Bombay High Court
Shri Maruti Mahadeo Kudale vs Shri Gajanan Baburao Pawar on 4 September, 2025
Author: N. J. Jamadar
Bench: N. J. Jamadar
2025:BHC-AS:37175
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Arun Sankpal
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 11281 OF 2025
Shivranjan Towers Sahakari Griha Rachana
Sanstha Maryadit,
A Cooperative Housing Society, registered under
the provisions of Maharashtra Cooperative
Societies Act, 1960
Having office at: Survey No.
12/19+20+22+23+29+30+31,
Someshwarwadi, Pashan, Pune - 411 008.
Through Its Chairman:
Mr. Avinash Benegal,
Age:Adult, Occupation: Business
Address for correspondence; Survey No.
12/19+20+22+23+29+30+31,
Someshwarwadi, Pashan, Pune - 411 008. ..Petitioner
Versus
1. Bhujbal Constructions
A partnership firm in accordance
ARUN
RAMCHANDRA
with the provisions of Indian Partnership
SANKPAL
Act, 1932,
Digitally signed
by ARUN
RAMCHANDRA
Having its Office at: Survey No. 12,
SANKPAL
Date: 2025.09.04
20:55:33 +0530
Someshwarwadi, Pashan, Pune - 411 008.
Represented Through its Partners:
a. Sanjay Tukaram Bhujbal
Age: 69 years, Occupation: Business
b. Dilip Tukaram Bhujbal
Age: 73 years, Occupation: Business
Both residing at: Survey No. 12,
Someshwarwadi, Pashan, Pune - 411 008.
1/23
::: Uploaded on - 04/09/2025 ::: Downloaded on - 04/09/2025 21:43:20 :::
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2. Subhadra Tukaram Bhujbal
Age: 93 years, Occupation: Agriculturist.
3. Sanjay Tukaram Bhujbal
Age: 69 years, Occupation: Business
4. Dilip Tukaram Bhujbal
Age: 73 years, Occupation: Business
5. Kishor Tukaram Bhujbal
Age: 67 years, Occupation: Business and
Agriculture
6. Vijay Tukaram Bhujbal
Age: 75 years, Occupation: Business and
Agriculture
7. Sameer Vijay Bhujbal
Age: 48 years, Occupation: Business and
Agriculture
8. Yogesh Sanjay Bhujbal
Age: 45 years, Occupation: Business and
Agriculture
Nos. 2 to 8 residing at: Having its Office
at: Survey No. 12,
Someshwarwadi, Pashan, Pune - 411 008. ...Respondents
Mr. A.A. Kumbhakoni, Senior Advocate, with Ronak Utagikar, Anand
Akut, Ameya Patwardhan and Manoj Badgujar, for the
Petitioner.
Mr. S.C. Wakankar, with Aishwarya Bapat, for Respondent No.1.
Mrs. S.D. Chipade, AGP, for the Respondent-State.
CORAM: N. J. JAMADAR, J.
RESERVED ON : 20th AUGUST 2025
PRONOUNCED ON : 4th SEPTEMBER 2025
JUDGMENT:
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1. The challenge in this Petition is to an order dated 14th May 2025
passed by the sole Arbitrator on an Application filed by the Petitioner-
Respondent in Arbitration Claim Petition No. 1 of 2025, under Section
16 of the Arbitration and Conciliation Act, 1996 ("the Act of 1996").
2. The background facts necessary for the determination of this
Petition can be stated as under:
2.1 Respondent Nos. 2 to 8 were the erstwhile holders of the parcels
of land bearing Survey Nos. 12/19+20+22+23+29+30+31,
admeasuring 27800 sq mtrs situated at village Pashan, Taluka Haveli,
District Pune. Under diverse development agreements, the Respondent
Nos. 2 to 8 granted development rights in respect of the aforesaid land
in favour of the Respondent No.1-firm. Pursuant thereto the Respondent
No.1 constructed five buildings i.e. A-2, B-2, B-3, C-2 and C-3 and sold
various tenements therein to the purchasers by executing Agreements for
Sale. The Respondent No.1 was thus governed by the legal regime
enshrined by the Maharashtra Ownership of Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer) Act, 1963
(" the MOFA"). The Respondent No.1 allegedly failed to discharge its
obligations under MOFA in as much as an association of flat purchasers
was not formed. Consequently, the flat purchasers of buildings A-2, B-2,
B-3, C-2 and C-3 formed the Petitioner-society. As the Respondent No.1
failed to convey the land in favour of the Petitioner-society, in breach of
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its obligations under MOFA, the Petitioner filed an application under
Section 11 of the MOFA before the Competent Authority.
