[Cites 16, Cited by 0]

Bombay High Court

Bhadra Enterprises vs Veer Tower Cooperative Housing Society ... on 10 February, 2026

     2026:BHC-OS:3835


                                                                                  F-J-ARBAP-103-2025+.doc



                                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                           ORDINARY ORIGINAL CIVIL JURISDICTION

                                           ARBITRATION APPLICATION NO. 103 OF 2025

                        Shree Dev Shasan Jain Shwetambar Murtipujak                             ...Applicant
                        Trust
                                   Versus
                        Veer Tower CHS Ltd.                                                     ...Respondent

                                                                  WITH
                                           ARBITRATION APPLICATION NO. 360 OF 2025

                        Bhadra Enterprises                                                      ...Applicant
                                   Versus
                        Veer Tower CHS Ltd.                                                     ...Respondent



                          Mr. Yogesh Naidu, a/w Eden D.H. Ribeiro & Khushbu Mota
                          Advocates for the Applicant.
                          Dr. Abhinav Chandrachud, a/w. Pragya & Mr. Ameya Khot, i/b
                          M/s.   Legal   Vision,  Advocates    for  Respondent    in
                          ARBPL/2695/2025.
                          Mr. Aadil Parsurampuria, a/w Pragya & Ameya Khot, i/b M/s.
                          Legal Vision, Advocates for Respondent in ARBAP/103/2025.



                                 CORAM                          : SOMASEKHAR SUNDARESAN, J.
                                 RESERVED ON                    : October 13, 2025
                                 PRONOUNCED ON                  : February 10, 2026
          Digitally
          signed by
          ASHWINI
ASHWINI   JANARDAN
JANARDAN VALLAKATI
VALLAKATI Date:
          2026.02.10
          15:24:48
          +0530




                                                                Page 1 of 29
                                                              February 10, 2026
                       Ashwini Vallakati




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JUDGEMENT:

Context and Factual Background:

1. The captioned proceedings are Applications filed under

Section 11 of the Arbitration and Conciliation Act, 1996 (" the Act").

2. Arbitration Application No. 2695 of 2025 is an application

under Section 11 of the Act filed by M/s. Bhadra Enterprises

("Developer"), a developer who has developed a building and eventually

conveyed it to the respondent, Veer Tower Cooperative Housing Society

Ltd. ("Society").

3. Arbitration Application No. 103 of 2025 is an application by

Shree Dev Shasan Jain Shwetambar Murtipujak Trust (" Temple Trust"),

a trust that is a recipient of gifts of land from the Developer for purposes

of a Jain Temple, standing on a part of the premises where a building

called Veer Tower was developed by the Developer.

4. The Developer and the Temple Trust are collectively referred

to as "Applicants".

5. This is a case where the Developer developed a property to

construct a building, which was conveyed to the Society. The Developer

executed sale agreements for various flats with individual flat

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purchasers. Each sale agreement explicitly made it clear that a certain

portion of land had been gifted to the Temple Trust for purposes of a

Jain temple and its functions. In other words, each flat purchaser

entered into a purchase agreement with the Developer, with eyes open,

and clear notice, that the Temple Trust was already a giftee of a certain

portion of land.

6. Each agreement between the Developer and the flat purchaser

contains an explicit disclosure and acknowledgement of the gift already

made to the Temple Trust. Each flat purchase agreement contains an

arbitration clause, which is the arbitration agreement, on the strength of

which, the captioned Applications have been filed.

7. The flat purchasers constituted the Society. The formation of

the Society was a facet clearly contemplated in each flat purchase

agreement, which also made it explicitly clear that the development

rights attendant with the land gifted to the Temple Trust would belong

to the Temple Trust. It was made clear that should the requisite

development by the Temple Trust not be completed at the time of

executing the conveyance of the land by the Developer to the Society,

upon formation of the Society or such other collective body of flat

purchasers, they would execute a fresh agreement in favour of the

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Temple Trust. In other words, the flat purchasers acknowledged the

rights of the potential development attendant with the land gifted to the

Temple Trust, to carry out the full exploitation of the land gifted to the

Temple Trust.

