Case Note & Summary
The judgment concerns a batch of petitions under Section 9 of the Arbitration and Conciliation Act, 1996, filed by high networth individuals who purchased apartments at Lodha World Towers, Worli, developed by Macrotech Developers Ltd. The petitioners sought full access to all utilities and Common Amenities such as gymnasium, club house, and spa, which they alleged were cut off by Macrotech over alleged default in payment of Federation Common Area Maintenance Charges (FCAM Charges). The petitioners claimed they had fully paid all applicable dues and, in fact, had overpaid, while Macrotech contended they were in arrears of approximately Rs. 15 lakh each. The dispute arose from the contractual framework where FCAM Charges were payable quarterly in advance, with escalation permitted at 7.5% to 10% per annum, and any higher hike requiring consent. Petitioners raised grievances about opacity, lack of audited accounts, use of proforma invoices enabling GST collection without tax invoices, and alleged escalation from Rs. 4.50 to Rs. 9.92 per square foot, which they claimed violated the contract. They also alleged that club and spa services were offered to outsiders, improperly loading charges on residents. Macrotech argued that only these petitioners refused to pay while other residents complied, creating inequity if defaulters enjoyed amenities. The court initially considered a proposal to deposit Rs. 15 lakh each under protest pending arbitration, but petitioners refused, asserting they had overpaid. During the proceedings, Macrotech provided inspection of accounts on March 2, 2025, but its adequacy was disputed. The judgment traced prior insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, where consent terms were executed for settlement in two tranches, with disputes continuing over adjustment against FCAM Charges. The court analyzed the agreements and contentions, noting that FCAM Charges were provisional and subject to annual settlement. However, the provided text ends before the final relief section, so the operative directions and final decision are not mentioned in the available excerpt.
Headnote
A) Arbitration - Interim Relief - Section 9 Arbitration and Conciliation Act, 1996 - Petitioners sought full access to Common Amenities such as gymnasium, club house, and spa at Lodha World Towers pending arbitration, claiming they had paid all dues, while respondent Macrotech had cut off access alleging default in FCAM Charges - Court considered whether relief could be granted and proposed deposit of Rs. 15 lakh each under protest as condition, but petitioners refused, contending they had overpaid - Held that interim relief under Section 9 is discretionary and requires balancing equities between parties (Paras 1-9).
B) Contract Interpretation - Maintenance Charges - FCAM Charges provisions in agreements - The agreement provided quarterly advance payment of FCAM Charges, annual settlement by June 30 after financial year, and escalation at 7.5% to 10% per annum; any higher hike required consent - Held that a dispute existed whether escalation to Rs. 9.92 per square foot violated the contractual cap and whether charges were provisional (Paras 9,13).
C) Evidence and Accounts - Proforma Invoices and GST - Tax and accounting disputes - Petitioners alleged that proforma invoices enabled charging GST without issuing actual tax invoice and that audited accounts were not provided, leading to opacity and inflation of FCAM Charges - Held that the court noted these contentions as part of the broader dispute over maintenance charge computation (Paras 10,12,14).
D) Equitable Relief - Denial of Amenities - Default and non-payment - Respondent argued that allowing defaulters to enjoy amenities while compliant residents paid would be inequitable - Held that the court examined whether denial of access was a proportionate self-help remedy or whether accounts should be settled first (Paras 5-7).
Issue of Consideration
Whether interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 should be granted to restore full access to Common Amenities at Lodha World Towers, Worli, pending arbitration, given disputes over FCAM Charges, allegations of overpayment/default, and opacity of accounts.
Law Points
- Section 9 of Arbitration and Conciliation Act
- 1996 allows interim relief pending arbitration
- such relief is discretionary and equitable
- petitioner seeking interim relief may be required to deposit disputed amount under protest
- access to common amenities may be tied to payment of FCAM charges
- disputes over maintenance charges are arbitrable
- proforma invoices do not amount to tax invoices
- escalation of charges beyond contracted range requires consent.
Case Details
2025 LawText (BOM) (04) 46
Arbitration Petition (L) No. 3817 of 2025 along with connected petitions
Somasekhar Sundaresan, J.
