Case Note & Summary
The petitioner, Aditya Developers, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking appointment of a Court Receiver to take possession of flats from respondent nos.2 to 7 and hand them over to the petitioner for demolition and redevelopment pursuant to a Redevelopment Agreement dated 25.9.2013 with respondent no.1 Society. The agreement contained an arbitration clause (Clause 62) for resolution of disputes between the parties. The petitioner alleged that respondent nos.2 to 7, who were members of the Society, were obstructing the redevelopment by not vacating their flats. The court examined whether the disputes with respondent nos.2 to 7 were arbitrable, as they were not parties to the agreement. The court held that the arbitration agreement only bound the petitioner and the Society, and disputes with third parties could not be referred to arbitration. Consequently, no interim relief could be granted under Section 9 against respondent nos.2 to 7. The court also noted that the petitioner failed to establish a prima facie case, balance of convenience, or irreparable loss. The petition was dismissed.
Headnote
A) Arbitration - Interim Relief under Section 9 - Prima Facie Case - The petitioner sought appointment of Court Receiver for possession of flats from dissenting members for demolition and redevelopment. The court held that the disputes regarding possession of flats by respondent nos.2 to 7 were not covered by the arbitration agreement as they were not parties to the agreement. The petitioner failed to make out a prima facie case for interim relief. (Paras 2-5) B) Arbitration - Scope of Arbitration Agreement - Third Parties - The arbitration agreement was between the petitioner and respondent no.1 Society only. The court held that disputes with respondent nos.2 to 7, who were not signatories to the agreement, could not be referred to arbitration. Therefore, no interim relief could be granted against them under Section 9. (Paras 3-5) C) Arbitration - Balance of Convenience - Irreparable Loss - The court found that the balance of convenience was not in favor of the petitioner as the dissenting members were in possession and the petitioner had not obtained their consent. The petitioner also failed to show irreparable loss. (Para 5)
Issue of Consideration
Whether the petitioner is entitled to appointment of Court Receiver in respect of the property under Section 9 of the Arbitration and Conciliation Act, 1996, pending arbitration.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Prima facie case
- Balance of convenience
- Irreparable loss
- Arbitrability of disputes
- Scope of arbitration agreement
