The Bombay High Court dismissed a petition under Section 9 of the Arbitration & Conciliation Act, 1996 filed by a developer against a cooperative housing society and a non-member resident. The court found that the developer misused legal provisions in an attempt to gain an unfair advantage in a redevelopment dispute, emphasizing that there was no valid arbitration agreement between the developer and the non-member. The court also noted that arbitration proceedings were neither intended nor warranted, leading to the imposition of costs on the developer for filing a frivolous claim.

1. Introduction and Parties Involved:

The petition was filed by Gulshan Townplanners LLP against Gulshan Cooperative Housing Society (Respondent No. 1) and Baiju Mahendra Doshi (Respondent No. 2). The developer sought relief under Section 9 of the Arbitration Act, alleging disputes arising from a Redevelopment Agreement (RDA) signed with the society.

2. Key Dispute:

Respondent No. 2, a non-member resident occupying B-Wing of the building, refused to consent to the redevelopment plans initiated by the society. The court clarified that the respondent was not a member of the society and had not signed the redevelopment agreements.

3. Developer's Claim:

The developer argued that despite not being a member, the non-member resident should comply with the society's majority decision, citing previous court rulings allowing such actions under Section 9 against non-members.

4. Court’s Analysis:

The court held that:

• No valid arbitration agreement existed between the petitioner and Respondent No. 2.
• The developer could not use Section 9 to enforce arbitration proceedings where no such agreement was in place.
• The redevelopment agreements were only between the society and its members, not binding on Respondent No. 2.

5. Judgments Cited:

The developer relied on previous cases, including Choice Developers vs. Pantnagar Pearl CHS Ltd. and Girish Mulchand Mehta vs. Mahesh Mehta, where non-cooperative society members were compelled to participate in redevelopment. The court, however, distinguished those cases as involving society members, unlike the present case where Respondent No. 2 was not a member.

6. Misuse of Section 9:

The court labeled the petition as an abuse of the legal process under Section 9, stating that the developer was attempting to bypass proper legal channels to force Respondent No. 2 to comply.

7. Final Order:

The petition was dismissed with a cost of ₹5,00,000 imposed on the developer for filing a frivolous and vexatious claim.

Acts and Sections Discussed:

• Section 9 of the Arbitration & Conciliation Act, 1996: Allows parties to seek interim measures of protection in disputes, but the court ruled that its provisions were misused as no valid arbitration agreement existed between the parties.
• Transfer of Property Act, Section 55(2): Cited by the respondent to highlight the cessation of any independent rights post-conveyance.

Ratio Decidendi:

The High Court emphasized that relief under Section 9 of the Arbitration Act cannot be sought without a valid arbitration agreement between the parties. Furthermore, attempts to use interim relief mechanisms as a tool to enforce rights against third parties, especially non-signatories, without privity of contract, are legally impermissible. This case reiterates the need for a clear arbitration agreement and a manifest intent to arbitrate before invoking Section 9.