Godrej May Face Perjury, Forgery and Massive Damages Action as the order restoring development rights was passed with the consent of the society members and was not opposed by the Brihanmumbai Municipal Corporation (BMC), despite being a party respondent in the proceedings.
The outcome places society members in a double-benefit position: the Godrej-built flats will be handed over through East & West Developers along with additional benefits promised by East & West.
Godrej emerges as a significant loser — not only having lost the project entirely, but also being disentitled from claiming any compensation or damages, owing entirely to its own conduct? A significant lesson for real estate giants.
Discussions indicate that the proposed perjury and forgery proceedings against certain society members, along with the earlier prosecution ordered by the Bombay High Court against office-bearers of Godrej Boyce for similar offences, compelled them to withdraw support from Godrej and consent to restoration of the development rights of East & West Developers in the multi-billion-rupee Wadala project.
By Ayush Tiwari :-
( As a final-year law student closely associated with some society members, I had the benefit of verifying the case papers, personally watching court hearings, and interacting with society members on the subject. This article attempts to cover all the factual and legal issues and doubts which may have arisen in the minds of society members, law students, junior advocates, the real estate community, and the common man. )
Mumbai: In a major development in the Wadala redevelopment dispute, the Bombay High Court has ordered restoration of status quo ante, placing East & West Developers back in the position they held prior to 23.01.2020. The order restores their original development rights while Godrej Developers whose entry was based on later orders effectively stands removed from the project.
The BMC had terminated the development rights of East & West Developers by order dated 26.02.2020, including the LOI, Tripartite Agreements and Deed of Confirmation, pursuant to the Court’s order dated 13.02.2020. Thereafter, Godrej was granted conditional permission on 05.11.2020. With the restoration of the position prior to 23.01.2020, the original development rights of East & West Developers stand revived.
Apart from the merits of the dispute, the claim of East & West Developers seeking restoration to the position prior to 23.01.2020 was expressly consented to by the Society members and was also not opposed (conceded) by the Brihanmumbai Municipal Corporation (BMC) — a statutory respondent that had been specifically directed by the Division Bench of the High Court to file its reply.
Consequently, the High Court’s order restoring the earlier position operates as a conclusive restoration of the development rights of East & West Developers, leaving little scope for anyone to raise any claim or challenge against the said order.
The order effectively reverses the present position and reinstates the rights of the original developer, placing Godrej in a severely disadvantaged position. Law declared by the Supreme Court which is applicable to this case indicate that the Godrej company may not even be entitled to claim compensation or damages for the investments it claims to have made in the project — and for good reason because the permission granted by the Bombay Municipal Corporation was expressly conditional, specifically noting that it was subject to the outcome of the pending proceedings before the High Court. With full knowledge of this conditionality, Godrej assumed the risk and invested approximately ₹1,000 crores in the project.
The Supreme Court has authoritatively settled this position of law. In M.I. Builders Pvt. Ltd. v. Radhey Shyam Sahu, (1999) 6 SCC 464, and in other landmark judgments, the Court has ruled that in such a situation, an interloping builder cannot subsequently seek protection merely because a substantial portion of construction has been completed. Accordingly, where the lawful development rights stand restored, the constructed structure cannot confer any legal advantage upon the unauthorized or interloping builder. In such circumstances, the structure effectively stands at the absolute will and discretion of the rightful developer — East & West Developers — who may either utilise the existing construction or demolish it, as they deem appropriate.
Background of the case :-
- East & West Developers undertook the redevelopment of land admeasuring approximately 8.5 acres belonging to the Municipal Corporation of Greater Mumbai (MCGM), comprising nearly 300 tenements of Azad Nagar Cooperative Housing Society. In the course of the project, East & West invested more than ₹123 crores, including substantial payments towards rent, rehabilitation obligations, and project-related expenses.
- Despite these substantial financial commitments and compliance with redevelopment obligations, several tenants failed to vacate the premises while continuing to receive and claim rent from the developer, thereby causing serious delays and prejudice to the project.
- In Suit No. 2160 of 2009, filed by 32 tenants seeking directions for payment of rent, the parties eventually arrived at an amicable settlement and consent terms were recorded before the High Court.
- By order dated 11.03.2015, the learned Single Judge Justice K.R. Shriram disposed of the suit in terms of the said consent terms.
- Under the consent decree, the society members were bound to hand over physical possession of their premises by 30.04.2015.
- However, the members of Azad Nagar Cooperative Housing Society failed to perform their obligations under the consent decree and did not hand over possession. Instead, while continuing to occupy the premises, they filed Contempt Petition No. 38 of 2017 alleging non-compliance by East & West Developers.
- In the said contempt proceedings, the High Court by order dated 14.02.2018 observed that the contempt petition was liable to be dismissed with costs, noting that payment of rent was conditional upon the society members vacating the premises and handing over possession. However, the society members themselves had failed to hand over possession as required under the consent decree and, despite themselves being at fault, were seeking contempt action against the East and West Developer.
