Bombay High Court
Yogendra J Poddar vs Ambit Urbanspace on 1 July, 2025
2025:BHC-OS:9775-DB
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPEAL (L) NO. 12585 OF 2025
IN
COMMERCIAL ARBITRATION PETITION (L) NO. 38696 OF 2024
Ambit Urbanspace .... Appellant
-Versus-
1. Poddar Apartment Co-operative
Housing Society Limited
2. Yogendra J. Poddar
(Being the Executors of the Estate of
Late Smt. Sushilabai Makhanlal Poddar)
3. Pawan J. Poddar
(Being the Executors of the Estate of
Late Smt. Sushilabai Makhanlal Poddar)
4. Raghvendra S. Poddar
(Being the Executors of the Estate of
Late Smt. Sushilabai Makhanlal Poddar)
5. Haresh Doshi
6. Ashu Farooq Sheir Haq Choudhary
7. Dr. Amita Laxmidas Shenoy
8. Dilip K. Limbad
9. Ketki Shantilal Desai .... Respondents
WITH
COMMERCIAL ARBITRATION APPEAL (L) NO. 16482 OF 2025
IN
COMMERCIAL ARBITRATION PETITION (L) NO. 38696 OF 2024
1. Yogendra J. Poddar
Page No.1 of 44
1 July 2025
::: Uploaded on - 01/07/2025 ::: Downloaded on - 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
2. Pawan J. Poddar
3. Raghvendra S. Poddar .... Appellants
-Versus-
1. Ambit Urbanspace
2. Poddar Apartment Co-operative
Housing Limited
3. Haresh Doshi
4. Ashu Farooq Sheir Haq Chodhury
5. Dr. Amita Laxmidas Shenoy
6. Dilip K. Limbad
7. Ketki Shantilal Desai .... Respondents
Mr. Mayur Khandeparkar with Mr. Vikramjeet Garewal, Mr. Santosh Pathak,
Mrs. Namita Natekar and Ms. Archana Karmokar i/b. Law Origin, for
Appellant in Commercial Arbitration Appeal (L) No. 12585/2025 and for
Respondent No. 1 in Commercial Arbitration Appeal (L) No. 16482/2025.
Mr. Ashish Kamat, Senior Advocate with Mrs. Pooja Kane and Mr. Jitendra
Jain i/b. Mr. Yogesh N. Adhia, for Appellant in Commercial Arbitration Appeal
(L) No.16482/2025 and for Respondent Nos. 2 and 4 in Commercial
Arbitration Appeal (L) No.12585/2025.
Mr. Amogh Singh i/b. Mr. Nimish Lotlikar, for Respondent No.1 in
Commercial Arbitration Appeal (L) No.12585/2025.
Mr. Vishawajit Sawant, Senior Advocate i/b. Mr. Narayan G. Samant, Mr.
Sandeep V. Mahadik and Ms. Duhita D. Desai, for Respondent Nos. 5, 7 and 8
in Commercial Arbitration Appeal (L) No.12585/2025.
Ms. Duhita D. Desai with Mr. Sandeep V. Mahadik and Mr. Narayan G.
Samant, for Respondent Nos. 3, 5 and 6 in Commercial Arbitration Appeal (L)
No.16482/2025.
_______________________________________________________________
Page No.2 of 44
1 July 2025
::: Uploaded on - 01/07/2025 ::: Downloaded on - 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Coram : Alok Aradhe, CJ. &
Sandeep V. Marne, J.
Judgment Reserved On: 24 June 2025.
Judgment Pronounced On : 1 July 2025.
JUDGMENT (Per: Sandeep V. Marne, J.)
1) These Appeals are filed challenging the judgment and order
dated 1 April 2025 passed by the learned Single Judge of this Court
dismissing Commercial Arbitration Petition (L) No. 38696/2024 filed by
the Appellant-Ambit Urbanspace under the provisions of Section 9 of the
Arbitration and Conciliation Act, 1996 (the Act) seeking interim measures
for vacation of premises by Respondent Nos. 5 to 9 for the purpose of
carrying out development process of the building in question.
2) The developer-Ambit Urbanspace has filed Commercial
Arbitration Appeal (L.) No.12585/2025 challenging the judgment and
order dated 1 April 2025. Commercial Arbitration Appeal (L)
No.16482/2025 is filed by original Respondent Nos.2 to 4 to the limited
extent of some of the findings recorded by the learned Single Judge qua
about tenancy rights of Respondent Nos. 5 to 8, even though there is no
specific direction against them in the operative part of the impugned
judgment and order.
