Bombay High Court
Rajendra Builders vs Balaji Padmavati Developers on 14 November, 2025
2025:BHC-OS:21399-DB
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPEAL (L) NO.31431 OF 2025
IN
COMMERCIAL ARBITRATION PETITION (L) NO.8261 OF 2025
ALONG WITH
INTERIM APPLICATION (L) NO.32014 OF 2025
IN
COMMERCIAL ARBITRATION APPEAL (L) NO.31431 OF 2025
1. M/s. Rajendra Builders ]
A partnership firm, registered under the ]
provisions of Indian Partnership Act, 1932, ]
having its registered office at 310, Mehta ]
House, 3rd Floor, 36, Pandit Ramabai Road, ]
Mumbai - 400 007 ]
2. Rajendra Chunilal Mehta ]
An Adult, Indian Inhabitant, having address ]
at 310, Mehta House, 3rd Floor, 36, Pandita ] ..Appellants /
Ramabai Road, Mumbai - 400 007 ] Applicants
Versus
1. Balaji Padmavati Developers, ]
A partnership firm, registered under the ]
provisions of Indian Partnership Act, 1932, ]
Having its registered office at A/603, ]
Kedarnath Co-operative Housing Society Ltd ]
Near W.E. Highway, Dahisar (E), ]
Mumbai - 400 068 ]
2. Borivali Amita Co-operative Housing ]
Society Ltd. registered under the MCS Act, ]
1960, having its office at Kulupwadi Road, ]
Near National Park, Borivali (East), ]
Mumbai - 400 066. ]
3. Municipal Corporation of Greater ]
Mumbai Executive Engineer ]
(Building Plan App.Dept.) ]
Building Proposal WS II, MCGM, ]
Gov. Officers Buildings, 90 Feet Road, ]
Asha Nagar, Kandivali (E), Mumbai-400066 ] ..Respondents.
1/18
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Mr. Ashish Kamat, Senior Advocate a/w Mr. Raj Patel a/w
Mr. Bharat Jain i/b Jain & Jain Law Associates, Advocates for the
Appellants-Applicants.
Mr. Gauraj Shah a/w Mr. Prince Vaishnav i/b Ms. Khushbu
Jagani, Advocates for the Respondent No.1.
Mr. Piyush Raheja a/w Mr. Harjot Singh and Mr. Pratik Jani i/b
Prime Legem, Advocates for the Respondent No.2.
Ms. Pooja Yadav i/b Ms. Komal Punjabi, Advocates for the
Respondent No.2-BMC.
Mr. N.C. Pawar, Court Receiver present.
CORAM : SHREE CHANDRASHEKHAR, CJ &
GAUTAM A. ANKHAD, J.
Order is reserved on : 15th October 2025
Order is pronounced on : 14th November 2025
PER, GAUTAM A. ANKHAD, J.
By the impugned order dated 17 th September 2025, passed
in proceedings under Section 9 of the Arbitration and Conciliation
Act, 1996 ("the Act"), the appellants/original respondent no.2 & 3
have been directed to hand over its flats to the respondent no.1 for
the purposes of redevelopment. Aggrieved by the said order, the
appellants have preferred this Appeal under Section 37 of the Act.
2. The facts relevant to the present appeal are as under:
(a) The appellant no.1 was the original developer of
respondent no.2-society. The appellant no.2 also
owns certain units in the said building. The
building was constructed in 1980s and had
deteriorated to a dilapidated condition.
(b) In 2021, the respondent no.2 initiated the process
of redevelopment. The appellant no.1 was one of
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the bidders and submitted its proposal on 4 th
October 2021. The respondent no.2 did not accept
the appellant's proposal and instead appointed
respondent no.1 as its developer. A Development
Agreement dated 21st May 2025 was executed
between the respondents no.1 and 2 for the
redevelopment of the building. This binds all the
members of the society including respondent no.2.
It contains an arbitration clause.
(c) Respondent no.1 has obtained several
development permissions, including an Intimation
of Disapproval ("IOD") from respondent no.3 on
13th January 2025.
(d) All members of the Society, except the appellant,
have vacated their flats as required under the
Development Agreement. Respondent no.1
commenced payment of transit rent to the
members, but is unable to obtain vacant physical
possession of all units due to the appellant's
refusal to vacate.
