Neeta Sawant 13-ARAPPL-20093-2025.docx

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION APPEAL (L) NO. 20093 OF 2025

IN

ARBITRATION PETITION NO. 175 OF 2025

WITH

INTERIM APPLICATION (L) NO. 20111 OF 2025

Pranav Constructions Limited ….Petitioner

: Versus :

Priyadarshini Co-operative Housing

Society Limited and others ….Respondents

ALONGWITH

ARBITRATION APPEAL (L) NO. 20373 OF 2025

IN

ARBITRATION PETITION NO. 175 OF 2025

WITH

INTERIM APPLICATION (L) NO. 20461 OF 2025

Priyadarshini Co-operative Housing

Society Limited                       ….Petitioner

: Versus :

Pranav Constructions Limited and Others ….Respondents

Mr. V. R. Dhond, Senior Advocate  with   Mr.   Prathamesh   Kamath,

Mr. Harsh Behany, Ms. Prachi Sanghavi and Ms. Saloni Manjrekar i/b HN

Legal,   for   Appellant   in   Arbitration   Appeal   (L)   No.   20093/2025   and  for

Respondent No. 1 in Arbitration Appeal (L) No. 20373/2025.

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Mr. Mayur Khandeparkar with Mr. Mohit Khanna i/b Mr. Yash A. Dhakad,

for   the   Appellant   in   Arbitration   Appeal   (L)   No.   20373/2025   and   for

Respondent No.1 in Arbitration Appeal (L) No. 20093/2025.

Mr. Rajiv Narula i/b Jhanagiani Narula & Associates, for Respondent No.2.

Mr. Karl Tamboly i/b Mr. Jamshed Ansari, for Respondent Nos. 3 and 4.

CORAM : ALOK ARADHE, CJ. &

SANDEEP V. MARNE, J.

DATED : 14 JULY 2025.

JUDGMENT (Per : Sandeep V. Marne, J.) :

1) These Appeals are �led under the provisions of Section 37

of the Arbitration and Conciliation Act, 1996 (the Act) challenging the

order dated 20 June 2025 passed by the learned Single Judge disposing

of Arbitration Petition No. 175/2025 �led under the provisions of

Section 9 of the Act without grant of any relief in favour of the

Petitioner therein.

2) Priyadarshini Co-operative Housing Society Limited

(Society) is the owner of land and building situated at Final Plot

No.42A of Town Planning Scheme No. II of Santacruz corresponding to

CTS No. G/112, G/113 and G/114 admeasuring 1006.40 sq.mtrs

(1254.19 sq.mtrs. as per Property Card), Bandra Taluka, Mumbai

Suburban District at 112 Swami Vivekanand Road, Mumbai – 400 054

consisting of ground plus three upper �oors comprising of 16

residential �ats, one bank premises on ground �oor and six garages.

The Development Agreement dated 12 March 2025 came to be

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executed between the Society and Pranav Constructions Limited

(Developer), under which development rights for redevelopment of

Society’s building were granted in favour of the Developer. The

Developer obtained Intimation of Disapproval (IOD) dated 27 March

2025 from Municipal Corporation of Greater Mumbai (MCGM) and

thereafter issued notice to vacate dated 28 March 2025 on the Society

calling it upon to ensure vacation of all the �ats, bank premises and

garages within 30 days. By letter dated 7 April 2025, the Society

forwarded 20 consent letters by its members informing the Developer

that some of the members (Respondent Nos.2 to 6) have refused to vacate

possession of their respective premises. Respondent No.2 occupies

Garage No.6, Respondent Nos. 3 and 4 occupy the bank premises on

the ground �oor and Respondent Nos. 5 and 6 occupy residential Flat

No. 8 on the �rst �oor. The Developer served Advocate’s notice dated 8

April 2025 to the Society as well as to Respondent Nos.2 to 6 for

execution of consent letters for vacation of possession of their respective

premises. Since Respondent Nos.2 to 6 failed to cooperate in the

redevelopment process by vacating possession of their respective

premises, the Developer �led Arbitration Petition No.175/2025 under

the provisions of Section 9 of the Act, inter-alia,  seeking interim

measures of direction against Respondent Nos.2 to 6 for signing and

executing consent letters for vacation of the premises in their

occupation in terms of the Development Agreement dated 12 March

2025. Alternatively, direction was sought for execution of consent letter

either by the Court Receiver or Prothonotary & Senior Master of this

Court on behalf of Respondent Nos.2 to 6. This is how Arbitration

Petition No. 175/2025 was �led by the Developer for the purpose of

ensuring vacation of the premises in occupation of Respondent Nos.2 to

6 for smooth carriage of the redevelopment process.

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3) The Arbitration Petition was resisted by Respondent Nos.2

to 6 by �ling their respective A�davits in Reply. After considering the

pleadings and the submissions canvassed on behalf of the rival parties,

the learned Single Judge proceeded to dispose of the Arbitration

Petition No. 175/2025 without grant of any relief in favour of the

Developer by judgment and order dated 20 June 2025. The Developer is

aggrieved by judgment and order dated 20 June 2025 and has �led

Arbitration Petition (L.) No. 20093/2025. The Society is also aggrieved

by judgment and order dated 20 June 2025 and has �led Arbitration

Appeal (L) No. 20373/2025.