Core Issue:

8. The core question that arises in adjudicating the two

Applications contained in the caption proceedings, is whether the

arbitration agreement contained in identical terms in each flat purchase

agreement, would stand inherited by the relationship between the

Developer and the Society, which is the body corporate formed by the

flat purchasers after completion of their purchases, pursuant to

agreements that each individually contained an arbitration agreement.

9. Admittedly, each flat purchase agreement between the

members of the Society and the Developer contains an arbitration

agreement. The flat purchasers who have privity to such arbitration

agreements, formed the Society. The issue that arises for purposes of

these proceedings under Section 11 of the Act, is whether an arbitration

agreement can be said to be in existence between the Developer and the

Society, and indeed whether it could also deal with disputes between the

Temple Trust and the Society.

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10. For completeness, it may be mentioned that the original

landowner was one M/s. Vandana Properties (" Original Owner"), which

had executed a development agreement dated January 17, 2006, with

the Developer. The building, Veer Tower, was constructed by the

Developer, with the Completion Certificate being received for on

December 8, 2014.

11. A gift of land portions along with development rights and

proportionate entitlements of the Temple Trust had been made by a

registered gift deed dated December 29, 2014 ("2014 Gift Deed"), by the

Developer and the Original Owner in favour of the Temple Trust. This

gift is spelt out and recited in each of the agreements between the

Developer and the members of the Society. Another gift deed dated

February 11, 2022, was also executed to convey the properties and rights

referred to therein to the Temple Trust. The competing claims to

entitlement between the Society and the Temple Trust is the subject

matter of the disputes and differences among the parties.

Suit No. 2952 of 2022:

12. Disputes and differences were raised by the Society by filing

Suit No. 2952 of 2022 before the City Civil Court at Dindoshi (" Suit").

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The suit was rejected by an order dated January 16, 2023 (" Section 8

Order"), allowing applications under Section 8 of the Act filed by the

Developer and the Temple Trust, indicating that the subject matter of

the dispute was covered by the arbitration agreement executed between

each of the members of the Society and the Developer, as inherited by

the Society.

13. Under Section 37 of the Act, only orders refusing to refer the

parties to arbitration under Section 8 are appealable. The Society filed

Writ Petition No. 7220 of 2023 (" WP 7220"), assailing the Section 8

Order, and that is pending before the relevant Bench of this Court.

14. The Society filed Writ Petition No. 211 of 2023 (" WP 211"), in

the disposal of which, a deemed conveyance had been allowed by a

Learned Single Judge of this Court by an order dated February 18, 2025.

15. The captioned Section 11 Applications have been filed by the

Developer and the Temple Trust, seeking reference of the disputes and

differences between the parties to arbitration.

16. In a nutshell, the arbitration agreement is contained in each of

the flat purchase and sale agreements executed between the Developer

and each member of the Society. It is the flat purchasers who organised

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themselves into the Society. Therefore, it is claimed by the Applicants in

both the captioned proceedings that the arbitration agreement has been

inherited by the Society and the disputes and differences between the

members of the Society and the Developer would need to be adjudicated

in arbitration proceedings. The Section 8 Court has effectively ruled as

such.

17. The Applicants contend that the existence of the arbitration

agreement has been rightly endorsed by the Learned City Civil Court.

They claim that the Society is frustrating the arbitration agreement, and

is not prosecuting WP 7220 challenging the Section 8 Order, despite

multiple efforts by the Applicants.

18. Therefore, the Section 8 Order having established the

existence of the arbitration agreement, the Applicants contend that the

arbitration must be allowed to commence and run its course. Therefore,

the Applicants have filed the captioned Section 11 Applications seeking

reference of the disputes to arbitration. The arbitration agreement

named two arbitrators, both of whom recused in January 2025.