2.2 By an order dated 28th December 2018, the Competent Authority
ordered to issue a certificate for grant of unilateral deemed conveyance
in respect of 16280.70 sq mtrs land out of the total area of 27800 sq
mtrs, alongwith the buildings constructed thereon. Since the Respondent
No.1 did not execute the conveyance, the deemed conveyance came to
be executed and registered by the authorised officer on 13 th February
2019.
2.3 The Respondent No.1 issued a notice to the Petitioner thereby
invoking Arbitration, as provided under Clause 38 of the Agreement for
Sale executed in favour of the the individual purchasers. Eventually, the
Respondent filed Arbitration Petition No. 145 of 2024 seeking
appointment of an Arbitrator under Section 11 of the Act of 1996. The
said Petition was allowed by an order dated 9 th December 2024.
However, it was clarified that the Petitioner was at liberty to raise all
questions of jurisdiction within the meaning of Section 16 of the Act of
1996 and all questions in that regard were expressly kept open.
2.4 The Respondent No.1 filed a statement of claim before the
Arbitrator. In view of the peremptory order passed by the learned
Arbitrator, the Petitioner was constrained to file Written Statement as
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well as a counter claim thereto. However, availing the liberty granted by
this Court, the Petitioner filed an Application under Section 16 of the Act
of 1996, asserting inter alia that the dispute is not arbitrable and there
was no Arbitration Agreement between the Claimant-Respondent No.1
and the society-Petitioner herein. The Arbitration Clause embedded in
individual Agreement executed by the members of the Petitioner-society
cannot be construed as "an existing Arbitration Agreement" between the
Petitioner and Respondent No.1, as required under Section 7 of the Act
of 1996. That the Petitioner-society was not even signatory to the
alleged Arbitration Agreement. Conversely the Deed of Deemed
Conveyance executed in favour of the Petitioner-society does not contain
any Arbitration Clause.
2.5 The Respondent No.1 resisted the Application by filing Reply. It
was inter alia contended that since indisputably the individual
Agreement holders had formed the Petitioner-society, all the rights and
responsibilities of the individual Agreement holders, who were the
members of the Petitioner-society, stood vested in the Petitioner-society.
Reliance was sought to be placed on Section 8 of the Act of 1996 to infer
the existence of an arbitral dispute between the Petitioner and
Respondent No.1.
2.6 By the impugned order the learned Arbitrator was persuaded to
dismiss the Application under Section 16 opining, inter alia, that the title
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of the Petitioner-society flowed through the individual Agreements and,
thus, the Petitioner-society was bound by the terms, rights and
responsibilities as incorporated in the individual Agreements. It was
further observed that to sustain the counter claim, the Petitioner-society
was relying upon the very same individual Agreements which contain
the Arbitration Clause. Thus, the challenge to the jurisdiction of the
Arbitrator was not sustainable.
2.7 Being aggrieved, the Petitioner-society has invoked the writ
jurisdiction.
3. At the outset, Mr Wakankar, the learned Counsel for the
Respondent No.1 assailed the maintainability of the Petition.
4. It was submitted that the legal position is fairly crystallized to the
effect that an order passed by the Arbitrator under Section 16 of the Act
of 1996 can only be assailed in a proceedings under Section 34 of the
Act of 1996 and such an order is not amenable to the extraordinary writ
jurisdiction, except in a case of patent lack of inherent jurisdiction.
Thus, according to Mr. Wakankar, the Petition deserves to be dismissed
in limine.
