Abhay Damodar Kanhere vs Morya Infraconstruct Private Limited ...
2025 Latest Caselaw 3966 Bom

Bombay High Court

Abhay Damodar Kanhere vs Morya Infraconstruct Private Limited ... on 16 June, 2025

2025:BHC-AS:24209

                                                                               28.ARP.148.2024.doc


                                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                                  CIVIL APPELLATE JURISDICTION

                                            ARBITRATION PETITION NO.148 OF 2024

                       Abhay Damodar Kanhere                                       ....Petitioner
                            Versus
                       Morya Infraconstruct Pvt. Ltd.                              ...Respondent


                             Mr. Sanjeev Sawant a/w. Mr. Malhar Bageshwar i/b Abhishek
                             Matkar, Advocate for Petitioner.

                             Mr. Pankaj J. Das, Advocate for Respondent.


                                                   CORAM: SOMASEKHAR SUNDARESAN, J.

                                                   DATE    : JUNE 16, 2025


                       ORAL JUDGEMENT :

                       Context and Background:

1. This Petition has been filed under Section 11 of the Arbitration

and Conciliation Act, 1996 ("Arbitration Act") seeking appointment of

an arbitrator in connection with disputes and differences arising out of

an Agreement for Sale dated November 16, 2019 ( "Agreement"). The

arbitration agreement is contained in Article 13.2 (found at Page 83 of

the Petition) of the Agreement. In the interest of brevity, the

arbitration agreement is not being extracted here. Suffice it to say that

this matter falls within the jurisdiction of this Court.

          Digitally
          signed by
          AARTI
AARTI     GAJANAN
GAJANAN   PALKAR
PALKAR    Date:
          2025.06.19

          17:38:52
          +0530                                               June 16, 2025
                       Aarti Palkar





                                                   28.ARP.148.2024.doc

2. The core scope of dispute between the parties is about the

provision of amenities in the flat purchased by the Petitioner from the

Respondent not being in conformity with the Agreement. It is common

ground that the agreement in question has an arbitration clause as an

arbitration agreement contained in Article 13.2 (Page 83).

Core Issue:

3. For purposes of these proceedings, the only objection that is

presented for my consideration on behalf of the Respondent is a point

of law, namely, that the disputes sought to be raised by the Petitioner

are not arbitrable in view of a judgment dated October 25, 2024 passed

by the Learned Single Judge of this Court in Second Appeal No.434 of

2023 ("Second Appeal Judgement"), whereby in the conclusion, it is

stated that disputes amenable to the jurisdiction of the Real Estate

(Regulation And Development) Act, 2016 (" RERA Act") are non-

arbitrable in nature. Consequently, it is submitted that the Learned

Single Judge of this Court has held that once jurisdiction of RERA is

attracted, the dispute is not amenable to arbitration. The upshot is that

judicial discipline would require this Court to follow the same position

as declared in that judgement.

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Analysis and Findings:

4. In my opinion, this objection need not detain my attention

significantly because of multiple reasons - first, the jurisdiction under

Section 11 of the Arbitration Act is a specific one with very limited

contours of examination permitted; second, issues of jurisdiction are

actually left to the arbitral tribunal under Section 16 of the Act; and

third, the ratio in the Second Appeal Judgement is not about whether

arbitration is ousted by RERA but the converse - whether RERA's

jurisdiction is ousted by arbitration.

Not the Ratio:

5. In Para 3 of the said judgment in the Second Appeal, the question

of law framed is explicitly set out, and reads as follows:-

"Whether the jurisdiction of Real Estate Regulatory Authority established under Section 20 of the Real Estate Regulation and Development Act, 2016 is ousted, if the agreement between the promoter and the allottee contains arbitration clause?"

