Bombay HC directs ED to issue redevelopment NOC despite attachment of one society flat

A Division Bench of the Bombay High Court, comprising Justices Bharati Dangre and Ashish S. Chavan, on 13 October directed the Enforcement Directorate (ED) to issue a no-objection certificate (NOC) in favour of Antaral Co-operative Housing Society within six weeks. The society had been unable to proceed with redevelopment because one flat in its building was attached under the Prevention of Money Laundering Act (PMLA).

Background of the case

The society's building is over 44 years old. Flat No. 4 was provisionally attached by ED on 28 February 2013, and the attachment was confirmed on 27 August 2013. When the society sought an NOC for redevelopment, ED rejected the request on 2 September 2025, citing the attachment. The society then approached the High Court through a writ petition. Related PMLA proceedings are pending before a Special Court in Ranchi.

What the court ordered

The court accepted the society's undertaking dated 24 September 2026 and its affidavit, and noted that only one flat in the building is attached. It allowed the petition on the following terms, as reported.

• The replacement flat given in place of Flat No. 4 remains subject to the attachment, and this must be recorded in the development agreement and the Permanent Alternate Accommodation Agreement (the document that fixes what each member receives in the new building).
• All rent, compensation and other monetary benefits for the attached flat must be paid only into an account designated by ED, and nothing may be paid to the accused.
• The court rejected ED's suggestion that the society furnish a bank guarantee before handing over the flat for demolition, observing that the society should not be put under financial pressure while the developer is not yet appointed and terms are not finalised.
• ED must place the society's affidavit and the High Court's order before the Special Court in Ranchi.

What this means for housing societies

Societies in which a single member's flat is attached by an investigating agency are not necessarily barred from redevelopment. The ruling indicates that courts may allow redevelopment to go ahead if the society gives clear undertakings that the attached flat's replacement and any related payments stay protected. Managing committees in such a position should keep these points in mind.

• Check whether any flat in the building is under attachment or litigation before finalising a developer and draft agreements.
• Draft the development agreement so that the replacement for an attached flat is expressly marked as attached.
• Be prepared to give a formal undertaking or affidavit, since the court relied on it to accept the society's good faith.

The report does not cite specific PMLA sections, and this article is based on the published report of the order rather than the full judgment. Societies facing a similar situation should have the order itself reviewed by their legal adviser before relying on it. ED is to issue the NOC within six weeks of the order.