Therefore, the Applicants request this Court to constitute the arbitral

tribunal under Section 11 of the Act.

19. The Developer claims direct privity to the arbitration

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agreement with each of the flat purchasers who have now organised

themselves into the Society. The Temple Trust claims through, and

under the Developer, who is a signatory to the arbitration agreement.

20. The Society contends that it has no privity to any arbitration

agreement with either the Developer or the Temple Trust, and that no

arbitral tribunal can be constituted. The Society also contends that the

contrary view returned by the Learned City Civil Court has been

challenged in WP 7220, which is pending.

Analysis and Findings:

Arbitration Agreement - Existence:

21. Against this backdrop, I have heard the Learned Advocates for

the respective parties and with their assistance examined the material

on record. At the threshold, it is evident that the arbitration agreement

between the parties is contained in each of the agreements executed

between the flat purchasers and the Developer, i.e., each of the

constituents of the Society, who have jointly formed the Society. The

Developer has rights against, and obligations owed to, each of the

constituents of the Society and the relationship between the Developer

and these constituents of the Society is governed by the arbitration

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agreement contained in each of the flat purchase agreements.

22. The Temple Trust is claiming through the Developer in terms

of the arbitration agreement executed by the Developer with each

member of the Society. The rights enjoyed by the Developer are the

rights conferred by the Developer on the Temple Trust, of which, the

members of the Society have notice. It is noteworthy that each and

every flat purchaser who is a constituent of the Society, entered into flat

purchase agreements, which contain the arbitration agreement, and also

clearly contain references to the gifts of land and rights to the Temple

Trust, as well as the rights of the Temple Trust.

23. Therefore, each and every member of the Society clearly had

notice of what rights had been granted to the Temple Trust, at the least

in respect of the rights covered by the 2014 Gift Deed. The arbitration

agreement provides for a sole arbitrator with two named alternative

arbitrators. Each of the agreements between each and every flat

purchaser and the Developer contains an identical arbitration

agreement, identifying the same two potential arbitrators. The

Developer invoked arbitration on January 13, 2025, after the Section 8

Order. The Temple Trust invoked arbitration on January 15, 2025,

claiming through the Developer.

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24. Each of the named arbitrators has declined the arbitral

mandate. This has led to the Section 11 proceedings owing to the

rejection of consent by the Society to appointing an arbitrator.

25. The individual members of the Society, each of whom is a

party to an arbitration agreement, have formed the Society, and the

Society claims that it has no privity to any arbitration agreement with

the Developer, or with the Temple Trust. On the other hand, the

Developer contends that the arbitration agreement with each and every

member of the Society would translate into an arbitration agreement

with the Society, since each of the constituents of the Society, has an

arbitration agreement with the Developer. The Temple Trust claims

that it is claiming through the Developer to enforce its rights, which

have clearly been recognised in each of the agreements between the

Developer and each member of the Society.

26. The Section 8 Application was allowed by the Learned City

Civil Court. I find that the each of the Society's constituents has privity

to the arbitration agreement with the Developer, and the Society seeks a

declaration that the gift of land made to the Temple Trust, which is

clearly recorded in the agreements, that each and every member of the

Society has signed, is sought to be declared as illegal. On the face of it,

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this makes the Society a veritable party to the arbitration agreement.

While the Society disclaims privity to the arbitration agreement with the

Developer, each and every agreement for sale executed by each and

every constituent of the Society contains an identical arbitration

agreement.

27. Indeed, the Society would contend that there is no arbitration

agreement between the Developer and the Society as a body corporate.

The arbitration agreement between each constituent of the Society and

the Developer, according to the Society, cannot translate into an intent

to arbitrate that binds the Society, which is purported to be a third party

to such arbitration agreement. In my opinion, this is not a reasonable

stand. The very nature of the arrangement is that each constituent of

the Society is a party to an arbitration agreement and when they form a

society on the very same subject matter of their bilateral agreements, it

would be a classic example of the Society being a veritable party to the

collective arbitration agreement.

