Pioneer Construction vs Sahakar Nagar Cooperative Housing Society
- Court
- Bombay High Court
2026:BHC-OS:10572
Megha 904_carbpl_13956_2026_fc.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION (L) NO.13956 OF 2026
WITH
COMMERCIAL ARBITRATION APPLICATION (L) NO.14176 OF 2026
M/s. Pioneer Constructions, ...Petitioner
V/s.
Sahakarnagar Co-operative Housing
Society Ltd. ...Respondent
________________
Mr. D.D. Madon, Senior Advocate and Mr. Ashish Kamat, Senior Advocate
with Mr. Shakeeb Shaikh, Ms. Sachi Lodha, Mr. Aftab Diamondwala &
Ms. Trushti Talekar i/b. M/s. Diamondwala & Co. for the Petitioner.
Mr. Chaitanya Chavan with Mr. Nikhil Jayakar i/b. Mr. Ankit Dubey for
the Respondent.
________________
CORAM: SANDEEP V. MARNE, J.
Reserved on: 22 APRIL 2026.
Pronounced on: 24 APRIL 2026
Judgment :
1) Commercial Arbitration Petition (L) No.13956 of 2026 filed under
Section 9 of the Arbitration and Conciliation Act, 1996 (the Arbitration
Act) seeking interim measures before commencement of the arbitral
proceedings.
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2) Commercial Arbitration Application (L) No.14176 of 2026 is filed
under Section 11 of the Arbitration Act for appointment of Arbitrator. It
is not on board. At the request of the learned counsel appearing for the
Applicant, the Application is taken on board for analogous hearing with
Commercial Arbitration Petition (L) No.13956 of 2026.
3) Section 9 Petition is filed under an apprehension that the
Respondent-Society is likely to execute Development Agreement with
the new Developer. The Society has already adopted resolution in
General Body Meeting held on 10 January 2026 appointing a new
developer. Further Special General Body Meeting (SGBM) was scheduled
to be held on 23 April 2026 for finalising draft of Development
Agreement to be executed with the new developer. The Petitioner has
accordingly, filed Section 9 Petition seeking interim measures in terms of
the following prayers:
a. that pending the hearing and final disposal of the arbitral
proceedings and for a period of 12 weeks thereafter, this Hon'ble
Court be pleased to pass an order and injunction restraining the
Respondent and/or their managing committee member/sand/or
their office bearer/sand/or any person/s claiming through or under
them from in any manner acting upon the Resolution dated 10th
January 2026 passed in SGBM being Exhibit "W' and "W-1" hereto
and notice dated 9th April 2026 of the Respondent being Exhibit "X"
and "X-1" hereto and also from in any manner executing any
development agreement and/or any such other agreement
authorizing the new developer to proceed with the new
development of the said Property as described in para 4
hereinabove.
b. that pending the hearing and final disposal of the present Arbitration
Petition, this Hon'ble Court be pleased to pass an order and
injunction restraining the Respondent and/ or their managing
committee member/ s and/ or their office bearer/ s and/ or any
person/ s claiming through or under them from in any manner
acting upon the Resolution dated 10th January 2026 passed in
SGBM being Exhibit "W" and "W-1" hereto and notice dated 9th
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April 2026 of the Respondent being Exhibit "X" and "X-1" hereto and
also from in any manner executing any development agreement
and/ or any such other agreement authorizing the new developer to
proceed with the new development of the said Property as described
in para 4 hereinabove.
c. Ad-interim and interim reliefs in terms of prayer clauses (a) and (b)
above.
d. For costs.
e. For such and other reliefs as the nature and circumstances of the case
may require.
4) The Respondent is a Society formed by owners/occupiers of 826
residential premises, 19 shops and 24 stalls in 46 buildings constructed
in the year 1957 on land belonging to Municipal Corporation of Greater
Mumbai at Naigaon Cross Road, 26 Road, Scheme No. 57, Wadala,
Mumbai - 400 034. Since the buildings of the proposed society were old
and dilapidated, it decided to redevelop the same and accordingly invited
offers from the developers. The proposed society selected Petitioner as a
Developer. Accordingly, Development Agreement dated 22 January 2013
(first DA) was executed in favour of the Petitioner-Developer. The Society
was registered on 5 April 2013. The Society applied to the Assistant
Registrar of Co-operative Societies, F/N Ward for grant of ‘No Objection’
for redevelopment of the buildings and by letter dated 11 March 2014 ‘No
Objection’ was granted in the Special General Body Meeting (SGBM). On
30 September 2014, the Society approved draft of the Development
Agreement and accordingly Development Agreement and Power of
Attorney were executed in favour of the Petitioner on 22 June 2015.
According to the Petitioner, during 2015 to 2018, the sanction of scheme
of redevelopment was withheld by the Planning Authority due to
proposal for sanction of fresh Development Control Regulations.
According to the Petitioner, the Society adopted a resolution in Annual
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General Meeting (AGM) dated 29 September 2018 to keep on hold the
redevelopment proposal until new Development Control Regulations
were notified. In the meantime, the society renegotiated the terms of
redevelopment with the Petitioner, under which the Petitioner agreed to
offer earnest money deposit of Rs.1 crore and to increase the size of
Permanent Alternate Accommodations (PAA) from 600 sq.ft. to 700 sq.ft.
and also agreed to pay corpus to each member of the Society.