3) A very brief factual narration of the case as a prologue to the
judgment would be necessary. For ease of reference, throughout the
judgment, parties are referred to by their description in the Commercial
Arbitration Appeal (L.) No.12585/2025 filed by the developer. By a Deed
of Conveyance dated 12 May 1972 between Smt. Sushilabai Makhanlal
Page No.3 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Poddar (Vendor) and Poddar Apartment Co-operative Housing Society
Limited (Purchaser), plot of land admeasuring 2014.50 sq.mtrs at CTS
No.73 and 73/1 to 10 of Village-Malad, Taluka-Borivali, Mumbai
Suburban District, S.V. Road, Kandivali (West), Mumbai – 400 067
together with building standing thereon known as ‘Poddar Apartment’
comprising of ground plus four upper floors consisting of 30 flats and 44
shops on the ground floor and 2 basements and 5 enclosed garages, was
purchased by the Respondent No.1-Society. Under the said conveyance,
the Vendor-Smt. Sushilabai Poddar, retained the ground floor comprising
of 44 shops, basement and 5 enclosed garages as absolute owner thereof
and was accordingly admitted as member of the first Respondent-Society.
Upon death of Smt. Sushilabai Poddar, Respondent Nos.2 to 4 claim
ownership in respect of 44 shops, 2 basements and 5 enclosed garages.
Respondent Nos. 2 to 4 inducted tenants in respect of the said 44 shops
and 2 basements. They also inducted five persons, including Respondent
Nos. 5 to 8, in the 5 enclosed garages. Apart from the said 46 tenants and 5
inductees of Respondent Nos.2 to 4, there are 31 members of the first
Respondent-Society.
4) The Society has resolved to undertake the process of
redevelopment of the building and appointed the Appellant as the
developer to carry out the development process. On 21 May 2024,
Development Agreement came to be executed between the Appellant and
Respondent No.1-Society with Respondent Nos.2 to 4 as confirming
parties. The first Respondent-Society has also executed a Power of
Attorney dated 21 May 2024 in favour of the Appellant. The Appellant
submitted plans for construction of the proposed building to the Slum
Rehabilitation Authority, which issued Letter of Intent (LOI) dated
9 October 2024 and Intimation of Approval (IOA) dated 15 October 2024
approving the building plans. By Supplementary Development Agreement
dated 21 October 2024, certain terms and conditions of the Development
Page No.4 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Agreement were amended. In the meantime, structural audit of the
building was conducted and acting on the report of the structural auditor,
Municipal Corporation for Greater Mumbai issued notice dated
10 October 2024 under the provisions of Section 354 of the Mumbai
Municipal Corporations Act, 1888 (MMC Act) for pulling down the
building to avoid mishap and untoward incident.
5) After securing the LOI and IOA, the Appellant called upon
the occupiers of flats, shops, basement and garages to vacate the same vide
notice dated 21 October 2024. The first Respondent-Society responded by
letter dated 8 November 2024 informing the Appellant about the status of
members who had submitted the keys of their respective flats/shops to the
Society and who were willing to execute Agreement for Permanent
Alternate Accommodation (PAAA). The Appellant claims that it has
accordingly issued cheques towards shifting charges, brokerage, corpus and
hardship compensation, as well as rental compensation in favour of
members/tenants who have handed over vacant and peaceful possession of
their respective premises. By letter dated 16 November 2024, the first
Respondent-Society informed the Petitioner that out of the total 81
members/tenants, 29 members and 24 tenants had vacated their respective
premises. It appears that Respondent Nos. 5 to 8 have refused to vacate
possession of the garages in their occupation. The Appellant learnt from
Respondent Nos.2 to 4 that Respondent No.9 is inducted by Respondent
No.6 (inductee of Respondent Nos.2 to 4) as illegal occupant in respect of
Garage No.2. Respondent Nos.5 to 8 as well as Respondent No.9 were not
vacating the possession of the premises in their occupation.
6) The Appellant accordingly filed Commercial Arbitration
Petition (L.) No. 38696/2024 under the provisions of Section 9 of the Act
seeking direction against Respondent Nos.5 to 8 to forthwith execute
PAAA. Appellant also sought direction against Respondent Nos.5 to 8 and
Page No.5 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Respondent No.9 to immediately vacate Garage Nos.1, 2, 3 and 4.
