[Cites 25, Cited by 0]
Bombay High Court
Vishwakiran Cooperative Housing ... vs Super Construction on 17 March, 2026
2026:BHC-OS:6748
Neeta Sawant ARBP 156 of 2025
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 156 OF 2025
Vishwakiran Co-operative Housing
Society Ltd. .....PETITIONER
: VERSUS :
M/s. Super Construction Company ....RESPONDENT
Mr. Amrut Joshi with Mr. Anish Karande and Mr. Shahrukh Shaikh i/b Mr.
Rohit Shetty for the Petitioner.
Mr. Aliabbas Delhiwala with Ms. Usha Singh and Mr. Pritesh Haridas
Bodekar i/b Vyas & Bhalwal, for the Respondent.
CORAM : SANDEEP V. MARNE, J.
JUDG. RESD. ON : 7 MARCH 2026.
JUDG. PRON. ON : 17 MARCH 2026
JUDGMENT :
1) This is a Petition filed under Section 9 of the Arbitration and
Conciliation Act, 1996 (Arbitration Act) seeking interim measures before
commencement of the arbitral proceedings. By the petition, the
Petitioner-Society seeks to restrain the Respondent from obstructing the
Society from carrying out development work of its building by appointing
new developer and from creating any third-party rights in respect of the
development rights conferred on the Respondent vide Agreement for
Redevelopment dated 2 February 2016.
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2) Petitioner is a cooperative housing society and owner of land
plot bearing Survey No. 341, CTS No. 629, Plot No. 1248, Sharda Devi
Marg, Government Colony, Bandra East, Mumbai - 400051 and building
constructed thereon. The building of the society comprises of A-wing of
20 flats, B-wing of 20 flats and C-wing of 5 flats. The total members of the
society are 45. The Occupation Certificate in respect of the buildings was
issued on 29 March 1990. Since the buildings were more than 30 years old
and did not have any lift facility, the members decided to go for
redevelopment thereof. A resolution was adopted in Special General Body
Meeting held on 3 August 2014. The Respondent was selected by the
Society for carrying out redevelopment of its buildings. Accordingly,
registered Development Agreement dated 2 February 2016 was executed
between the Petitioner-Society and Respondent-Developer. Out of the
agreed hardship compensation of Rs.4,60,00,000/-, Respondent-developer
paid 20% amount of Rs.92,00,000/- on 25 April 2016. Since the
Respondent-Developer did not commence redevelopment process, a Show
Cause Notice dated 25 January 2018 was issued by the Petitioner-Society.
Petitioner terminated the Development Agreement by notice dated 30
May 2018. Respondent invoked arbitration clause and thereafter filed
proceedings under Section 11 of the Arbitration Act bearing Arbitration
Application No. 285 of 2019. Respondent also filed Petition No. 915 of
2019 under Section 9. Consent terms were entered into between the
parties and they executed Supplementary Redevelopment Agreement
dated 18 December 2019, under which Respondent undertook to carry out
re-measurement of the entire plot within 30 days, repairs of the building
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within 2 months, to secure NOC from civil aviation authorities and to
secure all necessary permissions including from the planning authority
and Collector within 12 months. Respondents also undertook to complete
the redevelopment process within a period of 24 months with a grace
period of 6 months. Respondent also agreed to pay transit rent at the rate
of Rs.130 per sq.ft. to the members. Accordingly, consent terms were filed
and the petition was disposed of by order dated 18 December 2019.
3) According to the Petitioner-Society, Respondent has not
moved even an inch in the direction of redevelopment process after
execution of consent terms / supplementary redevelopment agreement
dated 18 December 2019. After waiting for sufficient time, the Petitioner-
Society has terminated the Development Agreement and Supplementary
Redevelopment Agreement by notice dated 18 May 2021. Respondent
replied to the Termination Notice on 27 July 2021. Petitioner-Society
wants to appoint another developer. However, it feels that new developer
would not take the risk of entering into the plot on account of
Respondent seeking to assert its right out of the Redevelopment
Agreement. Petitioner-Society also apprehends that the Respondent may
create third-party rights in the project by bringing some other developer
without the consent of the Society. Accordingly, Society has filed the
present Petition under Section 9 of Arbitration Act seeking following
interim measures:
(a) That pending the hearing and final disposal of the Arbitral proceedings and
till execution of the Award, this Hon'ble Court be pleased to pass a temporary /
mandatory order and injunction restraining the Respondent and/or their
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representatives, officers, servants, agents or any person or persons claiming
through or under them from in any manner, meddling and/or interfering with
and/or causing any obstruction in any manner whatsoever, to the Petitioners
appointing any New Developers and the new Developers carrying on with the
said redevelopment work at sire and it is prayed accordingly.
