The Nehru Nagar Amrapali Co-Operative Housing Society Limited vs Ms Rebuild

CNR No : HCBM020357882026

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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO.35787 OF 2026
The Nehru Nagar Amrapali Coop.
Housing Society Limited
… Petitioner
Vs.
ATUL
GANESH
KULKARNI
1. Rebuild
2. Pearl Concept Habitat LLP
… Respondents
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.11.03
11:32:23 +0530
Mr. Chirag Kamdar with Ms. Sakshi Agarwal and Mr.
Nilesh Jadhav i/by Mr. Bipin Joshi for the Petitioner.
Mr. Karl Tamboly with Mr. Vijay Dhingreja and Mr.
Anshul Kochar i/by V.J. Juris for Respondent No.2.
CORAM : AMIT BORKAR, J.
RESERVED ON : OCTOBER 30, 2026.
PRONOUNCED ON : NOVEMBER 3, 2026
JUDGMENT:
1. By the present Petition filed under Section 9 of the
Arbitration and Conciliation Act, 1996, the Petitioner is seeking
directions to direct the Respondents to hand over the original
redevelopment documents with respect to the Society’s property, to
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restrain the Respondents from representing themselves as
Developers of the siad Society property, and for other ancillary
reliefs as prayed for.
2. I have heard the learned Advocates appearing for the
Petitioner and Respondent No. 2. The dispute has arisen from the
Development Agreement dated 13 December 2007, Supplemental
Development Agreement dated 5 May 2012 and Deed of
Assignment dated 9 November 2015. According to the Petitioner
Society, the Respondents failed to complete the redevelopment and
did not perform the responsibilities accepted by them under these
documents. The Society says that it has terminated the
development rights and the Respondents have no right to continue
as Developers. It complains that, even after termination, the
Respondents have not returned the original redevelopment
documents and are preventing the Society from appointing
another Developer. Respondent No. 2 has disputed the Society's
case. According to it, the earlier termination was later given up by
both sides. It is submitted that the Society continued to write
letters requesting Respondent No. 2 to complete the remaining
work. The Society had agreed to give a necessary Power of
Attorney. Therefore, according to Respondent No. 2, the
Development Agreement and Deed of Assignment continue to bind
the parties. It is stated that the work could not be completed
because the Society did not give the required cooperation. The
first question is how far this Court should examine the dispute
while deciding a Petition under Section 9 of the Arbitration and
Conciliation Act, 1996. At this stage, the Court is not required to
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conduct a full trial. It is not required to finally decide whether the
termination of the Development Agreement was legal or not.
These questions will be decided by the Arbitral Tribunal after
considering the agreements, documents, evidence and submissions
of both sides. However, merely because the parties have agreed to
resolve their disputes through arbitration, this Court cannot refuse
interim protection where it is necessary. The Court has to consider
whether the Petitioner has shown a prima facie case, whether the
balance of convenience is in its favour and whether protection is
required to preserve the subject matter of arbitration. The Court
must consider what may happen to the Society and its members if
the requested relief is refused. In Kannamwar Nagar Aditya
Cooperative Housing Society Limited v. Shraddha Platinum
Builders and Developers and Others, Commercial Arbitration
Petition (L) No. 8692 of 2026 with Commercial Arbitration Petition
(L) No. 23499 of 2026, decided on 17 July 2026, this Court
considered a similar dispute between a Society and its Developer.
In paragraph 19, this Court observed that the question whether
termination was legal would be decided by the Arbitral Tribunal.
In a Petition under Section 9, the Court has to consider whether
interim protection is required to preserve the subject matter of
arbitration. In paragraph 31 of that judgment, this Court observed
that questions regarding the procedure followed for termination,
opportunity given to the Developer and seriousness of the breaches
would require detailed examination of the agreements and
evidence. Such questions cannot be finally decided in a Petition
under Section 9. The same approach will have to be followed here.
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However, merely because the Respondents dispute the termination,
the redevelopment cannot be allowed to remain stopped for an
unlimited period. I shall examine the rival submissions on the basis
of the documents available. The findings recorded here are only
for deciding the interim relief. They will not finally decide the
contrrights and liabilities of the parties.
Nature of the Development Agreement and obligations of the
Respondents:
3. There is no dispute that the Petitioner Society executed a
Development Agreement dated 13 December 2007 in favour of
Respondent No. 1, M/s. Rebuild. Under this Agreement,
Respondent No. 1 was required to redevelop Building No. 133 at
Nehru Nagar, Kurla (East), Mumbai. At that time, the Society had
40 members. The old building consisted of a ground floor and four
upper floors. Under the original Development Agreement,
Respondent No. 1 had agreed to provide permanent alternate
accommodation to the Society members. The agreed carpet area
was 323 sq. ft., along with the permitted niche and flower bed
area. Respondent No. 1 was required to provide transit
accommodation and monthly compensation during the
redevelopment work. The proposed building was to consist of a
ground floor and seven upper floors. Thereafter, the permissible
FSI increased from 2.4 to 2.5. Because of this increase, the parties
executed the Supplemental Development Agreement dated 5 May
2012. Under this Agreement, the carpet area of each member was
increased to 348 sq. ft. Respondent No. 1 accepted monetary
responsibilities towards the members and was permitted to
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construct the eighth floor. It is clear that the original terms were
later changed through the Supplemental Agreement. The
development potential of the property had increased. Since
permission for an additional floor was given, responsibilities arose
for its construction and for obtaining the necessary permissions
from the concerned authorities.
4. Respondent No. 1 could not complete the redevelopment
work. Thereafter, the Deed of Assignment dated 9 November 2015
was executed between Respondent No. 1, Respondent No. 2 and
the Petitioner Society as the confirming party. Neither side disputes
execution of the Deed of Assignment. Both sides rely upon this
document in support of their respective cases. The important
question is what responsibilities Respondent No. 2 accepted under
this Deed.
5. On reading the Deed of Assignment, it appears that
Respondent No. 1 was facing financial difficulties and was unable
to complete the remaining construction. Respondent No. 2 agreed
to provide financial assistance and use its experience for
completing the balance work. The incomplete work was described
in the Deed as the “Pending Construction Work”. The Deed records
that Respondent No. 1 had partly completed the building
consisting of ground plus seven floors and that Respondent No. 2
had agreed to complete the remaining work. It was agreed that the
Deed of Assignment would be read along with the earlier
Development Agreement and Supplemental Agreement. All parties
were required to follow the conditions contained in these
documents. Therefore, Respondent No. 2 cannot now say that it
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had no responsibility for the earlier obligations of Respondent No.
1. After accepting the assignment, Respondent No. 2 agreed to
complete the pending construction and clear the liabilities
accepted by it under the Deed. It accepted the rights arising from
the development arrangement, including the right to receive the
balance consideration from the new flat purchasers. The Deed
provided that Respondent No. 2 would clear the liabilities arising
from the development arrangement without creating any
encumbrance or lien over the property of the Society or its
members. Respondent No. 2 was permitted to obtain financial
assistance from banks or other financial institutions at its own risk
and cost. The Deed made Respondent No. 2 responsible for
completing the pending construction and obtaining the Occupation
Certificate from MCGM at its own cost. It was provided that
construction of the eighth floor would not begin until the
necessary payments were made for obtaining the Commencement
Certificate and clearing the dues of the concerned authorities. The
Deed showed that timely completion of the pending work was
important.