Appellant also sought direction for payment of sum of Rs.10,000/- per day
as pre-estimated liquidated damages/penalty by Respondent Nos.5 to 8
and by Respondent Nos.2 to 4 are per Clause-12.3 of the Development
Agreement. The Appellant also sought appointment of Court Receiver in
respect of Garage Nos.1, 2, 3 and 4 for taking over possession thereof. The
Arbitration Petition was supported by the first Respondent-Society by filing
Affidavit-in-Reply. A separate Affidavit-in-Reply was filed by Respondent
Nos.2 to 4 not seriously opposing grant of any relief against Respondent
Nos.5 to 8, but questioning the right of Respondent Nos.5 to 8/9 in respect
of the garages in their occupation. Affidavit-in-Reply was also filed by
Respondent Nos.5, 7 and 8. After considering the pleadings and after
hearing the learned counsel appearing for the rival parties, the learned
Single Judge pronounced the judgment and order on 1 April 2025 holding
that this is not a fit case of bonafide invocation of provisions of Section 9 of
the Act. The learned Judge accordingly disposed of Arbitration Petition
without grant of any relief in favour of the Appellant. The learned Judge
has however directed that the Appellant and the Society shall ensure safety
as well as free independent access to the subject garages during the course
of redevelopment. It has held that since the Respondent Nos. 5 to 8 are not
bound by the Development Agreement, they cannot be directed to comply
with it. Aggrieved by non-grant of any relief under Section 9 petition filed
by the Appellant, Commercial Arbitration Appeal (L) No. 12585/2025 is
filed by the developer-Ambit Urbanspace.
7) Original Respondent Nos.2 to 4 (landlords) are also aggrieved
by certain observations made by the learned Judge governing their
relationship with Respondent Nos.5 to 9 and they have accordingly filed
Commercial Arbitration Appeal (L.) No. 16482/2025. Both the Appeals
are taken up for hearing and disposal together.
Page No.6 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
8) Mr. Khandeparkar, the learned counsel appearing for the
Appellant-Ambit Urbanspace in Commercial Arbitration Appeal (L.) No.
12585/2025 would submit that learned Single Judge has erred in not
granting any relief to the Appellant in Section 9 petition ignoring the
position that Respondent Nos.5 to 8 do not have any independent right in
respect of the garages and must vacate the same, the moment premises to
which garages are attached are vacated by the members (Respondent Nos.2
to 4). That under Clause-12 of the Development Agreement, the Society,
its members and tenants are required to vacate and handover possession of
the respective premises to the Appellant-Developer for the purpose of
carrying out redevelopment. Since contractual obligation to vacate the
premises is not fulfilled, the Appellant is entitled to seek interim measures
under Section 9 of the Act. That an order of mandatory injunction can be
granted by a Court at an ad-interim stage and reliance is placed on the
judgment of the Apex Court in Hammad Ahmed Versus. Abdul Majeed1. That
Rule 803-E of the Bombay High Court Original Side Rules, inter-alia
enables impleadment and seeking reliefs against third parties in a petition
filed under Section 9 of the Act. Reliance in this regard is placed on
judgment in Girish Mulchand Mehta and another Versus. Mahesh S. Mehta
and another2. That in a Tenant Co-partnership Housing Society, legal
ownership of the building vests in the Society and a member merely has a
right to occupy the premises. That therefore members are bound by
obligations put on the Society in the Development Agreement. Reliance is
placed on Ramesh Himmatlal Shah Versus. Harsukh Jadhavji Joshi 3. That
Respondent Nos.2 to 4 are the members of the Society who have primary
responsibility of vacating and handing over possession of the premises
relatable to their membership and once it is established that they are not
co-operating by handing over possession of the premises, they must be
1 (2019) 14 SCC 1
2 2010 (2) Mh.L.J. 657
3 (1975) 2 SCC 105
Page No.7 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
treated as defaulting party and in such circumstances, there is warrant for
grant of interim measures under Section 9 of the Act.
