Bombay High Court
Ambit Urbanspace vs Poddar Apartment Co Operative Housing … on 1 April, 2025
2025:BHC-OS:5395
CARBPL.38696.2024 Final.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION (L) NO.38696 OF 2024
Ambit Urbanspace ...Petitioner
Versus
Poddar Apartment Co-operative Housing
Society Limited & Ors. ...Respondents
Mr. Mayur Khandeparkar a/w. Mr. Santosh Pathak a/w. Ms. Namita
Natekar & Ms. Archana Karmokar i/b. M/s. Law Origin, Advocates for
Petitioner.
Mr. Amogh Singh a/w. Mr. Nimish -Lotlikar i/b. Mr. Nimish Lotlikar,
Advocates for Respondent No.1-Society.
Mr. Ashish Kamat, Senior Advocate a/w. Mrs. Pooja Kane, Mr. Jitendra
Jain & Mr. Rohit Bamne i/b. Mr. Yogesh Adhia, Advocates for
Respondent Nos.2 to 4.
Mr. Vishal Kanade a/w. Monil Punjabi i/b. Mr. Sandeep Mahadik & Mr.
Narayan G. Samant and Duhita Desai, Advocate for Respondent Nos.5, 7
& 8.
CORAM : SOMASEKHAR SUNDARESAN, J.
RESERVED ON : JANUARY 21, 2025.
PRONOUNCED ON : APRIL 1, 2025.
JUDGEMENT:
Context and Factual Background:
1. This is a Petition under Section 9 of the Arbitration and Conciliation
Act, 1996 (“the Act”) filed by Ambit Urbanspace (“Developer”), which has
Digitally
signed by
AARTI
AARTI GAJANAN
GAJANAN
PALKAR
PALKAR
Date:
2025.04.01
executed a Development Agreement dated May 21, 2024 (” Development
11:34:01
+0530
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CARBPL.38696.2024 Final.docAgreement”) with Poddar Apartment Co-operative Housing Society Limited,
a Housing Society (“Society”) to redevelop a building, seeking protective
measures from this Court pending arbitration being invoked.
2. At the outset, it is worth mention that this is not a conventional case of
such petitions, which now have left a long legacy of jurisprudence in this
Court. The difference from the usual and typical pattern seen in Section 9
Petitions relating to redevelopment of properties in Mumbai, is stark.
Learned Counsel for all the parties fairly state that they do not have a specific
precedent of the specific nature involved in these proceedings.
3. This is not a case where a developer, who has a development
agreement with a co-operative society, seeking to invoke the interim
protective measures against recalcitrant and dissident members of the
society, where some members assert their individual will in multiple
directions, in conflict with the wider collective will of all members expressed
through the actions of the society. On the contrary, in this case, the
protective measures are sought against tenants occupying premises in the
property on a standalone basis, distinct and separate from the building in
question, who are not members of the Society, and out of the reach of the
collective will of the Society. In fact, their premises physically stand as
separate structures within the same plot of land. The landlord of the tenants
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is a member; has not initiated any proceedings for eviction in any forum; and
naturally has interests that are aligned with the Developer in eviction of the
tenants, invoking the jurisdiction under Section 9.
4. By the very pleadings of the Developer in this very Petition, it is evident
that the tenanted premises that are in dispute for purposes of this Petition
are five enclosed garages (“Subject Garages”). The Subject Garages have
been enclosed garages even when the original landlord one Sushilabai
Makhanlal Poddar (“Vendor”) had executed a Deed of Conveyance dated May
12, 1972, conveying the premises now owned by the Society – the Petition
pleads that the Vendor retained absolute ownership of the ground floor,
consisting of shops, the basement and five “enclosed garages” , and also
became a member of the Society (as pleaded in Paragraph 3.2 of the Petition).
Respondent No. 2, Respondent No. 3 and Respondent No. 4, Yogendra J.
Poddar, Pawan J. Poddar and Raghavendra S. Poddar, (executors of the
Estate of the Vendor i.e. Late Sushilabai Makhanlal Poddar), are now the
landlords of the Subject Garages (“Landlords”).