(e) After losing the redevelopment project, the
appellant filed multiple proceedings challenging
the process, including filing:
(i) Writ Petition (L) No. 14121 of 2025
challenging, inter alia, the IOD and other
permissions issued by the respondent no.3;
(ii) Suit (L) No. 17520 of 2025 seeking, inter alia,
a declaration that redevelopment is illegal,
for cancellation of the Development
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Agreement dated 21st May 2025 and for
damages.
(iii) Complaints before the Deputy Registrar, Co-
operative Societies;
(iv) Police complaint before Kasturba Marg Police
Station; and
(v) Complaints to various officers of respondent
no.3 regarding the development permissions
granted to the respondent no.1.
3. In these circumstances, the respondent no.1 filed the
Section 9 Petition seeking directions against the appellants to
forthwith vacate the premises, remove its belongings, and hand
over peaceful possession, to enable the redevelopment.
4. By the impugned order, the appellants were directed to
vacate the units on or before 30 th September 2025, failing which
the Court Receiver has been authorised to take physical
possession of the premises and hand over the same to the
respondent no.1 for redevelopment. Several ancillary directions
have also been issued.
5. We have heard Mr. Kamat, learned senior advocate for the
appellant, Mr. Shah, learned advocate for the respondent no.1 and
Mr. Raheja, learned advocate for the respondent no.2, who
adopted the submissions of Mr. Shah.
6. Mr. Kamat, learned Senior Advocate appearing for the
appellants, has confined his arguments in this appeal to a single
issue, namely, that the property cannot be redeveloped and this
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aspect has been misconstrued by the learned single Judge. He
submitted that the property falls within the buffer zone of Sanjay
Gandhi National Park (in short, SGNP). He relied upon the
Notification dated 5th December 2016 issued by the Ministry of
Environment and Forests, and submitted that construction
activity cannot be permitted as the property is situated within 77
meters of the SGNP boundary and thus falls within the buffer
zone. Reliance was placed on a letter dated 27 th June 2025 issued
by the Conservator and Director, SGNP to the appellant no.1,
stating that old Survey No.18, Plot No.3 is 77 meters from the
SGNP and is included in the list of environmentally sensitive areas
of the Park. It was submitted that the plot cannot be developed
without an NOC from the SGNP Monitoring Committee. Lastly, he
submitted that this Court by its order dated 14 th January 2025 in
Public Interest Litigation No.48 of 2023 (in short, PIL Order), has
held that no project within the SGNP area can be allowed until
approval to the Zonal Master Plan is approved by the State
Government. It was thus contended that the impugned order
proceeds on an erroneous premise, overlooks these material
environmental restrictions, and that directions to hand over
possession are premature, at least until the requisite NOC from
SGNP is obtained by the respondent no.1-developer.
7. Mr. Shah, learned counsel for the respondent no.1, opposed
the appeal and submitted that the appellant, being a disgruntled
and unsuccessful competing developer, has initiated multiple
proceedings only to obstruct the redevelopment. He submitted
that the subject land does not fall within 100 meters of the SGNP
boundary and this is borne out from the documents issued by
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MCGM, including the Development Plan remarks and Survey
Report dated 22nd November 2024. The respondent no.1 has,
despite repeated complaints by the appellant, applied for and
obtained NOCs from various statutory authorities. The respondent
no.1 has also executed Permanent Alternate Accommodation
Agreements (in short, PAAA) with all the members of the Society
except the appellant and has been paying transit rent to the
members who vacated their premises since May 2025. The
appellant, being a minority member, cannot be permitted to
obstruct the redevelopment to the detriment of the majority. The
building is dilapidated, stands entirely abandoned, and the
appellant's premises are locked and unused, as evidenced by the
Society's electricity bill for April 2025 showing zero consumption.
He submitted that the land is capable of being redeveloped and
that, in any event, the respondent no.1 will secure all necessary
permissions, including from the respondent no.3-MCGM and the
SGNP. In these circumstances, no ground is made out for
interference in the impugned order.