9) Mr. Khandeparkar would further submit that the
tenants/occupants of Respondent Nos.2 to 4 (Respondent Nos.5 to 8 and
Respondent No.9) cannot claim superior right than that of members of the
Society. That society has a superior right in the property vis-a-vis all
concerned. Any right which a member may create qua any third party
would be subservient to Society’s obligation under the Development
Agreement. That existence of such subservient right cannot be a reason for
the Court not to exercise jurisdiction under Section 9 of the Act by
directing tenant/occupant of member to vacate the premises. That since
Respondent Nos.5 to 8/9 do not have a superior right than the member,
they must walk out of the garages with the member. That a private
arrangement between tenants/occupants made behind the back of the
Society cannot bind the Society. That the Development Agreement
(Clause-7.4.3) provides Respondent Nos.5 to 8 with surface car parking
spaces on ownership basis in lieu of the garage and if they claim any right
to carry on business in such allotted premises, they can seek redressal of
such right, but cannot raise a defence in Section 9 petition.
10) Mr. Khandeparkar would further submit that out of the total
81 flats/shops only 4 garage occupants are obstructing and creating
hindrance in the entire process of redevelopment. That Appellant has spent
huge amounts on rent paid to the members and other tenants. That one of
the opposing garage occupant (Respondent No.6) has agreed to handover
possession of the garage premises in her occupation and has executed
Affidavit agreeing to execute PAAA. That use of garage premises by
Respondent Nos.5 to 8 and by Respondent No.9 is otherwise illegal. That
the garages were constructed when DCR 1967 was in force which did not
make any provision for garages to be included in computation of FSI. As
Page No.8 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
against this, Regulation 35(3)(i) of DCR 1991 and Regulation 32(2)(i) of
DCPR 2034 envisage counting of garages in FSI and therefore Society has
rightly agreed to accept mere parking spaces in lieu of the garages. He
would rely on judgment in M/s. Calvin Properties and Housing Versus. Green
Fields Co-operative Housing Society Limited and Others 4. Reliance is also
placed on Division Bench order in Kankubai Harakhlal Jain & Ors. Versus.
Muncipal Corporation of Greater Mumbai & Ors. 5 in support of contention
that unauthorized occupants of garages cannot be granted any premises in
the redeveloped building. Mere illegal use of garage for commercial use
would continue to maintain status of premises as garages and that
therefore it is not open for Respondent Nos.5 to 8 to obstruct the
redevelopment process. Reliance is placed on judgments in Shree Ahuja
Properties Pvt. Ltd. Versus. Brij Maraj and others6, Rajesh Mishra and Mrs.
Beena R. Mishra Versus. Shree Ahuja Properties Pvt. Ltd. and Others 7 and
Konark Structural Engineers Private Limited Versus. Borivali Samarpan Co-
operative Housing Societies Ltd. and Others 8. That mere handing over
possession of the garage premises for completion of redevelopment process
would not extinguish the alleged tenancy claim of Respondent Nos.5 to 8.
He would therefore pray for setting aside the order passed by the learned
Single Judge.
11) Mr. Singh, the learned counsel appearing for Respondent
No.1-Society would support the Appeal filed by the Developer submitting
that early completion of redevelopment process is in the interest of all the
members of the Society, whose interests are being prejudicially affected on
account of obstruction created by Respondent Nos.5 to 8/9 by not vacating
the garages in their unauthorized occupation.
4 Arbitration Petition No.638 of 2013 decided on 19 November 2013.
5 Writ Petition No.2351 of 2015 decided on 1 October 2015.
6 Notice of Motion No.1318 of 2019 in Suit No.760 of 2019 decided on 3 May 2021.
7 Appeal (L) No.11941 of 2021 decided on 16 September 2021.
8 (2021) SCC Online 11967
Page No.9 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
12) Mr. Kamat, the learned Senior Advocate appearing for
Respondent Nos. 2 to 4 in Commercial Arbitration Appeal (L) No.12585
of 2025 and for Appellants in Commercial Arbitration Appeal (L)
No.16482 of 2025 would submit that his clients are mainly affected on
account of findings of tenancy recorded by the learned Single Judge in the
impugned judgment and order in favour of the garage occupiers. He would
submit that the findings recorded by the learned Judge are likely to be used
by the garage occupiers in order to buttress their tenancy claims in other
proceedings. That they are unauthorisedly occupying the garages and
cannot claim status as tenants. That his clients are entitled to seek eviction
of the garage occupiers for unauthorisedly using the garages for purposes
other than parking of vehicles. He would therefore submit that all the
observations made by the learned Single Judge in the impugned judgment
in respect of tenancy status of garage occupiers are required to be set aside.