[Emphasis Supplied]

6. Therefore, it is quite clear that what the Learned Single Judge

ruled on was the question as to whether the jurisdiction of RERA,

which has been established under the RERA Act would be ousted, if the

agreement between the parties in those proceedings were to contain an

arbitration clause. Evidently, that has been answered by the Learned

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Single Judge in the said judgment, holding that the existence of an

arbitration clause would not oust the jurisdiction of RERA.

7. This is a fairly straightforward ratio because the RERA is a

regulatory authority, vested with certain punitive as well as remedial

powers. That statutory jurisdiction created by legislation could never

stand ousted by the existence of an arbitration agreement. On the

other hand, whether the existence of RERA's statutory powers would

render arbitral proceedings impossible to commence is not a question

that was framed in the judgment, and therefore any observation in that

regard can never be regarded as the ratio of the judgement.

8. As stated by the Supreme Court in Ravi Ranjan1:

41. It is well settled that a judgment is a precedent for the issue of law that is raised and decided. The judgment has to be construed in the backdrop of the facts and circumstances in which the judgment has been rendered. Words, phrases and sentences in a judgment, cannot be read out of context. Nor is a judgment to be read and interpreted in the manner of a statute. It is only the law as interpreted by in an earlier judgment, which constitutes a binding precedent, and not everything that the Judges say.

[Emphasis Supplied]

9. Consequently, any observation that may indicate that the

existence of jurisdiction of RERA would oust the arbitration

Ravi Ranjan Developers Pvt. Ltd. Vs. Aditya Kumar Chatterjee - 2022 SCC OnLine SC 568

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jurisdiction would be an obiter or a comment that does not form part of

the ratio laid down in the aforesaid judgment.

Ouster - Mixed Question of Fact and Law:

10. A quick prima facie set of observations on the RERA Act would

also be in order. The RERA Act contains a conventional provision on

the jurisdiction of RERA being in addition to and not in derogation of

other laws (Section 88). It also has a provision on the legislation

having effect notwithstanding anything inconsistent contained in other

laws (Section 89). These provisions would show that the RERA Act

would apply in addition to other laws and other laws would apply in

addition to RERA. Section 79 of the RERA Act provides for an ouster of

jurisdiction of civil courts. However such ouster is in respect of

entertaining suits and proceedings in respect of any matter that RERA,

its adjudicating officers and the Appellate Tribunal is empowered to

determine under the RERA Act. Therefore, it would be necessary for

the court approached to examine whether the subject matter of

determination presented to it is something that the RERA, the

adjudicating officers or the Appellate Tribunal is empowered to

determine.

11. Section 31 of the RERA Act provides for complaints against any

promoter, allottee or real estate agent, alleging violation of the RERA

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Act and subordinate law made thereunder. This essentially lays down

the foundation of what RERA is empowered to determine - whether

the RERA Act and subordinate law under it, is violated. Section 35

empowers RERA to investigate. Section 36 empowers RERA to issue

interim orders in the context of any contravention of the RERA Act -

basically a remedial power. Section 37 entails power to issue directions

in implementation of the RERA Act. Section 38 entails powers to

impose penalty or interest upon contravention of the RERA Act and

subordinate legislation under it. Section 71 empowers adjudicating

officers to compute compensation payable under Section 12 (truth in

advertising and promotion), Section 14 (adherence to sanctioned plans

and layouts), Section 18 (return of funds and restitution) and Section 19

(information rights).

12. Therefore, it is in respect of these matters that a civil court's

jurisdiction would be ousted. What the court is called upon to

determine would need to be examined from what the pleading

discloses. Whether that matter is something that the instrumentalities

under the RERA Act are empowered to determine would have to be

considered next. This would present essentially a mixed question of

fact and law. It is only thereafter that one could determine if the ouster

in Section 79 of the RERA Act is attracted.

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13. Therefore, in the context of arbitration, if one were to extrapolate

that the ouster of the civil court's jurisdiction automatically means an

ouster of the arbitral tribunals too (in itself, another important

question of law), it is only when the arbitral tribunal is presented with a

subject matter of adjudication that the import of the ouster would come

into consideration.