Accordingly, Development Agreement dated 22 April 2016 (second DA)
was executed.
5) According to the Petitioner, one Mr. Bhaskar G. Udawant adopted
proceedings against the Respondent-Society under Section 21-A of the
Maharashtra Co-operative Societies Act, 1960 seeking its de-registration,
which delayed the process of redevelopment. The complaint was rejected
on 11 May 2022. Petitioner cites the reasons of change in Development
Regulations, litigations filed by members and occurrence of Covid-19
Pandemic as reasons for non-commencement of the project. The
Respondent issued letters dated 3 December 2021, 7 March 2022 and 13
March 2022 calling upon the Petitioner to explain delay in
redevelopment project, which was replied by the Petitioner on 25 April
2022. The Petitioner claims that it forwarded tentative plans, common
consent letter, individual consent letters and draft for Agreement for
Permanent Alternate Accommodation (PAA) vide letter dated 25 April
2022. According to the Petitioner, it was the responsibility of the
Respondent-Society to secure common and individual consents from the
members. By way of further letter dated 3 October 2023, the Petitioner
requested for finalisation of the common consent, individual consents,
etc.
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6) In the meantime, India Realtech Corporation LLP expressed desire
in joining the Petitioner for joint redevelopment of the Society’s
property. However, in the AGM held on 16 September 2023, the
Respondent -Society adopted resolution terminating the appointment of
the Petitioner as Developer. However, the society decided to give a
chance to the Petitioner to execute the project and by letter dated 6 April
2024, the Respondent-Society withdrew termination letter and restored
appointment of the Petitioner as developer. The Respondent also
communicated the withdrawal of termination to the Divisional Joint
Registrar by letter dated 8 April 2024.
7) By letter dated 10 April 2024, the Respondent -Society wrote to the
Petitioner for offering better terms of redevelopment. By letter dated 27
May 2024, the Petitioner called upon the Society to complete all the
formalities such as common consent, individual consents and draft
Permanent Alternate Accommodation Agreement (PAAA). The Society
wrote to the Assistant Registrar on 18 June 2024 communicating that it
was proceeding ahead with the redevelopment with the Petitioner.
However, in the AGM held on 30 September 2024 the society once again
adopted resolution for terminating the appointment of the Petitioner.
The society claims to have communicated the decision of termination to
the Petitioner vide letter dated 4 February 2025, receipt of which is
denied by the Petitioner.
8) Though Petitioner’s appointment was terminated, it applied to the
Divisional Joint Registrar on 24 March 2025 for issuance of revised NOC.
By letter dated 1 April 2025, the Divisional Joint Registrar granted
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revised NOC permitting the Petitioner to redevelop the property of the
Respondent-Society. The Society got aggrieved by NOC granted by the
Divisional Joint Registrar vide letter dated 1 April 2025 and filed Revision
Application before the State Government. The Revision is allowed by
order dated 17 December 2025 setting aside the Divisional Joint
Registrar’s NOC dated 1 April 2025.
9) The Society invited proposals from developers and proposals were
received in the SGBM held on 3 March 2024. The society held further
SGBM on 10 January 2026 appointing a new developer to execute
redevelopment project. The Society has published a notice on 9 April
2026 proposing to hold further SGBM on 23 April 2026 for finalisation of
draft Development Agreement to be executed with the new developer.
The Petitioner has accordingly filed the present Petition seeking to
restrain the Society from moving ahead in the development project with
the new developer. The Respondent-Society has put in appearance after
receipt of private service and has sought time to file affidavit-in-reply
opposing the Petition. However, since the meeting of the Special General
Body of the Society is scheduled on 23 April 2026, the Petition is pressed
by the Petitioner and the same is opposed by the learned counsel
appearing for the Respondent-Society in absence of affidavit-in-reply.
10) I have heard Mr. Madon, the learned Senior Advocate appearing for
the Petitioner-Developer, who submits that the Petitioner-Society
cannot proceed to appoint a new developer without even bothering to
terminate the appointment of the Petitioner. He submits that the earlier
termination effected on 15 September 2023 is withdrawn by the Society
on 6 April 2024 and no cause arose for once again terminating the
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Petitioner’s appointment in the alleged SGBM on 30 September 2024.
That the Petitioner was not made aware of the resolutions adopted in the
SGBM on 30 September 2024 and no notice is given to it in respect of the
decision taken in the said meeting.
11) Mr. Madon further submits that under clauses 4 and 5 of the
second Development Agreement of 2016, it was the responsibility of the
Society to secure 70% individual consents whereafter the Petitioner was
supposed to approach to MCGM for securing necessary permissions. That
the Society has failed to secure consent letters from the society members
and is erroneously accusing Petitioner of delay. That after withdrawal of
earlier termination on 6 April 2024, the Society has not secured consent
letters from the members of the Society and has erroneously proceeded
to terminate the Petitioner’s appointment in the purported SGBM of 30
September 2024. That the purported letter dated 4 February 2025 shown
to this Court recording termination of Petitioner’s appointment was
never served on it.
