Case Note & Summary
The petitioner, M/s. R.R.B. Realtors Pvt. Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking appointment of a Court Receiver to take possession of tenements occupied by non-cooperating members of the respondent society, M/s. Subhash Nagar Rajeshwari CHS Ltd., for redevelopment of the society building. The society had entered into a Development Agreement dated 15th July 2013 with the petitioner for redevelopment of the building, which was constructed by MHADA and conveyed to the society in 1994. The building comprised 36 residential flats, each about 180 sq.ft., for Lower Income Group members. Respondents 2 to 8 were members who refused to vacate despite having signed individual agreements and the society's development agreement. Respondents 9 to 11 were owners of flats that had been locked for nearly a decade and were untraceable. The petitioner sought appointment of a Court Receiver to take physical possession of the tenements from respondents 2 to 8 and to take possession of the locked flats after inventory, with directions to hand over possession to the petitioner for redevelopment. The Court examined whether the non-cooperating members, who were not signatories to the development agreement, could be bound by it. The Court held that the society, being the owner of the building, had the authority to enter into the development agreement, and the members were bound by the decision of the majority. The Court found that the petitioner had made out a prima facie case, the balance of convenience was in favour of appointing a Court Receiver, and the petitioner and society would suffer irreparable loss if the redevelopment was stalled. The Court allowed the petition and appointed the Court Receiver to take possession of the tenements from respondents 2 to 8 and to take possession of the locked flats after making an inventory, with directions to hand over possession to the petitioner for redevelopment. The Court also directed the petitioner to pay agreed rent and other charges to the non-cooperating members and to provide alternative accommodation during redevelopment.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Appointment of Court Receiver - The Court considered whether a Court Receiver can be appointed to take possession of tenements occupied by non-cooperating members who are not signatories to the development agreement, for redevelopment of the society building. The Court held that the non-cooperating members are bound by the development agreement executed by the society, and the petitioner has made out a prima facie case for appointment of Court Receiver to facilitate redevelopment. (Paras 1-10) B) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Balance of Convenience - The Court held that the balance of convenience is in favour of appointing a Court Receiver as the redevelopment project is for the benefit of all members, and the non-cooperating members are causing delay and loss to the society and the developer. (Paras 11-15) C) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Irreparable Loss - The Court held that if the Court Receiver is not appointed, the petitioner and the society would suffer irreparable loss as the redevelopment project would be stalled, and the building is in a dilapidated condition. (Paras 16-20)
Issue of Consideration
Whether the Court can appoint a Court Receiver under Section 9 of the Arbitration and Conciliation Act, 1996 to take possession of tenements occupied by non-cooperating members who are not signatories to the development agreement, for the purpose of redevelopment of the society building.
Final Decision
The Court allowed the petition and appointed the Court Receiver to take physical possession of the tenements occupied by Respondent Nos. 2 to 8 and to take possession of the tenements of Respondent Nos. 9 to 11 after making an inventory, with directions to hand over possession to the petitioner for redevelopment. The Court directed the petitioner to pay agreed rent and other charges to the non-cooperating members and to provide alternative accommodation during redevelopment.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Appointment of Court Receiver
- Interim measures
- Non-signatory members bound by development agreement
- Prima facie case
- Balance of convenience
- Irreparable loss