5. Mr. Kumbhakoni, the learned Senior Advocate for the Petitioner,
countered the submissions on behalf of the Respondent No.1 with
tenacity. It was urged that the present case is indeed one of exceptional
rarity. In the face of the incontestable documents on record, the only
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inference that can be drawn is that there is no Arbitration Agreement
between the Petitioner and Respondent No. 1 and the Petitioner cannot
be compelled to arbitrate by banking upon the Agreement for Sale
executed by individual flat purchasers. Resultantly, it is the case of
patent lack of inherent jurisdiction. Amplifying the submission, Mr.
Kumbhakoni would urge that, the endeavour of Respondent No.1 to
compel the Petitioner to arbitrate by propounding the theory of
"claiming through" does not merit countenance as the controversy is set
at rest by the Constitution Bench Judgment in the case of Cox and Kings
Limited Vs Sap India Private Limited & Anr.1
6. Mr. Kumbhakoni further submitted that under Section 36 of the
Maharashtra Cooperative Societies Act 1960, the Petitioner-society has
an independent juristic existence, apart from its individual members.
The Petitioner-society is legally entitled to acquire and hold its own
property. Since the substance of the challenge in the statement of the
claim is to the conveyance of the title to the property under the Deed of
Deemed Conveyance, in which there is no Arbitration Clause, the
initiation of Arbitration against the Petitioner who is a non-signatory to
the prior Agreement to sale between the Respondent No.1 and the
individual flat purchasers, is legally incompetent. To this end, Mr.
Kumbhakoni placed reliance on a judgment of a learned Single Judge of
this Court in the case of BKS Galaxy Realtors LLP (Previously known BKS
1 (2024) 4 SCC 1.
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Galaxy Realtors Pvt Ltd) and Ors Vs Sharp Properties and Ors, 2 wherein
it was enunciated that once a conveyance is executed the object,
purpose, effectiveness and validity of the Agreement for Sale comes to
an end and thus the Arbitration Clause in such Agreement for Sale
comes to an end as the said Agreement stands fully discharged and does
not have any legal effect upon the execution of the conveyance.
7. Before adverting to note the legal framework which informs the
exercise of the writ jurisdiction, keeping in view the minimal
interference in the arbitration process, it may be necessary to note the
nature of the claim of the Respondent No.1 before the learned Arbitrator.
It is the stated case of the Respondent No.1 that it has no objection to
the grant of conveyance to the extent of land component admesuring
7469.39 sq mtrs as the entitlement of the Petitioner-society is restricted
to 7469.39 sq mtrs of land and not 16280.70 sq mtrs of land as granted
by the Competent Authority. Under the order dated 28 th December 2018
the Competent Authority has conveyed the area of land more than the
lawful entitlement of the Petitioner-society and its members. The
Respondent No.1 has thus sought a declaration that the entitlement of
the Petitioner-society is restricted to 7469.39 sq mtrs of land and not
16280.70 sq mtrs as recorded in the Deed of Deemed Conveyance dated
13th February 2019, and the consequential reliefs.
2 2024 SCC OnLine Bom 3514.
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8. It would be contextually relevant to note that there is not much
controversy over the fact that the Respondent No.1 had executed
Agreement for Sale in favour of individual flat purchasers who
eventually formed the Petitioner-society. The said Agreements contain an
Arbitration Clause, as under:
"38. In case of any dispute between the Promoter and
the Purchaser regarding interpretation of any of the
terms of this Agreement or regarding any aspect of the
transaction including quality of construction work,
defective service by the Promoter, delay in construction
work and/or sale deed, alterations in the plan, parking
arrangement, grant of exclusive uses, rendering of
account etc then such dispute shall be referred to the
arbitration of a single arbitrator to be appointed by the
Promoter whose decision shall be final and binding on
both the parties."
9. The core controversy revolves around the question as to whether
the Petitioner-society is bound by the aforesaid Arbitration Clause? The
learned Arbitrator, when his jurisdictional competence was questioned
by filing an Application under Section 16 of the Act of 1996, has ruled in
favour of the existence of jurisdiction. Can a challenge thereto be
entertained by this Court in exercise of the writ jurisdiction is the moot
question?