5. The ownership of the Landlords includes all the commercial shops in
the Society, two basements, all of which are tenanted, and which tenants are
being housed in the redeveloped premises. However, the Subject Garages,
which too are tenanted out to Respondents No. 5 to 8 (” Tenants”) are
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proposed to be given different treatment. In lieu of the Subject Garages, the
Tenants are proposed to be simply given open car parking spaces in the
redeveloped building, and that too under an agreement to which they are not
even signatories. Respondent No. 9 has been termed an illegal occupant of
one of the tenanted Subject Garages by the Developer and by the Landlords
in their respective pleadings.
6. In this Petition, the Developer is seeking ” eviction” (to quote the
pleadings of the Landlords in Paragraph 3 of their affidavit-in-reply) of the
Tenants, and that too, claiming under an agreement not even executed by the
Tenants. The Development Agreement purports to make the Tenants parties
in the title clause of the agreement, but there is not even a placeholder for
their signatures in the agreement. Worse, the Development Agreement was
supplemented by a Supplemental Development Agreement, also dated
October 21, 2024 (“Supplemental Agreement”), and that instrument does not
even purport to depict the Tenants as a party even in the title clause.
Privity – implications under Section 9:
7. The Development Agreement is purported to be structured as an
agreement among the Developer, the Society, the Landlords (termed as
‘Confirming Parties’), all the members (termed as ‘Members’) and all the
tenants including the Tenants. The Development Agreement proceeds to
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stipulate entitlements of the Landlords, the Members and the Tenants.
However, the Development Agreement is neither negotiated nor signed by
the Tenants. Not being members of the Society, the Tenants are out of the
reach of the collective will of the Society, which is usually brought to bear in
the equity jurisdiction of the Section 9 Court. Curiously, there is nothing in
the form of pleadings from the Developer, the Society or the Landlords to
even assert, much less confirm that the Tenants have executed the
Development Agreement. On the contrary, the material on record shows a
clear assertion from the Tenants that they were not even consulted about the
redevelopment and they have been unaware of the terms of the
redevelopment – a position not controverted and even endorsed by
implication, since the assertion is that the Tenants have no right to have a
say.
8. The Tenants who have no privity to the Development Agreement do
not have privity to the arbitration agreement. This is precisely why the
submissions of Mr. Mayur Khandeparkar, Learned Counsel on behalf of the
Developer, which are entirely based on what the Development Agreement
requires the Tenants to do, stand undermined. The submissions by Mr.
Khandeparkar copiously cite and rely on the provisions of the Development
Agreement. Unlike members of the Society, whose members are bound to
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conduct themselves in compliance with the larger collective will of the
Society, the Tenants stand on a completely different footing.
9. A suggestion from the Court asking the parties if they would be willing
to proceed to arbitration with the Tenants regardless (so that equities could
be balanced and competing considerations could be adjusted and an
arrangement could be worked out), was spurned by counsel on instructions.
10. It became evident in the course of the proceedings that the parties to
the arbitration agreement have no inter-se dispute for the subject-matter of
the arbitration agreement to be secured. There is also no dispute between the
Developer and the Landlords – the latter supports the grant of relief against
the Tenants as sought by the Developer. There is no dispute between the
Society and the Landlords either. These three parties support one another in
the hearing and apart from academic articulation of the possibility of claims
arising against one another, through the conduct of the proceedings, there
has been no invocation of arbitration by any of the three parties against
either of the other two parties. Even a praecipe filed recently seeking to
highlight the risk to life with the redevelopment being conducted alongside
the Subject Garages did not point to any arbitration proceedings being
invoked.
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11. The provisions of Section 9 of the Act and the scope of jurisdiction
must be borne in mind. Under Section 9, a party to an arbitration agreement
may apply to the Court to make interim measures of protection to preserve
the subject-matter of the arbitration agreement. Such interim measures may
also include the detention or preservation of the subject-matter of the dispute
in arbitration. Any property as to which any question may arise in the
arbitration could also be detained or preserved in this jurisdiction. Indeed,
such other interim measure of protection as may appear to the Court to be
just and convenient, may also be taken.
12. Indeed, it is now settled law that a third party whose interests would be
affected by interim protective measures that may be made in exercise of the
powers under Section 9 of the Act can be made a party to such a Petition. The
very objective of such a course is to enable the third party whose interests
would be affected, to have notice of the proceedings so that their interests
could also be factored in when formulating an interim protective measure.