12) Mr. Madon further submits that there is no termination clause in
the Development Agreement and therefore it is impermissible to
terminate the same without securing leave of the Court. He relies on
judgment of the Hon’ble Supreme Court on K.S. Majunath and Others
V/s. Moorasavirappa alia Muttanna Chennappa Batil since deceased by
1
his LRs and Others He further submits that all allegations of delay prior
to 6 April 2024 are deemed to have been condoned and the society has
acquiesced in the same on account of withdrawal of earlier termination.
He relies on judgment of the Hon’ble Supreme Court in All India Power
1 2025 SCC OnLine SC 2378
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2
Engineer Federation and Others V/s. Sasan Power Limited and Others .
He submits that the Respondent-Society is going ahead with new
developer out of greed of securing higher benefits. That the Society has
acted in complete breach of the Development Agreement and therefore,
grant of interim measures is necessary.
13) The Petition is opposed by Mr. Chavan, the learned counsel
appearing for the Respondent-Society, who submits that the Petitioner
has grossly delayed the redevelopment process. That despite Petitioner’s
appointment made in the year 2013, it has done absolutely nothing
during last 13 long years. That beyond spending an amount of Rs.1 crore
towards earnest money deposit, the Petitioner has not incurred any
expenditure. That the intention of the Petitioner in filing the present
Petition is to keep the redevelopment project in continuous state of
litigation. That the Society is entitled to have the project completed
through another developer. He submits that the Petitioner’s
appointment is earlier terminated by the General Body of the Society on
15 September 2023. However, Managing Committee has unauthorisedly
withdrawn termination on 6 April 2024. That the decision to withdraw
termination was not taken by the General Body. That the General Body
once again terminated the appointment vide Resolution dated 30
September 2024. That the Petitioner was communicated decision of
termination vide letter dated 4 February 2025. He submits that despite
his termination, the Petitioner has erroneously secured NOC from the
Divisional Joint Registrar on 1 April 2025, which NOC was challenged by
the Society before the Hon’ble Minister, Co-operation. That by order
dated 17 December 2025, the Hon’ble Minister has allowed the Revision
2 (2017) 1 SCC 487
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setting aside the Divisional Joint Registrar’s NOC of 1 April 2025. Thus,
there is no NOC available with the Petitioner for carrying out
redevelopment process of the Respondent-Society. That the Petitioner is
thus free to carry out redevelopment project through the Developer of its
choice. He further submits that the Petitioner was always aware of
passing of resolution dated 30 September 2024 as well as various
decisions taken by the Society from time to time. He places on record the
affidavit-in-reply filed by the Petitioner before the Hon’ble Minister. Mr.
Chavan accordingly prays for dismissal of the Petition.
14) Rival contentions raised on behalf of the parties now fall for my
consideration.
15) The disputes and differences have arisen between the parties out
of the Development Agreement dated 22 June 2015 as amended vide
fresh Development Agreement dated 22 April 2016. There is arbitration
agreement between the parties in clause 31 of the Development
Agreement dated 22 April 2016, which reads thus:
31. If at any time dispute, difference or question arises between the
parties hereto or between either of the parties and the representatives
of the other party or between their or any of their representatives,
touching, pertaining, affecting, concerning or relating to the terms of
this Agreement or the existence, construction, validity or meaning of
these presents or the rights or liabilities of the parties hereto or their
representative under these present or otherwise relating to the
premises then every such dispute, difference or question shall be
referred to arbitration under the provisions of Arbitration &
Conciliation Act, 1996 and any re-enactment or modification thereof for
the time being in force, shall be adopted. The parties hereto agree that
the sole Arbitrator shall be Shri Sandeep Dolas, Advocate. The decision
and Award of the Sole Arbitrator shall be binding upon the parties
hereto.
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16) The Petitioner-Developer was initially selected by the Respondent-
Society in the year 2013. After securing permission/NOC from the office
of the Assistant Registrar on 11 March 2014, the first Development
Agreement was executed on 22 June 2015. After re-negotiations between
the parties, second Development Agreement has been executed on 22
April 2016.
17) The Society comprises of about 869 units including 826 residential
premises, 19 shops and 24 stalls spread over 46 buildings in Wadala at
Mumbai. Buildings of the Society are constructed on the municipal land.
The buildings of the Society are constructed in the year 1957 and by now
period of almost 70 years has now elapsed. It is the case of the
Respondent-Society that buildings have become old and dilapidated and
it is dangerous to reside in the same. However, despite initiation of
process of redevelopment in the year 2013, the redevelopment project is
yet to kick start despite passage of 13 long years.
18) It appears that the Society had initially terminated the
appointment of the Petitioner-Developer by adopting resolution in
SBGM on 15 September 2023. However, by letter dated 6 April 2024 it was
communicated to the Petitioner that the Committee members had taken
a decision to withdraw the termination and to go ahead with the
Petitioner as the developer for execution of the project jointly with JSW
group. It is contention of the Society that decision of withdrawal of
termination was taken by the Managing Committee unsupported by the
decision of the General Body of the Society. It appears that the Managing
Committee also wrote to Divisional Joint Registrar on 8 April 2024
communicating the decision to withdraw the termination notice. On 10
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April 2024, the Society wrote to the Petitioner and apparently sought
better terms and conditions as detailed therein. The Society requested
the Petitioner to execute a registered Deed of Confirmation-cum-
Supplemental Agreement by incorporating the fresh demands of the
society’s members. It appears that the Petitioner issued a detailed letter
dated 27 May 2024 to the Society requesting the Society to complete all
formalities for smooth redevelopment of the project. On 18 June 2024,
the Society wrote to the Assistant Registrar of Co-operative Societies
confirming that it had not appointed any new Developer and was going
ahead with the project with the Petitioner.
