Case Note & Summary
The petitioner, Nehru Nagar Ratnadeep Co-operative Housing Society Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures against the respondent, S.D. Bhalerao Constructions, a developer. The society had 40 members whose building was demolished in January 2015, and they had been suffering since 2011 when 39 members vacated their tenements. The society entered into a development agreement with the respondent, but the respondent failed to complete the project and allegedly attempted to create third party rights over the property. The society sought orders restraining the respondent from holding itself out as developer, from transferring or encumbering the property, and directing removal of barricades and materials from the site. The court examined the prima facie case, balance of convenience, and irreparable injury. It noted that the society's members were literally on the street and the developer had not fulfilled its obligations. The court found that the society had a strong prima facie case and that the balance of convenience was in its favor, as the developer's actions would cause irreparable harm. The court granted interim relief restraining the respondent from creating any third party rights and directed the respondent to remove its barricades and materials from the property within two weeks. The court also appointed a Court Receiver to take symbolic possession of the property if the respondent failed to comply. The petition was disposed of accordingly.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Prima Facie Case - The court considered whether a housing society whose building was demolished and whose members were displaced since 2011 was entitled to interim relief against the developer for breach of development agreement - Held that the society made out a strong prima facie case for grant of interim relief as the developer had failed to complete the project and was attempting to create third party rights (Paras 1-10). B) Arbitration - Balance of Convenience - Section 9 of the Arbitration and Conciliation Act, 1996 - Irreparable Injury - The court held that the balance of convenience was in favor of the society as the members were suffering for over a decade and the developer's actions would cause irreparable injury if not restrained - Held that interim protection was necessary to protect the society's rights pending arbitration (Paras 11-15).
Issue of Consideration
Whether the petitioner society is entitled to interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, restraining the respondent developer from creating third party rights and directing removal of barricades from the subject property pending arbitration.
Final Decision
The court allowed the petition and granted interim relief restraining the respondent from creating any third party rights over the property and directed the respondent to remove its barricades and materials within two weeks. The court also appointed a Court Receiver to take symbolic possession if the respondent failed to comply.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Prima Facie Case
- Balance of Convenience
- Irreparable Injury
- Interim Measures
- Breach of Development Agreement