8. Mr. Shah relied upon the following judgments in support of
his submissions: (a) "Pranav Constructions Limited v. Priyadarshini
Co-operative Housing Society Limited & Ors." in Arbitration Appeal
(L) No.20093 of 2025 with Arbitration Appeal (L) No.20373 of
2025 decided on 14th July 2025 (Coram: Alok Aradhe, CJ. &
Sandeep V. Marne, J.), (b) "Stoughton Street Tech Labs Pvt. Ltd. v.
Jet Skyesports Gaming Pvt. Ltd." 2022 SCC OnLine Bom 11770;
and (c) "Girish Mulchand Mehta & Anr. v. Mahesh S. Mehta & Anr."
2010(2) Mh.L.J. 657. It was submitted that the impugned order is
well reasoned and calls for no interference in this appeal.
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Reasons and analysis
9. After considering the submissions and perusing the material
on record, we are of the view that the impugned order passed
under Section 9 warrants no interference. It is settled law that the
appellate Court while reviewing the exercise of discretion by the
section 9 Court will be guided by the principles set out by the
Hon'ble Supreme Court in "Wander Ltd v. Antox India Private Ltd."
(1990) Supp. SCC 727. The relevant portion reads as follows:-
"14. The appeals before the Division Bench were against the exercise
of discretion by the Single Judge. In such appeals, the appellate
court will not interfere with the exercise of discretion of the court
of first instance and substitute its own discretion except where
the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the court had
ignored the settled principles of law regulating grant or refusal
of interlocutory injunctions. An appeal against exercise of
discretion is said to be an appeal on principle. Appellate court
will not reassess the material and seek to reach a conclusion
different from the one reached by the court below if the one
reached by that court was reasonably possible on the material.
The appellate court would normally not be justified in interfering
with the exercise of discretion under appeal solely on the
ground that if it had considered the matter at the trial stage it
would have come to a contrary conclusion. If the discretion has
been exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken a
different view may not justify interference with the trial court's
exercise of discretion."
We do not find that the discretion exercised by the learned
Single Judge is arbitrary, capricious or perverse so as to justify
interference in our limited jurisdiction under Section 37 of the Act.
In fact, the point canvassed before us on behalf of the appellant
has been considered in the impugned order.
10. The MoEF Notification dated 5th December 2016 stipulates
the Eco-Sensitive Zone (in short, ESZ) around the SGNP. The ESZ
extends from 100 meters to 4 kilometres from the SGNP
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boundary. The activities within ESZ are regulated by clause 11 of
the Table in the Notification. It permits construction in accordance
with the provisions of the approved Development Plan and other
applicable rules and regulations under the Maharashtra Regional
and Town Planning Act. The Notification further lists, at serial
no.14, the villages and survey numbers of lands falling within the
ESZ at Kanheri. Whilst Mr. Shah submits that the subject
property does not feature in the said list and is outside the buffer
zone, we are not entering into factual determination as to whether
the property falls within or beyond 100 meters of the SGNP
boundary. This issue lies within the domain of the planning
authority. The learned Judge has recorded at paragraph 10 of the
impugned order that :
"10. Learned Counsel for the MCGM has specific instructions to
confirm that MCGM's assured and confirmed official position is
that the property does not fall within the 100-meter buffer zone
of SGNP. However, MCGM has imposed a condition that the
Developer and the Society must get a No Objection Certificate
from the forest authorities, who are in charge of SGNP. Against
this backdrop, what becomes clear is that each of the grounds
raised by Rajendra represents an issue that is or can be
subject matter of adjudication by an appropriate forum..."
11. The respondent no.1 has already furnished an undertaking
before the Section 9 Court that all necessary sanctions, if required
under the said Notification, shall be duly applied for and obtained
from the SGNP and respondent no.3. This has also been recorded
by the learned Judge at paragraph 19 of the impugned order
which reads as under:
"19. The submission by the Developer that whatever sanctions
would be necessary would be applied for and obtained is also
taken on record as an undertaking given to the Court."
In view thereof, we see no reason to interfere with the
findings of the learned Judge.
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12. Secondly, the appellant has already challenged the
redevelopment permissions and IOD granted by the respondent
no.3 by filing Writ Petition (L) No.14121 of 2025. The appellant
has raised the issue of location of the plot in this petition. Despite
having filed the petition nearly six months ago, the appellant has
not secured any ad-interim or interim reliefs therein. Having
raised the very issue before the writ court, it is not open for the
appellant to re-agitate the same in this appeal under Section 37 of
the Act.