28. Therefore, for the Society to claim that there is no privity of

contract between the Society and the arbitration agreement does not

inspire confidence. When each and every member of the Society has

privity to identical commercial provisions and, indeed, to an identical

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dispute resolution clause, it is a classic case of what makes the Society a

veritable party.

29. It is contended on behalf of the Society that the Society is not

a creature of the agreements, but is an independent body corporate

constituted by its members who may have had their own arbitration

clauses with the Developer. The Society further contends that it cannot

be presumed to be bound by such arbitration clauses between its

individual constituents. This contention does not resonate or inspire

confidence in my mind. The very fact that the Society is a collection of

multiple parties having the very same arbitration agreement with the

Developer, would place the Society in the place of a veritable party. The

Society is not an incidental element in the relationship between its

constituents on one side, and the Developer on the other. The subject

matter of the relationship between the Society and the Developer is but

the development of the property that is contracted in individual

contracts between each member of the Society and the Developer. This

is an active, direct and substantive privity, and not an incidental,

ephemeral and insignificant formal privity to the subject. Each of the

agreements between the flat purchasers and the Developer positively

contemplates the formation of the Society, which is undeniably a

product of the operation of the agreements containing the arbitration

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clause.

30. The Society has contended that it is not a veritable party to the

agreements and that there is no mutuality of intention among the

members of the Society to have their disputes resolved by arbitration.

This is a mere statement of a formal objection that entirely lacks

substance. The very cause for the Society's existence is the collection of

interests of its members. Each and every member has privity to the

arbitration agreement executed with the Developer. Each such

counterparty to the arbitration agreement with the Developer has come

together to form the Society. Therefore, the very cause of the Society's

existence is the extension of the identical interests enjoyed by its

members who came together to form the Society. In fact, each and

every bilateral agreement between the Developer and each member of

the Society records that the Society would be formed. The Society's

incorporation is a logical extension of what was contemplated in the

agreement containing the arbitration clause. For the Society, whose

very reason for existence is rooted in the agreements containing the

arbitration clause, to contend that the arbitration clause would not

entail the Society being a veritable party, rings hollow.

31. It is also contended on behalf of the Society that there is no

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subsequent agreement between the Developer and the Society ratifying

the arbitration agreement. This is unnecessary in the facts of this case,

since the very constitution of the Society is contemplated in the bilateral

agreements between the Developer and each counterparty who is now a

member of the Society. The very formation of the Society is a facet of

these bilateral agreements. The fact that the Society would be formed is

an action contemplated in the agreements between the Developer and

each member of the Society. In the factual matrix of this case, the very

existence of the Society is an outcome of the agreements between the

constituents of the Society and the Developer, with the formation of the

Society being an action pursuant to these very agreements.

Arbitrability Issues:

32. The Society also claims that the disputes in question are

beyond the scope of arbitrability, inasmuch as what is sought by the

Society is a cancellation of the gift deeds executed by the Developer in

favour of the Temple Trust with no privity of the Society to such gift

deeds. The Society would contend that 89 flat purchasers who have

executed the agreements containing the arbitration clause have come

together to form the Society with a specific registration. Therefore, the

members of the society are entitled to all the rights and entitlements

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upon formation of the Society and all future development rights

connected with the property would belong to the Society and not to the

Temple Trust. To my mind, this would fall within the ambit of what can

be called "subject matter" arbitrability objection. This falls within the

domain of the arbitral tribunal; and the Section 11 Court must resist the

temptation to pronounce upon this facet upfront, since it could

jeopardise the interests of the parties, who have actually chosen this

activity to be undertaken by the arbitral tribunal.