The third party gets an opportunity of being heard, and if in the Court’s
discretion, the third party’s interests outweigh the protection sought, the
Section 9 Court, could take an appropriate decision on whether at all to grant
any protective reliefs, or whether to grant such reliefs by imposing such terms
and conditions as may be appropriate, to also address the interests of the
third party. It is in this spirit that I tried to draw out the parties to come up
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with reasonable proposals to balance interests, but such effect came to
naught.
13. A suggestion was put to the Developer, the Society and the Landlords
that to adjust equities, the Landlords could earmark specific units in the
redeveloped premises for being kept distinct and clear of encumbrances
pending resolution of the dispute between the Landlords and the Tenants.
The idea was to examine if it would be possible to make pro tem
arrangements to secure competing interests of the parties, but this was firmly
rebuffed by the Landlords, with copious written and verbal submissions on
how the Landlords could never be put to terms as part of equitable terms and
conditions that the Section 9 Court could impose on a Petition filed by the
Developer.
14. Therefore, this Petition would need to be dealt without the assistance
of any reasonable proposals forthcoming from the parties that would benefit
from the grant of the reliefs sought, necessitating exercising the Court’s
discretion, balancing competing considerations and examining what would
be appropriate in the facts and circumstances of the case.
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Usage of Subject Garages by Tenants:
15. Evidently, the Tenants are statutory protectees of the Maharashtra
Rent Control Act, 1999 (“Rent Act“). The Landlords assert that the only use
the Tenants could have put the Subject Garages to was to park an identified
car and nothing else. It is equally true that the Landlords have not taken any
proceedings in decades to deal with what they allege to be unauthorised and
illegal usage of the Subject Garages.
16. Of course, it is argued by Mr. Ashish Kamat, Learned Senior Counsel
on behalf of the Landlords that mere silence of the Landlords would not
amount to acquiescence by them, or give rise to any estoppel to prevent their
assertion that the usage of the Subject Garages is illegal. The Landlords now
assert that the Tenants deserve no consideration beyond being given open car
parking spaces in lieu of the enclosed Subject Garages, since their usage of
the Subject Garages is different from the parking of cars. The Landlords were
fully aware of the nature of usage by the Tenants. Mr. Vishal Kanade,
Learned Counsel on behalf of the Tenants would assert that the Landlords
have charged rent as if the Subject Garages were commercial premises, since
they have demanded that the Tenants pay additional assessment tax
demanded by the Municipal Corporation of Greater Mumbai.
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17. The Landlords assert that rent receipts issued by them specify the
usage to which the Subject Garages could be put. I have carefully examined
the rent receipts to see if this contention is borne out, and I find that the rent
receipts simply provided for pre-printed options for allusion and reference to
the property. The options were “Ground / Basement / Shop / Garage” and the
Landlords simply struck out the three options other than “Garage”. Nothing
in the rent receipt would show that the exclusive use to which the Subject
Garages could be put, was regulated by that instrument. It is wholly
inaccurate to submit that the rent receipts “expressly mention” that the
Subject Garages “would be used for garages only”.
18. That the Subject Garages were always enclosed, and they were put to
use other than to park a car, and that rent was collected on their usage with
full knowledge of the nature of usage is potentially even discernible from the
tenancy agreements that have been brought on record by the Landlords,
without their annexures. The tenancy agreements produced in the
Landlords’ reply are near identical in their terms. Mr. Kamat would assert
that these agreements recite a specific number of a car that would be parked
in the garage. In my opinion, such a recital would not be dispositive of
whether the usage for any other purpose was not envisaged and was contrary
to the knowledge or desire of the Landlords. The very same agreements also
make references to flooring and ceiling and their maintenance. They also
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make it clear that the rent amount would not include electricity and water
supply charges. Prima facie, it would be rather odd to have metered
electricity and water supply to a mere parking space. It cannot be ruled out
that the parties knew what use it would be put to, and when their relations
were not sour as it is now, they had agreed to purport that a parking for a car
would be recited, but tacitly acknowledging that there would be electricity
and water supply to the enclosed Subject Garages, to enable the real purpose
to which they were put.
19. In any case, such assertions by each of these parties would evidently lie
in the appropriate jurisdictional forum under the Rent Act. These issues
involve answering mixed questions of fact and law that would need trial.