10. The legal regime enshrined by the Act of 1996 was directed
towards the consolidation of the law governing the Arbitration. The Act
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of 1996 is thus a self-contained code. In order to achieve the object of
the speedy disposal of the arbitration matters by the Arbitral Tribunals,
which are the forums of the dispute redressal chosen by the parties, the
Act of 1996 prescribes time limits for the disposal of such matters and
even the Applications and Appeals preferred against the orders passed
thereunder.
11. The minimal judicial intervention is emphasized by incorporating
a non-obstante clause in Section 5 of the Act of 1996, which provides
that notwithstanding anything contained in any other law for the time
being in force, in matters governed by Part -I of the Act of 1996, no
judicial authority shall intervene except where so provided in the said
Part. Section 37 of the Act of 1996 provides a limited right of Appeal
against specified judgments and orders only. The Legislative intent
becomes more clear in Sub-section (3) of Section 37, which interdicts a
second Appeal against an order passed under Section 37 of the Act of
1996. Thus, the determination under Section 16 of the Act of 1996 by
the Arbitrator, has to follow the discipline envisaged by the said section,
which provides a mechanism of challenge under Section 34 of the Act of
1996.
12. This brings to the fore the limits of the exercise of the writ
jurisdiction, premised on the pristine proposition that the legal regime
under an enactment cannot override the constitutional guarantee and
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right. The question was elaborately considered by the Three Judge
Bench of the Supreme Court in the case of Deep Industries Limited Vs
Oil and Natural Gas Corporation Limited & Anr, 3 wherein the Supreme
Court after adverting to the relevant provisions of the Act of 1996 and
the previous pronouncements including the Seven Judge Bench
Judgment of the Supreme Court in the case of SBP & Co Vs Patel
Engineering Ltd And Anr,4 expounded the legal position as under:
"17. This being the case, there is no doubt whatsoever
that if petitions were to be filed under Articles 226/227
of the Constitution against orders passed in appeals
under Section 37, the entire arbitral process would be
derailed and would not come to fruition for many years.
At the same time, we cannot forget that Article 227 is a
constitutional provision which remains untouched by the
non-obstante clause of Section 5 of the Act. In these
circumstances, what is important to note is that though
petitions can be filed under Article 227 against
judgments allowing or dismissing first appeals under
Section 37 of the Act, yet the High Court would be
extremely circumspect in interfering with the same,
taking into account the statutory policy as adumbrated
by us herein above so that interference is restricted to
orders that are passed which are patently lacking in
inherent jurisdiction.
18. ... ... ...
19. ... ... ...
3 (2020) 15 SCC 706.
4 (2005) 8 SCC 618.
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20. While the learned Additional Solicitor General is
correct in stating that this statement of the law does not
directly apply on the facts of the present case, yet it is
important to notice that the seven-Judge Bench has
referred to the object of the Act being that of minimizing
judicial intervention and that this important object
should always be kept in the forefront when a 227
petition is being disposed of against proceedings that are
decided under the Act.
21. ... ... ...
22. One other feature of this case is of some
importance. As stated herein above, on 09.05.2018, a
Section 16 application had been dismissed by the
learned Arbitrator in which substantially the same
contention which found favour with the High Court was
taken up. The drill of Section 16 of the Act is that where
a Section 16 application is dismissed, no appeal is
provided and the challenge to the Section 16 application
being dismissed must await the passing of a final award
at which stage it may be raised under Section 34. What
the High Court has done in the present case is to invert
this statutory scheme by going into exactly the same
matter as was gone into by the arbitrator in the Section
16 application, and then decided that the two year ban
was no part of the notice for arbitration issued on
02.11.2017, a finding which is directly contrary to the
finding of the learned Arbitrator dismissing the Section
16 application. For this reason alone, the judgment
under appeal needs to be set aside."
(emphasis supplied)
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13. In the case of Punjab State Power Corporation Limited Vs Emta
Coal Limited And Anr5 further explaining the import of the observations
in paragraph 17 in the case of Deep Industries (Supra) (extracted
above), the Supreme Court cautioned against the purported misuse of
the said expression of law, in the following words:
"4. We are of the view that a foray to the writ court
from a Section 16 application being dismissed by the
arbitrator can only be if the order passed is so perverse
that the only possible conclusion is that there is a
patent lack in inherent jurisdiction. A patent lack of
inherent jurisdiction requires no argument whatsoever
--it must be that perversity of the order that must
stare one in the face.
