justices J.B. Pardiwala and K. Vinod Chandran set aside the High Court's judgment, holding the PAAA to be a statutory arrangement under the MHAD Act, 1976 and Development Control Regulations — not a private contract. The developer was directed to execute the PAAA and hand over possession of the three flats within two months, failing which the appellants would be entitled to damages at monthly rental value, besides damages for delay already caused. Costs of Rs 50,000 each were awarded at both court levels, and the pending civil suit was directed not to be proceeded with.
React
Comments (0)