6. Another important condition is contained in Clause (g).
Under this clause, the Society agreed to cooperate in
redevelopment of Building No. 132, which is next to Building No.
133. However, this cooperation was subject to the condition that
the area in possession of the Society would not be changed or
reduced. The entrances, exits and parking arrangements of both
buildings were required to remain separate. This condition is
important because the later dispute between the parties is about
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the compound wall and boundary between Building Nos. 132 and
133. Merely because Respondent No. 2 was appointed as
Developer of the adjoining building, it cannot claim any additional
right over the Society's property. The Deed protects the Society's
area and requires that its separate facilities should be maintained.
7. I find that the contention of Respondent No. 2 that the
Society was required to pay the balance corpus amount of Rs.60
lakhs is not supported by the Deed of Assignment. Clause (f)
records that Respondent No. 2 had agreed to pay Rs.60 lakhs to
the Society on the date of execution of the Deed. There is a receipt
dated 2 November 2015 showing that the Society received this
amount. Therefore, on the material available, the responsibility to
pay this amount was upon Respondent No. 2 and not the Society.
This submission of Respondent No. 2 cannot be accepted.
8. The Respondents have relied upon the Deed of Assignment
to say that the Society was required to cooperate in obtaining
permissions and completing the construction. This submission
requires consideration. The Society cannot deny that the Deed
expected it to give cooperation wherever necessary. However, the
kind of cooperation required and the extent of the Society's
responsibility will have to be understood by reading the entire
Deed. In relation to Building No. 132, the Society's responsibility
was subject to the condition that its own property area would not
be reduced. Therefore, the Deed of Assignment shows that
Respondent No. 2 was responsible for completing the remaining
construction, obtaining the Occupation Certificate, clearing the
project liabilities and protecting the Society against claims made
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by the new flat purchasers. These responsibilities are important
while examining the conduct of Respondent No. 2.
Construction carried out and remaining work:
9. The Society alleges that the Respondents failed to complete
the construction, did not construct the eighth floor, did not obtain
the Occupation Certificate and did not follow the requirements of
the concerned authorities. It has alleged poor construction quality
and damage to the property. Respondent No. 2 has denied these
allegations. According to it, Respondent No. 1 had constructed the
building consisting of ground plus seven upper floors sometime in
or around 2014. The 40 members of the Society had taken
possession of their rehabilitation flats and were staying there.
Therefore, according to Respondent No. 2, only the eighth floor
and certain other remaining work were incomplete.
10. The statements of both sides regarding the extent of
construction will have to be considered along with the earlier
proceedings before MahaRERA and this Court. Five flat purchasers
had approached MahaRERA complaining that possession of their
flats had not been given. By order dated 15 January 2018, the
Chairperson of MahaRERA held that the purchasers were entitled
to receive possession before 31 December 2018, which was the
date mentioned in the project registration. The Appellate Bench of
MahaRERA, by order dated 29 August 2018, directed payment of
interest at 10.05% per annum from 1 January 2018 until
possession was given after obtaining the Completion Certificate.
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11. Respondent No. 2 challenged that order before this Court by
filing Second Appeal (St.) Nos. 27914 of 2018 and connected
appeals. By judgment dated 29 August 2019, pronounced on 17
September 2019, the appeals were dismissed by the learned Single
Judge.
12. In the observations made in that judgment in paragraph 37,
this Court recorded that Respondent No. 1 had constructed the
building consisting of ground plus seven upper floors and had
given possession of the rehabilitation flats to the Society members
without obtaining the Occupation Certificate. In paragraph 38, the
Court recorded that construction of the flats proposed on the
eighth floor had not even started. The said judgment recorded that
Respondent No. 1 had sold nine out of the ten flats proposed to be
constructed on the eighth floor. The names of the purchasers were
included in the list attached to the Deed of Assignment. The Court
held that Respondent No. 2 had accepted the liabilities arising
from the earlier development arrangement towards those
purchasers. In paragraph 42, this Court held that Respondent No.
2 had accepted the rights and liabilities created by Respondent No.
1, including the rights of the new flat purchasers. In paragraph 48,
the Court made it clear that Respondent No. 2 could not avoid its
statutory responsibilities towards the purchasers merely by issuing
a termination letter. The Court observed:
“The appellant cannot be allowed to wriggle out of such
pending obligations under the guise of termination of
agreements entered into with the erstwhile promoter which
are assigned in favour of the appellant herein.”
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13. In paragraph 55, this Court noticed that Respondent No. 2
had not produced any material to show what steps it had taken
against MCGM or MHADA because the necessary Commencement
Certificate was not granted. This observation is important while
considering the present defence of Respondent No. 2 that the
Society's non-cooperation prevented it from obtaining the
necessary permissions.
14. I am aware that the Society was not a party to the above
Second Appeal proceedings. Therefore, that judgment cannot be
treated as a final decision on the dispute between the Society and
Respondent No. 2 regarding termination of the Development
Agreement. However, the judgment is relevant for understanding
how much construction was completed, what rights of third-party
purchasers had been created and what liabilities Respondent No. 2
had accepted under the Deed of Assignment. It is clear that the
building was not left without any construction. The rehabilitation
portion consisting of ground plus seven floors had been
constructed and possession was given to the Society members. At
the same time, the eighth floor was not completed, the Occupation
Certificate was not obtained and the rights of the flat purchasers
still required protection.
15. The present case cannot be treated as a case where the
Developer did not carry out any construction at all. However, the
Respondents cannot say that redevelopment was completed merely
because possession of the rehabilitation flats was given to the
members. Completion of the remaining work and obtaining the
Occupation Certificate were important responsibilities accepted by
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Respondent No. 2 under the Deed of Assignment.
16. The Society alleges that the building is in a dilapidated and
unsafe condition. Respondent No. 2 denies this. The Society has
referred to damage to the building and collapse of a slab. However,
there is no independent structural audit report before this Court
which establishes the condition of the building. I am not recording
any final finding about whether the building is structurally safe or
unsafe. However, the fact that the Occupation Certificate has not
been obtained and the remaining work has not been completed is
supported by the material placed before this Court.
17. Merely because the members were given possession of their
rehabilitation flats, their right to have the building completed
according to the sanctioned plans and to obtain the Occupation
Certificate does not come to an end. Respondent No. 2 had
accepted this responsibility under the Deed of Assignment. The
judgment of this Court dated 17 September 2019 makes it clear
that Respondent No. 2 cannot avoid its statutory responsibilities
towards the flat purchasers by relying upon termination of the
Deed of Assignment. The rights of those purchasers will have to be
protected, whatever may be the dispute between the Society and
the Respondents regarding continuation of the development rights.
Termination of the development arrangement:
18. The next question is whether the development arrangement
was terminated and whether the parties later restored it by their
conduct. The Petitioner relies upon its notice dated 7 July 2017.
