Land Lord can terminate Development Agreement : Bombay High Court

By Legal Bureau

In a case Chaurangi Builder v MADC Hon Bombay High Court had decided that Land Lord can terminate Development Agreement. The hon Court held that if Builder Stops construction and not willing to start it soon then the Landlord can terminate the development Agreement. Since the Agreement is in the nature of License and no reasonable time is seen to restart, the agreement can be terminated.

The Hon Court further held that it is not necessary to have termination clause in the development agreement. The default of builder is sufficient enough to terminate the agreement.

The affect of the judgement will be huge on society redevelopment agreement and builders are sleeping over such projects even after four to five years of demolishing the society building. Normally when the plans are passed and first CC is received, builder ask society to vacate. After giving rent for 18 months, builders then do not comply with Development Agreement and take an excuse of plan not passed or there are government NOC delays etc. These anomalies are subject of dispute and builder fails to start construction work. Hundreds of such society will feel relief with such good judgement.

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