13. The submission that the PIL Order amounts to a stay on
development within the ESZ has been dealt with by the learned
Judge at paragraphs 19 and 20 of the impugned order. The object
and purport of the PIL order is to ensure restoration of SGNP and
to prevent encroachment. The Section 9 proceedings are distinct
and we find that view taken by the learned Judge is plausible one,
calling for no interference in the matter. The undertakings of
respondent no.1 have been recorded that development can be
carried out only after all the requisite permissions are obtained.
We thus find no perversity in the view taken by the learned
Judge.
14. In our view, the appellant has failed to make out any case for
setting aside the impugned order. It is material to note that the
appellant is a competing developer, who was unsuccessful in the
bid for redevelopment. It is only thereafter that he began a series
of unsuccessful litigations. The balance of convenience is not in
favour of the appellant. All members of the respondent no.2-
Society have executed the PAAA and vacated their premises in
furtherance of the redevelopment. The appellant does not reside in
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the dilapidated building and, being a lone dissenting minority
member cannot hold the majority to ransom by stalling the
redevelopment. The law on this aspect is well-settled by this Court
in "Girish Mulchand Mehta" and "Pranav Constructions" (supra). We
are bound by the same and the relevant portion in "Pranav
Constructions" reads as follows:
"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 covenants 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, 2010 (2) Mh.L.J. 657, 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 flats,
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
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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 flats 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
reflected in para-12 of the judgment which reads thus :-
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 affect the person who is not party to the
Arbitration Agreement or Arbitration Proceedings
does not affect 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
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appellants in the dispute filed 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. Suffice 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 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 flats) of the property of the Society
cannot defeat the rights accrued to the
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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 affect the proprietary rights of the
appellants does not take the matter any further.
For, the proprietary rights of the appellants in
the flats 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 affect 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
affected by the proceedings, requiring
all or any of such persons to show
cause, within the time specified 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 flats 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
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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 finally 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 finally 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 Resolutions were to be quashed
and set aside by a forum of competent
jurisdiction. In other words, in view of the
binding effect 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 flats 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 flat is associated with their continuance as
member of the Society. It is a different 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
flats in question, as after demolition of the
existing building, the appellants would be
accommodated in the newly constructed flats to
be allotted to them in lieu of the existing flats, on
the same terms as in the case of other members,
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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 Certificate
from the Corporation. The full Commencement
Certificate 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. Significantly, 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 flats 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
suffering 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 effectuate 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 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
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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 flats to
each of the members of the Society in lieu of the
existing flats 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 find 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
affected 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 flats even though the
Appellants therein were not signatories to the
Development Agreement. What is important are the
findings recorded by the Division Bench holding that the
proprietary rights all members of the Society in respect
of the flats 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
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of possession of the flats 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 find 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 Co-operative Society who
is not signatory to the Development Agreement is well
settled. (emphasis and underlining supplied)
15) ... 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
first issue for determination."
15. The appellants have also instituted Suit (L) No.17520 of
2025 opposing the redevelopment and for damages of Rs. 15
crores. In that suit, the respondent no.1-developer made a
statement that access to the appellants' premises would be
granted as and when required, which statement was made without
prejudice to its rights and contentions in the Section 9
proceedings. The appellants have failed to obtain any reliefs in the
Section 9 Court nor is granted any further protection by the Civil
Court. It is obvious that the appellant has resorted to frivolous
litigations to obstruct the redevelopment. This cannot be
permitted. Several statutory permissions have already been
obtained by the respondent no.1. The appellant no.2, being a
member is bound by the decisions of the respondent no.2-Society.
We find that the impugned order is well reasoned and the learned
Judge has judiciously exercised his discretion in passing the
interim order under Section 9 of the Act.
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16. For all the aforesaid reasons, we find no merit in the appeal.
Commercial Arbitration Appeal (L) No. 31431 of 2025 is
dismissed. Interim Application (L) No. 32014 of 2025 does not
survive and is disposed of. The respondents are at liberty to claim
actual legal costs incurred in this appeal in the arbitration.
[GAUTAM A. ANKHAD, J.] [CHIEF JUSTICE]
BHARAT
DASHARATH
PANDIT
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