A developer-partner’s implied authority does not, by itself, authorize transfers of partnership immovable property.

The Petitioner was admitted as a partner of Respondent No. 1 under a Deed of Reconstitution dated 27 October 2021, with a 75% share in profits and losses; Respondent Nos. 2 and 3 held 20% and 5%, respectively.

The firm acquired land for redevelopment and constructed the “Park Crown” project. The Petitioner claimed to have contributed substantial capital and alleged that Respondent Nos. 2 and 3 sold or dealt with project units without his authority or disclosure.

The Respondents maintained that unit sales were within the ordinary business of the developer firm and that the Petitioner had agreed to retire upon settlement; the Petitioner disputed the settlement’s terms and effect.

The Petitioner sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, pending arbitration.

Whether the Petitioner established a basis for interim protection against dealings with units in the project, having regard to the partners’ authority under the Deed of Reconstitution and the Indian Partnership Act, 1932.

Whether the alleged oral settlement and retirement from the firm rendered the Section 9 petition unmaintainable.

Whether the interim relief should extend to a blanket restraint on all unit sales or be limited to preserving the dispute’s subject matter and relevant records.

Section 9 of the Arbitration and Conciliation Act, 1996 empowers the court to grant interim measures, applying the usual principles governing interim injunctions, including prima facie case and balance of convenience; relief must be reasonably necessary in the circumstances (*Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.*, (2007) 7 SCC 125; *Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited*, (2022) 20 SCC 178).

Under Sections 19(1) and 19(2)(g) of the Indian Partnership Act, 1932, a partner’s implied authority to bind the firm in its usual business does not, absent applicable usage or custom, itself include authority to transfer the firm’s immovable property; the deed and the partner’s actual authority must be considered.

A partner’s share in profits does not confer ownership of a corresponding fraction of each partnership asset; on dissolution or retirement, the partner’s interest is worked out in the net assets after liabilities (*Addanki Narayanappa v. Bhaskara Krishnappa*, (1966) 3 SCR 400).

An incorrect reference in an arbitration clause to the Arbitration Act, 1940 does not invalidate an otherwise valid arbitration agreement under Section 7 of the 1996 Act (*Purushottam s/o Tulsiram Badwaik v. Anil*, (2018) 8 SCC 95).

The judgment also relied on *Bina Murlidhar Hemdev* for the principle that ordinary implied authority does not, without more, authorise transfer of firm immovable property.

The deed established the Petitioner’s substantial interest in the firm, but his 75% profit share did not make him the owner of 75% of each unit or entitle him to stop every sale.

Although unit sales could form part of the firm’s ordinary development business, that fact alone did not establish the partners’ authority to transfer firm property; the deed, actual authority, and any relevant trade usage or custom required consideration.

The disputed sales figures, accounts, and alleged settlement raised issues requiring examination, but the material did not establish that all alleged sales were unauthorised or that fraud or diversion had occurred.

The written arbitration clause remained operative notwithstanding the parties’ disputed accounts of an oral settlement, whose existence and effect were matters for the arbitral tribunal.

A blanket prohibition would unduly impede the firm’s ongoing business, so protection was confined to transactions undertaken in accordance with the deed and the Act, together with disclosure and preservation of records.

Pending commencement and during the arbitral proceedings, Respondent Nos. 2 and 3 were restrained from dealing with unsold units except in accordance with the Deed of Reconstitution and the Indian Partnership Act, 1932; before a proposed transaction, they must give the Petitioner written disclosure of the purchaser, consideration, payment terms, and material terms.

They were directed to provide a complete statement and relevant transaction documents within four weeks and to preserve project and financial records.

Earlier sale agreements were neither invalidated nor determined, and the arbitral tribunal remains free to decide the parties’ substantive rights uninfluenced by the prima facie findings.

No order as to costs was made.