4) Mr. Dhond, the learned Senior Advocate appearing for the

Developer would submit that Respondent Nos.2 to 6, in their capacity

as members of the Society, are bound by the terms and conditions of the

Development Agreement and cannot take stand contrary to the

obligations of the Society arising out of the Development Agreement.

That the Developer has agreed to o�er permanent alternate

accommodation to Respondent Nos.2 to 6 in accordance with the

decision taken by the General Body of the Society. That even garage

occupier is being provided permanent alternate accommodation in lieu

of garage premises. That the so called dispute between Respondent

Nos.2 to 6 and the Society about entitlement of the members to a

particular area in the new building cannot be a subject matter of

adjudication in proceedings �led under Section 9 of the Act. He would

submit that the issue involved in the Appeal is squarely covered by the

judgment of this Court in Ambit   Urbanspace   Versus.   Poddar

Apartment Co-operative Housing Society Limited

1

.

1Commercial Arbitration Appeal (L) Nos. 12585 of 2025 and 16482 of 2025 decided on

1 July 2025.

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5) Mr. Khandeparkar, the learned counsel appearing for the

Society would adopt the submissions canvassed by Mr. Dhond.

Additionally, he would submit that the members of the Society are

bound by the covenants of the Development Agreement, which include

arbitration clause. He relies on provisions of Section 28(3) of the Act

mandating the Arbitral Tribunal to take into account the contract

applicable to the transaction and would submit that the alleged

grievance of Respondent Nos.2 to 6 of discrimination falls completely

outside the agreement between the Developer and the Society. That the

said dispute is between the Society and members, which cannot be

mixed up with the issue of Society’s obligations under the Development

Agreement. He would rely on judgment of the Apex Court in Bengal

Secretariat Cooperative Land Mortgage Bank and Housing Society

Ltd. Versus. Alok Kumar and another

2

in support of the contention that

Court cannot sit in appeal over commercial wisdom of the Society in

striking a bargain with the Developer. Inviting our attention to the

judgment of this Court in Calvin Properties and Housing Versus. Green

Fields Co-operative Housing Society Limited and others

3

, he would

submit that the individual claims of members of the Society cannot be

adjudicated in proceedings under Section 9 of the Act and that the same

needs to be adjudicated in separate proceedings.

6) Mr. Narula, the learned counsel appearing for Respondent

No.2 (Garage Occupier) would oppose both the Appeals submitting that

the Society and the Developer have practiced discrimination amongst

residential �at owners and commercial premises owners/garage owners

while e�ecting the redevelopment process. That residential �at owners

are being o�ered additional 39% area over the premises in the old

building whereas his client (Respondent No.2) is being granted 20% less

22022 SCC OnLine SC 1404

32013 SCC OnLine Bom 1455

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area than the area of garage currently in his occupation. That �at

owners/members are receiving higher areas in the redeveloped

building at the cost of reduction of area of Respondent No.2. That the

learned Judge has appreciated this discriminatory treatment meted out

to Respondent No.2 and has exercised discretion in not granting any

relief to the Developer in arbitration proceedings. He would rely upon

judgment of the Apex Court in Wander Ltd. and another Versus. Antox

India  P.   Ltd.

4

in support of his contention that this Court cannot

interfere in the exercise of discretion by the learned Single Judge while

refusing to grant interim measures.

7) Mr. Narula would further submit that the decisions of the

Society in undertaking redevelopment process are marred by fraud,

misrepresentation and su�er from violation of statutary guidelines. He

would place reliance on direction dated 4 July 2019 issued under

Section 79A of the Maharashtra Co-operative Societies Act, 1960 to

demonstrate that the redevelopment process undertaken by the Society

su�ers from lack of transparency. That the Society had initially decided

to go for self development. However, without inviting tenders, the

Society has handed over the redevelopment rights to the Developer

without o�ering any choice to the Society members and without

discussing the redevelopment bene�ts with the members. That

appreciating the position that the entire redevelopment process is

arbitrary and discriminatory, the learned Single Judge has rightly

refused to grant any interim measures in favour of the Developer. That

39% of the fungible area made available in respect of garage of

Respondent No.2 is being handed over to the residential �at owners

resulting in gross reduction in the area of Respondent No.2 in the new

building. He would rely upon judgment of this Court in Avenues

41990 (Supp) SCC 727

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Seasons Properties LLP Versus. Nissa Hoosain Nensey & Ors.

5

in

support of the contention that arbitration agreement can be invoked

only against a member who has signed the Development Agreement.

He would pray for dismissal of the Appeals.