19) It appears that nothing happened during next 3 ½ months. On 30
th
September 2024, the Society conducted its 12 Annual General Body
Meeting, in which the issue of redevelopment project through the
Petitioner was taken up as a last-minute subject and the Society adopted
resolution to terminate the appointment of the Petitioner by
withdrawing the opportunity given to it vide letter dated 6 April 2024.
The Society also resolved to withdraw letter dated 8 April 2024 issued to
the Divisional Joint Registrar.
20) Copy of minutes of SBGM held on 30 September 2024 is placed on
record on behalf of the Society. The Petitioner has not bothered to
produce copy of General Body resolution adopted on 30 September 2024
nor there is any disclosure made about the same in the body of the
Petition. However, Petitioner’s knowledge in respect of the Resolution
dated 30 September 2024 can be gathered from the affidavit-in-reply
dated 13 September 2025 filed before the Hon’ble Minister by it in which
it pleaded as under:
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17. … I say that when Annual General Meeting of the Applicant
society took place on 30-09-2024 the partner who was looking after
the redevelopment project of the Applicant Society was hospitalized.
21) The reply was filed after noticing following averments in the
Revision Application filed by the Society:
N. It is pertinent to note that even after giving these assurances, the
Developer, M/s. Pioneer Constructions, failed to act upon them and
despite of another chance given to the Developer, no interest was
shown by him and as result, On 30.09.2024, in the duly convened
A.G.M, the members reaffirmed by majority vote that the Developer,
M/s.Pioneer Constructions’ termination is to be held valid and
decided to withdraw the letters dated 06.04.2024 and 08.04.2024
addressed to the Respondent No.1 and The Developer. The
Appellate craves leave to refer to an reply upon as and when
produced the copy of the Minutes of Meeting of the A.G.M. held on
30.09.2024.
The Petitioner has thus suppressed the position that General Body of the
Respondent-Society had adopted resolution to terminate the Petitioner’s
appointment vide AGM held on 30 September 2024.
22) The Society relies on letter dated 4 February 2025 addressed to the
Petitioner by which decision taken in the AGM dated 30 September 2024
was allegedly communicated to it. The Petitioner stoutly denies having
received letter dated 4 February 2025. At this juncture, I do not propose
enter into this factual controversy.
23) Though Petitioner’s appointment was terminated by the society
on 30 September 2024, it wrote to the Divisional Joint Registrar on 24
March 2025 for issuance of revised NOC on the basis of withdrawal letter
dated 6 April 2024. Thus Petitioner did not disclose its termination and
relied on withdrawn letter dated 6 April 2024. Acting on Petitioner’s
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letter dated 24 March 2025 the Divisional Joint Registrar proceeded to
issue NOC on 1 April 2025 to the Petitioner. The Society challenged NOC
dated 1 April 2025 by filing Revision Application No.355 of 2025 before
the Hon’ble Minister. Petitioner participated in the hearing conducted
before the Hon’ble Minister by filing affidavit-in-reply. The Hon’ble
Minister has proceeded to decide validity of the NOC dated 1 April 2025
issued by the Divisional Joint Registrar. The Hon’ble Minister took note
of the fact that though the Petitioner was appointed vide AGM dated 1
September 2013, the redevelopment project had not kick started in
absence of any stay order by any authority/court. The Hon’ble Minister
took note of the decision taken in AGM held on 15 September 2023
terminating the appointment of the Petitioner. The order observes that
though an opportunity was granted to the Petitioner vide letter dated 8
April 2024, it did not take any concrete steps and accordingly resolution
was passed in AGM dated 30 September 2024 terminating its
appointment. Hon’ble Minister noted that the resolutions adopted in
AGM dated 15 September 2023 and 30 September 2024 were not
questioned before any court and had attained finality. On the basis of
above broad reasonings, the Hon’ble Minister has set aside the NOC
issued by the Divisional Joint Registrar on 1 April 2025.
24) The order passed by the Hon’ble Minister on 17 December 2025
has not been challenged by the Petitioner despite passage of four long
months. More importantly, while the Petitioner has conveniently relied
upon Divisional Joint Registrar’s NOC dated 1 April 2025 in the Petition,
it has suppressed copy of Minister’s order dated 17 December 2025. This
Court does not appreciate the conduct of the Petitioner in relying on
NOC dated 1 April 2025 by not producing copy of the Hon’ble Minister’s
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Order, which has set aside the said NOC. Instead of producing copy of the
Order dated 17 December 2025, Petitioner has referred to the same in
paragraph 30 of the Petition by making a bald averment that the order is
a nullity and grants relief beyond the scope of revision and was issued
without jurisdiction. Though it is contended that the Petitioner is in the
process of filing appropriate proceedings against order dated 17
December 2025, the fact remains that the said order is not challenged
despite passage of four long months. This prima facie depicts level of
interest of the Petitioner in the project.
25) The position that emerges is that the Society has adopted
resolution in the AGM dated 30 September 2024 terminating the
Petitioner’s appointment. The NOC granted in favour of the Petitioner by
the Divisional Joint Registrar on 1 April 2025 is set aside by the Hon’ble
Minister by order dated 17 December 2025. Thus, there is no NOC in
favour of the Petitioner for carrying out redevelopment project.
