Case Note & Summary
The petitioners, Shahveer Padam Kapadia and another, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief against the respondents, Omkar Realtors and Developers Pvt. Ltd. and another. The dispute arose from a contract dated 20 June 2017 for the sale of a flat (Flat 6501) in a high-rise building known as 'Omkar 1973, Worli.' The petitioners paid a substantial amount of Rs. 22,41,00,000 towards the purchase price. However, the flat was not delivered in a habitable condition because the developer had left structural struts inside the flat, which were required for ongoing construction of the building's lift shaft. The petitioners sought a mandatory injunction directing the respondents to remove the struts and make the flat habitable, or alternatively, to allow the petitioners to remove the struts at the respondents' cost, and to pay default interest for the delay. The court considered the principles for granting interim relief under Section 9 of the Act, including the existence of a prima facie case, balance of convenience, and irreparable loss. The court noted that the petitioners had a strong prima facie case as they had paid almost the entire consideration and were unable to use the flat. The balance of convenience was in favor of the petitioners, as the developer's inconvenience in removing the struts was minimal compared to the petitioners' hardship. The court also found that the petitioners would suffer irreparable loss if the relief was not granted. Consequently, the court directed the respondents to remove the struts and complete the flat within 12 weeks, failing which the respondents would pay compensation of Rs. 5 lakhs per month to the petitioners until the flat was made habitable. The petition was disposed of accordingly.
Headnote
A) Arbitration - Interim Measures - Section 9 of Arbitration and Conciliation Act, 1996 - Prima Facie Case - The petitioners purchased a flat in a high-rise building and paid substantial consideration. The flat was not habitable due to struts left by the developer. The court held that the petitioners have a strong prima facie case for relief as the developer failed to deliver the flat in habitable condition. (Paras 1-10) B) Arbitration - Interim Measures - Balance of Convenience - Section 9 of Arbitration and Conciliation Act, 1996 - The balance of convenience was in favor of the petitioners as they had paid over Rs. 22 crores and were unable to use the flat. The developer's inconvenience in removing struts was outweighed by the petitioners' hardship. (Paras 11-20) C) Arbitration - Interim Measures - Irreparable Loss - Section 9 of Arbitration and Conciliation Act, 1996 - The court found that the petitioners would suffer irreparable loss if the struts were not removed and the flat made habitable, as they had invested a large sum and could not use the property. (Paras 21-25) D) Arbitration - Interim Measures - Mandatory Injunction - Section 9 of Arbitration and Conciliation Act, 1996 - The court granted a mandatory injunction directing the developer to remove struts and complete the flat within 12 weeks, failing which the developer must pay compensation of Rs. 5 lakhs per month. (Paras 26-30)
Issue of Consideration
Whether the petitioners are entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, directing the respondent developer to remove struts from the flat and make it habitable, pending arbitration.
Final Decision
The court allowed the petition and directed the respondents to remove the struts and complete the flat within 12 weeks. In default, respondents to pay compensation of Rs. 5 lakhs per month to the petitioners until the flat is made habitable.
Law Points
- Interim measures under Section 9 of Arbitration and Conciliation Act
- 1996
- Prima facie case
- Balance of convenience
- Irreparable loss
- Mandatory injunction
- Specific performance of contract for sale of flat
- Compensation for delay