8) Mr. Tamboly, the learned counsel appearing for

Respondent Nos.3 and 4, who are owners of commercial bank premises

on the ground �oor would submit that his clients are being provided

with only 19% additional area as compared to grant of 39% additional

area to residential �at owners. Additionally, it is submitted that the

premises have already been gifted by Respondent Nos.3 and 4 in favour

of son and granddaughter, who were not impleaded as party

Respondents to the Arbitration Petition. That Respondent Nos.3 and 4

have challenged Society’s Resolution before the Co-operative Court. He

would distinguish the judgment of this Court in Ambit Urbanspace

(supra) contending that when allegations of fraud are involved, rights of

members of the Society would not be subservient to the Society’s

obligations under the Development Agreement. Lastly, Mr. Tamboly

would submit that jurisdiction of the Appellate Court under Section 37

of the Act is limited and that the Appellate Court cannot interfere with

exercise of discretion by the learned Single Judge merely because

another view is plausible. He would pray for dismissal of both the

Appeals.

9) Rival contentions of the parties now fall for our

consideration.

10) Before proceeding further, it must be noted that brother of

Respondent Nos. 5 and 6 (occupiers of residential Flat No.8) has appeared

5Appeal Nos. 42, 43 and 44 of 2024 decided on 22 October 2024.

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in person and has submitted that Respondent Nos.5 and 6 has agreed to

execute the consent letter for vacation of Flat No.8. Thus the dispute is

now restricted only in respect of Respondent No.2 (owner of Garage No.6)

and Respondent Nos. 3 and 4 (owner of bank premises). Therefore, the

position that obtains today is that out of 16 �ats, one bank premises on

ground �oor and six garages (total 23 premises), owners/occupiers of

21 premises have executed/agreed to execute consent letters for

vacation of the premises and are willing to co-operate in the

redevelopment process of the Society’s building. It is only the

owner/occupier of the two premises viz. Garage No.6 and bank

premises on ground �oor who are opposing the redevelopment process.

11) The learned Single Judge has disposed of Arbitration

Petition No. 175/2025 �led under the provisions of Section 9 of the Act

without grant of any relief in favour of the Developer. Perusal of the

order of the learned Single Judge would indicate that decision of the

Society in allotting lesser percentage of additional area to garage and

commercial premises owners as compared to residential �at owners is

the main reason for non-grant of any relief in favour of the Developer.

After noticing that the Society has practiced discrimination by granting

only 19% increase to commercial occupants as compared to 39%

increase to residential unit owners, the learned Single Judge has refused

to exercise discretion in favour of the Developer. Another reason for

non-grant of any relief by the learned Single Judge in favour of the

Developer is absence of possibility of real arbitration happening

between the parties. The learned Judge also took note of pending

proceedings in the Co-operative Court between Respondent Nos.3 and 4

and the Society and held that the position of the parties would

unalterably vary if any order is passed under Section 9 by the Court.

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12) Two broad issues that arises for determination in the

present Appeals are as under :-

(i) Whether individual members of a Co-operative Society are

bound by the covenants in the Development Agreement executed

by the Society with the Developer and whether their individual

rights are subservient to the obligations of Co-operative Society

under the Development Agreement ?

(ii) Whether existence of disputes between the members and the

Society about their entitlements �owing out of redevelopment

process can be a ground for the Court not to make interim

measures directing vacation of premises in exercise of power

under Section 9 of the Act ?

13) As observed above, two members of the Society who are

owners/occupiers of Garage No.6 and bank premises on ground �oor

are refusing to handover possession of their premises for carrying out

redevelopment process of the Society's building. Their grouse is non-

grant of similar treatment as compared to residential unit owners. They

feel discriminated as the General Body of the Society has resolved to

grant lesser additional area to garage and commercial premises owners

as compared to residential premises owners. The issue for consideration

is whether this grouse of Respondent No.2 and Respondent Nos.3 and 4

can be agitated in a petition �led under Section 9 of the Act.

14) Respondent No.2 as well as Respondent Nos.3 and 4 are

admittedly members of the Society. The Society has executed

Development Agreement with the Developer and the Society is

contractually bound by the covenants agreed therein. The issue about

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convenants of agreement executed between the Society and the

Developer being binding on individual members is no more res-integra.

In recent decision delivered by us in Ambit Urbanspace  (supra), the

principle of rights of individual members of the Society being

subservient to Society’s obligation under the Development Agreement

towards the Developer has been discussed. This Court discussed the

ratio of the Division Bench judgment in Girish Mulchand Mehta and

another Versus. Mahesh S. Mehta and another

6

and held in paras-24 to

28 as under :-

24) The covenants of the Development Agreement are binding on the

Society and its members. The issue about a Developer seeking interim

measures against a member of the Society who is not a signatory to the

Development Agreement, and who have not consented for

redevelopment, is no more res integra. This Court has repeatedly held that

a non-co-operative member of a co-operative housing society is bound by

the collective will expressed through the general body resolutions and

that therefore the covenants of Development Agreement would bind

individual member as well. It is also equally well settled that if a

particular member of the Society is not party to the Development

Agreement, Court can make interim measures against such non-co-

operative member by having recourse to the provisions of Section 9 of

the Act.

