Rights of society members to rehousing prevail over developer’s profit interests in redevelopment disputes.

The Petitioner-Developer was selected by the Respondent-Society in 2013 to redevelop buildings constructed in 1957.

A Development Agreement (DA) was executed in 2015 and a second DA in 2016.

Despite the passage of 13 years, no construction commenced.

The Society terminated the Petitioner’s appointment in September 2023, but the Managing Committee later withdrew this termination in April 2024 to give the Petitioner another chance.

When no progress was made, the Society's General Body passed a resolution on September 30, 2024, to re-terminate the Petitioner.

The Divisional Joint Registrar initially granted the Petitioner a revised NOC in April 2025, but this was set aside by the State Government (Hon’ble Minister) in December 2025.

In January 2026, the Society appointed a new developer.

The Petitioner filed a Section 9 petition seeking to restrain the Society from executing a DA with the new developer.

1. Whether interim measures under Section 9 of the Arbitration Act should be granted to restrain the Society from proceeding with a new developer despite the Petitioner’s 13-year delay.

2. Whether a Development Agreement can be unilaterally terminated by a Society in the absence of a specific termination clause.

3. Whether the Developer’s right to earn profit overrides the Society members' right to timely redevelopment of dilapidated buildings.

The Court applied Section 9 and Section 11 of the Arbitration and Conciliation Act, 1996.

The Court distinguished K.S. Majunath v. Moorasavirappa regarding the non-determinability of sale agreements, holding that redevelopment rights are subservient to the housing rights of members.

It relied on Huges Real Estate Developers LLP v. Khernagar Adarsh CHSL, which establishes that a developer’s loss of profit can be compensated by damages, whereas halting redevelopment causes irreparable injury to residents.

It also considered Sections 51 and 52 of the Indian Contract Act, 1872, regarding reciprocal promises.

The Court found that the Petitioner had "not moved even a single brick" in 13 years and failed to prove that the Society obstructed the project.

Regarding the lack of a termination clause, the Court held that a Society cannot be "shackled" to a defaulting developer indefinitely, as the developer does not acquire ownership of the land but merely a right to earn profit after fulfilling construction obligations.

The Petitioner's justification for delay (lack of 70% member consents) was rejected as a "pretext" raised for the first time in litigation, contradicting earlier claims of ill health.

The Court noted the Petitioner’s "gross delay" in seeking relief and suppression of the State Government's order setting aside its NOC.

Balancing the equities, the Court determined that the safety and housing rights of 826 families in nearly 70-year-old structures far outweigh the commercial interests of the developer.

per the arbitration clause and parties' consent, the Court allowed the Section 11 Application and appointed Mr. Amrut Joshi, Advocate, as the sole Arbitrator to resolve the disputes.