A housing society may be bound by its members’ arbitration clauses despite being a non-signatory.

The Applicant Trust had executed individual Agreements for Sale with flat purchasers in the respondent housing societies.

Those agreements contained an arbitration clause.

The societies were registered subsequently.

The Trust alleged non-payment of ground lease rent, administrative and maintenance charges, and parking charges, and invoked arbitration.

The societies objected, among other grounds, that they had not signed the Agreements for Sale and that related monetary reliefs were being pursued before the NCDRC.

The Trust undertook not to press and to withdraw its interim application before the NCDRC.

The Court heard the connected Section 11 applications together.

Whether the pending consumer proceedings, including the Trust’s interim application seeking monetary reliefs, precluded appointment of an arbitrator under Section 11.

Whether the arbitration clause in the flat purchasers’ Agreements for Sale could be invoked against the respondent societies, although the societies were not signatories to those agreements.

Section 11(6-A) of the Arbitration and Conciliation Act, 1996 confines the Court’s examination at the appointment stage principally to the existence of an arbitration agreement; the Court need not conduct a full trial of the claims and defences.

The Supreme Court’s decision in M. Hemalatha Devi v. B. Udayasri establishes that the consumer’s election of remedy and the nature of the dispute—not simply which party approached a forum first—are relevant when considering the relationship between consumer proceedings and arbitration.

The Court also relied on Shri Shivranjan Towers Sahakari Griha Rachana Sanstha Maryadit v. Bhujbal Constructions for the principle that a society’s absence as a signatory is not, by itself, determinative where the society and its members’ rights are connected with the agreements.

It referred to Section 36 of the Maharashtra Co-operative Societies Act, 1960, and Daman Singh v. State of Punjab on members acting through the society in matters concerning the society’s rights and duties.

The Court held that the NCDRC objection did not justify refusing appointment because the Trust undertook not to press and to withdraw the interim application containing the monetary claims said to overlap with the arbitration; the undertaking was accepted and made binding, preventing the Trust from seeking those same interim reliefs again before the NCDRC.

On the signatory objection, the Court considered that the societies were formed by the purchasers who had acquired rights under the Agreements for Sale and that the claims concerned the same flats, property, and associated obligations.

It therefore rejected the contention that the societies were strangers to the arbitration arrangement solely because they did not exist when the agreements were executed.

The Court left the scope and merits of individual claims—including liability, amount, limitation, and contractual basis—to the arbitrator.

The Trust’s undertaking to withdraw and not press Interim Application No. 5157 of 2023 before the NCDRC was accepted and made binding.

The Section 9 petitions were converted into applications under Section 17 for consideration by the arbitrator, and the merits of all claims and defences were left open.