25) In Girish Mulchand Mehta (supra), the Division Bench of this Court

has dealt with a situation where the Appellants therein were non-co-

operative members to the redevelopment process initiated by the Society.

They refused to handover possession of their respective �ats, inter alia, on

the ground that they were not parties to the Development Agreement.

The Developer took recourse to petition under Section 9 of the Act before

the learned Single Judge of this Court, who found that the two non-co-

operative members (Appellants therein) were causing obstruction resulting

in delay in redevelopment of the Society’s building. The Single Judge

therefore allowed the petition under Section 9 of the Act appointing Court

Receiver with power to take physical possession of the �ats in question

and handing it over to the Developer for the purpose of demolition and

construction of the new building. In the Appeal preferred by the said two

non-co-operative members before the Division Bench, one of the issues

formulated was whether interim measures could be passed by the Court

in exercise of power under Section 9 of the Act only against a party to an

Arbitration Agreement or arbitration proceedings. The question so

formulated is re�ected in para-12 of the judgment which reads thus :-

62010 (2) Mh.L.J. 657

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12. The next question is whether order of formulating the interim

measures can be passed by the Court in exercise of powers under

section 9 of the Act only against a party to an Arbitration Agreement

or Arbitration Proceedings. As is noticed earlier, the jurisdiction under

section 9 can be invoked only by a party to the Arbitration Agreement.

Section 9, however, does not limit the jurisdiction of the Court to pass

order of interim measures only against party to an Arbitration

Agreement or Arbitration Proceedings; whereas the Court is free to

exercise same power for making appropriate order against the party to

the Petition under section 9 of the Act as any proceedings before it.

The fact that the order would a�ect the person who is not party to the

Arbitration Agreement or Arbitration Proceedings does not a�ect the

jurisdiction of the Court under section 9 of the Act which is intended

to pass interim measures of protection or preservation of the subject-

matter of the Arbitration Agreement.

26) The Division Bench answered the question so formulated in

paragraphs-16 and 18 of the judgment as under :-

16. In the present case, it is not in dispute that the General Body of

the Society which is supreme, has taken a conscious decision to

redevelop the suit building. The General Body of the Society has

also resolved to appoint the respondent No. 1 as the Developer.

Those decisions have not been challenged at all. The appellants

who were members of the Society at the relevant time, are bound by

the said decisions. The appellants in the dispute �led before the

Cooperative Court have only challenged the Resolution dated 27-4-

2008, which challenge would merely revolve around the terms and

conditions of the Development Agreement. As a matter of fact, the

General Body of the Society has approved the terms and conditions

of the Development Agreement by overwhelming majority. Merely

because the terms and conditions of the Development Agreement

are not acceptable to the appellants, who are in minuscule minority

(only two out of twelve members), cannot be the basis not to abide

by the decision of the overwhelming majority of the General Body

of the Society. By now it is well established position that once a

person becomes a member of the Co-operative Society, he loses his

individuality with the Society and he has no independent rights

except those given to him by the statute and Bye-laws. The member

has to speak through the Society or rather the Society alone can act

and speaks for him qua the rights and duties of the Society as a

body (see Daman Singh v. State of Punjab, reported in (1985) 2 SCC 670 :

AIR 1985 SC 973). This view has been followed in the subsequent

decision of the Apex Court in the case of State   of   U.P. v. Chheoki

Employees Co-operative Society Ltd., reported in (1997) 3 SCC 681 : AIR

1997 SC 1413. In this decision the Apex Court further observed that

the member of Society has no independent right qua the Society and it

is the Society that is entitled to represent as the corporate aggregate.

The Court also observed that the stream cannot rise higher than the

source. Su�ce it to observe that so long as the Resolutions passed by

the General Body of the respondent No. 2 Society are in force and not

overturned by a forum of competent jurisdiction, the said decisions

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would bind the appellants. They cannot take a stand alone position

but are bound by the majority decision of the General Body. Notably,

the appellants have not challenged the Resolutions passed by the

General Body of the Society to redevelop the property and more so, to

appoint the respondent No. 1 as the Developer to give him all the

redevelopment rights. The proprietary rights of the appellants

herein in the portion (in respective �ats) of the property of the

Society cannot defeat the rights accrued to the Developer and/or

absolve the Society of its obligations in relation to the subject-

matter of the Arbitration Agreement. The fact that the relief prayed

by the respondent No. 1 in section-9 Petition and as granted by the

Learned Single Judge would a�ect the proprietary rights of the

appellants does not take the matter any further. For, the proprietary

rights of the appellants in the �ats in their possession would be

subservient to the authority of the General Body of the Society.