Section 16 and Section 11 of the Arbitration Act:

14. This is eminently something capable of being adjudicated in an

application under Section 16 of the Arbitration Act. I have to agree with

Learned Counsel for the Petitioner in this regard. He would submit

that the arbitral tribunal is eminently capable of dealing with any

question of ouster under Section 16 of the Arbitration Act, and that this

Court should restrict its examination to existence of the arbitration

agreement, in terms of Section 11(6A) of the Arbitration Act.

15. There is considerable force in this submission. It is not for a

Section 11 Court to lay down the law and articulate the ratio on whether

the Learned Single Judge in the Second Appeal meant to hold that

arbitration jurisdiction stands ousted when that was not the issue

framed for being answered.

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Directions:

16. On a separate note, Learned Counsel for both sides also express a

joint view that the disputes in question in the present case are

eminently capable of being resolved and given a little bit of time, the

parties may not need to proceed to any dispute resolution forum.

17. Taking this into account and considering that an arbitration

agreement is indeed in existence, no useful purpose would be served

keeping these proceedings pending any further, but it would be

appropriate to defer the effect of this order by a period of six weeks

from the upload of the order on the website of this Court to enable the

parties to constructively engage and attempt to resolve their disputes.

That would be a course of action that they ought to prefer to presenting

intricate questions of law that could end up with both parties

expending serious financial resources in litigation.

18. Needless to say, should the disputes be resolved, there shall be no

need for them to approach the arbitrator appointed hereby. Should the

dispute not be resolved within the aforesaid period of six weeks, the

arbitral tribunal appointed hereby shall have jurisdiction to commence

the reference once the parties approach the arbitral tribunal.

19. With the aforesaid observations and directions this Petition is

finally disposed of in the following terms :-

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A] Mr. Rohit Joshi, a Learned Advocate of this Court is hereby appointed as the Sole Arbitrator to adjudicate upon the disputes and differences between the parties arising out of and in connection with the Agreement referred to above.

The contact details of the Learned Arbitrator are set out below:-

               Address           : 203, Anmol Saphire,
                                   Baji Prabhu Deshpande Road,
                                   Near Gajanan Vada Pav Centre,
                                   Vishnunagar, Naupada,
                                   Thane (West) - 400 602.

               Email Id :        : [email protected]


               B]        A copy of this Order will be communicated to the

Learned Sole Arbitrator by the Advocates for the Petitioner within a period of one week from today. The Petitioner shall provide the contact and communication particulars of the parties to the Arbitral Tribunal along with a copy of this Order;

C] The Learned Sole Arbitrator is requested to forward the statutory Statement of Disclosure under Section 11(8) read with Section 12(1) of the Arbitration Act to the parties within a period of two weeks from receipt of a copy of this Order;

D] The parties shall appear before the Learned Sole Arbitrator on such date and at such place as indicated, to obtain appropriate directions with regard to conduct of the arbitration including fixing a schedule for pleadings, examination of witnesses, if any, schedule of hearings etc. At

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such meeting, the parties shall provide a valid and functional email address along with mobile and landline numbers of the respective Advocates of the parties to the Arbitral Tribunal. Communications to such email addresses shall constitute valid service of correspondence in connection with the arbitration and;

E] All arbitral costs and fees of the Arbitral Tribunal shall be borne by the parties equally in the first instance, and shall be subject to any final Award that may be passed by the Tribunal in relation to costs.

20. Needless to say, nothing contained in this order is an expression

of an opinion on merits of the matter or the relative strength of the

parties. All issues on merits are expressly kept open to be agitated

before the arbitral tribunal appointed hereby.

21. All actions required to be taken pursuant to this order, shall be

taken upon receipt of a downloaded copy as available on this Court's

website.

[SOMASEKHAR SUNDARESAN, J.]

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