Doctrine of indoor management prevents corporate bodies from repudiating contracts based on internal lack of authorization.

The Petitioner, an advertisement agency, entered into an "Agreement for Construction of Hoardings and Display of Advertisements" dated 28 October 2025 with the Respondent Federation

The Federation had previously passed a General Body Resolution on 4 May 2025 awarding the contract to the Petitioner

The Petitioner obtained necessary permissions from the Thane Municipal Corporation (TMC) and Traffic Department, paying substantial fees

When the Petitioner commenced work on 21 February 2026, the Federation’s Chairman obstructed it, claiming the location was unsafe and that the Secretary—who signed the Agreement and NOCs—had no authority to bind the Federation

The Petitioner filed this Section 9 petition seeking interim measures to restrain the Federation from disturbing the construction or terminating the agreement

1. Whether a valid arbitration agreement exists between the parties given the Respondent's challenge to the Secretary's authority to sign the Agreement.

2. Whether the Petitioner is entitled to interim measures to protect its rights to install the hoarding at the specifically agreed site.

The court primarily applied Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures before the commencement of arbitral proceedings

The court relied on the "Doctrine of Indoor Management," as established in Shri. Kantu Shankar Dessai v. Soceidade Agricola Dos Gauncares De Cuncolim E Veroda, which protects third parties dealing with a body corporate by allowing them to assume that internal procedures (like resolutions or authorizations) have been duly complied with

The court also applied the principles of balance of convenience, prima facie case, and irreparable injury required for the grant of interim injunctions

The court found a strong prima facie case that an arbitration agreement exists, noting that the Agreement was backed by a General Body Resolution and the ministerial act of signing by the Secretary falls under the doctrine of indoor management

The Federation's denial was deemed an afterthought because contemporaneous correspondence (specifically the letter dated 22 February 2026) did not challenge the Agreement's validity but only the site location

Furthermore, a letter signed by both the Chairman and Secretary in November 2025 confirmed the contract award

Regarding the site, the court noted North Recital (C) of the Agreement specifically identified the location, and the Petitioner's proposal had also specified "next to the entry gate"

The court dismissed the Federation's safety concerns by referencing a Structural Engineer's report certifying sufficient road width for emergency vehicles

The balance of convenience favored the Petitioner, who had already invested significantly, whereas the hoarding (a non-permanent structure) could be removed if the final award favored the Federation

The Petition was partly allowed. The court restrained the Respondents from obstructing or stopping the construction of the hoarding structure at the agreed site till the final arbitral award

This relief is subject to the Petitioner commencing arbitration within 90 days as per Section 9(2) of the Act

The operative directions were stayed for four weeks at the Respondent’s request