Moreso, such rights cannot be invoked against the Developer

(respondent No. 1) and in any case, cannot extricate the Society of

its obligations under the Development Agreement. Since the relief

prayed by the respondent No. 1 would a�ect the appellants, they were

impleaded as party to the proceedings under section 9 of the Act,

which was also necessitated by virtue of Rule 803-E of the Bombay

High Court (Original Side) Rules. The said Rule reads thus:—

“R. 803-E.Notice of Filling Application to persons likely to be

affected.— Upon any application by petition under the Act, the

Judge in chambers shall, if he accepts the petition, direct notice

thereof to be given to all persons mentioned in the petition

and to such other persons as may seem to him to be likely to be

a�ected by the proceedings, requiring all or any of such

persons to show cause, within the time speci�ed in the notice,

why the relief sought in the petition should not be granted”.

18. We have no hesitation in taking the view that since the appellants

were members of the Society and were allotted �ats in question in that

capacity at the relevant time are bound by the decision of the General

Body of the Society, as long as the decision of the General Body is in

force. As observed earlier, the appellants have not challenged the

decisions of the General Body of the Society which is supreme, insofar

as redevelopment of the property in question or of appointment of the

respondent No. 1 conferring on him the development rights. The

appellants have merely challenged the Resolution which at best would

raise issues regarding the stipulations in the Development Agreement.

The General Body of the Society has taken a conscious decision which

in this case was after due deliberation of almost over 5 years from

August, 2002 till the respondent No. 1 came to be �nally appointed as

Developer in terms of Resolution dated 2nd March, 2008. Moreover,

the General Body of the Society by overwhelming majority not only

approved the appointment of respondent No. 1 as developer but also

by subsequent Resolution dated 27th April, 2008 approved the draft

Development Agreement. Those terms and conditions have been

�nally incorporated in the registered Development Agreement

executed by the Society in favour of respondent No. 1. That decision

and act of the Society would bind the appellants unless the said

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Resolutions were to be quashed and set aside by a forum of competent

jurisdiction. In other words, in view of the binding e�ect of the

Resolutions on the appellants, it would necessarily follow that the

appellants were claiming under the Society, assuming that the

appellants have subsisting proprietary rights in relation to the �ats

in their possession. It is noticed that as of today the appellants have

been expelled from the basic membership of the Society. Their right to

occupy the �at is associated with their continuance as member of the

Society. It is a di�erent matter that the decision of expelling the

appellants from the basic membership of the. Society will be subject to

the outcome of the decision of the superior authority where the

appeals are stated to be pending. If the decision of the Society to expel

the appellants is to be maintained, in that case, the appellants would

have no surviving cause to pursue their remedy even before the Co-

operative Court much less to obstruct the redevelopment proposal. As

a matter of fact those proceedings will have to be taken to its logical

end expeditiously. Even if the appellants were to continue as

members, they would be bound by the decision of the General Body

whether they approve of the same or otherwise. In any case, keeping

in mind that the Development Agreement does not absolutely take

away the rights of the appellants in the �ats in question, as after

demolition of the existing building, the appellants would be

accommodated in the newly constructed �ats to be allotted to them in

lieu of the existing �ats, on the same terms as in the case of other

members, provided the appellants continue to remain members of the

Society. Under the Development Agreement, the respondent No. 1 is

obliged to complete the project within 18 months from the date of

receipt of full Commencement Certi�cate from the Corporation. The

full Commencement Certi�cate would be issued only upon the vacant

possession of the entire building is delivered to the respondent No. 1

who in turn would demolish the same with a view to reconstruct a

new building in its place. Signi�cantly, out of twelve (12) members, ten

(10) members have already acted upon the Development Agreement

as well as have executed separate undertaking-cum-agreement with

the respondent No. 1 Developer. They have already vacated �ats in

their occupation to facilitate demolition of the existing building and

have shifted to alternative transit accommodation as back as in

February, 2009. The project has been stalled because of the obstruction

created by the appellants herein who are in minuscule minority. The

said ten members of the Society who have already shifted their

premises, they and their family members are su�ering untold

hardship. At the same time, the respondent No. 1 who has already

spent huge amount towards consideration of the Development

Agreement and incurred other incidental expenses to e�ectuate the

Development Agreement in addition will have to incur the recurring

cost of paying monthly rent to the ten members who have already

shifted to transit accommodation. The learned Single Judge has noted

that the appellants are not in a position to secure the amount invested

and incurred including the future expenses and costs of the

respondent No. 1 herein in case the project was to be stalled in this

manner. Even before this Court the appellants have not come forward

to compensate the respondent No. 1 herein and the other ten members

of the Society for the loss and damage caused to them due to

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avoidable delay resulting from the recalcitrant attitude of the

appellants. Considering the impact of obstruction caused by the

appellants to the redevelopment proposal, not only to the

respondent No. 1 Developer but also to the overwhelming majority

of members (10 out of 12) of the Society, the learned Single Judge of

this Court opined that it is just and convenient to not only appoint

the Court Receiver but to pass further orders for preservation as

well as protection and improvement of the property which is

subject-matter of Arbitration Agreement. We have already noticed

that the Court's discretion while exercising power under section 9

of the Act is very wide. The question is whether in the fact situation

of the present case it is just and convenient to appoint Court Receiver

coupled with power conferred on him to take over possession of the

entire building and hand over vacant and peaceful possession thereof

to the respondent No. 1 who in turn shall redevelop the property so as

to provide �ats to each of the members of the Society in lieu of the

existing �ats vacated by them as per the terms and conditions of the

Development Agreement, as ordered by the learned Single Judge. For

the reasons noted by the Learned Single Judge which we have

reiterated in the earlier part of this decision, we �nd that it would be

just and convenient to not only appoint Court Receiver to take over

possession of the property but also pass further order of empowering

the Court Receiver to hand over vacant possession of the suit building

to the respondent No. 1 to enable him to complete the redevelopment

work according to the terms and conditions of the Development

Agreement.