33. The Society would also contend that in WP 211, a deemed

conveyance had been allowed by a Learned Single Judge of this Court by

an order dated February 18, 2025. That is again a distraction for the

Section 11 Court, which has to focus on the existence of the arbitration

agreement, leaving all facets, including arbitrability to the arbitral

tribunal.

34. It is apparent that the Society has been formed by its

constituents, each of whom had executed an arbitration agreement with

the Developer. The Society is a body corporate and may have a legal

identity distinct from its members but, prima facie, it is clear that the

rights and obligations of the individual members contracted with the

Developer would stand in a continuum into the relationship between

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such members, now constituted into the Society. Evidently, each and

every member of the Society has privity to an arbitration agreement

with the Developer. When the Society was formed, the rights and

obligations owed to and owed by each of its constituent members were

inherited by and succeeded to by the Society.

Scope of Section 11 Court - veritable party examination:

35. I have to be mindful of the scope of my jurisdiction - Section

11 of the Act. While I have to examine the existential question posed in

the objections by the Society, I must be careful not to tread upon the

domain of the arbitral tribunal. The requirement to examine the

existence of the arbitration agreement must be married with the fact

that the Society is not a signatory to the arbitration agreement between

each of its members and the Developer, and the fact that the Temple

Trust is not a signatory to the arbitration agreement between the

members of the Society and the Developer.

36. Towards this end, the following analysis from the declaration

of the law by the Constitution Bench of the Supreme Court in Cox and

Kings1 would be noteworthy:

1 Cox and Kings Ltd. v. SAP India (P) Ltd. - (2024) 4 SCC 1

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164. In case of joinder of non-signatory parties to an arbitration agreement, the following two scenarios will prominently emerge: first, where a signatory party to an arbitration agreement seeks joinder of a non-signatory party to the arbitration agreement; and second, where a non-signatory party itself seeks invocation of an arbitration agreement. In both the scenarios, the referral court will be required to prima facie rule on the existence of the arbitration agreement and whether the non-

signatory is a veritable party to the arbitration agreement. In view of the complexity of such a determination, the referral court should leave it for the arbitral tribunal to decide whether the non-signatory party is indeed a party to the arbitration agreement on the basis of the factual evidence and application of legal doctrine. The tribunal can delve into the factual, circumstantial, and legal aspects of the matter to decide whether its jurisdiction extends to the non-signatory party. In the process, the tribunal should comply with the requirements of principles of natural justice such as giving opportunity to the non-signatory to raise objections with regard to the jurisdiction of the arbitral tribunal. This interpretation also gives true effect to the doctrine of competence-competence by leaving the issue of determination of true parties to an arbitration agreement to be decided by arbitral tribunal under Section 16.

[Emphasis Supplied]

37. Applying the aforesaid prima facie examination standard, to

my mind, what is evident is that the arbitration agreement between the

constituents of the Society and the Developer is clearly in existence. The

very basis of the Society coming into being is the bunch of agreements in

each of which, the arbitration agreement is contained. The very

formation of the Society is a facet contemplated in these agreements

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containing the arbitration clause. Prima facie, it is clear to me that the

arbitration agreement is in existence and the Society, which is but a

creature brought into being as contemplated in the agreements

containing the arbitration agreement and whose constituents are parties

to the arbitration agreement, is a veritable party to the arbitration

agreement. Beyond this threshold, the Section 11 Court must be

cautious not to pronounce upon any facet that would erode the

sovereignty of the domain of the arbitral tribunal.

38. The very fact that the subject matter of the agreement between

each flat purchaser and the Developer was always intended to subject

disputes to arbitration, is a strong pointer of conduct that indicates the

intent to subject disputes relating to the subject matter of the individual

flat purchase agreements to arbitration. The content of the agreements

unequivocally recorded the pre-existing registered 2014 Gift Deed in

favour of the Temple Trust. To that extent, considering that the dispute

raised by the Society in the Suit relates to making claims against the

Temple Trust, and now that the Temple Trust too is claiming through

the Developer against the Society, it is apparent that the Temple Trust

falls into the category of a person claiming through the Developer, who

is a party to the arbitration agreement.