5. Unfortunately, the parties are using this
expression which is in our judgment in Deep Industries
Ltd (Supra), to go to the Article 227 Court in matters
which do not suffer from a patent lack of inherent
jurisdiction. This is one of them. Instead of dismissing
the writ petition on the ground stated, the High Court
would have done well to have referred to our
judgment in Deep Industries (Supra) and dismiss the
Article 227 petition on the ground that there is no such
perversity in the order which leads to patent lack of
inherent jurisdiction. The High Court ought to have
discouraged similar litigation by imposing heavy costs.
The High Court did not choose to do either of these
two things."
5 (2020) 17 SCC 93.
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14. The issue again came up for consideration before a Three Judge
Bench of the Supreme Court in Bhaven Construction Through
Authorised Signatory Premjibhai K. Shah Vs Executive Engineer, Sardar
Sarovar Narmada Nigam Limited & Anr, 6 wherein the sole Arbitrator had
rejected an Application of the Respondent No.1 therein and held that the
sole Arbitrator had jurisdiction to adjudicate the dispute. After adverting
to the judgment of the Supreme Court in the case of Nivedita Sharma Vs
Cellular Operators Association of India, 7 the Supreme Court enunciated
that, it is prudent for a judge to not exercise discretion to allow judicial
interference beyond the procedure established under the enactment.
This power needs to be exercised in exceptional rarity, wherein one party
is left remediless under the statute or a clear, "bad faith" shown by one
of the parties. This high standard set by the Supreme Court is in terms of
the legislative intention to make the Arbitration fair and efficient.
15. With reference to the decision in the case of Deep Industries
(Supra), the Supreme Court further observed that Section 16 of the Act
of 1996 necessarily mandates that the issue of jurisdiction must be dealt
first by the Tribunal before the Court examines the same under Section
34. The Respondent No.1 was, therefore, not left remediless, and has
statutorily been provided a chance of Appeal.
6 (2022) 1 SCC 75.
7 (2011) 14 SCC 337.
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16. The position in law which thus emerges is that, ordinarily, the
challenge to an order determining the jurisdiction of the Arbitral
Tribunal must be through the regime envisaged by Section 16 and
Section 34 of the Act of 1996. A Writ Petition can be entertained by the
High Court only in cases of patent lack of inherent jurisdiction. In that
category also, the lack of jurisdiction should be such that it does not
warrant any investigation and becomes so glaringly evident that no
other inference is plausible. An exceptionally rare situation which justify
the exercise of plenary jurisdiction may also arise where in view of the
order passed by the Arbitrator, one of the parties is left completely
remediless or "bad faith" is clearly exhibited by one of the parties.
Barring these exceptional situations, the Writ Court will be well-advised
not to interdict the arbitral process by adhering to the principle of
minimal interference and non break-ability of the arbitral process.
17. Whether the Petitioner has succeeded in making out such a strong
case as to cross the jurisdictional impediment? Mr Kumbhakoni wold
urge, the answer must be in the affirmative. The thrust of the submission
of Mr. Kumbhakoni was that the Deed of Deemed Conveyance which is
the subject matter of challenge in the Arbitration proceeding does not
contain the Arbitration Clause and the fact that the Agreements to Sale
in favour of individual flat purchasers contain the afore-extracted
Arbitration Clause is of no avail.
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18. The first part of the submission premised on the absence of the
Arbitration Clause in the Deed of Deemed Conveyance does not carry
much substance. An Arbitration Agreement is a creature of contract. The
principle of party autonomy is the sub-stratum of arbitration process. A
Deed of unilateral Deemed Conveyance, in the very nature of things, is
strictly not an instrument inter-vivos. Such a Deed of unilateral Deemed
Conveyance would not incorporate an Arbitration Clause which is an
expression of the consensual decision to resolve the dispute by a forum
of choice. Therefore, the submission of Mr. Kumbhakoni that since the
Conveyance Deed does not contain an Arbitration Clause, the Petitioner-
society cannot be compelled to arbitrate, does not carry much substance.