Through this notice, the Society terminated the Development
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Agreement, Supplemental Agreement and Deed of Assignment.
The reasons given were delay in construction, failure to construct
the eighth floor, failure to provide the collapsible gate, defects in
the RCC structure, poor construction quality, deviation from
sanctioned plans and non-payment of statutory dues. Even before
this, the Society had terminated the Power of Attorney dated 13
December 2007 through its Advocate's letter dated 19 April 2017.
The Society had stated that the Respondents were not financially
capable of completing the project. Therefore, the notice dated 7
July 2017 was not the first occasion on which the Society raised its
complaints. It had earlier called upon the Respondents to complete
the remaining work and thereafter took steps to terminate the
Power of Attorney.
19. Respondent No. 2 says that it replied to the termination
notice dated 7 July 2017 by its letter dated 3 August 2017.
According to it, the allegations made by the Society were denied
and it was explained that the Society was not giving cooperation
for completing the remaining work. Respondent No. 2 says that the
Society did not send any reply to its letter dated 3 August 2017.
On this basis, it is argued that the Society had given up its earlier
termination.
20. The reply dated 3 August 2017 is an important document
and cannot be ignored. Respondent No. 2 had raised the defence
that the Society was not cooperating. However, merely because the
Society did not send another reply, it cannot be said that the
Society withdrew its termination notice. Whether the Society
accepted the explanation of Respondent No. 2 or whether the
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parties later restored the development arrangement will have to be
decided by considering all the later documents and the conduct of
both sides. In this connection, the letter dated 1 February 2019
addressed by Respondent No. 2 to the Society is very important.
Respondent No. 2, through its Advocates, first stated that the
Society had not replied to its earlier letter dated 3 August 2017. It
claimed that the Society had accepted its stand and was to be
treated as having withdrawn the earlier termination. The letter
stated:
“Thus, by its conduct your Society has accepted our Client's
contention and deemed to have withdrawn the purported
termination.”
21. However, the letter did not end there. Respondent No. 2
thereafter stated that it had no other option but to terminate the
Development Agreement, Power of Attorney and Deed of
Assignment. Paragraph 5 of the letter stated:
“the said Documents stand terminated w.e.f. the date of this
letter and our Client stands absolved of all their
liabilities/responsibilities towards your Society in the matter
of development of your Society's plot.”
22. Thus, the letter dated 1 February 2019 contains two different
statements. In the first part, Respondent No. 2 claimed that the
Society had withdrawn its earlier termination. In the later part,
Respondent No. 2 declared that the Agreements stood terminated
from that date and that it was free from its responsibilities towards
the Society. Both statements must be read together. Respondent
No. 2 cannot rely only upon the first part and ignore the later part.
The letter shows that Respondent No. 2 decided to bring the
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development arrangement to an end with effect from 1 February
2019. It records its intention to recover Rs.91,08,142/-, which it
claimed to have spent on the project. It claimed a paramount
charge over the remaining development potential of the Society's
property. I find that the present submission of Respondent No. 2
that its letter dated 1 February 2019 was only a conditional
acceptance of the Society's termination is not supported by the
words used in that letter. Respondent No. 2 stated that the
development documents stood terminated with effect from that
date.
23. There is another important document supporting this view.
On 8 March 2020, Respondent No. 2 addressed a letter to
MahaRERA regarding completion of the registered real estate
project. In that letter, Respondent No. 2 stated that the Society had
terminated the Development Agreement and Deed of Assignment.
It stated that the Society was still firm on its decision and that
there was no possibility of obtaining permission for restarting and
completing the remaining work. The relevant part reads:
“However, since the Society is still firm on its decision, we
see no possibility of getting permission to start and complete
the balance work of registered project.”
24. Respondent No. 2 thereafter stated:
“Therefore, now, we have decided to terminate the project on
‘as is where is basis’ and requested MahaRERA to accept the
Completion Certificate issued by the Project Architect.”
25. This letter dated 8 March 2020 was written by Respondent
No. 2 to a statutory authority. It was not a statement made by the
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Society against Respondent No. 2. Respondent No. 2 informed
MahaRERA that the Society had terminated the development
arrangement, that the Society continued to insist upon its decision
and that there was no possibility of restarting the remaining work.
It stated that it had decided to terminate the project on an “as is
where is” basis.
26. This conduct of Respondent No. 2 is important. If
Respondent No. 2 was always ready and willing to complete the
redevelopment under the Deed of Assignment, there was no reason
for it to inform MahaRERA that restarting the work was not
possible and that it had decided to terminate the project on an “as
is where is” basis.
27. The letter dated 8 March 2020 does not support the
argument that the Society had mutually withdrawn its termination
notice dated 7 July 2017. On the contrary, Respondent No. 2
informed MahaRERA that the Society continued to insist upon
termination. This is different from the present stand of Respondent
No. 2 that the Society had accepted its reply dated 3 August 2017
and withdrawn its earlier termination.
28. I am unable to accept the submission that the original
termination was given up immediately after the reply dated 3
August 2017. The documents of February 2019 and March 2020
show that both sides had taken steps and made statements treating
the development arrangement as having come to an end. They
show that the project was not being continued in the normal
manner under the Deed of Assignment. At the same time, I am not
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recording any final finding that the Society's termination dated 7
July 2017 was valid or that Respondent No. 2 was justified in
issuing its own termination letter dated 1 February 2019. The
effect of these letters, the rights arising from them and the
question whether either termination was effective will have to be
decided by the Arbitral Tribunal. However, Respondent No. 2
cannot ignore its own communications of 2019 and 2020 while
now claiming that the Deed of Assignment continuously remained
in force.
Effect of subsequent correspondence and order dated 4 July 2022:
29. Respondent No. 2 has placed considerable reliance upon the
correspondence exchanged after 2022. According to it, both parties
continued to act under the Deed of Assignment. It is submitted
that the Society requested Respondent No. 2 to complete the
remaining construction, called upon it to construct a new
compound wall and assured it that a fresh Power of Attorney
would be executed. Therefore, according to Respondent No. 2,
both parties later gave up the earlier termination.
30. The Petitioner has filed an Additional Affidavit and has
disputed this meaning given to the correspondence. According to
the Petitioner, the later letters were exchanged only for complying
with the order dated 4 July 2022 passed by this Court in Writ
Petition (L) Nos. 10078 of 2021, 16955 of 2021 and 3335 of 2021.
The Society states that the correspondence was mainly regarding
the compound wall and demarcation of the boundary between
Building Nos. 132 and 133. The Petitioner has stated:
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“co-operation does not mean giving up or waiving of
termination nor it implies that the correspondences are on
the basis that the assignment is valid, binding and
subsisting.”
31. The order dated 4 July 2022 passed by this Court will have
to be considered in this background. In those proceedings, the
dispute regarding the wall between Building Nos. 132 and 133
was before the Court. The Court recorded that the width of the
Development Plan road had changed because of the revised layout.
It was observed that the wall between the two buildings was
creating a deadlock and the matter was not moving forward.