- However, the society members subsequently misled the Court and distorted the factual and legal position, resulting in further proceedings and, in the same Contempt Petition No. 38 of 2017, by order dated 28.08.2018, the learned Single Judge took the proceedings in an entirely different direction and began adjudicating issues which were beyond the contempt jurisdiction.
- The order dated 28.08.2018, going far beyond the original consent decree dated 11.03.2015, introduced a drastic coercive mechanism by directing statutory authorities such as SRA and MCGM to terminate the development permissions of East & West Developers upon a single alleged default without issuing any show-cause notice.
- These directions effectively usurped the jurisdiction of the municipal authorities and bypassed the statutory procedure under the MRTP Act, which governs termination of development rights.
- It is well settled that contempt jurisdiction cannot be used to grant substantive relief or directions beyond the scope of the original order or decree, as repeatedly held by the Supreme Court in Arumugam v. V. Balakrishnan, (2019) 18 SCC 150, and Gostho Behari Das v. Dipak Kumar Sanyal, (2023) 20 SCC 158.
- On the basis of these settled legal principles, East & West Developers challenged the order of the Single Judge before the Division Bench of the Bombay High Court.
- Meanwhile, the society members joined hands with Godrej and, relying upon the orders passed in the contempt proceedings, filed another contempt application which resulted in an order dated 23.01.2020 issuing contempt notice against East & West Developers.
- Thereafter, by order dated 13.02.2020, the Court directed BMC to cancel the development permissions of East & West Developers.
- These orders were also challenged before the Division Bench.
- During the pendency of the appeal, Godrej and certain society members approached BMC seeking permission for redevelopment through Godrej as the new developer.
- The BMC adopted a cautious approach and by its conditional approval dated 05.11.2020 clearly recorded that any permission granted would remain subject to the final outcome of the proceedings pending before the High Court.
- In such circumstances, the proper course for Godrej was either to await the outcome of the litigation or seek an expeditious judicial determination.
- However, instead of doing so, Godrej proceeded to invest nearly ₹1000 crores and constructed several towers, despite being fully aware that the matter was sub judice and that its permissions were conditional.
- In legal parlance, such conduct is described by the Supreme Court as “working at one’s own risk,” meaning that the party proceeds with construction fully aware that the outcome of the litigation may render the investment legally unenforceable.
- Updates of Appeal:- 09 March 2026 Hearing: Bombay High Court Division Bench Questions and Directs Counsel for Azad Nagar Co-operative Housing Society
- The Hon’ble Division Bench observed that the submissions made by Adv. Nilesh Ojha appear prima facie lawful, and that the impugned orders appear beyond the scope of contempt jurisdiction. The Bench, headed by Hon’ble Justice Suman Shyam, also noted that a similar legal position had been recognized earlier in Yogesh Prakash Kela v. High Court on its Own Motion, 2025:BHC-OS:26102, where the Court had set aside the order passed by the learned Single Judge.
- The Bench further indicated that the orders passed by the learned Single Judge do not stand judicial scrutiny as it is directly against the binding precedents of the Supreme Court.
- The main order dated 11.03.2015 clearly records that a consent decree was passed. Therefore, a contempt petition is not maintainable, and the proper remedy is enforcement through execution proceedings under Order 21 Rule 32 CPC, not contempt jurisdiction.
[ Note :- In this regard, reliance was placed by Adv. Nilesh Ojha on Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307, where the Hon’ble Supreme Court held that once the foundation of such proceedings fails, all consequential proceedings must fall. The Court held:
“39. … as the application …. itself was not maintainable all subsequent proceedings remained inconsequential. The legal maxim sublato fundamento cadit opus (when the foundation is removed, the structure falls) applies.”]
- The Bench clearly indicated that the contempt court cannot pass any order beyond the Consent Terms and decree dated 11.03.2015.
- Further, the order does not record that what was the actual disobedience and whether the alleged disobedience was wilful and deliberate, which is an essential requirement, since only wilful disobedience is actionable under contempt law.
- The Division Bench made it clear to Adv. Karl Tamboli, counsel for the Society, that instead of the Division Bench passing a detailed order, he may take instructions from the Society members as to whether they wish to consent to setting aside the impugned orders and all consequential actions based on them, failing which the Bench would proceed to pass a detailed order.
- For this purpose, Society’s counsel Adv. Karl Tamboli and Mr. Ravi Gandhi sought time until 12.03.2026 for taking permissions from the society members.
- View of the Society Members: After hearing the observations of the Court, intense discussions started taking place among the members. Many members have reportedly conveyed to the society’s executive committee that they will support the course of law and justice, which according to them lies with East & West Developers, and that they are unwilling to support any wrong and unlawful stand either by certain society members or by Godrej, which prima facie appears to be at fault.