(b) That pending the hearing and final disposal of the arbitral proceedings and
till execution of the Ward, this Hon'ble Court be pleased to pass a mandatory
order and injunction directing the Respondent to hand over to the Petitioners,
in original, each and every document relating to the redevelopment process of
the said Property including but not limited to Letter/s from MCGM, Plans,
sanctioned plans, approvals, permissions (applied for and received), Power of
Attorney, Development Agreement dated 02-02-2016 as also the Supplemental
Agreement dated 18-12-2019, and all such other documents which are in their
(Respondents') possession and it is prayed accordingly.
(c) That pending the hearing and final disposal of the Arbitral proceedings and
till execution of the Award, this Hon'ble Court be pleased to pass an Order
permitting the Petitioners to register the fresh Re-Development Agreement
with any New Developer and have it duly registered with the Sub-Registrar of
Assurances, notwithstanding the Re-Development Agreement dated 022-02-
2016 which is presently registered and it is prayed accordingly.
(a-1) That pending the hearing and final disposal of the Arbitral proceedings
and till execution of the Award, this Hon'ble Court be pleased to restrain the
Respondent, its partners, representatives, officers,servants, agents, and/or all or
any persons claiming through or under them by an order of temporary
injunction from creating any third party rights and/or encumbrance of any kind
whatsoever in respect of the said Plot i.e. Survey No.341, CTS No. 629, Plot No.
1248, Sharda Devi Marg, Government Colony, Bandra (East), Mumbai - 400
051admeasuring 1874 sq. metres, in any manner whatsover.
(d) That pending the hearing and final disposal of the Arbitral proceedings and
till execution of the Award, this Hon'ble Court be pleased to pass a mandatory
order and injunction directing the Respondent to obtain and hand over to the
Petitioner if any No-objection Certificates (NOC's) from the Structural
Engineer(s), Architect(s) & Consultants), MEP Consultant(s), Project
Management Consultant(s), Licensed Plumbing Contractor(s), Electrical
Contractor(s), Painting and Fabrication Contractor(s) and such other
consultants/contractors/ agencies employed by the Respondent in respect of the
said Property, if so appointed by the Respondent Developers for the suit Project.
(e) That pending the hearing and final disposal of the Arbitral proceedings and
till execution of the Award, this Hon'ble Court be pleased to order and direct all
the concerned authorities including the MCGM and MHADA not to insist on any
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NOC(s) from the Respondent Developers and/or from any of the persons, as a
condition/pre-requisite for processing any application for development,
permission, NOC that the Petitioners may make itself or through its Constituted
Attorney or through their New Developers and it is prayed accordingly.
(f) That pending the hearing and final disposal of the Arbitral proceedings and
till execution of the Award, this Hon'ble Court be pleased to pass an Order
directing the Respondent to render all co-operation and sign all
documents/papers/forms/deeds as may be required by the Petitioner or their
newly appointed Developers in the redevelopment process and it is prayed
accordingly.
(g) That ad-interim interim reliefs in terms of prayer clause (a) to (f) above be
granted.
(h) That cost of the present Petition be provided for.
(i) That such other and further reliefs as to this Hon'ble Court may deem fit and
proper in the facts of the present case may also be granted.
4) The Petition is opposed by Respondent by filing Affidavit in
Reply.
5) Mr. Joshi, the learned counsel appearing for the Petitioner
submits that grant of interim measures under Section 9 of Arbitration Act
are necessary for the purpose of enabling the Society to go for
redevelopment through another developer. He submits that during last 10
long years, Respondent has done virtually nothing at the site. That the
building of Society is in dangerous and dilapidated condition and requires
immediate demolition. He submits that Respondent has already been
given one chance by extending time limits for development by entering
into Consent Terms and Supplementary Redevelopment Agreement dated
18 December 2019. That even after Consent Terms, Respondent has done
absolutely nothing at the site. That the members of Society cannot be
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made to wait indefinitely and other developers are not even willing to
discuss the proposal with the Society on account of Respondent asserting
its rights despite termination of Development Agreement vide notice
dated 18 May 2021.