32. The learned Advocate appearing for the occupant of Building
No. 133 submitted that the Developer had not obtained the
Occupation Certificate and that steps would be taken to obtain it if
the wall was removed. The Court accepted this statement. The
learned Advocate appearing for the Planning Authority submitted
that the Developer would remove the wall at its own cost. The
learned Counsel appearing for the Developer agreed to do so.
33. The Court thereafter directed:
“The parties should cooperate with each other for obtaining
the Occupancy Certificate.”
34. On reading the entire order, it is clear that those proceedings
mainly concerned removal of the compound wall and taking steps
for obtaining the Occupation Certificate. The order does not
declare that the Development Agreement or Deed of Assignment
was restored or brought back into force. It does not record that the
Society had withdrawn its termination notice dated 7 July 2017 or
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agreed to restore the development rights of Respondent No. 2. The
Court directed the parties to cooperate with each other for a
particular purpose. Respondent No. 2 had agreed before the Court
to remove the compound wall at its own cost and take steps for
obtaining the Occupation Certificate. Therefore, merely because
the parties complied with this order, it cannot be said that the
entire development arrangement was restored.
35. The letter dated 21 July 2022 addressed by the Petitioner's
Advocate to Respondent No. 2 must be understood in this
background. Through this letter, the Society called upon
Respondent No. 2 to construct a new boundary wall according to
the revised demarcation. It asked Respondent No. 2 to give a time
schedule for obtaining the Occupation Certificate. Since this letter
was sent soon after the order dated 4 July 2022, it can be
understood as an effort by the Society to ensure compliance with
the directions issued by this Court.
36. I have considered the letter dated 4 July 2023 addressed by
Respondent No. 2 to the Society. The subject of the letter was
“Completion of Pending Work of Your Bldg No. 133 ... and
obtaining Occupation Certificate”. Respondent No. 2 referred to
the Deed of Assignment dated 9 November 2015 and the order
dated 4 July 2022. It requested the Society to give a letter on its
letterhead to MHADA for carrying out demarcation of Building No.
133. It stated that Respondent No. 2 would pay the charges
required for such demarcation. Its subject refers to completion of
the pending work and obtaining the Occupation Certificate. It
shows that Respondent No. 2 was still trying to take certain steps
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concerning the Society's building. It shows that Respondent No. 2
was asking the Society to cooperate for obtaining demarcation
from MHADA. However, on reading the contents, the main request
appears to be for giving a letter for the limited purpose of carrying
out demarcation.
37. Respondent No. 2 has relied upon the Society's letter dated
23.03.2026, other correspondence and the communication dated
11.11.2025. According to Respondent No. 2, these letters show
that the Society continued to recognise it as the Developer. It is
argued that the Society had agreed to execute a Power of Attorney
after construction of the boundary wall. The later correspondence
shows that the parties did not stop communicating after the order
dated 4 July 2022. Some discussions continued regarding the
compound wall, demarcation, Occupation Certificate and
completion of the remaining work. This correspondence may be
important while deciding whether the Society later gave up its
earlier termination or whether both sides agreed to continue with
some responsibilities under the Deed of Assignment. However,
merely because the parties continued to exchange letters, it cannot
be treated as proof that all the development rights which were
earlier terminated had been restored. There must be clear material
showing that both sides intended to restore the entire development
arrangement and permit Respondent No. 2 to continue as
Developer with all the rights under the earlier agreements.
38. The clause in the Deed of Assignment stating that the earlier
two agreements would continue until they were substituted,
cancelled or revoked in writing is important. Both sides may rely
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upon this clause before the Arbitral Tribunal while explaining the
effect of the termination notices and their later conduct. Whether
the correspondence after 2022 was sufficient to restore the entire
development arrangement will require reading all the agreements
and letters together. At this stage, I am unable to accept the
argument of Respondent No. 2 that the order dated 4 July 2022
restored its development rights. The order did not decide that
question. Similarly, the Society's cooperation in removing the wall
and carrying out demarcation cannot, without anything more, be
treated as unconditional withdrawal of its earlier termination.
39. I find that the allegation that MHADA had directed joint
redevelopment of Building Nos. 132 and 133 is not established by
the order dated 4 July 2022. That order refers to the changed
layout and removal of the wall. It does not direct that both
buildings should be redeveloped jointly. The Deed of Assignment
provides that the Society's area shall not be reduced and that the
entrance, exit and parking arrangements of both buildings shall
remain separate. Respondent No. 2 may rely upon the
correspondence regarding demarcation and cooperation to support
its case. However, it cannot claim an independent right to reduce
the Society's property area or insist upon joint redevelopment
merely because it is developing Building No. 132.
Allegation of non-cooperation by the Society and Power of
Attorney:
40. Respondent No. 2 has strongly relied upon the fact that the
Society did not execute a fresh Power of Attorney in its favour.
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According to Respondent No. 2, without such Power of Attorney
and a letter on the Society's letterhead, it was not possible to
submit plans for construction of the eighth floor or take steps
before MHADA and MCGM.
41. This submission requires consideration. Under the original
Development Agreement, the Society had agreed to execute a
General Power of Attorney in favour of the Developers or their
nominees for carrying out the redevelopment. Accordingly, a
Power of Attorney dated 13 December 2007 was executed in
favour of the partners of Respondent No. 1. The Society later
terminated this Power of Attorney by its letter dated 19 April 2017.
42. Respondent No. 2 contends that after taking over the rights
and liabilities under the Deed of Assignment, it was entitled to
receive the necessary authority from the Society for completing the
remaining work. The Society says that no Power of Attorney was
ever executed in favour of Respondent No. 2. It says that it had
agreed to give only such cooperation as was provided in the Deed
of Assignment.
43. By letter dated 23 July 2021, the Society's Advocate stated
that the Power of Attorney dated 13 December 2007 had been
executed in favour of the partners of Respondent No. 1 and that no
Power of Attorney was ever executed in favour of Respondent No.
2. Therefore, it is not disputed that no separate Power of Attorney
was given to Respondent No. 2. However, whether the Society was
required to execute a fresh Power of Attorney in favour of
Respondent No. 2 cannot be decided merely because no such
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document was actually executed. The original Development
Agreement provided for execution of a Power of Attorney. The
Deed of Assignment stated that the earlier agreements would
continue to bind the parties. Therefore, Respondent No. 2 can
certainly argue that the Society was required to give the necessary
authority for carrying out the work assigned to it.
44. On the other hand, the Society points out that the Deed of
Assignment does not state that a fresh Power of Attorney must be
executed in favour of Respondent No. 2. It is its case that after
termination of the development arrangement, it was not required
to give any authority to Respondent No. 2. This submission of the
Society will have to be considered.
