Case Note & Summary
The Bombay High Court dealt with an arbitration petition filed by Chirag Infra Projects Pvt Ltd, the developer, against Vijay Jwala Cooperative Housing Society Ltd and its dissenting member, Kondvilkar. The society owned a dilapidated building declared 'C1' by the planning authority, unfit for human habitation. In September 2014, the society passed a resolution to redevelop the building, and a development agreement was executed in December 2015. Nineteen of the twenty members vacated their premises in November 2018, but the second respondent, Kondvilkar, refused to vacate, obstructing the redevelopment for over six years. He had not challenged the resolution or the agreement in any court. The developer sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, to resolve the dispute. The court noted that the dissenting member's conduct was unreasonable and that he had no legal basis to obstruct the majority decision. The court appointed a sole arbitrator to decide all disputes between the parties, including the issue of possession and implementation of the redevelopment agreement. The court emphasized that the dissenting member cannot hold the entire society to ransom and that the majority decision must prevail for the benefit of all members.
Headnote
A) Arbitration - Appointment of Arbitrator - Section 11 Arbitration and Conciliation Act, 1996 - Dispute between society and dissenting member regarding redevelopment - Court appointed arbitrator to resolve dispute, holding that majority decision binds dissenting member and obstruction cannot continue indefinitely (Paras 1-29). B) Cooperative Housing Society - Redevelopment - Majority Resolution - Dissenting Member - Society resolved to redevelop dilapidated C1 building; 19 of 20 members vacated; dissenting member refused to vacate - Court held that dissenting member cannot obstruct redevelopment and must abide by majority decision (Paras 4-10). C) Arbitration - Arbitrability - Section 11 Arbitration Act - Dispute regarding redevelopment agreement and society resolution - Court found that dispute falls within arbitration clause and appointed arbitrator to decide all disputes (Paras 11-29).
Issue of Consideration
Whether a dissenting member of a cooperative housing society can obstruct redevelopment of a dilapidated building despite a valid majority resolution and development agreement, and whether the dispute is arbitrable under Section 11 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court appointed a sole arbitrator to decide all disputes between the parties, including the issue of possession and implementation of the redevelopment agreement. The dissenting member was directed to cooperate and not obstruct the arbitration proceedings.
Law Points
- Arbitration
- Majority decision binding on dissenting member
- Section 11 Arbitration Act
- Redevelopment agreement
- Dilapidated building
- C1 category building
- Obstruction by minority member
- Binding nature of society resolution