6) Mr. Joshi further submits that the stand taken by
Respondents in the Affidavit in Reply about Consent Terms and
Supplementary Redevelopment Agreement constituting novation of
original contract is totally misleading. That the Supplementary
Redevelopment Agreement is executed only to supplement the terms and
conditions of the original Development Agreement. That therefore there
is a valid arbitration agreement between the parties even after the
execution of the Supplementary Redevelopment Agreement. He relies on
judgment in Pushpa Devi Bhagat vs. Rajinder Singh and Ors.1 in support
of his contention that Consent Terms ultimately represent private
contract between the parties with superimposition of seal of the Court.
That therefore mere entering into consent terms does not mean that the
stipulations of the original Redevelopment Agreement of 2016 get
obliterated. He submits that the Supplementary Redevelopment
Agreement cannot be enforced on its own and in absence of the original
Redevelopment Agreement. That therefore arbitration clause contained
in original Redevelopment Agreement would continue to remain binding
on the parties notwithstanding execution of Supplementary
Redevelopment Agreement or the Consent Terms. In support, he relies on
judgment of the Apex Court in Chrisomar Corporation vs. MJR Steels
1 (2006) 5 SCC 566
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Private Limited and Anr2. In support of contention that the
Redevelopment Agreement of 2016 is the principal document between
the parties which is inseparably intertwined with the Supplementary
Redevelopment Agreement. Mr. Joshi relies on judgment of this Court in
Mahindra Mangilalji Jain vs. M/s. Radha Construction Co and Ors. 3 He
also relies on judgment of this Court in Om Swayambhu Siddhivinayak
vs. Harischandra Dinkar Gaikwad and Ors.4
7) Mr. Joshi further submits that this Court has repeatedly
ensured that the redevelopment process is not delayed on account of
presence of earlier developer at the site. In support of his contentions, he
relies on the following judgments:
1. Chaurangi Builders & Developers Pvt. Ltd. vs. Maharashtra
Airport Development Company Ltd.5
2. Gopi Gorwani vs. Ideal Co-operative Housing Society Ltd. And
Ors.6
3. Heritage Lifestyle and Developers Ltd. vs. Cool Breeze Co-
operative Housing Society Ltd. And Ors.7
4. New Aarti Co-operative Housing Society Ltd. vs. Kabra Estate &
Investment Consultants8
2 (2018) 16 SCC 117
3 Commercial Arbitration Application (L) No. 12427 of 2025 decided on 4 March 2026
4 2025 SCC OnLine Bom 4906
5 2013 SCC OnLine Bom 1530
6 2013 SCC OnLine Bom 1967
7 2014 (3) Mh.L.J. 376
8 2015 SCC OnLine Bom 5929
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5. Jal Ratan Deep Co-operative Housing Society Ltd. Vs Kumar
Builders Mumbai Realty Private Ltd.9
6. Goregaon Sukhnivas Co-operative Housing Society Ltd. vs.
Sukushal Builders & Developers and Ors.10
7. SSD Escatics Pvt. Ltd. Vs Goregaon Pearl Co-operative Housing
Society Ltd.11
8. Karan Group Builders and Developers and Ors. Vs. Dindoshi
Vrindavan CHS Ltd. And Ors.12
9. Solaris Developers Pvt. Ltd. vs. Eversmile Co-op. Housing
Society Ltd.13
10. Asha Sonu Samjiskar and Ors. vs. Sadguru Enterprises14
11. Rajawadi Arunodaya Co-operative Housing Society Ltd. vs.
Value Projects Pvt. Ltd.15
12. Swashray Co-op Housing Society Ltd. And Ors. vs. Shanti
Enterprises16
13. ISON Builders LLP vs. Om Sai Ram Cooperative Housing
Society (proposed) and Ors.17
8) Mr. Joshi would accordingly pray for grant of interim
measures against the Respondent-Developer.
9 2015 SCC OnLine Bom 5928
10 2016 SCC OnLine Bom 3366
11 Commercial Arbitration Petition (L) No. 1072 of 2018 decided on 14 December 2018
12 2019 (4) ABR 673
13 2019 SCC OnLine Bom 13335
14 Commercial Arbitration Petition (L) No. 674 of 2019 decided on 24 September 2019.
15 2021 SCC OnLine Bom 9572
16 2023:BHC-OS:13075
17 2026 SCC OnLine Bom 319
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9) The Petition is opposed by Mr. Delhiwala, the learned
counsel appearing for the Respondent. He submits that no interim
measures can be made in the present Petition in the light of absence of
any arbitration agreement between the parties. That the arbitration
agreement contained in the original agreement of redevelopment dated 2
February 2016 stands replaced by the Consent Terms filed before the
Court. That the dispute resolution mechanism agreed between the parties
got altered on account of Consent Terms passed by the Court. That the
only remedy for the Petitioner is to seek enforcement of Consent Terms.