45. Whether refusal to execute the Power of Attorney amounted
to a breach by the Society, whether Respondent No. 2 was
prevented from obtaining the Commencement Certificate and
whether non-cooperation by the Society caused the delay will
require examination of the exact terms of the agreements and later
correspondence. It will be necessary to examine whether
Respondent No. 2 had actually submitted plans and applications
before the authorities and whether any permission was refused
because the Society had not given the Power of Attorney. I am not
accepting the Petitioner's argument that the Society had no duty at
all to provide cooperation under the development arrangement. At
the same time, I am unable to accept the argument of Respondent
No. 2 that the entire delay was caused by the Society. The
Respondents were required to take necessary steps before the
concerned authorities and produce material showing that they
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were ready and financially capable of completing the remaining
work.
46. The judgment dated 17 September 2019 passed by this Court
in the Second Appeals is relevant even on this issue. As noticed, in
paragraph 55 of that judgment, this Court observed that
Respondent No. 2 had not produced any material to show what
steps it had taken against MCGM or MHADA because the
Commencement Certificate was not granted. This observation is
important because the present defence of Respondent No. 2 is
mainly based upon the allegation that the Society did not provide
the required cooperation.
47. Respondent No. 2 has referred to letters dated 13 April 2017,
13.06.2017 and certain other communications through which it
had requested the Society to provide documents and cooperation.
These letters may show that requests were made. However, merely
making a request does not establish that the Society was
responsible for the entire delay. It will have to be shown what
particular work could not be carried out, what permissions were
required, what steps were taken by Respondent No. 2 and how the
Society prevented it from proceeding further.
48. There is a considerable gap after the letter dated 8 March
2020 addressed by Respondent No. 2 to MahaRERA. If Respondent
No. 2 had decided to terminate the project on an “as is where is”
basis because the Society was not cooperating, it was necessary for
Respondent No. 2 to show when and how the parties thereafter
restored their contr-relationship and on what conditions. At
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present, the material on this aspect is not sufficiently clear. I find
that the defence of non-cooperation raised by Respondent No. 2
will have to be decided in arbitration. On the present material, this
defence cannot be accepted as a sufficient reason to prevent the
Society from taking steps to complete redevelopment through
another Developer.
Dispute regarding the compound wall and demarcation:
49. Respondent No. 2 has alleged that the Society constructed an
illegal boundary wall and that this obstructed redevelopment of
Building No. 132. According to Respondent No. 2, the revised
demarcation issued by MHADA required removal of the wall and
shifting it towards Building No. 133. The Society disputes this
allegation. It says that it never agreed to reduce or change the area
in its possession.
50. I have referred to Clause (g) of the Deed of Assignment. This
clause provides that the boundaries of the Society's plot could be
changed without reducing the total area of the plot. It provides
that the entrance, exit and parking arrangements of the Society
would remain separate from those of the adjoining building.
Therefore, the Respondents cannot rely upon the condition
regarding cooperation for redevelopment of Building No. 132 to
say that the Society had agreed to give up any portion of its
property.
51. The order dated 4 July 2022 passed by this Court does not
support the argument that the Society had agreed to joint
redevelopment of both buildings. The order records the revised
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layout, the need to remove the wall and the agreement of the
Developer to remove it at its own cost. It directs the parties to
cooperate for obtaining the Occupation Certificate. I find that the
dispute regarding the compound wall and demarcation is separate
from the question whether Respondent No. 2 continues to have
development rights under the Deed of Assignment. The
Respondents cannot use the dispute regarding the wall to claim an
unrestricted right over the Society's property. At the same time, the
Society cannot refuse to follow any lawful demarcation or
direction issued by the competent authority. The Deed of
Assignment protects the Society's total property area. The
boundary and any permissible change will have to be decided
according to the approved plans and lawful demarcation carried
out by the competent authority.
Alleged suppression of correspondence:
52. Respondent No. 2 has strongly alleged that the Petitioner has
not placed important correspondence before this Court. It is
pointed out that the Petition was notarised on 7 October 2026 and
filed on 14 October 2026, whereas the legal notice issued by
Respondent No. 2 was dated 6 October 2026. It is argued that the
Society did not disclose the notice dated 11 September 2026
issued on behalf of five flat purchasers or its reply dated 12
October 2026. The Petitioner has explained in its Additional
Affidavit that the letter dated 6 October 2026 was received after
the Petition was filed. Respondent No. 2 disputes this explanation.
However, from the material available, the exact date on which the
said letter was actually received is not established. I find that the
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correspondence dated 11 September 2026 and 12 October 2026
was relevant and should be considered while deciding the dispute.
According to Respondent No. 2, the Society's reply stated that the
earlier development documents could not be treated as giving any
unrestricted or continuing right to Respondent No. 2. Even if the
Society accepted that certain rights and responsibilities existed
under the earlier documents, such acceptance cannot be treated as
an admission that Respondent No. 2 continued to have an
unrestricted right to carry out redevelopment.
53. Respondent No. 2 has referred to letters dated 2 February
2023, 7 March 2023, 14 May 2023, 30 August 2023 and certain
letters of 2025, including the letter dated 11 November 2025.
According to Respondent No. 2, these communications show that
the Society continued to recognise it as the Developer and had
agreed to execute the necessary Power of Attorney. The Petitioner
disputes the meaning which Respondent No. 2 wants to give to
these letters. The complete contents of all these communications
will have to be examined by the Arbitral Tribunal. Merely stating
that a letter was issued on a particular date does not establish
what exact admission or promise was made in it. All the
correspondence will have to be read in its proper order and along
with the earlier termination notices and the order dated 4 July
2022. I am not inclined to hold that the Petitioner deliberately kept
back material facts from this Court merely on the basis of the
allegations made by Respondent No. 2. However, the Society will
have to place the complete correspondence, including its reply
dated 12 October 2026 and all letters concerning the Power of
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Attorney and demarcation, before the Arbitral Tribunal. The same
responsibility applies to Respondent No. 2. It will have to produce
the complete correspondence, applications made before the
authorities, permissions obtained, expenses incurred and all other
documents on which it relies. Neither party should be permitted to
rely upon selected letters while keeping the remaining
correspondence away from the Arbitral Tribunal.
Claim of Rs.91,08,142/- and alleged charge over development
potential:
54. Respondent No. 2 has claimed that it spent Rs.91,08,142/-
towards completion of the project. The letter dated 1 February
2019 gives details of the expenditure which Respondent No. 2
claims to have incurred. This amount includes Rs.60 lakhs paid to
the Society and other expenses towards electricity, stamp duty,
registration, labour charges, legal expenses, property taxes, repairs
and construction materials. The Society disputes the right of
Respondent No. 2 to recover this amount. According to the Society,
Respondent No. 2 had accepted all the liabilities under the Deed of
Assignment and had agreed to clear those liabilities without
creating any encumbrance or lien over the Society's property.
55. I find that the amount claimed by Respondent No. 2 is a
money claim arising from the development arrangement. Whether
the amount was actually spent, whether the expenditure was
necessary for the project, whether it was incurred according to the
Deed of Assignment and whether Respondent No. 2 is entitled to
recover it from the Society are questions which will have to be
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decided in arbitration. However, merely because Respondent No. 2
has claimed Rs.91,08,142/-, it does not mean that a charge or lien
is created over the Society's property. The Deed of Assignment
provided that Respondent No. 2 would obtain financial assistance
at its own risk and cost and clear the liabilities without creating
any encumbrance over the Society or its members. No separate
document creating a charge over the Society's property has been
shown to this Court. The statement in the letter dated 1 February
2019 that Respondent No. 2 would have a “paramount charge”
over the remaining development potential is not sufficient, , to
establish an enforceable charge at this stage. Respondent No. 2
will be free to raise its money claim before the Arbitral Tribunal.