(emphasis and underlining added)

27) The Division Bench in Girish Mulchand Mehta took note of Rule

803E of the Bombay High Court Original Side Rules under which the

Court is empowered to direct issuance of notice to all persons who are

likely to be a�ected by the proceedings. The Division Bench held that

Court’s powers under Section 9 are very wide and accordingly upheld

the order of the Single Judge directing vacation of possession of �ats even

though the Appellants therein were not signatories to the Development

Agreement. What is important are the �ndings recorded by the Division

Bench holding that the proprietary rights all members of the Society in

respect of the �ats in their possession would be subservient to right

acquired by the developer under the Development Agreement and

cannot extricate the Society of its obligations under that agreement.

28) In our view, the judgment in Girish Mulchand Mehta clearly lays

down a law that covenants of Development Agreement would bind even

non-cooperative members, who are not signatories thereto and Court can

exercise power under Section 9 of the Act to direct handing over of

possession of the �ats to the developer by such non-cooperative members

for the purpose of demolition and construction of new building. The

judgment in Girish Mulchand Mehta has consistently been followed in

various decisions of this Court and in order not to increase the length of

this judgment, we �nd it unnecessary to discuss ratio of all of those

judgments. This is how the issue of jurisdiction of Court exercising power

under Section 9 of the Act to make interim measures against member of

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Co-operative Society who is not signatory to the Development Agreement

is well settled.

(emphasis and underlining supplied)

15) In Ambit   Urbanspace, the garage occupiers were not

members of the Society and therefore this Court has decided the further

issue of permissibility to make interim measures under Section 9 of the

Act against a person occupying premises in the Society’s building but

not a member thereof. In the present case, it is not necessary to go into

the said aspect as Respondent No.2-garage occupier is not only a

member of the Society but the Developer has agreed to allot him

permanent alternate accommodation. Therefore, the ratio of the

judgment in Ambit Urbanspace is relevant to the present Appeals only

to the extent of principle of rights of individual members of the Society

being subservient to Society’s obligation under the Development

Agreement. This Court exercising jurisdiction under Section 9 of the Act

can make interim measures against individual members of the Society

who refuses to co-operate in the redevelopment process. Thus

covenants of Development Agreement would bind even a non-co-

operating member of the Society. The Court exercising powers under

Section 9 of the Act can therefore make interim measures qua such non-

co-operating members by directing them to vacate possession of

premises for ensuring smooth redevelopment of Society’s building. This

would conclude the �rst issue for determination.

16) Now we turn to the second and the main issue involved in

the Appeals. As observed above, the learned Single Judge has taken

note of dispute between Respondent Nos.2 to 6 with the Society about

grant of lesser additional area in redevelopment process. It is held that

Respondent Nos.2 to 4 are being discriminated by not granting   pari

pasu bene�t of additional area as compared to residential unit owners.

The issue for consideration is whether the Court exercising power

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under Section 9 of the Act can refuse to make interim measures on the

ground of existence of such dispute between Society and members. As

held in Girish Mulchand Mehta  (supra), the grievances between the

Society and its members qua entitlements �owing out of redevelopment

process cannot be agitated in proceedings �led under Section 9 of the

Act. They need to be decided separately under Section 91 of the M.C.S.

Act as the Co-operative Court alone has jurisdiction to decide validity

of Resolutions adopted by the General Body of the Society. If such

disputes do not touch upon business of Society, the member will have

to �le a Civil Suit. This position is also clear from the following

observations made by this Court in judgment in Calvin Properties and

Housing (supra) :-

In my view, in these proceedings under Section 9 of Arbitration and

Conciliation Act, this Court cannot adjudicate upon the merits of

individual claims of the respondents members of the society and

the same can be adjudicated only in appropriate proceedings. In

these proceedings only interim measures can be granted by this

Court. This Court is thus not adjudicating on the issue raised by

respondent Nos. 2 to 6C whether they are entitled to any larger area

as claimed. In view of the fact that more than 3/4th majority of

members have passed resolution and have agreed to appoint the

petitioner as developer on the terms and conditions agreed upon and

recorded in development agreement, in my view, respondent Nos. 2 to

6C cannot stop the redevelopment project.