That the arbitration agreement has ceased to exist upon execution of
Consent Terms. Now if there are any allegations of breach, breach can
only be of Consent Terms. That therefore arbitration is no longer a
remedy available to the Petitioner-Society. Since arbitration itself cannot
be sought, there is no question of seeking any interim measures against
the Respondent.
10) Mr. Delhiwala further submits that once the consent terms
are entered, the original cause of action gets subsumed and all rights of
parties get governed by the consent terms. In support of his contention,
he relies on judgment of Apex Court in Byram Pestonji Gariwala vs.
Union Bank of India and Ors.18 , Rama Narang vs. Ramesh Narang and
Anr.19 and Som Dev and Ors. vs. Rati Ram and Anr. 20 He also relies on
judgment of Delhi High Court United India Assurance Company Limited
18 (1992) 1 SCC 31
19 (2006) 11 SCC 114
20 (2006) 10 SCC 788
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vs. Competition Commission of India21. He also relies on judgment of
Apex Court in Bhanu Kumar Jain vs. Archana Kumar and Anr22.
11) Mr. Delhiwala further submits that Petitioner-Society has
committed fundamental breaches of both, the Development Agreement as
well as the Supplementary Redevelopment Agreement and is not entitled
to seek any interim measures. That the Respondent has always performed
the contractual obligations and is unable to proceed ahead with
redevelopment on account of non-cooperation by Petitioner-Society. He
relies on contractual covenant under which Society was supposed to
execute the Power of Attorney, which has not been executed. He submits
that without Power of Attorney from Society, it is not possible for
Respondent-Developer to take any steps towards redevelopment. He
submits that Respondent in fact has several claims against the Petitioner-
Society. That Respondent has incurred huge expenditure in the Project
and Petitioner-Society cannot be permitted to bring a new developer
prejudicing the rights of the Respondent.
12) Rival contentions of the parties now fall for my
consideration.
13) This is a typical dispute between a cooperative housing
society and developer where there is an allegation of delay in execution of
redevelopment project of the society by the developer. The society
21 LPA 724/2019 decided on 1 November 2025
22 (2005) 1 SCC 787
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intends to carry out redevelopment through another developer and is
finding it difficult to do so on account of assertion of rights in the project
by the Respondent-Developer. While the law on the subject of rights of
developer to earn profits out of redevelopment project remaining
subservient to right of members of society to have their homes rebuilt is
reiterated in several judgments of this Court, a slight twist is added in the
present case by the Respondent on account of execution of Consent
Terms and Supplementary Redevelopment Agreement between the
parties on 18 December 2019. Respondent has raised a plea that the
arbitration agreement in original development agreement of 2016 stood
novated and substituted by new dispute resolution mechanism in the
Consent Terms. It is therefore contended that in absence of arbitration
agreement between the parties, interim measures under Section 9 cannot
be made.
14) Petitioner-Society and Respondent-Developer entered into
registered Agreement of Redevelopment dated 2 February 2016. Society
alleges that the Developer failed to act in terms of Development
Agreement and beyond paying a sum of Rs. 92,00,000/- to the Society
towards hardship compensation, no steps are taken by the Developer for
completion of the project. The Society accordingly terminated the
Development Agreement by letter dated 30 May 2018. In proceedings filed
under Sections 9 and 11 of the Arbitration Act, parties entered into
consent terms on 18 December 2019. They executed Consent Terms as
well as Supplementary Redevelopment Agreement under which the
timelines for taking various steps were altered. Respondent agreed to
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complete construction of the building within a period of 24 months with
grace period of 6 months. Thus, under the Supplementary Redevelopment
Agreement, Respondent had time of 30 months to complete
reconstruction of society's building. By now, a period of more than 6 long
years has expired from date of execution of Supplementary
Redevelopment Agreement and it is not disputed that building of Society
has not even been demolished by Respondent-Developer. The reason for
not undertaking the demolition of building is more than obvious. If flats
are vacated and the building is demolished, the developer becomes liable
to pay transit rent and therefore, developer usually does not seek vacation
of flats or go for demolition of building unless he is sure of capability and
permissibility of undertaking the construction of new building.