26) The conspectus of the above discussion is that the Petitioner has
thus delayed implementation of redevelopment during last 13 long years.
I am not inclined to accept the submission made on behalf of the
Petitioner that it could do nothing in absence of consent letters by 70%
members. It is contended on behalf of the Respondent-Society that the
pretext of absence of 70% individual consents is raised for the first time
in the present Petition and that the same was not cited as a reason
before the Hon’ble Minister for explaining delay. Perusal of the reply
filed before the Hon’ble Minister indicates that absence of consent
letters by 70% members was not pleaded as a justification for not taking
any steps in the redevelopment project. On the contrary, the Petitioner
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has sought to justify delay in implementation of redevelopment project
by contending that proposal to the Planning Authority was not
submitted on account of possible changes in redevelopment laws due to
advent of DCPR 2034. This is clear from following pleadings in
paragraphs 12 and 15 of the Petition:
12. The Petitioner submits that during the period 2015 to 2018
the sanction of scheme of redevelopment was withheld by the
planning authority due to New Development Control Regulations
were under process of sanctioning. The Development Control and
Promotion Regulation 2034 came into effect in the year 2018 and
process of sanctioning by the planning authority had commenced in
the year 2019. ...
15. The Petitioner submits that despite the Respondent knowing the
facts that the Petitioner was prevented to proceed further with the
redevelopment due to change in redevelopment law, various
litigations filed by the members and occurrence of COVID-19, the
Respondent issued three letters dated 3rd December 2021, 1'1 March
2022 and 13th April 2022 inter alia calling upon the Petitioner to
submit the explanation for delay in redevelopment of the said
Property. ...
27) Petitioner has relied upon letter of the Society dated 6 April 2024
by which termination effected in AGM dated 15 September 2023 was
withdrawn. The Society has actually questioned the authority of the
Managing Committee in withdrawing termination in absence of General
Body Resolution. However, this aspect can be gone into while deciding
the rival claims of the parties finally. As of now I proceed on a footing
that Petitioner’s termination was indeed withdrawn by the Society on 6
April 2024. The Petitioner has relied upon judgment of the Apex Court in
All India Power Engineer Federation (supra) in support of its contention
that letter dated 6 April 2024 constitutes waiver of allegation in respect
of past delay. As of now, I am unable to accept the contention of waiver
of objection of delay. The issue may be relevant while deciding the
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claims of the Petitioner finally. However, for deciding the issue of interim
measures, this Court cannot ignore the fact that the Petitioner has done
absolutely nothing in respect of the project for the last 13 long years.
28) Petitioner’s reliance on the provisions of Sections 51 and 52 of the
Indian Contract Act, 1872 also does not provide much assistance to it for
deciding the issue of making interim measures. The Petitioner has not
written a single communication to the Society that in absence of consent
letters of 70% members, it was unable to submit proposal to the
Municipal Corporation for securing permissions. It appears that even
tentative plans for construction were not prepared by the Petitioner nor
shared with the Society at any point of time. At least after withdrawal of
termination on 6 April 2024, the Petitioner ought to have written to the
Society that it was awaiting the consent letters from 70% members and
was prevented from taking steps in the redevelopment project. As a
matter of fact, the stand of absence of consent letters coming in the way
of taking steps in the project appears to be contrary to the position taken
by the Petitioner in its affidavit-in-reply filed before the Hon’ble
Minister, in which it gave following justification for doing nothing after
withdrawal of termination on 6 April 2024:
17. … I say that as disclosed hereinabove I am a partner of the
Respondent No.3. I say that I was looking after the redevelopment
project of the Applicant society. I say that on account of ill-health, I
was required to be hospitalized for 25 days for undertaking heart
valve replacement operation alongwith an open heart surgery and
was advised to take complete bed rest for 6 months i.e. till March
2025.I say that when Annual General Meeting of the Applicant
society took place on 30-09-2024 the partner who was looking after
the redevelopment project of the Applicant Society was hospitalized.
29) Thus, the Petitioner gave the pretext of ill health of one of its
partners for six months for doing nothing post withdrawal of
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termination on 6 April 2024. It has now turned around and sought to
raise a new pretext of absence of consent of 70% members for not taking
any steps in redevelopment project. In that view of the matter, it is not
possible to make any interim measures in favour of the Petitioner by
relying on Clauses 4 and 5 of the Development Agreement. Prima facie,
the case does not involve failure to perform reciprocal promise by the
society.
30) There is gross delay on the part of the Petitioner in not applying
for interim measures. The Petitioner’s appointment is terminated on 30
September 2024. Even if it is accepted arguendo that it did not receive
letter dated 4 February 2025, it was served with Revision Application
No.355 of 2025, which was filed by the Society on or about 28 May 2025.
Though the Revision Application, the Petitioner acquired knowledge of
termination of its appointment vide SGBM resolution dated 30
September 2024. While filing affidavit-in-reply dated 13 September 2025,
the Petitioner referred to appointment of a new Developer by the Society
in paragraph 17 of the reply, which means that it had knowledge about
appointment of a new developer by the Society. Alongwith the present
Petition, the Petitioner has produced copy of notice dated 25 December
2025 convening SGBM on 10 January 2026 for the purpose of discussing
proposals received by the Society in SGBM held on 3 March 2025 for
appointment of a new developer. The Petitioner sent advocate notice
dated 9 January 2026 objecting to holding of SGBM on 10 January 2026.