Consequently, reliance placed by Mr. Kumbhakoni on the judgment in
the case of BKS Galaxy Realtors LLP (Supra) is inapposite in the facts of
the cast at hand.
19. Can the Petitioner-society be compelled to arbitrate in view of an
Arbitration Clause contained in the Agreement for Sale executed in
favour of the individual flat purchasers?
20. Undoubtedly, the Petitioner-society is not a signatory to the said
Agreement for Sale and it could not have been a signatory as it was yet
to be formed. Therefore, the issue cannot be determined only on the
premise that the Petitioner-society is not a signatory to those Agreement
for Sale which contains the Arbitration Clause.
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21. At this juncture the nature of a cooperative society and especially
its relations qua the members who form the society after its
incorporation, assumes critical salience. Under Section 36 of the MCS
Act 1960, the registration of a society shall render it a body corporate by
name under which it is registered, with perpetual succession and a
common seal, and with power to acquire, hold and dispose of property,
to enter into contracts, to institute and defend suits and other legal
proceedings and to do all such things as are necessary for the purpose
for which it is constituted.
22. With the registration under the Act of 1960, a society becomes a
corporate body. In the case of Daman Singh & Ors Vs State of Punjab &
Ors,8 a Constitution Bench of the Supreme Court had an occasion to
consider the juridical status of a cooperative society under the Punjab
Cooperative Societies Act, 1961. Section 30 of the Punjab Cooperative
Societies Act, 1961 also conferred status of a body corporate on every
society registered thereunder. In the context of the submission that the
cooperative societies were not the corporations within the meaning of
Article 31-A(1)(c) of the Constitution of India, the Supreme Court
examined as to what a "corporation" means and comprehends ordinarily
and in the scheme of the Constitution. Thereafter the Supreme Court
ruled that there cannot be the slightest of doubt that a cooperative
society is a corporation as commonly understood.
8 (1985) 2 SCC 670.
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23. In the case of Daman Singh (Supra) the Supreme Court also
expounded the position in law as to what happens to the person who
formed themselves into a society or subsequently became members of
the society. The Supreme Court enunciated that once a person becomes a
member of a cooperative society, he looses his individuality qua the
society and has no independent rights except those given to him by
statute and by-laws. He must act and speak through the society or rather,
the society alone can act and speak for him qua rights or duties of the
society as a body.
24. In the light of the aforesaid juridical status of a cooperative
society and the relation of the individual members qua the society, the
nature of the underlying dispute between the parties assumes critical
salience. It can hardly be contested that the rights and obligations of the
parties have their genesis in the Agreements for Sale executed by
Respondent No.1 in favour of individual flat purchasers. By executing
those Agreements the Respondent No.1 subjected himself to the regime
of MOFA.
25. The legal regime under MOFA postulates that after execution of
an Agreement for Sale of the flats/units in a building to be constructed if
the Promoter, on construction and putting the flat/unit purchasers in
possession of the respective units, fails to take steps for formation of
cooperative society, as mandated under Section 10 thereof, or fails to
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convey the title and execute the documents, in accordance with the
terms of the Agreement, the obligations of the Promoter can be enforced
by approaching Competent Authority and, thereupon, the Competent
Authority is empowered to issue a certificate to the Sub-Registrar or any
other appropriate Registration Officer certifying that it is a fit case for
enforcing unilateral execution of a conveyance conveying the right, title
of the Promoter in the land and building in favour of the society as
deemed conveyance.
26. In a recent pronouncement in the case of Arunkumar H. Shah Huf
Vs Avon Arcade Premises Cooperative Society Limited and Ors, 9 the
Supreme Court enunciated that the Competent Authority while deciding
the Application under Section 11(3) of MOFA by following summary
procedure cannot conclusively and finally decide the question of title.
Therefore, notwithstanding the order under sub-section (4) of Section
11, the aggrieved parties can always maintain a civil suit for establishing
their rights.