15) Petitioner-Society has placed on record the photographs of
the building at Exhibit-A to the Petition which depict sorry state of
affairs. The building appears to be in a grossly dilapidated and dangerous
condition with several senior citizen members residing in their respective
flats in extremely dangerous conditions. Municipal Corporation had
issued notice dated 10 April 2019 to the Society in respect of its
dangerous and dilapidated condition. There is structural report of 2017 on
record which again depicts the dangerous condition of the building.
However, despite passage of more than 10 long years, the Respondent-
Developer has failed to take any steps for demolition of existing building
and construction of the new building.
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16) So far as the twist of consent terms sought to be added by
Respondent-Developer is concerned, the same is without any substance.
Mr. Delhiwala himself repeatedly admitted during course of submissions
that contractual obligations arising between the parties out of
Redevelopment Agreement dated 2 February 2016 continue to operate
notwithstanding execution of Consent Terms and Supplementary
Redevelopment Agreement dated 18 December 2019. However, he raises a
curious plea of arbitration clause in Redevelopment Agreement getting
obliterated on account of execution of Consent Terms. Usually, cases
involve the eventuality of expiry, termination etc. of the principal
underlying contract, in which case arbitration clause survives. In the
present case, what Mr. Delhiwala has canvassed before me is an
impossible proposition that the principal contract survives even after
execution of the consent terms and supplementary agreement, but
arbitration clause contained in the principal agreement has come to end.
The submission, in my view, deserves outright rejection. Parties have not
executed any document evincing an agreement for non-operation of the
arbitration clause in the 2016 Redevelopment Agreement.
17) Apart from the fact that the Respondent itself treats the
Redevelopment Agreement as subsisting and binding, it is also seen that
the Supplementary Agreement cannot be performed on its own without
the aid of the Redevelopment Agreement. In Chrisomar Corporation
(supra), Hon'ble Apex Court has considered the provisions of Sections 62
and 63 of Indian Contract Act, 1872 and has held that it is only when
parties agree to substitute a completely different contract for the earlier
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contract or rescind the original contract, performance of original contract
comes to an end. The Apex Court referred to the judgment of Calcutta
High Court in Juggilal Kamplapat vs. N.V. Internationale Crediet-En-
Handels Vereeninging 'Rotterdam'23 in its judgment. It is held that if new
contract does not have independent contractual force and cannot be
enforced without the aid of principal contract, the terms and conditions
of original contract would continue to be the part of modified contract,
except to the extent of inconsistency. The Apex Court held in paras-34 to
39 of the judgment in Chrisomar Corporation as under :
34. Sections 62 and 63 of the Contract Act read as follows:
"62. Effect of novation, rescission, and alteration of contract.--If the
parties to a contract agree to substitute a new contract for it, or to rescind or
alter it, the original contract need not be performed.
63. Promisee may dispense with or remit performance of promise.--Every
promisee may dispense with or remit, wholly or in part, the performance of the
promise made to him, or may extend the time for such performance, or may
accept instead of it any satisfaction which he thinks fit."
35. It is the appellant's case that Section 63 of the Contract Act is attracted to
the facts of the present case whereas it is the respondent's case that Section 62
is so attracted, the result being that the original agreement is substituted by a
fresh agreement.
36. The respondent's case is that Section 62 applies, since the original contract
has been "altered". This being the case, the original contract need not be
performed.
37. It is clear that where parties to a contract agree to substitute a completely
different contract for the first, or to rescind a contract, the performance under
the original contract and/or rescinded contract comes to an end. When parties
to a contract "alter" a contract, the question that has to be answered is as to
whether the original contract is altered in such a manner that performance
under it is at an end.
38. In Juggilal Kamlapat v. N.V. Internationale Crediet-En-Handels Vereeninging
'Rotterdam' , the original contract dated 10-8-1950 contained an arbitration
23 1952 SCC OnLine Cal 250
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clause. In para 11 of the judgment, it was found as a fact that the original
contract was modified in certain material particulars. Despite this, it was found
that since the modifications do not go to the root of the original contract and do
not change its essential character, the facts do not warrant the inference that
the parties intended to rescind the original contract. The High Court held: (SCC
OnLine Cal paras 14-15)
"14. In the present case the modifications do not go to the very root
of the first contract and do not change its essential character. The facts
do not warrant the inference that the parties intended to rescind the
contract, dated 10-8-1950. The April arrangement was entered into in
response to pressing demands for delivery under that contract and with
a view to implement it. The arrangement has no independent
contractual force, no meaning and content separately from and
independently of the original contract.