That the Landlords have chosen not to assert any right arising out of allegedly
unauthorised abuse of tenancy (meant to simply park a car) for two and half
decades (going by the vintage of most of the tenancy agreements), would give
a prima facie pointer to the state of mind of the parties about the nature of
the use to which the Subject Garages had been consensually put.
20. The Section 9 Court cannot be called upon to declare conclusively
whether the Subject Garages were put to unauthorised use. Purely to get a
prima facie view on what transpired, the Section 9 Court could examine the
contentions of the parties and see what appropriate measures, if any, may be
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adopted, and that too only in aid of a real arbitration under the arbitration
agreement. That is all that I have attempted above. I am not convinced that
the nature of the usage of the Subject Garages by the Tenants could be held to
be without the knowledge and consent of the Landlords, for the Landlords to
assert strongly that the Tenants are illegal users of the Subject Garages such
that they have no better rights than open car parking spaces in the
redeveloped property, and that too in terms of the Development Agreement
and the Supplemental Agreement to which the Tenants are not even parties.
Tenants – Different from Members of a Society:
21. This brings me to the facet of the difference between the law governing
rights of dissentient members of a co-operative society and the rights of
tenants who are not members of such a society. It is noteworthy that in the
instant case, the Landlords are the ones who have membership of the Society.
If there were to be a hindrance to the redevelopment, causing problems
under the Development Agreement, it would be because such member of the
Society has been unable to engage with the Tenants in a manner that would
enable a smooth conduct of the Development Agreement. Therefore, should
there arise a need to make an equitable adjustment, one would need to factor
in how to adjust equities for and against the Landlords, who have, prima
facie, with full knowledge, willingly suffered the usage of the Subject Garages
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for two decades or more and have sought to simply give the Tenants open car
parking spaces in lieu of the Subject Garages.
22. It is also noteworthy that the record shows that the access to the
Subject Garages is distinct and their existence has not come in the way of the
building being demolished. When the Petition was heard, the building was
already demolished. It was the desire to remove the Tenants and bind them
to their “entitlement” (to open car parking spaces) under an agreement they
did not even execute, that appears to drive the Petition. Therefore, while Mr.
Kamat is indeed right about the scope of the Section 9 jurisdiction being
primarily driven by the subject matter of the contract that contains the
arbitration agreement, this is a case where the agreement affecting the rights
of the Tenants does not even have the Tenants as a party. The assertion by
the Tenants that they have never been briefed about the redevelopment and
that the Development Agreement was never even shown to them has a ring of
truth to it, particularly when the pleadings of the parties does not purport to
assert that the Tenants had executed it, and more so since the agreement
annexed does not even show a placeholder for them to execute. Prima facie,
it appears that the template used in approaching any and every
redevelopment litigation under Section 9 has been blindly adopted here too.
The Developer and the Landlords have repeatedly referred to the Tenants’
“entitlement” under the Development Agreement. All it amounts to is their
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proposal as to what the Tenants should expect, rather than an agreement
either executed by the Tenants or executed by anyone with authority to bind
the Tenants.
23. This is precisely, why the various submissions about the obligations of
the Tenants as purportedly contained in the Development Agreement, as
made by the Landlords, cannot be countenanced. The Tenants never
contracted any obligations under the Development Agreement. This is
completely distinct from the legal position in which members of the Society
are routinely placed. When the Developer contracted the Development
Agreement with the Society, the members of the Society were bound by the
terms contracted by the Society on their behalf. A co-operative society is a
body corporate that is governed by an elected managing committee, which is
the governing body. The members of the co-operative society elect such
managing committee. Statutorily, what is contracted by the society cannot be
deviated from by the members. It is in this context that in Section 9
proceedings, members who hold up the larger interest of the society present
inequitable conduct, which can be remedied in this jurisdiction, and even
then, taking care not to subvert or unduly undermine the interests of the
dissenting members. Tenants who are not part of such a collective or
constituents of a body corporate, and are in fact, protectees of the Rent Act,
stand on a different footing. The equity principles that would apply in the
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case of members of a society who do not fall in line would not be blindly and
absolutely applicable when adjusting for the interests of tenants.
24. As stated above, the Tenants are statutory protectees of the Rent Act.
Indeed the tenancy agreements relied on by the Landlords refers to them as
“statutory” tenants. Eviction of a tenant is subject matter of special
provisions and procedures under the Rent Act. In my opinion, what is writ
large on the record is an attempt to get an eviction on terms materially
different from what the Tenants enjoy, by the intervening redevelopment.
