In a ruling with significant implications for the real estate sector, the Bombay High Court on 11 February 2026, has reinforced the lasting power of historic property covenants. The Court denied interim relief to a housing society seeking to redevelop its 60-year-old building, upholding a restrictive covenant from the 1940s that limited construction height. This decision serves as a critical reminder of the due diligence required in property transactions.

The Core Conflict

The dispute was between New Deluxe Co-operative Housing Society Ltd. ("New Deluxe"), which planned a major redevelopment of its property on Altamount Road, and Pemino Co-operative Housing Society Ltd. ("Pemino"). Pemino objected, citing a restrictive covenant in New Deluxe's chain of title, originating from indentures in 1943 and 1944, which prohibited any construction on New Deluxe's plot from exceeding 30 feet in height. New Deluxe filed a suit to have the covenant declared unenforceable and sought a temporary injunction to proceed with its project.

The Court's Prima Facie Findings

The decision to dismiss New Deluxe's application for an injunction was based on several key prima facie determinations:

Suppression of Material Facts: The Court noted that New Deluxe initially approached the court on the basis that no restrictive covenant existed, only to change its stance after Pemino produced New Deluxe's own title deeds explicitly referencing the restriction. This lack of upfront disclosure was viewed critically, as a party seeking equitable relief must approach the court with "clean hands."
Doctrine of "Approbate and Reprobate": The Court held that a party cannot accept the benefits of a deed (i.e., title to the property) while simultaneously rejecting the burdens or conditions contained within it (the height restriction). New Deluxe was bound by the terms under which it derived its title.
Covenant "Runs with the Land": The Court found a prima facie case that the covenant was intended to bind all subsequent owners of the land, not just the original parties. It had travelled through successive conveyances and was incorporated by reference into New Deluxe's own title deed of 1963. An express assignment in every subsequent deed was not deemed essential for its continuance.
Balance of Convenience: Granting the injunction would have permitted construction that would irreversibly alter the property before the case was decided at trial. This would cause irreparable prejudice to Pemino and was against the balance of convenience.

Key Takeaways

This judgment highlights that due diligence is crucial, as a property's entire chain of title must be meticulously examined for binding restrictions. Furthermore, the ruling shows that old covenants remain potent; one cannot assume a restriction is obsolete simply due to age or changes in the neighbourhood. Finally, the case highlights that courts demand complete transparency in litigation, and any attempt to conceal relevant facts can fatally undermine a claim for equitable relief like an injunction.

The Court has dismissed the interim application, halting any redevelopment exceeding the 30-foot limit until the suit is finally adjudicated. The ruling underscores a fundamental principle of property law: the deeds of the past can, and do, dictate the deals of the future.

The Past is Present: Bombay HC Ruling on Property Covenants