15. The effect of the alterations or modifications is that there is a
new arrangement; in the language of Viscount Haldane
in Morris v. Baron and Co. [Morris v. Baron and Co., 1918 AC 1 (HL)] : (AC
p. 17)
'a new contract containing as an entirety the old terms together with
and as modified by the new terms incorporated.'
The modifications are read into and become part and parcel of the
original contract. The original terms also continue to be part of the
contract and are not rescinded and/or superseded except insofar as they
are inconsistent with the modifications. Those of the original terms
which cannot make sense when read with the alterations must be
rejected. In my view the arbitration clause in this case is in no way
inconsistent with the subsequent modifications and continues to
subsist."
39. We approve of the said judgment as laying down the correct law on the
expression "alter" in Section 62 of the Contract Act. In order that a contract
that is altered in material particulars fall under Section 62, it must be clear that
the alteration must go to the very root of the original contract and change its
essential character, so that the modified contract must be read as doing away
with the original contract. If the modified contract has no independent
contractual force, in that it has no meaning and content separately from and
independently of the original contract, it is clear that there is no new contract
which comes into being. The original terms continue to be part of the modified
contract except to the extent that they are inconsistent with the modifications
made.
18) In Mahindra Mangilalji Jain (supra), this Court has
considered the issue of giving effect to the arbitration clause contained in
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the principal instrument for the purpose of resolution of disputes arising
out of Memorandum of Understanding, not containing arbitration
agreement. This Court held in para 39 as under:
(39) In my view, the ratio of judgments in Ameet Lalchand Shah
[(2018) 15 SCC 678] and Cox and Kings Ltd. [(2024) 4 SCC 1] (supra) would
squarely apply in present case where multiple documents are executed by
parties to give effect to a composite transaction. The MOU is inseparably
intertwined with Retirement Deed and does not have its own legs to stand on.
The MOU therefore cannot be separated from the Deed of Retirement,
notwithstanding the 'entire agreement' clause. The MOU, on its own, does not
seek to execute any separate transaction and only provides for a methodology
for payment of consideration under the MOU. In my view therefore, reference
to arbitration can be made by invoking arbitration clause in the Deed of
Retirement, even though the Petitioner seeks to enforce the contractual
obligations flowing out of the MOU.
19) In the present case also, the Supplementary Redevelopment
Agreement cannot be enforced on its own. It has no legs to stand on its
own. Performance of Supplementary Redevelopment Agreement cannot
be ensured without the aid of the 2016 Redevelopment Agreement. This
position is admitted by Mr. Delhiwala, who himself has repeatedly
contended that the Society has committed breach of contractual
stipulations of 2016 Redevelopment Agreement. Once it is admitted that
the original redevelopment agreement continues to survive even after
execution of supplementary agreement, it is incomprehensible that
arbitration clause in original redevelopment agreement would come to an
end.
20) Even execution of consent terms would effect no change in
respect of enforceability of redevelopment agreement. It is well-settled
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position that consent terms are nothing but private agreement between
parties with seal of court and reliance in this regard by Mr. Joshi on
judgment of the Apex Court in Pushpa Devi Bhagat (supra) is apposite.
The baseless contention is raised on behalf of Respondent that dispute
resolution mechanism agreed in redevelopment agreement has come to
an end on account of execution of consent terms. By executing Consent
Terms, parties took on record the Supplementary Redevelopment
Agreement, which merely supplements the contractual obligations
provided in the original redevelopment agreement. In fact, order dated 18
December 2019 categorically records that Supplementary Redevelopment
Agreement is not in supersession but mere modification of the previous
development agreement. This is clear form clause 5 of the Supplementary
Redevelopment Agreement, which reads thus :
5. Parties agree that the supplementary document is not in supersession of but
is in agreed modification of and addition to the previous Development
Agreement. So noted.
21) Even the consent terms confirm that Redevelopment
Agreement dated 2 February 2016 shall remain valid and subsisting
between the parties and that Supplementary Redevelopment Agreement
was executed only for the purpose of supplementing the terms and
conditions in addition to the Redevelopment Agreement. In my view
therefore, mere execution of consent terms between the parties cannot be
a reason for holding that the agreed dispute resolution mechanism has
came to an end and that only remedy available to the Petitioner-Society is
to seek enforcement of the consent terms. Reliance by Mr. Delhiwala on
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judgments in Byram Pestonji Gariwala, Rama Narang, and Som Dev
(supra) in this regard is inapposite.
22) I am therefore of the view that the arbitration clause in the
Agreement for Redevelopment dated 2 February 2016 continues to subsist
between the parties and therefore Petitioner's prayers for grant of interim
measures before commencement of arbitral proceedings can be
considered in Petition filed under Section 9 of the Arbitration Act.