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39. The Temple Trust is seeking to assert a right by claiming

through the Developer, who is himself seeking to assert his rights as a

party to the arbitration agreement with the constituents of the Society,

which in turn has clear subject matter commonality with the rights of

the Temple Trust, which were acknowledged and recognised by each flat

purchaser, who is a constituent of the Society.

40. While these are prima facie findings, the Supreme Court has

explicitly declared in Cox and Kings that the role of the non-signatory

party is to be left to the Arbitral Tribunal. Taking a holistic view of the

matter, it is loud and clear that the subject matter commonality and the

denial of the Temple Trust's entitlements that lies at the heart of the

Society's Suit, even while the Temple Trust's rights were explicitly

recited, recognised and contracted in each of the individual agreements

between the Developer and every constituent of the Society. Satisfied

with this prima facie position, I find no basis to deny allowing these

Applications, making a reference to an Arbitral Tribunal, of course

leaving it to the Arbitral Tribunal appointed hereby to examine any

challenges arising out of jurisdictional facts, which would well be subject

matter of adjudication of evidentiary jurisdictional facts, which fall

within the domain of the Arbitral Tribunal and not the Section 11 Court.

In Cox and Kings, the Supreme Court stated the following:

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140. Section 35 of the Arbitration Act provides that an arbitral award shall be final and binding on the parties and persons claiming under them respectively. In Cheran Properties (supra), this Court rightly observed that the expression "persons claiming under them" is "a legislative recognition of the doctrine that besides the parties, an arbitral award binds every person whose capacity or position is derived from and is the same as a party to the proceedings." It was further observed that "[h]aving derived its capacity from a party and being in the same position as a party to the proceedings binds a person who claims under it."

Similarly, Section 73 also provides that a settlement agreement signed by the parties shall be final and binding "on the parties and persons claiming under them respectively."

141. Sections 8, 35, and 45 use the phrase "parties or any person claiming through or under". The word "or" is used in Section 8 and 45 as a disjunctive particle to express an alternative or give a choice between "parties" or "any person claiming through or under". Consequently, either the party to an arbitration agreement or any person claiming through or under the party can make an application to the judicial authority to refer the dispute to arbitration. It is in the interest of respecting the intention of the parties and promoting commercial efficacy, that the above provisions allow either the party or any person "claiming through or under him" to refer the disputes to arbitration.

142. On the other hand, Sections 35 and 73 use the phrase "parties and persons claiming under them". The use of the word "and" in Sections 35 and 73 conveys the idea that "parties" is to be added or taken together with the subsequent phrase "any person claiming through or under." The above provisions provide that an arbitration award binds not only the parties but also all such persons who derive their capacity from the party

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to the arbitration agreement. Again, the foundational basis for this provision is commercial efficacy as it ensures that an arbitral award leads to finality, such that both the parties and all persons claiming through or under them do not reagitate the claims. Moreover, the use of the word "and" in Sections 35 and 73 leads to an unmistakable conclusion that under the Arbitration Act, the concept of a "party" is distinct and different from the concept of "persons claiming through or under" a party to the arbitration agreement.

[Emphasis Supplied]

41. Applying the aforesaid, it is clear that the Temple Trust, as a

person claiming through the Developer, would be bound by the outcome

of the proceedings. Therefore, in disposal of the Section 11 Application

filed by the Developer, the disputes insofar as they impinge on the rights

and interests of the Temple Trust, of which each flat purchaser who has

constituted the Society has notice, gives privity to the arbitration

agreement in the hands of the Temple Trust. Therefore, the Temple

Trust shall be entitled to be made a respondent by the Developer in the

arbitral proceedings it seeks to initiate against the Society and its

constituents.

42. The interests of the Developer and the Temple Trust being