(emphasis and underlining added)

17) In our view, therefore the alleged grievances of Respondent

Nos.2 to 4 in respect of various decisions taken by the General Body and

Managing Committee of the Society in implementing the

redevelopment process cannot be decided in petition �led under

Section 9 of the Act nor existence of such disputes would be a bar for

Section 9 Court to make interim measures in a given case. The members

of the Society are bound by the covenants of the Development

Agreement and if they act contrary to the covenants of the Development

Agreement, the Court exercising power under Section 9 of the Act can

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step in and make necessary interim measures. Merely because an

individual member has some grievances against the Society in respect

of either appointment of Developer or implementation of

redevelopment process or grant of additional area, the same needs to be

resolved outside the framework of Section 9 of the Arbitration Act.

Such grievances can be agitated either in a dispute �led under Section

91 of the M.C.S. Act if they touch upon the business of the Society or in

the alternative members can �le a Civil Suit in respect of their

grievances qua the decisions adopted by the Society if they do not touch

upon the business of the Society. In the present case, Respondent No.2

has raised serious disputes about the manner in which the

redevelopment process is implemented by the Society. Undertaking

redevelopment through a Developer, choice of Developer made by the

General Body of the Society, as well as the bene�ts granted to the garage

owners are sought to be questioned by Respondent No.2. He needs to

adopt appropriate proceedings qua his grievances. While Respondent

Nos.3 and 4 have �led a dispute before Co-operative Court, Respondent

No.2 has apparently not �led any proceedings to challenge the

Resolutions adopted by the General Body of the Society. However,

existence of such disputes cannot be a reason to defeat petition �led

under Section 9 of the Act.

18) Reliance placed by Mr. Narula on Division Bench judgment

of this Court in Avenues Seasons Properties LLP (supra) does not cut

any ice. This Court has decided Appeal under Section 37 of the Act in

which order passed under Section 8 of the Act was under challenge. In

case before the Division Bench, the Plainti�s had sought a declaration

that their bungalows were separate and individual structures and that

the Resolution passed by the Housing Society seeking to include their

bungalows in redevelopment process was illegal. In that suit, the

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Developer �led an application under Section 8 of the Act for return of

plaint by relying on arbitration clause in the Development Agreement

executed with the Society. In the light of this factual position, the issue

before the Division Bench was whether Plainti�s, who did not sign the

Development Agreement, were bound by arbitration clause and

whether the plaint in their suit could be directed to be returned by

having recourse to Section 8 of the Act. This Court concluded that a

party who is not a signatory to the Development Agreement and who

had �led a suit seeking a declaration for exclusion of bungalows from

redevelopment process could not be relegated to arbitration by virtue of

agreement executed between the Developer and the Society. In our

view, the judgment has no application to the facts of the present case.

Though it is sought to be suggested by Mr. Narula that the views

expressed in Avenues   Seasons   Properties   LLP and in Ambit

Urbanspace are not consistent, in our view, there is no inconsistency in

the views as the issue before the Division Bench in Avenues Seasons

Properties LLP was entirely di�erent and arose in the context of a suit

�led by bungalow owners for a declaration that they should be treated

separately from the other structures of the Society and should not be

included with Society’s redevelopment process. On the other hand, in

Ambit  Urbanspace, the garage occupiers, who were not signatories to

the Development Agreement, wanted to participate in the

redevelopment process, but were insisting that they must be provided

with permanent alternate accommodations while carrying out

redevelopment of the Society’s building. Apart from this, there is a

fundamental di�erence between the nature of proceedings involved in

both the judgments. Avenues   Seasons   Properties   LLP proceedings

arose out of Developer’s application under Section 8 of the Act seeking

return of plaint and relegation of dispute to arbitration, whereas

proceedings in Ambit Urbanspace arose out of petition �led under

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Section 9 of the Act. The position remains consistent that a non-

member and a non-signatory to the Development Agreement can also

be roped in for seeking interim measures under Section 9 of the Act if

such a person occupies any premises in the building of the Society. In

Avenues Seasons Properties LLP, the claim of the Plainti�s was that

they do not occupy any part of the building of the Society and their

bungalows are independent than that of structures of the Society. This

the fundamental di�erence between the two judgments. In the instant

case, Respondent Nos.2 to 4 are part of Society’s building and have not

taken a position that they need to be excluded from redevelopment

process. In our view, therefore reliance by Mr. Narula on judgment of

Division Bench of this Court in Avenues Seasons Properties LLP does

not assist the case of Respondent No.2.