However, at that stage, the Petitioner did not take steps for seeking
interim measures by filing Section 9 Petition. He let conduct of SGBM on
10 January 2026 in which the Society considered proposals of various
developers and decided to appoint M/s. Sugee Developers (Sugee Avenue
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Private Limited) for implementation of the Society’s redevelopment
project. The present Petition is filed on 18 April 2026 only after issuance
of Notice dated 9 April 2026 for conduct of further SGBM for finalaisation
of draft Development Agreement with the new Developer. The Petition is
moved one day before holding of SGBM on 23 April 2026. The Petitioner
has thus not approached this Court with necessary alacrity despite
having sufficient notice of appointment of new developer.
31) It is sought to be contended on behalf of the Petitioner that in
absence of termination clause in the Development Agreement it is
impermissible for the Society to terminate the same, and reliance is
placed on judgment of the Apex Court in K.S. Majunath (supra). The
judgment in K.S. Majunath is in the context of termination of Agreement
for Sale of immovable property and it is held that unilateral termination
of Agreement for Sale is impermissible except in cases where agreement
itself is determinable in nature in terms of Section 34 of the Specific
Relief Act, 1963. The Apex Court has held that a party having valid
reason for termination of non-determinable Agreement for Sale needs to
approach the Court and obtain declaration as to the validity of such
termination /rescission and it is not necessary for non-terminating party
to do so. In my prima facie view the judgment would have no application
to the facts of the present case, which relates to termination of
appointment of a Developer. Rights of a developer do not stand on same
pedestal as that of purchaser of property under the Agreement for Sale.
When Developer fails to complete redevelopment project or delays it
indefinitely, I do not see any difficulty why the society cannot terminate
the Development Agreement and get the redevelopment project
implemented through another developer. In a redevelopment project,
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though a right is created in favour of the Developer to sell flats in sale
component portion, he does not become owner of the land in question,
nor the Development Agreement is intended to confer any ownership in
the land taken up for development. The right of the developer to sell flats
in sale component portion fructifies only after he completes obligation
under the Development Agreement to put society members in possession
of PAAs. The Developer, who fails to construct the building and put
members in possession of PAAs does not hold any title even in respect of
sale component flats. Reference in this regard can be made to the
following observations in the Judgment of this Court in SSD Escatics Pvt.
3
Ltd Vs. Goregaon Pearl Housing Society Ltd. :
In my view, a clause in the redevelopment agreement for denial of
damages or compensation to the developer can be enforced in law
because of the peculiarity of the contract. In a redevelopment
agreement, the developer undertakes the responsibility of rehousing
the society members by demolishing the old building and by
constructing a new one. In return, the developer secures right to sell the
additional constructed units to recoup the expenditure and to earn
profits. He has the responsibility of praying transit rent to the society
members in the interregnum. Developer in an agreement for
redevelopment does not secure ownership in the land and the Society
continues to remain the owner. He has the primary responsibility of
providing new houses to the members. His right to earn profits in the
project crystallizes only after he fulfills the obligations of paying transit
rent and putting back the society members in possession of
reconstructed flats. If the developer fails to perform the primary
obligations, his right to earn profits by selling the flats remains
imperfect. Therefore once the developer commits breach of obligation
to provide constructed flats/units to the society members and once the
DA is terminated on that count, the right of the developer to earn
profits from the project continues to remain imperfect. In absence of
right to make profits in the project, the developer cannot seek
damages/compensation from the society. This is a reason why if the
developer agrees not to claim compensation or damages in the event of
termination of contract by the Society due to his defaults, such
contractual clause would be enforceable in law.
(emphasis added)
3 Commercial Arbitration Petition No. 354 of 2024 decided on 30 March 2026
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In view of fundamental difference in the contract of redevelopment and
Agreement for Sale, the ratio of judgment of the Apex Court in K.S.
Majunath would have no application to the present case.
32) The members of the Society are languishing in old and dilapidated
buildings constructed in the year 1957. What is at stake for the members
of the Society is far superior right to reside in safer and better homes as
compared to right of the Petitioner-Developer to earn profits out of
redevelopment project. Beyond paying the amount of Rs.1 crores towards
earnest money deposit, the Petitioner has apparently not incurred any
expenditure in the project. It has not taken any steps in the project
during last 13 long years. He has not moved even a single brick. Prima
facie it appears that the project is being used by the Petitioner only as a
business venture with no intention of even commencing the project. The
fact that Petitioner has negotiated with other developers (India Realtech
Corporation LLP and JSW Group) indicates possible incapability on the
part of the Petitioner to complete the project.
33) Thus when rights of the society members to reside in safer and
better homes is pitted against the right of the developer to make profits
in the project, the former must prevail over the latter. In Huges Real
Estate Developers LLP and Khernagar Adarsh Co-operative Housing
4
Society Limited, the Division Bench of this Court has recognised this
principle and has held in paragraphs 31 and 33 of the judgment as under:
31) Unlike suits involving specific performance of other contracts, the
contracts dealing with redevelopment of old buildings of housing
societies involve special circumstance where the condition of the old
4 Commercial Appeal No.45 of 2025 decided on 19 August 2025
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building gets deteriorated with passage of each day. Redevelopment of
buildings is undertaken by societies mostly because the buildings are
in bad shape and need to be pulled down. Therefore timely
completion of reconstruction assumes importance. Therefore, while
considering the issue of grant of temporary injunction to restrain a
housing society from proceeding ahead with reconstruction of its
building, this vital aspect needs to be borne in mind.
xxx
33) Afterall a developer is engaged by housing societies on account of
lack of expertise and wherewithal for undertaking reconstruction of
their buildings. If societies possess the financial capability to
undertake reconstruction of their buildings, they can engage a
contractor to reconstruct the building and such construction contract
would be incapable of being specifically performed. However, because
of lack of expertise and financial capabilities of housing societies,
development rights are granted in favour of a developer which
envisage sale of some units in the reconstructed building and enables
the developer not only to recover the cost of demolition of old
building and construction of new building but also earn his profits
through the project. This is how a developer, who is engaged
essentially to reconstruct society’s building, also secures some rights
in the redevelopment process. On account of creation of this limited
interest in the property, the Development Agreements can be
specifically performed. However, what must be borne in mind is the
fundamental principle that the rights of a developer to earn profits
through redevelopment contracts would always remain subservient to
the rights of the society to have its building reconstructed. Therefore,
when it comes to deciding the prayer for temporary injunction, the
Court’s approach should normally be avoidance of halting of the
redevelopment process in cases where it is possible to secure the
rights of the developer atleast to some extent. The ultimate interest of
the developer in undertaking redevelopment project is to earn profits.
When rights of residents of dilapidated buildings to reside in safe
houses is pitted against the rights of the developer to earn profits
through redevelopment contracts, the latter must yield to the former
atleast when it comes to consideration of grant of temporary
injunction. This is because developer’s loss of opportunity to earn
profits can always be made good by awarding monetary decree in his
favour. However, if redevelopment project of buildings is halted till
decision of suit filed by the developer, the loss caused to the residents
of the building cannot be undone. This is particularly true where the
old buildings are not in habitable condition. Therefore prima facie
inquiry in such cases would ordinarily revolve around the issue as to
who is guilty of breach of Development Agreement so as to put the
guilty party to terms. Thus, if the society members are prima facie
found to have terminated the Development Agreement in an illegal
manner, the Court can put the society to terms before allowing the
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redevelopment process to progress further through another
developer.
34) The principle is reiterated by this Court in Ison Builders LLP V/s.
5
Om Sai Ram Co-operative Housing society (proposed) and others. in
which this Court, by following the ratio of the judgments in Huges Real
Estate Developers LLP, Borivali Anamika Niwas CHSL Versus. Aditya
6
Developers & Ors ., Rajawadi Arundaya CHSL Versus. Value Project Pvt.
7
Ltd. and Swashray CHSL vs. Swashray Co- operative Society Housing
8
Society Limited and Others Versus. Shanti Enterprises has held in
paragraphs 37 and 38 of the judgment as under:
37) In my view, the principles discussed in Huges Real Estate
Developers LLP by the Division Bench would apply squarely to the
present case where the members of the Society are deprived of
permanent alternate accommodations and are languishing in 75-year-
old structures and are eagerly awaiting redevelopment of the land.
Petitioner’s interest in the project are limited to earning profits.
Petitioner can claim damages against the Society and members if it can
prove that the termination is invalid. However, whether the Petitioner
can further stall the process of redevelopment till adjudication of its
claims in respect of the termination? The answer to the question
appears, to my mind, to be in the negative. Sufficient opportunities
have been given to the Petitioner both by the Society, as well as by
MCGM to make progress in the project. The case does not involve a
circumstance where construction of the building has commenced and
certain difficulties have prevented the Petitioner-Developer from
completing the Project. The present case involves a situation where
even existing structures are yet to be demolished. The status quo at the
land prevails for the last 12 long years. It is therefore appropriate that
the Society and MCGM are permitted to proceed with development on
the land through another developer chosen by the Society and it is not
necessary to stall the process till Petitioner gets its claims relating to
termination adjudicated.
5 Commercial Arbitration Petition (L) No.36533 of 2025 decided on 23 January 2026
2019 SCC Online Bom. 10718
6
2021 SCC Online Bom. 9572
7
CARBP (L) 10432 of 2023 decided on 3 November 2023
8
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38) A Single Judge of this Court in Swashray CHSL (supra) has also
taken note of cases where members of Societies suffer due to gross
delay in the redevelopment process. This Court referred to judgments
of this Court in Borivali Anamika Niwas CHSL Versus. Aditya
Developers & Ors. and Rajawadi Arundaya CHSL Versus. Value Project
Pvt. Ltd. and has held in para-32 of the judgment as under:
32. Thus, the Petitioner – Society has clearly made out a
strong prima facie case in it favour as regards termination of
the development agreement and the necessity to take steps for
working out the redevelopment project through other means.
There is sufficient material on record to show that the
Petitioner – Society has completely lost faith and trust in the
Respondent – Developer about completion of the
redevelopment project. The Petitioner – Society is not
expected to be at the mercy of the Respondent – Developer.
The Petitioner – Society cannot be shackled with a
Development Agreement in which the Respondent –
Developer indulges in repeated defaults, without any hope of
the redevelopment project actually being completed. The
members of the Petitioner – Society have been out of
possession since the year 2017 and none of the timelines
specified in the Development Agreement or the
Supplementary Development Agreement or even PAAAs have
been honored by the Respondent – Developer. There is
nothing to show that the Petitioner – Society in any manner
obstructed the Respondent – Developer in executing the
project. Thus, the factual position in the present case is akin
to cases in which this Court while exercising power under
Section 9 of the said Act has granted directions that amount to
mandatory injunctions at interim stage. The position of law
expounded and confirmed by this Court repeatedly in the
aforementioned judgments, inures to the benefit of the
Petitioner – Society in the present case. Therefore, a clear case
is made out by the Petitioner – Society for granting reliefs as
claimed in its petition filed under Section 9 of the said Act. For
the same reasons, the reliefs sought by the Respondent –
Developer deserve to be rejected. This Court is of the opinion
that holding otherwise would grant a premium to a defaulting
developer like the Respondent before this Court and the
Petitioner – Society and its members would continue to suffer
for no fault on their part. Even today the Respondent –
Developer is liable to pay monetary benefits to the members of
the Petitioner – Society under the documents executed
between the parties. The Respondent – Developer was not
forthcoming at any stage during pendency of the present
petitions about making good such payments to the members
of the Petitioner – Society.
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35) In my view, therefore, if the stakes of the rival parties are weighed,
it is clear that the stakes of the society members in respect of
redevelopment project are way higher than as compared to the one for
the Petitioner. If the interim measures are granted in Petitioner’s favour,
the same would result in redevelopment project being delayed
indefinitely. This would endanger the lives of the 826 members, who are
residing in the buildings constructed in the year 1957. The members are
waiting for safer, bigger and better homes for the last 13 long years and
their wait cannot continue indefinitely. On the other hand, if interim
measures are refused, the Petitioner may only lose opportunity of
earning profits in the project. In case, Petitioner succeeds in its claims, it
can be adequately compensated while passing the arbitral Award.
36) The project also appears to be of substantially large magnitude as
the same is being executed on land admeasuring 40,520.18 sq. mtrs.
comprising of 46 buildings with 826 residential premises, 19 shops and
24 stalls in 46 buildings. In my view, therefore, it would not be
appropriate to make interim measures in favour of the Petitioner. All the
three parameters of prima facie case, irreparable loss, balance of
convenience are against the Petitioner and in favour of the Respondent -
Society. In my view therefore, no case is made out for grant of interim
measures in favour of the Petitioner before commencement of the
arbitral proceedings.
37) So far as the Application filed under Section 11 of the Arbitration
Act is concerned, Mr. Chavan has fairly not disputed arbitration
agreement between the parties. Clause 31 of the Development
Agreement provides for appointment of the named Arbitrator. However,
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both the learned counsel appearing for the parties, on instructions, have
made a statement that this Court can appoint any other fit person to act
as a sole Arbitrator for adjudication of disputes and differences between
the parties.
38) I accordingly proceed to pass the following order:
(i) Commercial Arbitration Petition (L) No.13956 of 2026 filed
under Section 9 of the Arbitration Act is disposed of without
granting any relief in favour of the Petitioner.
(ii) Mr. Amrut Joshi, an Advocate practising in this Court is
appointed as the sole Arbitrator to adjudicate upon the
disputes and differences between the parties arising out of
Development Agreement dated 22 June 2015 as amended
vide fresh Development Agreement dated 22 April 2016. The
contact details of the Arbitrator are as under:-
nd
:- Office No.12, Darya Building, 2
Office
Address
Floor, Above Aarti Book Store,
Hutatma Chowk, Fort, Mumbai-400
001
Email id :- [email protected]
contact No. :- 9004200707
(iii) A copy of this order be communicated to the learned sole
Arbitrator by the Advocates for the Applicant within a period
of one week from the date of uploading of this order. The
Applicant shall provide the contact and communication
particulars of the parties to the Arbitral Tribunal alongwith a
copy of this order.
(iv) The learned sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
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with Section 12(1) of the Act to the parties within a period of
2 weeks from receipt of a copy of this order.
(v) The parties shall appear before the learned sole Arbitrator
on such date and at such place as indicated by him, to obtain
appropriate direction with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc.
(vi) The fees of the sole Arbitrator shall be as prescribed under
the Bombay High Court (Fee Payable to Arbitrators) Rules,
2018 and the arbitral costs and fees of the Arbitrator shall be
borne by the parties in equal portion and shall be subject to
the final Award that may be passed by the Tribunal.
39) With the above directions, both Section 9 Petition as well as
Section 11 Application are disposed of without making any order as to
costs.
[SANDEEP V. MARNE, J.]
40) After the judgment is pronounced, the learned counsel
appearing for the Petitioner prays for continuation of arrangement
made vide order dated 22 April 2026 for a period of one week. The
request is opposed by the learned counsel appearing for the
Respondent-Society. Considering the nature of findings recorded in
the judgment, I am not inclined to continue the interim order any
further. The request is accordingly rejected.
[SANDEEP V. MARNE, J.]
Signed by: Megha S. Parab
Designation: PA To Honourable Judge
Date: 24/04/2026 18:51:39
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