23) So far as merits of the dispute are concerned, it is seen that
the Respondent has done precious little during last 10 long years towards
redevelopment of Society's building. The members of Society continue to
remain languished in old and dilapidated homes. Despite owning the land
and the building, Society is prevented from reconstructing the building
merely because Agreement for Redevelopment and Supplementary
Agreement is executed with the Respondent-Developer. Time has come
to permit the Society to carry out redevelopment through another
developer. This Court has repeatedly taken a view that when rights of the
members of the society to have their homes rebuilt are pitted against the
right of the developer to earn profits through redevelopment project, the
former must prevail over the latter. Reference in this regard can be made
to the judgment of this Court in Huges Real Estate Developers LLP vs.
Shrinkage Adarsh Co-operative Housing Society Limited and Anr. 24
Even otherwise, there are several judgments of this Court wherein the
right of the society to appoint new developer for completing the
24 Commercial Appeal No.45 of 2025 decided on 19 August 2025
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redevelopment work has been repeatedly upheld leaving open the remedy
of arbitration for earlier developer to claim damages. It is repeatedly held
that a defaulting developer cannot restrain the society from proceeding
ahead with the redevelopment through another developer and that
developer's remedy lies in claiming damages in arbitration. The
investments made by the earlier developer cannot be a ground for
continuing him in respect of the project, which is grossly delayed with no
hope of its completion. Mr. Joshi has rightly relied on judgments of this
Court in Chaurangi Builders, Gopi Gorwani, Heritage Lifestyle, New
Aarti Co-operative Housing Society Ltd., Jal Ratan Deep Co-operative
Housing Society Ltd., Goregaon Sukhnivas Co-operative Housing Society
Ltd. SSD Escatics Pvt. Ltd., Karan Group Builders and Developers,
Solaris Developers Pvt. Ltd., Asha Sonu Samjiskar, Rajawadi Arunodaya
Co-operative Housing Society Ltd., Swashray Co-op Housing Society Ltd.
and ISON Builders LLP (supra). Since the principles are well settled, it is
not necessary to discuss the ratio of each of the judgment relied upon by
Mr. Joshi.
24) In the present case, what Respondent is doing is to gamble in
the Project at the cost of lives of the society members. What is at stakes
for the Respondent-developer is an insignificant amount he has invested
and the opportunity to make profits in the project. But what is at stake for
the society members is of far greater significance and would outweigh the
stakes of the developer. Redevelopment project cannot be treated as a
'property' capable of being hoarded and sold to another developer by
earning profits.
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25) In the present case, the Court is convinced that the Petitioner
must be permitted to appoint new developer for completing the work of
demolishing the existing building and reconstructing the same.
Respondent has been given sufficient time by the Society. If in past 10
years, Respondent has not been able to secure development permission
from planning authority or even to demolish the existing building by
undertaking the obligation of paying transit rent to the members, absence
of enthusiasm, interest and capacity to complete the project is writ large.
This Court is also conscious of the position that the second termination of
Respondent's appointment is effected by the Petitioner-Society on 18
May 2021. Substantial time has elapsed thereafter. However, in a
redevelopment project, there are often unique circumstances where
Municipal Corporation does not permit society or new developer to
submit plans without securing NOC from architect of earlier developer.
Thus, there are three major factors why this Court considers it necessary
to make interim measures even before commencement of arbitral
proceedings. Firstly, the society building is in dangerous and dilapidated
condition. Any mishap would result in injury or loss of human life. It is
therefore necessary that immediate steps are taken for appointment of
new developer, particularly before onset of monsoon so that there are no
casualties on account of happening of any untoward incident. Secondly,
the Society has started scouting for other developer and no developer is
showing interest on account of Respondent-Developer asserting rights in
the project. In such circumstances, grant of interim measures would
enable the Society to negotiate with the new developers, who would feel
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confident for taking over the contractual obligations once they are
satisfied that the Respondent cannot obstruct the redevelopment process.
Thirdly the redevelopment of building of society is the subject matter of
arbitration. It happens quite often that developer finding it financially
difficult to complete the project, executes an arrangement with another
developer on a profit-sharing basis. If urgent interim measures are not
made, the Respondent-Developer is likely to create third-party rights in
respect of the project. This is yet another reason why interim measures
are required to be made to preserve the subject matter of arbitration. In
my view therefore, a case is made out for grant of interim measures in the
Petition.