27. The aforesaid position in law has been crystallized by a long line
decisions of this Court, commencing from the judgment of a learned
Single Judge of this Court in the case of Mazda Construction Company
Vs Sultanabad Darshan CHS Ltd.10
9 2025 SCC OnLine SC 828.
10 2012 SCC OnLine Bom 1266.
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28. In the light of aforesaid legal position, reverting to the facts of the
case, incontrovertibly, the Respondent No.1 could have instituted a Suit
seeking the determination of the question of title over the area of land
in respect of which the certificate of deemed conveyance has been
ordered to be issued by the Competent Authority. Mr. Kumbhakoni
attempted to salvage the position by canvassing a submission that the
Petitioner-society would not be prejudiced if such a course is adopted by
the Respondent No.1 as the avenues against an adverse determination in
such a Suit are not as restricted as in the case of an award in an
arbitration proceeding. The submission looses sight of the very efficacy
of the arbitration as a preferred dispute resolution mechanism, by the
choice of the parties. If a Suit could be legally instituted, a fortiori the
Respondent No. 1 could invoke the arbitration, provided there exists an
arbitration agreement.
29. The matter can be looked at from another perspective. What the
Petitioner-society enforced before the Competent Authority was the
obligation of the Respondent No.1 under Section 11(1) to convey to the
Petitioner his right, title and interest in the land and building in
accordance with the Agreement executed under Section 4 of the MOFA
in favour of the individual flat purchasers. The right accrued to the
Petitioner-society under Section 11 of the MOFA arose from the
obligation incurred by the Respondent No.1 under the Agreements for
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Sale, under Section 4 of the MOFA. Independent of such obligations of
the Respondent No.1, the Petitioner-society could not have maintained
the application for deemed conveyance.
30. The learned Arbitrator was, therefore, justified in holding that if
the Petitioner-society was seeking to enforce the rights created in favour
of the individual members under the Agreements for Sale, the Petitioner-
society cannot claim that it is not bound by the arbitration clause
contained in those Agreements.
31. As noted above, the juridical status of a cooperative society is that
of a Corporation. Consistent with this position, an analogy of
enforcement of pre-incorporation contracts contained in Section 15(h)
and 19(e) of the Specific Relief Act, 1963 can also be drawn. In the case
at hand the Respondent No.1 entered into Agreements for Sale in favour
of individual flat purchasers who subsequently formed the cooperative
society. It is true the individual members at that point of time were not
in the shoes of the Promoter of the society. However, after formation of
the cooperative society by the individual members, the cooperative
society professed to enforce the obligations of the Respondent No.1
under those very Agreements for Sale, espousing the rights of the
individual flat purchasers as a Corporation aggregate.
32. In the instant arbitration proceeding, the Respondent No.1 is
seeking declaration in regard to the deemed conveyance on the basis of
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those very Agreements for Sale which form the basis of rights and
obligations of the parties. Respondent No.1 now cannot enforce the
contractual obligations against the individual flat purchasers, when they
have formed the Petitioner-society and deemed conveyance has been
ordered to be executed in favour of the Petitioner.
33. In the case of Radhakrishna Ananta Prabhu and Ors Vs Giri
Constitution and Ors,11 a learned Single Judge of this Court held that on
incorporation, the contract becomes enforceable by or against the
company or the society depending upon the terms of incorporation and
adoption of the contract by the company or society and the provisions of
Section 15(h) and 19(e) of the Specific Relief Act. 1963 would apply to
such contracts.
34. For the forgoing reasons, I find it difficult to agree with the
submission of Mr. Kumbhakoni that the case at hand is governed by the
principles of law which apply to the arbitrability of the dispute with a
non-signatory to the contract. The Petitioner-society cannot be said to be
a third party to the arbitration dispute.
35. Resultantly, it cannot be said that the Petitioner has succeeded in
making out such exceptional case as would warrant interference in the
arbitral process. The impugned order neither suffers from such patent
inherent lack of jurisdiction nor can be said to be so perverse as to stare
in the face.
11 1992 Mh.L.J. 836.
-WP-11281-2025.DOC
36. Thus, the Petition does not deserve to be entertained.
37. Hence the following order:
:ORDER:
The Petition stands dismissed with costs.
[N. J. JAMADAR, J.]