However, merely making such a claim cannot prevent the Society
from taking steps for redevelopment. The indemnity given under
the Deed of Assignment in favour of the Society against claims
made by flat purchasers and investors is important. The
Respondents had accepted responsibility for claims arising from
the sale of flats and other rights created by Respondent No. 1.
Therefore, the Society's right to protect its property cannot depend
upon Respondent No. 2 first receiving the amounts which it claims
to have spent.
Rights of flat purchasers:
56. There is another aspect which requires separate
consideration. The Deed of Assignment records the existence of
flat purchasers forming part of the free-sale component. However,
the material on record shows different figures regarding the
number of flats sold on the eighth floor. The Society refers to seven
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flats. Respondent No. 2 refers to nine flats. The Deed of
Assignment and judgment dated 17 September 2019 refer to ten
proposed flats.
57. The judgment dated 17 September 2019 passed by this Court
has considered the rights of five purchasers and recognised the
statutory responsibilities of Respondent No. 2 towards them. The
rights of these purchasers cannot be taken away by the present
order. The dispute regarding termination between the Society and
the Respondents cannot be used to defeat the rights created in
favour of the purchasers. Respondent No. 2 will have to give
complete details of all purchasers, the flats agreed to be sold, the
consideration received, the balance consideration payable and the
agreements executed with them. It will have to disclose whether
any third-party rights were created after execution of the Deed of
Assignment.
58. While proceeding with redevelopment through another
Developer, the Society will have to keep in mind the rights of the
existing purchasers and follow all applicable provisions of the Real
Estate (Regulation and Development) Act, 2016. This Court is not
deciding the individual rights of the purchasers in the present
Petition. Those rights will remain open and will have to be
protected according to law. The statutory responsibilities which
this Court had recognised against Respondent No. 2 in the Second
Appeals cannot be treated as having come to an end merely
because the Society is now being permitted to take steps for
redevelopment.
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Steps taken by the Society for appointment of a new Developer:
59. The Society states that the building is in a dilapidated
condition and redevelopment should be taken forward without
delay. It states that it has followed the procedure under Section
79A of the Maharashtra Co-operative Societies Act, 1960.
60. By letter dated 25 March 2026, the Society approached the
Deputy Registrar of Co-operative Societies and requested
appointment of an authorised officer and calling of a Special
General Body Meeting for appointment of a new Developer. The
Society forwarded the consent of its members in support of the
redevelopment proposal. Thereafter, the Executive Engineer,
Building Proposal Department, issued a letter dated 13 May 2026
directing the Society to make arrangements for appointing a
Project Management Consultant to examine the proposal regarding
appointment of a Developer. The Society was directed to arrange
video recording and a meeting was fixed on 18 May 2026. These
documents show that the Society has started the process of
appointing a new Developer. It is not merely stating before this
Court that it wants another Developer. It has taken steps before the
concerned authorities and is trying to proceed according to the
applicable procedure.
61. Respondent No. 2 argues that these steps are against its
contr-rights. According to it, the Society cannot appoint another
Developer while the Deed of Assignment continues to bind the
parties. This argument will depend upon the final decision
regarding termination and the later conduct of the parties.
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However, as discussed, the project has remained incomplete for a
considerable period. The Occupation Certificate has not been
obtained. Construction of the eighth floor and other remaining
work is still pending. Respondent No. 2 has not placed before this
Court any definite and reliable programme showing how the
remaining work will now be completed, within what time and
through what financial arrangements. The Society cannot be made
to wait without any end until the Arbitral Tribunal finally decides
the contr-dispute. The purpose of Section 9 is to protect the subject
matter of arbitration. It is not meant to allow an incomplete
redevelopment project to remain stopped for an uncertain period.
Applicable decisions and principles governing redevelopment
disputes:
62. I have considered the judgment of this Court in Om Vithal
Cooperative Housing Society Limited v. Trilogy Infra Private
Limited, Arbitration Petition (L) No.25010 of 2026 with
Commercial Arbitration Petition (L) No.23586 of 2026, decided on
20 August 2026. This judgment is relevant because it deals with
the competing rights of a Society and its Developer after
termination of a redevelopment agreement. In paragraph 19, this
Court observed that the limited question under Section 9 was
whether redevelopment should continue with the existing
Developer until arbitration was completed or whether the Society
should be permitted to take steps for redevelopment while
protecting the rights and claims of the Developer. In paragraph 25,
this Court considered the effect of an extension given by the
Society to the Developer. It was held that merely because an
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extension is given, the Developer does not get an unlimited right
to delay the project without facing any consequence. The
extension is given so that the Developer can complete its
responsibilities within the extended period. This principle is
relevant here. The later correspondence and cooperation between
the parties cannot give Respondent No. 2 an unlimited right to
continue with the project without showing progress or giving a
definite programme for completion. In paragraphs 27 and 28, this
Court held that the validity of termination cannot be finally
decided in proceedings under Section 9. The Court can make an
interim arrangement so that redevelopment does not remain
stopped until arbitration is completed.
63. The said judgment considered the decision in Pioneer
Constructions v. Sahakarnagar Co-operative Housing Society
Limited, 2026 SCC OnLine Bom 2711. In paragraph 30, this Court
reproduced the following observation:
“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.”
64. In paragraph 33, this Court referred to the principle that the
Court must make a prima facie examination to find out which
party appears to be responsible for breach of the Development
Agreement. It was made clear that a Society cannot be permitted
to terminate every Development Agreement merely because it
wants to appoint another Developer. If the Society has wrongly
terminated the Agreement, the Court can put proper conditions
upon the Society before allowing it to proceed with
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redevelopment.
65. The Court has to examine the conduct of both sides. It
cannot assume that the Society is always right or that the
Developer is always wrong. The performance of
contrresponsibilities, reasons for delay, financial capacity of the
Developer and later conduct of both parties must all be considered.
66. The judgment in Om Vithal Cooperative Housing Society
considered the decisions in Ison Builders LLP, Commercial
Arbitration Petition (L) No.36533 of 2025, decided on 23 January
2026, and Swashray Co-operative Housing Society Limited v.
Shanti Enterprises, Commercial Arbitration Petition (L) No.10432
of 2023, decided on 3 November 2023.
67. In paragraph 38, this Court referred to the principle that a
Developer whose main interest is earning profit under a
redevelopment agreement can claim damages if the Society has
wrongly terminated the Development Agreement. However, the
Developer cannot insist that the Society must wait until the entire
arbitration is completed before taking steps for redevelopment.
68. In paragraph 40, this Court reproduced the following
observation from Swashray :
“The Petitioner-Society is not expected to be at the mercy of
the Respondent-Developer.”