Mr. Navroz Seervai, Senior Advocate a/w Mr. Dharam Jumani, Ms. Nupur Jalan, Mr. Mihir Nerurkar, Mr. Munaf Virjee, Ms. Aakruti Jayendran i/b AMR Law for Petitioner-Santanu Sengupta; Mr. Sharan Jagtiani, Senior Advocate a/w Mr. Chirag Kamdar, Ms. Apurva Manwani, Siddharth Joshi, Ms. Nanki Crewal, Harsh Nandu, Ms. Manasi Joglekar and Ms. Krisha Thakkar i/b Wadia Ghandy & Co. for Respondent-Macrotech Developers Limited
Santanu Sengupta & Anr and other petitioners
Macrotech Developers Ltd.
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Nature of Litigation
Arbitration petitions under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief
Remedy Sought
Petitioners sought full access to all utilities and facilities/Common Amenities at Lodha World Towers, Worli, including gymnasium, club house, spa, etc., and resolution of dispute over FCAM Charges.
Filing Reason
Macrotech cut off access to certain Common Amenities alleging default in payment of FCAM Charges, while petitioners disputed the charges as opaque and inflated.
Previous Decisions
Initially mentioned as urgent; Macrotech clarified access to residential units and parking was not cut off. Earlier insolvency proceedings under IBC were rejected by Adjudicating Authority, and on appeal before NCLAT, consent terms were executed for payment in two tranches. Inspection of accounts provided on March 2, 2025.
Issues
Whether Petitioners were entitled to interim relief under Section 9 to restore access to Common Amenities pending arbitration
Whether FCAM Charges were properly calculated and escalated within contractual limits
Whether denial of access to Common Amenities by Macrotech was justified due to alleged default
Whether Petitioners had overpaid FCAM Charges and were entitled to accounts and reconciliation
Submissions/Arguments
Petitioners argued that they had fully paid all dues and in fact had overpaid; they claimed entitlement to know actual maintenance expenses and audited accounts; they alleged use of proforma invoices to charge GST without remitting to Revenue; they pointed to escalation beyond contracted 7.5% to 10% range; they argued denial of access to gym and club injures basic right to life and health.
Respondent argued that petitioners were the only owners raising grievances, other residents paid FCAM Charges without issue; allowing defaulters to enjoy Common Amenities would be inequitable; each petitioner was in arrears of approximately Rs. 15 lakh; denial of access was necessary to address inequity; respondent had provided inspection of accounts from October 2017.
Ratio Decidendi
Interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 is discretionary and requires balancing of equities; court may require deposit of disputed amount under protest as condition for interim relief; disputes over maintenance charges and access to amenities are to be resolved through arbitration; escalation of FCAM Charges beyond contracted range without consent may be impermissible.
Judgment Excerpts
This bunch of Petitions under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) is a collective effort to seek interlocutory relief in the form of full access to all utilities and facilities available at the Lodha World Towers, Worli (“Lodha Worli”), developed by Macrotech Developers Ltd. (“Macrotech”), a Respondent in all these Petitions.
Macrotech claims that the Petitioners are in default and to assert its rights, has cut off access of these Petitioners to certain Common Amenities.
The FCAM Charges stipulated in the agreements were provisional in nature. The estimated FCAM Charges for the first 60 months (five years) payable by the purchasers of the units was indicated.
In August 2024, Macrotech is said to have issued another “Proforma Invoice” for the FCAM Charges for the period between March 2018 and January 2025.
Procedural History
Petitions under Section 9 were filed seeking interim relief. Initially mentioned as urgent, where Macrotech clarified access to residential units and car parking spaces was not cut off for any Petitioner, but full and free access to Common Amenities had been cut off. On March 2, 2025, Macrotech provided inspection of accounts to Petitioners. Earlier, insolvency proceedings under Insolvency and Bankruptcy Code, 2016 were initiated against Macrotech; the Adjudicating Authority rejected the application, and on appeal before NCLAT, consent terms were executed for payment in two tranches. The judgment was reserved on February 28, 2025 and pronounced on April 4, 2025.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
- Insolvency and Bankruptcy Code, 2016:
