Case Note & Summary
The matter arose from a redevelopment dispute concerning Poddar Apartment, a building comprising ground plus four upper floors with 30 flats, 44 shops, 2 basements, and 5 enclosed garages. By a Deed of Conveyance dated 12 May 1972, the vendor Smt. Sushilabai Makhanlal Poddar sold the property to Poddar Apartment Co-operative Housing Society Limited but retained the ground floor shops, basements, and garages as absolute owner. After her death, her executors, Respondent Nos. 2 to 4, claimed ownership of these retained premises and inducted tenants in shops and basements, and also inducted five persons including Respondent Nos. 5 to 8 in the garages. The Society resolved to redevelop the building and appointed Ambit Urbanspace as developer. A Development Agreement was executed on 21 May 2024 between the developer, the Society, and the executors as confirming parties. The Slum Rehabilitation Authority issued Letter of Intent on 9 October 2024 and Intimation of Approval on 15 October 2024. A structural audit led to a notice under Section 354 of the Mumbai Municipal Corporations Act, 1888 dated 10 October 2024 for pulling down the building. The developer called upon occupiers to vacate; by 16 November 2024, 29 members and 24 tenants had vacated, but Respondent Nos. 5 to 8 refused to vacate the garages, and Respondent No. 9 was allegedly an illegal occupant in Garage No. 2. The developer filed a Section 9 petition before the Bombay High Court seeking directions for execution of Permanent Alternate Accommodation Agreements, vacation of garages, liquidated damages, and appointment of a Court Receiver. The learned Single Judge dismissed the petition on 1 April 2025, holding that Respondent Nos. 5 to 8 were not bound by the Development Agreement and that the petition was not a bonafide invocation of Section 9. The Single Judge directed the developer and Society to ensure safety and free access to the garages during redevelopment. The developer filed Appeal (L) No. 12585/2025 challenging the dismissal, while the landlords filed Appeal (L) No. 16482/2025 limited to findings on tenancy rights. Both appeals were heard together, with judgment reserved on 24 June 2025 and pronounced on 1 July 2025. The provided excerpt does not include the final appellate disposition.
Headnote
A) Arbitration - Interim Measures under Section 9 - Non-Signatories Not Bound by Development Agreement - Arbitration and Conciliation Act, 1996, Section 9 - The developer sought directions against occupants who were not parties to the development agreement to execute permanent alternate accommodation agreements and vacate garages; the learned Single Judge held that since Respondent Nos. 5 to 8 were not bound by the development agreement, they could not be directed to comply with it, and the petition was not a fit case for bonafide invocation of Section 9; the court directed safety and free access during redevelopment. (Paras 6-7)
Issue of Consideration
Whether non-signatories to a development agreement can be directed under Section 9 of the Arbitration and Conciliation Act, 1996 to vacate premises and execute alternate accommodation agreements; whether the Section 9 petition was a bonafide invocation of jurisdiction.
Law Points
- Non-signatories not bound by development agreement
- Section 9 petition not bonafide when seeking mandatory injunction against third parties
- safety obligations during redevelopment
- tenant co-partnership society ownership vests in society
- members bound by society's obligations
Case Details
2025 LawText (BOM) (07) 65
Commercial Arbitration Appeal (L) No. 12585 of 2025 in Commercial Arbitration Petition (L) No. 38696 of 2024; Commercial Arbitration Appeal (L) No. 16482 of 2025 in Commercial Arbitration Petition (L) No. 38696 of 2024
Alok Aradhe, CJ, Sandeep V. Marne, J
Mr. Mayur Khandeparkar, Mr. Vikramjeet Garewal, Mr. Santosh Pathak, Mrs. Namita Natekar, Ms. Archana Karmokar, Mr. Ashish Kamat, Mrs. Pooja Kane, Mr. Jitendra Jain, Mr. Amogh Singh, Mr. Vishwajit Sawant, Mr. Narayan G. Samant, Mr. Sandeep V. Mahadik, Ms. Duhita D. Desai
Ambit Urbanspace (in Appeal (L) No. 12585/2025); Yogendra J. Poddar, Pawan J. Poddar, Raghvendra S. Poddar (in Appeal (L) No. 16482/2025)
Poddar Apartment Co-operative Housing Society Limited, Yogendra J. Poddar, Pawan J. Poddar, Raghvendra S. Poddar, Haresh Doshi, Ashu Farooq Sheir Haq Choudhary, Dr. Amita Laxmidas Shenoy, Dilip K. Limbad, Ketki Shantilal Desai (in Appeal (L) No. 12585/2025); Ambit Urbanspace, Poddar Apartment Co-operative Housing Limited, Haresh Doshi, Ashu Farooq Sheir Haq Chodhury, Dr. Amita Laxmidas Shenoy, Dilip K. Limbad, Ketki Shantilal Desai (in Appeal (L) No. 16482/2025)
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Nature of Litigation
Commercial arbitration appeals arising from dismissal of a Section 9 petition under the Arbitration and Conciliation Act, 1996 seeking interim measures for vacation of premises for redevelopment of a building.
Remedy Sought
In the original Section 9 petition, the developer sought directions to Respondent Nos. 5-8 to execute Permanent Alternate Accommodation Agreements and to vacate garages, direction to Respondent No.9 to vacate, payment of Rs.10,000/- per day as liquidated damages, and appointment of Court Receiver for garages. In appeals, developer seeks reversal of dismissal; landlords seek limited setting aside of findings on tenancy rights.
Filing Reason
Occupants of garages refused to vacate despite redevelopment approvals and a structural audit notice under Section 354 of the Mumbai Municipal Corporations Act, 1888, causing obstruction to redevelopment.
Previous Decisions
Single Judge of Bombay High Court dismissed Commercial Arbitration Petition (L) No. 38696/2024 on 1 April 2025, holding that it was not a bonafide invocation of Section 9 and that Respondent Nos.5-8 were not bound by the Development Agreement; directed safety and free access during redevelopment.
Issues
Whether a party to a development agreement can seek interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 against non-signatories to the agreement?
Whether the Section 9 petition was a bonafide invocation of jurisdiction when mandatory injunction was sought against occupants not bound by the development agreement?
Submissions/Arguments
Respondent Nos.5 to 8 do not have any independent right in respect of the garages and must vacate the same once the premises to which garages are attached are vacated by members.
Under Clause 12 of the Development Agreement, the Society, its members and tenants are required to vacate and handover possession of respective premises; non-fulfillment entitles the appellant to seek interim measures under Section 9.
An order of mandatory injunction can be granted by a Court at an ad-interim stage, relying on Hammad Ahmed v. Abdul Majeed.
Rule 803-E of the Bombay High Court Original Side Rules enables impleadment and seeking reliefs against third parties in a Section 9 petition, relying on Girish Mulchand Mehta and another v. Mahesh S. Mehta and another.
In a Tenant Co-partnership Housing Society, legal ownership of the building vests in the Society and a member merely has a right to occupy; members are bound by obligations put on the Society in the Development Agreement, relying on Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi.
Respondent Nos.2 to 4 are members of the Society who have primary responsibility of vacating and handing over possession of premises relatable to their membership.
Ratio Decidendi
Non-signatories to a development agreement cannot be directed under Section 9 of the Arbitration and Conciliation Act, 1996 to vacate premises or execute alternate accommodation agreements; a Section 9 petition for such mandatory relief against third parties is not a bonafide invocation of jurisdiction.
Judgment Excerpts
the learned Single Judge pronounced the judgment and order on 1 April 2025 holding that this is not a fit case of bonafide invocation of provisions of Section 9 of the Act.
It has held that since the Respondent Nos. 5 to 8 are not bound by the Development Agreement, they cannot be directed to comply with it.
The learned Judge has however directed that the Appellant and the Society shall ensure safety as well as free independent access to the subject garages during the course of redevelopment.
Procedural History
By a development agreement dated 21 May 2024 and supplementary agreement dated 21 October 2024, the developer was appointed for redevelopment. Structural audit notice under Section 354 of MMC Act was issued on 10 October 2024. Occupants refused to vacate; developer filed Commercial Arbitration Petition (L) No. 38696/2024 under Section 9 of the Arbitration and Conciliation Act, 1996. The learned Single Judge dismissed the petition on 1 April 2025, holding no bonafide invocation and no relief, with safety directions. Developer filed Commercial Arbitration Appeal (L) No. 12585/2025; landlords filed Commercial Arbitration Appeal (L) No. 16482/2025 limited to findings. Both appeals were heard together; judgment reserved on 24 June 2025 and pronounced on 1 July 2025.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
- Mumbai Municipal Corporations Act, 1888: Section 354
- Bombay High Court Original Side Rules: Rule 803-E