69. The meaning of this observation is that a Society and its
members cannot be forced to remain under an incomplete
development arrangement for an unlimited period, particularly
when there have been repeated defaults and there is no reasonable
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assurance that the work will be completed.
70. At the same time, paragraph 45 of Om Vithal Cooperative
Housing Society makes it clear that payment of damages may not
be an adequate answer in every case. If the building is
substantially completed, the Developer has made substantial
investment and is financially capable of completing the remaining
work, the Court may have to take a different view. Every case will
have to be decided on its own facts and material. In paragraph 47,
this Court held that if the Society is prevented from proceeding
with redevelopment, the entire project may remain dependent
upon the final result of arbitration. Arbitration may take
considerable time. The Society and its members cannot be
expected to remain uncertain during this period when the project
can otherwise be taken forward and the Developer's money claims
can be decided separately.
71. These observations are relevant to the present dispute,
though the facts are not exactly the same. Here, the rehabilitation
portion has been constructed and possession has been given to the
members. Therefore, this is not a case where the members have
lost their homes after demolition and are all waiting in transit
accommodation. However, the construction remains incomplete,
the eighth floor has not been constructed, the Occupation
Certificate has not been obtained and the rights of the flat
purchasers have not been fully dealt with.
72. The earlier judgment in Kannamwar Nagar Aditya
Cooperative Housing Society Limited is relevant. In that case, this
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Court considered repeated defaults by the Developer, non-payment
of hardship compensation, incomplete construction and repeated
assurances which were not followed by performance. In paragraph
28, this Court held that merely saying that defaults would be
corrected is not sufficient when earlier assurances had not resulted
in compliance. In paragraph 29, this Court considered the
argument of the Developer that substantial investment had been
made and third-party rights had been created. It held that the
money investment could be compensated through arbitration if the
Developer succeeded in establishing its claim. However, the loss of
time suffered by the members of the Society could not be
compensated so easily. In paragraphs 40 to 42, this Court
ultimately held that the Society had made out a strong prima facie
case for interim protection and permitted it to proceed with
redevelopment, while keeping the money claims and other
disputed liabilities open for arbitration.
73. The principles laid down in the above two judgments make it
clear that the Court must examine whether continuation of the
existing Developer is likely to take redevelopment forward or
whether it will only result in disputes and delay. The Court must
protect genuine money claims of the Developer and the rights of
existing flat purchasers. For making such an interim arrangement,
it is not necessary to finally decide the validity of termination.
Overall assessment of the rival submissions:
74. Applying the above principles to the present case, I find that
Respondent No. 2 has raised certain important defences which
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cannot be ignored. It relies upon the construction completed,
possession given to the Society members, execution of the Deed of
Assignment, alleged non-cooperation by the Society, absence of a
fresh Power of Attorney and correspondence exchanged after the
order dated 4 July 2022. These submissions may be important
when the matter is decided by the Arbitral Tribunal. In particular,
whether the Society was required to execute a fresh Power of
Attorney, whether its failure to do so prevented Respondent No. 2
from obtaining necessary permissions and whether the later
correspondence amounted to withdrawal of the earlier termination
will require detailed examination. However, the question before
this Court is not whether Respondent No. 2 may be able to
establish some rights before the Arbitral Tribunal. The question is
whether, on the material available, Respondent No. 2 should be
allowed to continue claiming an independent right to carry out
redevelopment and prevent the Society from taking steps for
completing the project.
75. While considering this question, certain facts which are not
seriously disputed are important. The original Development
Agreement was executed on 13 December 2007. The Supplemental
Agreement was executed on 5 May 2012. Respondent No. 1 could
not complete the project and thereafter assigned the remaining
development work and liabilities to Respondent No. 2 on 9
November 2015. Even after execution of the Deed of Assignment,
the project remained incomplete. The rehabilitation portion and
the building up to the seventh floor may have been substantially
completed and possession was given to the members. However, the
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eighth floor was not constructed and the Occupation Certificate
was not obtained.
76. Five flat purchasers had to approach MahaRERA for
enforcing their rights. Respondent No. 2 faced an adverse order
before MahaRERA and thereafter before this Court in the Second
Appeals decided on 17 September 2019. This Court held that
Respondent No. 2 could not avoid its statutory responsibilities
towards the purchasers by relying upon termination of the Deed of
Assignment. The letter dated 1 February 2019 issued by
Respondent No. 2 and its later letter dated 8 March 2020
addressed to MahaRERA are important. Through these
communications, Respondent No. 2 treated the development
arrangement as having come to an end and informed the statutory
authority that there was no possibility of restarting the remaining
work.
77. The later correspondence after 2022 shows that the parties
again started discussing certain pending matters. However, no
clear document showing that the entire development rights were
unconditionally restored in favour of Respondent No. 2 has been
produced. The order dated 4 July 2022 mainly concerned removal
of the compound wall and obtaining the Occupation Certificate.
Cooperation for complying with that order cannot be treated as
restoration of all development rights. Respondent No. 2 has not
placed before this Court any reliable material showing that it has
now made definite financial arrangements for completing the
remaining work. There is no clear construction programme
showing what steps have been taken for obtaining the
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Commencement Certificate for the eighth floor, when the
remaining work will be completed and by what date the
Occupation Certificate will be obtained. Merely saying that
Respondent No. 2 is ready and willing to complete the project is
not sufficient. There must be some material showing how and
within what time the remaining work will actually be completed.
The Society has waited for several years after execution of the
Deed of Assignment. Even after the order dated 4 July 2022, the
Occupation Certificate has not been obtained. The correspondence
relied upon by Respondent No. 2 shows that some efforts were
made for demarcation and for resolving the dispute regarding the
compound wall. However, these letters do not show that the
remaining construction was completed or that the Occupation
Certificate was obtained. Efforts for demarcation cannot be treated
as completion of the main responsibilities under the Deed of
Assignment.
78. I find that the material available does not give sufficient
confidence that Respondent No. 2 will be able to complete the
remaining work within any definite and reliable period. On the
contrary, the long delay, earlier termination communications,
failure to obtain the Occupation Certificate and continuing
disputes between the parties show that there is a serious
breakdown in their relationship. Merely because Respondent No. 2
has incurred some expenditure or has money claims against the
Society, it does not mean that it must necessarily be allowed to
continue as Developer. Such claims can be examined by the
Arbitral Tribunal. If Respondent No. 2 establishes that the
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termination was wrongful and that it is entitled to recover any
amount, the Tribunal can grant proper money relief. At the same
time, the Society cannot use this order to defeat the rights of
existing flat purchasers. The Society will have to proceed with
redevelopment according to RERA and other applicable laws.
Appointment of a new Developer will not bring an end to the
responsibilities which Respondent No. 2 has towards the existing
purchasers under the earlier agreements and the orders passed in
the RERA proceedings. Therefore, the balance of convenience is in
favour of permitting the Society to take the redevelopment process
forward, while keeping the money claims of Respondent No. 2
protected and ensuring that the rights of existing flat purchasers
are not affected. If the Society is prevented from taking steps, the
incomplete project may remain dependent upon the final result of
arbitration. There is no sufficient reason to make the Society wait
for an unlimited period.