Mr. Khandeparkar’s allusion to the reliefs sought in the Petition being a
“temporary displacement” of the Tenants pending the redevelopment rings
hollow since the Tenants are not being given any redeveloped premises akin
to what they are currently entitled to and protected for under the Rent Act.
This is a clear distinguishing feature in these proceedings as compared with
the facts covered in all the case law cited. I deal with the case law later.
25. The Landlords have also vociferously submitted that the usage of the
Subject Garages is illegal and a punishable offence under the Maharashtra
Town Planning Act, 1966, and that there can be no estoppel against law. No
detailed elaboration of this facet is warranted since the Section 9 Court
cannot pronounce upon whether an offence under that law has been
committed and which parties would be guilty of such an offence if there were
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one – whether it would be just the Tenants or the Tenants along with
Landlords. That would be a matter of evidence and trial. That no invocation
of such alleged offence has been made for over two decades would be a prima
facie pointer to the seriousness (or the lack of it) of the issue for the limited
purpose of deciding whether the Section 9 jurisdiction would come to the aid
of removal of the Tenants from the Subject Garages. In this light, the
invocation of Section 24 of the Indian Contract Act, 1872 too need not detain
further judicial attention at stage of the matter in this jurisdiction.
26. Mr. Kamat would equally argue in the same breath that only the
jurisdictional forums under the Rent Act would have jurisdiction to
determine issues of tenancy. I agree with him. This is precisely why the
strong assertions of violations by the Tenants ought not to detain my
attention. More importantly, this is precisely why the Section 9 proceedings,
in my opinion, ought not to be used as a back-door eviction proceedings,
when no such proceedings have been taken during the two decades of the
tenancy relationship, that too on facts within the knowledge of the Landlords.
FSI – the economic driver of this conflict:
27. The key driver of this conflict is this: the Subject Garages were
constructed in 1967. Mr.Khandeparkar would explain that no floor space
index (“FSI”) benefits would arise from them. It was only in the
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Development Control Regulations of 1991 that garages were included in the
FSI computation. Therefore, in the sharing of the spoils of the redevelopment
among the Developer, the Society and the Landlord, they do not have an
incentive to provide for any component of their negotiated inter-se
entitlements to accommodate the Tenants’ interests. Towards that end, they
do not perceive any economic value in negotiating with the Tenants who are
tenants using the Subject Garages in the same pattern for decades. They have
executed the Development Agreement and the Supplemental Agreement
without negotiation with the Tenants and without a bargain being struck with
the protected Tenants. They are indeed entitled to advisedly adopt such an
approach, but equally, such approach brings with it consequences in the law.
28. The usual approach adopted towards members of the Society cannot be
used against the Tenants. This is why it was put to these parties if they would
objectively come up with interim measures to balance and protect the
Tenants’ interests, to enable the Court to consider a “temporary
displacement” as Mr. Khandeparkar puts it. However, without any such
adjustment, if what is sought is granted, it would constitute a permanent
displacement in the factual matrix. A measure taken under Section 9 of the
Act, in my opinion, ought not to conflict with special protective provisions in
ameliorative legislation such as the Rent Act.
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29. It is the Landlords’ desire not to share any of the redevelopment
benefit with Tenants in lieu of the redevelopment. Towards that end, making
submissions about illegality that has been the course of conduct for decades,
makes it inequitable to benefit the Landlords and the Developer by granting
the reliefs sought by them. The allocation of open car parking slots to
Tenants who have been using the Subject Garages, prima facie, with the full
knowledge and consent of the Landlords, is not a proposal that was even put
to the Tenants for it to be claimed as a contracted “entitlement”.
30. Purely from the perspective of assessing reasonableness in conduct of
the parties in order to exercise discretion under Section 9 of the Act, I have
examined the correspondence between the parties. The Tenants have
indicated their willingness to engage on the redevelopment when they were
confronted with a demand of compliance with an agreement that was neither
negotiated nor signed with them. They were informed that they would be
treated differently from the other tenants (those using shops and the
basement, whose structures qualify for computing FSI). It is in this context
that to see how reasonable a party claiming in equity is, I put to the
Developer and the Landlords if they would either earmark specific premises
and keep it apart, for a resolution of the issues arising from this peculiar
situation. However, that was rejected outright and therefore equity
considerations in this facet of the matter failed.