- The earlier prosecution ordered by a Division Bench of the Bombay High Court against officials of Godrej Boyce in a serious case involving fraud upon the High Court by doing forgery and perjury :- Godrej and Boyce Manufacturing Co. Pvt. Ltd. The Union of India 1992 CRI. L. J. 3752–
- The earlier prosecution ordered by a Division Bench of the Bombay High Court against officials of Godrej Boyce in a serious case involving fraud upon the High Court has also become a subject of extensive discussion among the members and their legal advisors. In that case, the Division Bench had made severe observations regarding the dishonest and fraudulent conduct of Godrej Boyce, imposed costs, and directed criminal prosecution against the responsible directors for allegedly creating forged documents and using them as genuine before the High Court.
- Legal advisors have reportedly cautioned some society members that if any forged or fabricated resolution is created, or if the lawful claim of East & West Developers is opposed by relying upon false records or positions contrary to binding judicial precedents, such conduct may attract serious criminal consequences. Offences relating to false evidence and fabrication of documents may attract liability under Sections 192, 193, 199, and 200 of the IPC. Further, if forged resolutions or fabricated documents are used before a court in order to wrongfully secure control over property or a development project, such acts may also fall within the ambit of Section 467 IPC, which carries punishment up to imprisonment for life.
- The legal position is well settled that members of a society cannot easily escape responsibility unless they demonstrate that they opposed the impugned resolutions in the meetings and protested against any unlawful acts. In the absence of such protest, members may also become liable under Sections 107 and 120B of the IPC for abetment and criminal conspiracy arising from illegal omission or failure to prevent the commission of an offence. In appropriate cases, such allegations may also result in criminal investigation and custodial interrogation. (See: Rajendra Ramdas Chaudhari v. State of Maharashtra, MANU/MH/0111/2009; Raman Lal v. State, 2001 Cri LJ 800.).
- Courts have consistently held that a litigant who approaches the Court without clean hands is liable to have the proceedings dismissed at any stage. Advocates assisting in false or frivolous claims may also face consequences. The Court would fail in its duty if such conduct is tolerated. Such litigants pose a serious threat to the administration of justice, and permitting them to escape consequences only encourages wrongdoing and spreads social pollution. Such conduct is impermissible in law and persons indulging in it may face strict legal consequences, including prosecution and imprisonment in appropriate cases. (See: Walmark Holdings Limited v. Fortis Healthcare Limited, 2026 DHC 515; Ashok Kumar Saraogi v. State of Maharashtra, 2016 ALL MR (Cri) 3400; ABCD v. Union of India, (2020) 2 SCC 52; Sundar Vis v. State, 2023 SCC OnLine SC 310; State v. Mangesh, 2020 SCC OnLine Bom 672; Naveen Singh v. State of U.P., (2021) 6 SCC 191; Sushil Ansal v. State (NCT of Delhi), 2022 SCC OnLine Del 482; Dilip v. State of Gujarat, 2011 SCC OnLine Guj 7522; Prominent Hotels v. New Delhi Municipal Corporation, 2015 SCC OnLine Del 11910; Hindustan Organic Chemicals Ltd. v. ICI India Ltd., 2017 SCC OnLine Bom 74; Sajid Khan Moyal v. State of Rajasthan, 2014 SCC OnLine Raj 1450; Kusha Duruka v. State of Odisha, (2024) 4 SCC 432; Ahmad Asrab Vakil, 1926 SCC OnLine All 45; H.S. Bedi v. NHAI, 2016 SCC OnLine Del 432; P.V.R.S. Manikumar v. Krishna Reddy, 1999 SCC OnLine Mad 107; Ranbir Singh v. State, 1990 SCC OnLine Del 40; Silloo Danjishaw Mistri, 2016 SCC OnLine Bom 3180; Baduvan Kunhi v. K.M. Abdulla, 2016 SCC OnLine Ker 23602; Lal Bahadur Gautam v. State of U.P., (2019) 6 SCC 441; Heena Nikhil Dharia v. Kokilaben K. Nayak, 2016 SCC OnLine Bom 9859.).
- Wisdom prevailed over Society members and they took collective decision to give their consent for setting aside the order dated 23.01.2020 passed by the learned Single Judge : –
- After the above discussions and deliberations, wisdom prevailed among the society members and they collectively decided to give their consent for setting aside the order dated 23.01.2020 passed by the learned Single Judge, along with all consequential actions and orders arising from the said order.
- Accordingly, on 12.03.2026, Azad Nagar Co-operative Housing Society formally conveyed its consent for setting aside the order dated 23.01.2020 and all consequential actions taken pursuant to it.
- Based on this consent, the Hon’ble Division Bench of the Bombay High Court passed an order on dated 12.03.2026 setting aside the impugned order dated 23.01.2020 passed by the Single Judge order and restoring the earlier position.
- The Respondent BMC have not taken any objection for allowing the prayer and hence the East and West developer are restored to their position before 23.01.2020.
Download the order dated 12.03.2026 passed by the Division Bench.
