Court Protects Attached Flat but Rejects Bank Guarantee Demand, Clearing the Way for Redevelopment
🏢 A Major Relief for Housing Society Redevelopment
The Bombay High Court has directed the Enforcement Directorate (ED) to issue a No-Objection Certificate (NOC) within six weeks for the redevelopment of a 44-year-old housing society in Mumbai. The decision came in a case involving Antaral Co-operative Housing Society, where redevelopment had been delayed because one of its flats was attached by the ED in connection with an alleged money-laundering case.
⚖️ Why Was the Redevelopment Stuck?
The society comprises 10 flats and 12 members. Its building, which is more than 44 years old, reportedly lacks modern safety facilities and a lift, making it unsuitable and unsafe for occupation. Several senior citizens are also among the affected residents.
The ED had attached Flat No. 4 in 2013 under the Prevention of Money Laundering Act (PMLA). When the society approached the agency for permission to proceed with redevelopment, its request was rejected on September 2, 2025, as the flat remained under attachment and was in the custody of the Special Court.
📑 Society Assures Protection of ED's Rights
Before the High Court, the society clarified that it was not challenging the attachment or seeking to dilute the ED's rights over the property. Instead, it proposed safeguards to ensure that the agency's interests would remain protected throughout redevelopment.
The society undertook that the replacement flat allotted after redevelopment would continue to remain subject to the ED's attachment. The details of the attachment would also be clearly mentioned in the Development Agreement and Permanent Alternate Accommodation Agreement (PAAA).
💰 Financial Benefits to Be Safeguarded
The society further assured the court that all financial benefits arising from the attached flat, including transit rent, corpus fund and hardship compensation, would be deposited into a separate account designated by the ED. These amounts would not be handed over to the person accused in the money-laundering proceedings.
The society also agreed to hand over possession of the replacement flat to the ED after completion of the redeveloped building and issuance of the Occupation Certificate.
🏛️ High Court Rejects Bank Guarantee Requirement
During the proceedings, the ED insisted that the society furnish a bank guarantee before the existing attached flat could be demolished. The guarantee was intended to secure the delivery of the replacement flat.
However, the Bombay High Court rejected this demand, observing that requiring a bank guarantee would place unnecessary financial pressure on the society, particularly when the developer and redevelopment terms had not yet been finalised. The court also noted that only one flat in the society was under attachment.
✅ ED Directed to Issue NOC Within Six Weeks
In its order dated October 13, 2026, the Bombay High Court directed the ED to issue the NOC within six weeks, subject to the safeguards provided by the society. The court further instructed the society and its appointed developer to keep the ED involved while preparing the Development Agreement and PAAA. The relevant documents must be vetted by the ED specifically in relation to Flat No. 4.
What Does This Mean for Housing Societies?
The judgment highlights that the attachment of an individual flat does not necessarily have to bring an entire housing society's redevelopment to a standstill. Where adequate safeguards are provided to protect the interests of the investigating agency, redevelopment may be allowed to proceed without imposing an unreasonable financial burden on the society.
For housing societies facing similar redevelopment obstacles, the ruling highlights the importance of transparent documentation, legal safeguards and cooperation with concerned authorities while protecting residents' safety and redevelopment interests.
Source:
🏢Bombay High Court Directs ED to Issue NOC for Redevelopment of 44-Year-Old Mumbai Housing Society