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31. Mr. Kanade is right when he submits that effectively, the grant of
reliefs in this Petition would efface the existing status of protected “statutory
tenants” with existing usage of the Subject Garages. They would be reduced
to owning mere parking spaces in a redeveloped building with no other
connection to the redeveloped premises. Such ownership would hardly be of
any real value and is indeed without known precedent. In my opinion, this is
hardly a position of equity that can be embraced in the discharge of
discretion, when such permanent consequences would be visited on the
Tenants in the garb of “temporary displacement”. In fact, grant of the reliefs
sought would partake the character of final reliefs in eviction proceedings,
and would not even be in aid of arbitration proceedings (which are non-
existent), considering the alignment of interests of the Developer, the Society
and the Landlords.
32. One of the reliefs sought by the Developer comes close to being
reasonable despite the above analysis. Prayer clause (c) relies on Clause 12.3
of the Development Agreement to direct the Tenants and the Landlords to
pay to the Developer a sum of Rs. 10,000 per day to preserve liquidated
damages contracted, for the period of the stand-off from November 5, 2024
until the date of handover of the Subject Garages to the Developer. It would
not be possible to grant such relief against the Tenants for obvious reasons –
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the simplest reason being the Tenants were not even offered a draft of the
Development Agreement to see if they would agree to the clause stipulating
liquidated damages. However, the Landlords have actively negotiated the
Development Agreement, which provides that “Members / Tenants” who do
not vacate when scheduled, would be liable to pay such amount of Rs. 10,000
per day. The Landlords are members of the Society. Getting the Subject
Garages vacated could be said to be their responsibility. The Landlords in
their capacity as members have failed to deliver vacant and peaceful
possession as contracted. It would be open to the Developer to claim the
liquidated damages from the Landlords. However, there is not even an
invocation of arbitration until now against them. Moreover, merely because
there is a liquidated damages clause, the amount cannot become payable in
absolute terms, as indicated by the Supreme Court in Kailash Nath1 – that
damages have been suffered would still have to be demonstrated.
33. More importantly, Clause 12.3 of the Development Agreement entitles
the Developer to set off costs of litigation from the financial dues payable
under the Development Agreement to the “Members / Tenants”. However,
Clause 7.3 envisages that only Members shall be entitled to financial
payments – transit rent, brokerage, shifting charges, corpus fund etc. Clause
7.4 which sets out what would be paid to tenants, does not identify the
1
M/s. Kailash Nath Associates Vs. Delhi Development Authority & Anr.- (2015) 1 SCR
627
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Tenants who are tenants of the Subject Garages as recipients of any payment.
In these circumstances, if the Developer is desirous of setting off Rs. 10,000
per day from the amounts payable to Landlords, it is for the Developer to take
such action as advised without needing assistance of this Court. On this
limited (and only) facet of ostensible conflict between the Developer and the
Landlords, Mr. Kamat’s written submissions resist grant of any relief by this
Court on the premise that interim relief cannot be in the nature of final relief.
34. Whether the Landlords, who are identified as “Confirming Parties” and
not as “Members” in the Development Agreement, could also be treated as a
defaulting “member” is for the Developer to take advice on. This Court’s
jurisdiction under Section 9 would not be necessary for enabling this
measure as a temporary interim measure.
Consideration of Case Law:
35. A catena of judgements have been pressed into service by Mr.
Khandeparkar and Mr. Kamat. I would necessarily have to deal with them.
As stated earlier, a basic element of differentiation of these judgments is that
most of them are passed in the context of members of a co-operative society
(a body corporate) being bound by the actions of the collective will of the
wider body of constituents of such body corporate. In these cases, equity
considerations were crystal clear – those objecting to the redevelopment were
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indeed being given redeveloped premises in lieu of their existing premises,
and typically, larger premises upon redevelopment. That apart, in every case,
they would be entitled to financial entitlements as well, to enable them to
make arrangements during their temporary displacement and for future
entitlements to the corpus of the society. In all the precedents, it is the
unreasonableness in such members’ grievances, despite getting a larger
entitlement, that drove the Court’s discretion to make appropriate
interventions.
