### Third-party purchasers may challenge Section 17 interim orders under Section 37 if their rights are adversely affected.

The Petitioners (Owner) and Respondent (Developer) entered into a Joint Development Agreement (JDA) in 2009 for land in Kurla.

The JDA entitlement included flats for tenants and a 50% share of the free-sale component for the Owner.

In 2013, an Allocation Confirmation Letter identified 16 Subject Flats as the Owner’s entitlement and 2 specific "Lien Flats" to secure the Developer’s construction costs.

Between 2013-2014, the Owner sold the Subject Flats to third-party Flat Purchasers via registered agreements.

In 2016, the Developer assured the Owner/Purchasers that the Occupation Certificate was imminent.

Subsequently, disputes arose regarding construction costs and the "Wagh" tenant's portion.

The Developer refused to hand over possession of the Subject Flats, claiming a lien over the Owner's entire share.

The Arbitral Tribunal, in orders dated Feb 14, 2019, and Dec 15, 2022, refused to grant interim possession to the Owner or Purchasers, maintaining a status quo.

The Owner and Flat Purchasers challenged these orders under Section 37 of the Arbitration and Conciliation Act, 1996.

1. Whether Flat Purchasers, as third parties to the arbitration agreement, have the locus standi to challenge Section 17 interim orders under Section 37 of the Act.

2. Whether the Arbitral Tribunal was justified in refusing to hand over possession of the Subject Flats to legitimate purchasers pending final adjudication.

The Court applied Section 37 and Section 17 of the Arbitration and Conciliation Act, 1996, noting that the court's power to grant interim measures must not prejudice third parties.

It relied on the principle from Prabhat Steel Traders Pvt. Ltd. v. Excel Metal Processors Pvt. Ltd., which establishes that a third party whose rights are adversely affected by an arbitral interim order can maintain an appeal under Section 37.

It further applied the principle from Girish Mulchand Mehta v. Mahesh S. Mehta, holding that Section 9/17 remedies can extend to non-parties if their interests are embedded in the subject matter.

Regarding the scope of appellate interference, the Court adhered to Wander Ltd. v. Antox India (P) Ltd., which restricts interference unless the lower forum's view is perverse or arbitrary.

The Court found the Arbitral Tribunal’s orders perverse as they ignored material evidence, specifically the 2013 Allocation Confirmation Letter where the Developer had already restricted his lien to two specific flats.

By allowing the Developer to exert a "blanket lien" over all flats sold to third parties, the Tribunal effectively rewritten the contract ante litem motam.

The Court noted that the Developer’s claim was essentially a money claim for construction costs, which cannot be used to ransom legitimate third-party purchasers who acquired rights with the Developer’s full knowledge and tacit approval (evidenced by the OC Confirmation Letter and letters to banks).

The Court observed that while the precise dues between the Owner and Developer required trial, the "overwhelmingly strong prima facie case" of the Flat Purchasers necessitated protection to avoid inequity.

It set aside the Impugned Orders insofar as they denied possession of the Subject Flats.

The Court directed: (a) Flat Purchasers to deposit balance consideration with the Court Receiver within four weeks; (b) the Developer to hand over keys to the Court Receiver; and (c) the Court Receiver to place Purchasers in possession as "agents of the Receiver" without royalty.

The deposited funds and possession shall abide by the final Arbitral Award.

All petitions were disposed of with a request for the Tribunal to expedite the proceedings.