26) Respondent's claim for damages can always be adjudicated by
the Arbitral Tribunal. However, redevelopment work of the Society need
not be halted till Respondent gets its claim against the Society
adjudicated through arbitration. Petitioner society has intention to
arbitrate with the Respondent. Therefore steps need to be taken for
commencement of the arbitral proceedings within 90 days as per
provisions of Section 9(2) of the Arbitration Act.
27) I proceed to pass the following order:
a. Pending the arbitration proceedings and till making of the
final award, there shall be interim measures in favour of the
Petitioner and against the Respondent in terms of prayer
clauses (a), (b), (c), (a1), (d) and (e) which read thus:
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(a) That pending the hearing and final disposal of the Arbitral
proceedings and till execution of the Award, this Hon'ble Court
be pleased to pass a temporary / mandatory order and injunction
restraining the Respondent and/or their representatives, officers,
servants, agents or any person or persons claiming through or
under them from in any manner, meddling and/or interfering
with and/or causing any obstruction in any manner whatsoever,
to the Petitioners appointing any New Developers and the new
Developers carrying on with the said redevelopment work at sire
and it is prayed accordingly.
(b) That pending the hearing and final disposal of the arbitral
proceedings and till execution of the Ward, this Hon'ble Court be
pleased to pass a mandatory order and injunction directing the
Respondent to hand over to the Petitioners, in original, each and
every document relating to the redevelopment process of the said
Property including but not limited to Letter/s from MCGM, Plans,
sanctioned plans, approvals, permissions (applied for and
received), Power of Attorney, Development Agreement dated 02-
02-2016 as also the Supplemental Agreement dated 18-12-2019,
and all such other documents which are in their (Respondents')
possession and it is prayed accordingly.
(c) That pending the hearing and final disposal of the Arbitral
proceedings and till execution of the Award, this Hon'ble Court
be pleased to pass an Order permitting the Petitioners to register
the fresh Re-Development Agreement with any New Developer
and have it duly registered with the Sub-Registrar of Assurances,
notwithstanding the Re-Development Agreement dated 022-02-
2016 which is presently registered and it is prayed accordingly.
(a-1) That pending the hearing and final disposal of the Arbitral
proceedings and till execution of the Award, this Hon'ble Court
be pleased to restrain the Respondent, its partners,
representatives, officers, servants, agents, and/or all or any
persons claiming through or under them by an order of
temporary injunction from creating any third party rights and/or
encumbrance of any kind whatsoever in respect of the said Plot
i.e. Survey No.341, CTS No. 629, Plot No. 1248, Sharda Devi
Marg, Government Colony, Bandra (East), Mumbai - 400
051admeasuring 1874 sq. metres, in any manner whatsover.
(d) That pending the hearing and final disposal of the Arbitral
proceedings and till execution of the Award, this Hon'ble Court
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be pleased to pass a mandatory order and injunction directing
the Respondent to obtain and hand over to the Petitioner if any
No-objection Certificates (NOC's) from the Structural
Engineer(s), Architect(s) & Consultants), MEP Consultant(s),
Project Management Consultant(s), Licensed Plumbing
Contractor(s), Electrical Contractor(s), Painting and Fabrication
Contractor(s) and such other consultants/contractors/ agencies
employed by the Respondent in respect of the said Property, if so
appointed by the Respondent Developers for the suit Project.
(e) That pending the hearing and final disposal of the Arbitral
proceedings and till execution of the Award, this Hon'ble Court
be pleased to order and direct all the concerned authorities
including the MCGM and MHADA not to insist on any NOC(s)
from the Respondent Developers and/or from any of the persons,
as a condition/pre-requisite for processing any application for
development, permission, NOC that the Petitioners may make
itself or through its Constituted Attorney or through their New
Developers and it is prayed accordingly.
b. The interim measures shall remain effective for 90 days
within which the Petitioner-Society shall take steps for
commencement of the arbitral proceedings.
28) With above directions, the Arbitration Petition is allowed.
There shall be no order as to costs.
[SANDEEP V. MARNE, J.]
29) After the judgment is pronounced, the learned counsel
appearing for the Respondent prays for stay of the judgment for a period
of four weeks. The request is opposed by the learned counsel appearing
for the Petitioner. Considering the nature of findings recorded in the
order, prayer for stay of the judgment is rejected.
Digitally
signed by
NEETA
[SANDEEP V. MARNE, J.]
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2026.03.17
20:55:48
+0530 _____________________________________________________________________________
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