36. The case at hand stands on a peculiarly different footing. The Tenants
alone would get a downgrade upon redevelopment. They have been users of
the enclosed Subject Garages with water and electricity connections and have
the statutory protection as tenants. In sharp contrast, they would be thrown
to a purported ownership of an open car park in the redeveloped building.
37. The Developer and the Landlords have pressed into service the
judgments rendered in Shree Ahuja Properties2; Rajesh Mishra3; Calvin
2
Shree Ahuja Properties Pvt. Ltd. Vs. Brij Maraj – Notice of Motion No.1318 of 2019 in
Suit No.760 of 2019
3
Rajesh Mishra and Mrs. Beena R. Mishra & Ors. Vs. Shree Ahuja Properties Pvt. Ltd. &
Ors. – Appeal (L) No.11941 of 2021 in Notice of Motion No.1318 of 2019 along with Notice
of Motion No.1518 of 2019 in Suit No.760 of 2019 with Interim Application (L) No.11946 of
2021.
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Properties4; Choice Developers5; Sarthak Developers6; Heritage Lifestyles7;
Ferrum Realtors8; Kankubai Jain9; and Shantilal Gandhi10.
38. Both the Developer and the Landlords emphatically endorse the
rulings in Shree Ahuja and Rajesh Mishra. These two decisions relate to the
same litigation. Rajesh Mishra being an appellate decision, Shree Ahuja
merges into it. This was a case of garages too but it is of no avail to the
Developer and the Landlords simply because the Court clearly recorded that
the developer had agreed to provide all garage occupants residential premises
in the new redeveloped building in lieu of the garages, which would be of a
size upgraded by 38% of the size of the garages. This was considered by the
Court to be fair. Such a fact pattern is completely distinguishable with the
peculiar facts of the instant case, where the Tenants get a downgrade to an
open car parking slot in lieu of the enclosed Subject Garages from which they
cannot be evicted except with due process of law under the Rent Act.
4
M/s. Calvin Properties and Housing Vs. Green Fields Co-operative Housing Society
Limited & Ors. – Arbitration Petition No.638 of 2013.
5
Choice Developers Vs. Pantnagar Pearl Co-operative Housing Society Limited & Ors. –
2022 SCC Online Bom 786.
6
M/s. Sarthak Developers Vs. Bank of India Amrut/Tara Staff Co-operative Housing Society
Limited & Ors. – Appeal (Lodging) No.310 of 2012 with Notice of Motion (Lodging)
No.2137 of 2012 in Arbitration Petition No.1385 of 2010.
7
Heritage Lifestyles and Developers Pvt. Ltd. Vs. Amar-Villa Co-Operative Housing Society
Ltd. & Ors. – 2011 SCC OnLine Bom 349.
8
Ferrum Realtors Private Limited Vs. Sind Maharashtra Co-operative Housing Society
Limited & Ors. – Commercial Arbitration Petition (L) No.38354 of 2022.
9
Kankubai Harkhlal Jain and Ors. Vs. MCGM & Ors. – Order dated 1/10/2015 passed in
Writ Petition 2351 of 2015
10
Shantilal Gandhi Vs. Prabhakar Balkrishna Mahanubhav – 2005 (4) Mh.L.J.507.
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39. In Calvin Properties, Choice Developers and Sarthak Developers, the
interests of a wide general body of members of a co-operative society was in
conflict with the interest of a minuscule number of members of that society.
Each of these members was being offered an upgrade from the pre-
redevelopment position. Their conduct was therefore not tenable either in
equity or in law (their own sweet will could not override the collective will of
the other constituents of the co-operative society, which is a body corporate).
With that framework in play, interventions were made by the Court.
40. Heritage Lifestyles and Ferrum Realtors involve an element of tenancy,
but are distinguishable and indeed stand on a different footing. In Heritage,
the tenant indeed received a redeveloped flat and the tenancy rights were
kept intact. In Ferrum too, although it was a case of a tenant of a member
holding up the redevelopment, the landlord-member had an eviction decree
in his favour under the Rent Act. Yet, the Learned Single Judge left open the
contentions on entitlement to tenancy in respect of the flat in question and a
rehabilitation unit in lieu of the tenanted flat.