79. I am of the view that the original redevelopment documents
should be handed over to the Society. The Society is the owner of
the building and is entitled to keep the documents relating to its
property. These documents are necessary for placing the title and
redevelopment proposal before prospective Developers and the
concerned statutory authorities. The Respondents cannot continue
to keep the original documents merely because they have raised
money claims or dispute the termination. However, Respondent
No. 2 must be allowed to keep proper copies of these documents
for pursuing its claims in arbitration. These documents are
necessary for deciding the amount allegedly spent on the project,
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the extent of construction completed, the rights of purchasers and
the responsibilities of the parties. Therefore, both sides must
maintain proper records.
80. The parties will have to maintain proper accounts of the
expenditure incurred and any expenditure which may be incurred
for completing the project. The Society will have to keep records of
the fresh redevelopment arrangement, payments made to the
statutory authorities and transactions with the new Developer.
81. I am satisfied that the Petitioner has made out a prima facie
case for interim protection under Section 9 of the Arbitration and
Conciliation Act, 1996. However, the relief must be limited to
protecting the redevelopment process and keeping the rights and
claims of both sides safe. No final declaration regarding the
legality or validity of termination can be made at this stage.
82. In view of the above discussion and after considering the
material placed on record by both sides, the following order is
passed:
(i) The Arbitration Petition filed by the Petitioner Society
is partly allowed;
(ii) The Petitioner Society is permitted to take steps for
appointing a new Developer or for undertaking self-
redevelopment of Building No. 133, Nehru Nagar, Kurla
(East), Mumbai. The Society shall follow the applicable
procedure under Section 79A of the Maharashtra Co-
operative Societies Act, 1960 and obtain all necessary
permissions, approvals and consents under RERA, MHADA,
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MCGM and other applicable laws;
(iii) Until commencement and conclusion of the arbitral
proceedings, Respondent Nos. 1 and 2, their partners,
officers, servants, agents and all persons claiming through or
under them shall not represent before any authority,
purchaser, Developer or third party that they have an
independent and continuing authority to undertake
redevelopment of the Society's property on the basis of the
Development Agreement dated 13 December 2007,
Supplemental Development Agreement dated 5 May 2012
and Deed of Assignment dated 9 November 2015;
(iv) Respondent Nos. 1 and 2 shall not obstruct or interfere
with the Society in taking lawful steps for redevelopment,
either by undertaking self-development or through another
Developer appointed according to law;
(v) Respondent Nos. 1 and 2 shall, within two weeks from
today, hand over to the Society all original documents
relating to the title and redevelopment of Building No. 133
which are in their possession or control. These shall include
the Development Agreement dated 13 December 2007,
Supplemental Development Agreement dated 5 May 2012,
Deed of Assignment dated 9 November 2015, Power of
Attorney, Sale Deed, Lease Deed, IOD, Commencement
Certificate, MHADA NOC, approved plans, revised layout
plans, parking layout approval, permissions, correspondence,
receipts, drawings and all other project records;
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(vi) Before handing over the original documents,
Respondent Nos. 1 and 2 may keep photocopies or scanned
copies of the same. The Society shall prepare a list of all
original documents received and shall preserve proper copies
for the purpose of arbitration;
(vii) Respondent No. 2 shall, within three weeks from today,
file an Affidavit giving the following details:
a) Complete details of all flats sold and unsold in
the project.
b) Names and addresses of all flat purchasers, along
with copies of the agreements executed with them.
c) Amounts received from the flat purchasers and
the balance consideration payable.
d) Details of construction expenditure, payments
made to the statutory authorities and outstanding dues
of MHADA and MCGM.
e) Details of all creditors, debtors and
encumbrances, if any, claimed in respect of the project.
f) Details of all sanctioned plans, revised plans,
permissions, approvals and applications made before
the concerned authorities.
g) Details of the construction work completed and
the remaining work which is required to be carried out.
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(viii) Respondent Nos. 1 and 2 and all persons claiming
through or under them are restrained from creating any
fresh third-party rights, executing fresh agreements, selling,
transferring, assigning, mortgaging, charging or otherwise
creating any encumbrance over the Society's property or any
part of it on the basis of the disputed redevelopment
documents;
(ix) The above restraint shall not affect the existing rights
of the flat purchasers under their respective agreements or
the statutory responsibilities of Respondent No. 2 under
RERA and the orders passed in proceedings relating to those
purchasers. The rights of existing purchasers shall not be
treated as having come to an end because of this order;
(x) The Society shall maintain proper accounts and records
of all expenses incurred and transactions undertaken under
any fresh redevelopment arrangement. It shall preserve all
documents, approvals, receipts, agreements and
correspondence so that the money claims of Respondent No.
2, if any, can be properly examined by the Arbitral Tribunal;
(xi) The claim of Respondent No. 2 for recovery of
Rs.91,08,142/-, interest, damages and any other amount
allegedly spent on the project is kept open for decision by the
Arbitral Tribunal. Merely on the basis of the claim made by
Respondent No. 2 in its letter dated 1 February 2019, no
charge or lien over the Society's property is recognised;
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(xii) All contentions raised by petitioner are kept open for
decision by the Arbitral Tribunal;
(xiii) All rights and liabilities of Respondent Nos. 1 and 2,
are kept open for decision in arbitration and appropriate
statutory proceedings;
(xiv) The Society is free to approach the concerned
authorities for recording the termination, obtaining fresh
approvals, seeking changes in plans and obtaining such other
permissions as may be necessary for taking redevelopment
forward. Respondent Nos. 1 and 2 shall not obstruct any
such lawful steps;
(xv) Respondent Nos. 1 and 2 shall remove of all articles
and contractors from the property.;
(xvi) The Petitioner Society shall ensure that the rights of
existing flat purchasers are protected and that any fresh
redevelopment arrangement is entered into only after
following all applicable legal requirements. The money
claims of Respondent No. 2, if established, shall remain
subject to the final arbitral award;
(xvii)Both sides shall preserve all original documents,
correspondence, approvals, sanctioned plans, payment
receipts, agreements and other records relating to the
redevelopment project. Neither party shall destroy, change or
misuse any such document or record;
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(xviii) If the arbitral proceedings have not commenced, the
Petitioner shall take proper steps to commence arbitration
within ninety days from the date of this order, in accordance
with Section 9(2) of the Arbitration and Conciliation Act,
1996;
(xix) It is made clear that all findings recorded in this order
are only prima facie findings for deciding the present Petition
under Section 9 of the Arbitration and Conciliation Act,
1996. The learned Arbitral Tribunal shall independently
decide all questions, including the legality of termination,
alleged breaches, later conduct of the parties, rights of the
flat purchasers and money claims. The Tribunal shall not be
influenced by any observations made in this order;
83. The Arbitration Petition is disposed of in the above terms.
There shall be no order as to costs.
84. At this stage, learned Advocate for Respondent No.2 seeks
stay of this judgment and order. However, for the reasons recorded
above, the request for stay stands rejected.
(AMIT BORKAR, J.)
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