19) Mr. Narula has relied upon celebrated judgment of the

Apex Court in Wander Ltd. (supra) in support of his contention that

Appellate Court cannot interfere in exercise of discretion of the Trial

Court while passing interim order. It must be observed at once that the

judgment in Wander Ltd. outlines the jurisdiction of the Appellate

Court exercisable under Order 43 of the Civil Procedure Code, 1908

against an order of Trial Court granting or refusing to grant temporary

injunction under Order XXXIX Rules 1 and 2 of the Code. In that sense,

principles may not strictly apply to proceedings before the Appellate

Court under Section 37 of the Act while deciding correctness of order

made under Section 9 of the Act. However, even if the principle

enunciated in Wander Ltd. are held to be applicable to Appeal under

Section 37 of the Act, we are of the view that interference in the order

passed by the learned Single Judge is warranted in the facts and

circumstances of the present case as exercise of discretion is based on

irrelevant consideration of entitlement of Respondent Nos.2 to 4 in the

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matter of allotment of additional area in the new building. As held

above, dispute of allotment of additional area is not a relevant

consideration for deciding the petition under Section 9 of the Act as the

said dispute needs to be resolved in independent proceedings under

Section 91 of the M.C.S. Act or by �ling a Civil Suit. Ordinarily, the

Appellate Court would be loathe in interfering with discretion exercised

by the learned Single Judge. However, where irrelevant consideration

has a�ected the mind of the Court while exercising the discretion, the

Appellate Court would be justi�ed in interfering with exercise of

discretion. In the instant case, the equitable and discretionary relief of

interim measures is declined to the developer by taking into

consideration the aspect of alleged discriminatory treatment meted out

to Respondent Nos.2 to 4. What is however ignored is the position that

the Developer has no role to play in deciding the distribution of

additional area between the members. That decision is taken by

majority of members of the society. Thus, the relief of interim

measures is declined to the developer by taking into consideration a

factor over which it has no control. Therefore, in our view exercise of

discretion while declining relief under Section 9 of the Act is improper

warranting interference by the Appellate Court.

20) Reliance is placed by both the parties on judgment of the

Apex Court in Bengal Secretariat cooperative Land Mortgage Bank

and Housing Society Ltd. (supra). Mr. Khandeparkar has relied on the

said judgment in support of the contention that Court cannot sit as an

Appellate Authority over commercial wisdom of General Body of the

Society, whereas, Respondents have relied upon very same judgment in

support of the contention that if the decision of General Body of the

Society is product of fraud or misrepresentation or is opposed to

statutory provisions, the Court can interfere in the decision of the

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General Body of the Society. There can be no dispute about this

proposition. However, the issue is about the exact forum which can go

into the correctness of the Resolution adopted by the General Body of

the Society. If the Resolution adopted by the General Body of the

Society touches upon business of the Society, such resolution needs to

be challenging by �ling application under Section 91 of the M.C.S. Act.

On the other hand, if such Resolution does not touch upon business of

the Society, the remedy for an a�ected party is to �le a Civil suit. Under

no circumstances, however, such dispute can be remotely raised in

proceedings �led under Section 9 of the Act.

21) So far as the issue of transfer of membership of Respondent

Nos.3 and 4 in pursuance of execution of gift is concerned, the same is

of little relevance to the redevelopment process undertaken by the

Society and the Developer. If the donees are aggrieved by non-grant of

membership to them in respect of Flat No.8, they have appropriate

remedy available under the provisions of the M.C.S. Act. As of now, the

Developer can only deal with current members of the Society and as

and when the donees of Respondent Nos.3 and 4 secure membership of

the Society, the Developer is bound to handover possession of alternate

accommodation in favour of such transferee member. Vacation of

possession of the premises need not wait admission of donees as

members of the society. Vacation of premises by original member and

grant of possession of alternate accommodation to the succeeding

member is not barred. In our view therefore the aspect of execution of

gift by Respondent Nos. 3 and 4 is wholly irrelevant to the issue of

vacation of premises for carrying out the redevelopment process.

22) The last issue that remains is about possibility of arbitration

taking place between the parties. The Society and its members are

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bound by the covenants of the Development Agreement. If Society fails

to discharge its obligations under the Development Agreement and if its

members do not vacate possession of premises, the Developer will have

to invoke arbitration and seek appropriate reliefs against the Society.

Non-vacation of premises by Respondent Nos. 2 to 4 can thus become a

trigger point for invocation of arbitration by Developer against the

Society. It is therefore di�cult to hold at this juncture that there is

absolutely no possibility of arbitration taking place between the parties.

23) In our view, therefore the Developer has made out a case

for grant of interim measures in petition �led under Section 9 of the

Act. We accordingly proceed to pass the following order :-

(I) Judgment and order dated 20 June 2025 passed in Arbitration

Petition No. 175/2025 is set aside.

(II) Respondents Nos. 2 to 4 are directed to execute consent letters

and to vacate the possession of the premises in their occupation

to the Developer in terms of the Development Agreement dated

12 March 2025 for the purpose of demolition and redevelopment

of Society’s building.

(III) In the event Respondent Nos.2 to 4 fail to vacate possession

of the premises in their occupation within a period of four weeks,

the Developer is granted liberty to approach the Court Receiver

of this Court, who shall take possession of premises in occupation

of Respondent Nos.2 to 4 and handover the same to the

Developer by taking police assistance, if necessary.

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24) With the above directions, the Arbitration Appeals are

allowed without any order as to costs. With dismissal of the Appeals,

nothing survives in Interim Applications and the same also stand

disposed of.

[SANDEEP V. MARNE, J.] [CHIEF JUST ICE]

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