41. In sharp contrast, in the facts of the matter at hand, far from having an
eviction decree, despite continued usage of the Subject Garages for over at
least twenty years, the Landlords have not even filed any proceedings alleging
violation of the tenancy agreement and the allegedly unauthorised and illegal
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change of user. The Landlords have collected rent without demur or protest
and indeed as indicated earlier, the allusion to a car parking objective
appears incidental or even contrived, with the parties knowing what the
actual usage was meant to be. Any determination of the legitimacy of use
would be a mixed question of fact and law that only proceedings under the
Rent Act could answer. Worse, the Tenants rights would not at all be kept
intact. Their tenancy rights would be wiped out and worse, they would be
downgraded from enclosed premises that they have been operating from, to
an open car parking slot.
42. Kankubai Jain is a case of a Learned Division Bench of this Court
dealing with a writ petition seeking a direction to the Maharashtra Housing
and Area Development Authority to consider an application for change of
occupancy status of a garage. In a tenanted garage, jewellery business was
being carried on. The petitioners in that case were desirous of getting an
alternate commercial area in lieu of the garage that they were using, and
instead they were being given an equivalent residential area in the
redeveloped premises. It is in that context that the Learned Division Bench
held that a writ petition was misconceived. The Court made an observation
that a “garage” had a connotation of an area for repairing of vehicles or
parking of vehicles. That was not a case of a Section 9 Court presented with
an inequitable position of the tenant of an enclosed garage getting nothing
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but an open parking space in the redeveloped premises. I am afraid this case
is evidently distinguishable in view of the clear difference in the nature of
facts involved and the nature of jurisdiction involved. Therefore, it would not
be of any assistance to the Developer or the Landlords.
43. Finally, Shantilal Gandhi is a case of a landlord having obtained an
eviction decree on the premise of an unauthorised change of usage and a
prohibition on the change of usage from residential premises to commercial
premises, under applicable law. Far from having a decree, the Landlords in
the instant case have not even taken up any proceedings of any nature on the
allegedly illegal change of usage. As stated earlier, the Section 9 Court cannot
pronounce upon what would essentially entail a trial to answer a mixed
question of fact and law under the Rent Act. It is the denuding of the very
protection of the Rent Act coupled with a downgrade from the current
situation that the Tenants are in, that informs my view of it being inequitable
and inappropriate to exercise discretion to grant the reliefs sought by the
Developer, which would also aid the Landlords, whose burden it is to comply
with obligations.
Conclusion and Directions:
44. To sum up, I am not persuaded that this is a fit case of a bona fide
invocation of Section 9 of the Act seeking interim protective measures to
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preserve the subject-matter of a dispute. A dispute is not perceptible or even
ephemeral – evidently there is none. The jurisdiction under Section 9 is an
equitable jurisdiction to be exercised with a fair and just discretion of the
Court. In the circumstances of the case, I am not convinced that these
principles have been demonstrated to warrant the Court’s intervention to
exercise discretion to make arrangements for removal of statutorily-
protected Tenants from their premises permanently, and hand them open car
parking spaces, and to label such action as “temporary displacement.”
45. The Tenants are not objecting to the redevelopment. They are open to
redevelopment but want their interests and rights as tenants to be respected
and recognised, commensurate with their actual use. I am afraid it would not
be open to the Landlords to pretend that this is not a case of a backdoor
eviction or that they are victims of the allegedly illegal occupation. It would
simply not be open to the Landlords to pretend that the Tenants had a right
to only park vehicles when, to their knowledge, for years, the tenants have
been using the Subject Garages for purposes far different from parking cars.
Therefore, to try to give them an ostensible “choice” of an open parking space
and to quote the larger good of the majority would not present a fit case to
exercise my discretion in favour of removing the Tenants.
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46. Therefore, the Section 9 Petition is disposed of without grant of any
relief as sought. It is however directed that the Developer and the Society,
shall ensure the safety and the current free independent access to the Subject
Garages during the course of the redevelopment. The Tenants, not being
bound by the Development Agreement, which they are not even a party to,
cannot be directed to comply with it. Needless to say, if the parties reach any
other means of resolution of their current stand-off, they would be at liberty
to agree on how to re-arrange their affairs and their inter-se relationship.
47. In the peculiar facts and circumstances of the case, I am persuaded not
to impose costs on any party despite this being a Commercial Arbitration
Petition.
48. All actions required to be taken pursuant to this order, shall be taken
upon receipt of a downloaded copy as available on this Court’s website.
[SOMASEKHAR SUNDARESAN J.]
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