13) Both the Appeals are strenuously opposed by Mr. Sawant, the
learned Senior Advocate appearing for Respondent Nos. 5, 7 and 8 (garage
occupants). He would submit that the learned Single Judge has rightly
refused to grant any relief in favour of the Appellant-Developer in Petition
filed under Section 9 of the Act in the light of well settled law that
provisions of Section 9 of the Act can only be in aid of subsequent
arbitration proceedings. That the learned Judge has recorded a specific
finding about the suggestion made for commencement of arbitration
proceedings being spurned by the Appellant-Developer. That the learned
Judge has rightly noticed absence of any intention on part of the
Appellants to commence or pursue the arbitration against the garage
occupiers. Relying on judgments of the Apex Court in Sundaram Finance
Ltd. Versus. NEPC India Ltd.9 and Firm Ashok Traders and Another Versus.
Gurumukh Das Saluja and Others10, he would submit that in absence of an
9 (1999) 2 SCC 479
10 (2004) 3 SCC 155
Page No.10 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
intention to go to arbitration, no interim measures can be made under
Section 9 of the Act. He would submit that the learned Judge has rightly
held that there is no real dispute between the Appellants and garage
occupiers, or between the Developer and Respondent Nos.2 to 4 or
between the Developer and the Society. That in absence of existence of any
dispute, which could ultimately be taken to arbitration, no interim
measures under Section 9 of the Act can be made. There is no agreement
for arbitration between the developer and the garage occupiers, who are
actually the tenants of Respondent Nos.2 to 4. That proceedings under
Section 9 of the Act are initiated with ulterior objective of putting to an
end the tenancy rights of the garage occupants, by adopting a shortcut
method. That the rights of his clients are not subservient to the obligations
of the Society and they enjoy independent right of occupation of the
premises in their possession. Allotment of open/surface parking spaces to
his clients would practically bring to an end to their tenancy rights as the
Maharashtra Rent Control Act, 1999 (the Rent Act) does not apply in
relation to open space. That Small Causes Court alone has jurisdiction to
decide cases covered by Section 41 of the Presidency Small Causes Courts
Act, 1882 and the tenancy disputes cannot be decided in arbitration. In
support, he has placed reliance of judgment of Full Bench of this Court in
Central Warehousing Corporation, Mumbai Versus. Fortpoint Automotive
Private Limited, Mumbai11. By relying on judgment in Suresh Shah Versus.
Hipad Technology India Private Limited12, he would contend that the dispute
between landlord and tenant is arbitrable only in the event of non-
application of special statute such as the Rent Act. So far as the Appeal
filed by Respondent Nos.2 to 4 is concerned, Mr. Sawant would submit
that the learned Judge has rightly recorded findings relating to tenancy
rights of his clients which do not warrant any disturbance by this Court in
11 2010 (1) Mh.L.J. 658
12 AIR OnLine 2020 SC 926
Page No.11 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
exercise of appellate jurisdiction. He would accordingly pray for dismissal
of both the Appeals.
14) Rival contentions of the parties now fall for our consideration.
15) The issue that arose before the learned Single Judge in
Commercial Arbitration Petition (L) No. 38696 of 2024, and which again
arises for our consideration, is whether interim measures under Section 9
of the Act can be made qua the garages, which are in occupation of
Respondent Nos.5 to 8/9, who admittedly do not use the garages for repair
of vehicles or for parking of vehicles, but use them for commercial
purposes. The position in respect of the four garages is as under :-
Garage No. Name of Occupant Respondent No. Existing carpet area
1 Haresh Doshi 5 194 sq.ft.
2 Ashu Farooq Sheir Haq 6 194 sq.ft.
Chodhury
who has allegedly handed over
possession to Ketki Shantilal
Desai 9
3 Dr. Amita Laxmidas 7 200 sq.ft.
Shenoy
4 Dilip K Limbad 8 105 sq.ft.
Appellant claims that Respondent No. 6 (Ashu Farooq Sheir Haq
Chodhury) has shown willingness to execute PAAA by accepting allotment
of surface car parking space on ownership basis. But since Respondent
No. 9 actually occupies the Garage No. 2, interim measures were sought
both against Respondent Nos. 6 and 9. It appears that Respondent No.6
has not opposed the Arbitration Petition before the learned Single Judge.
16) Respondent Nos. 5, 6 and 8 as well as Respondent No.9 claim
that they are inducted as tenants in respect of the above four garages by
Respondent Nos.2 to 4, who are the members of Respondent No.1-Society
Page No.12 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
in respect of 44 shops and 2 basements. So far as the fifth garage (Garage
No.5 admeasuring 200 square feet) is concerned, the occupant thereof has
not been impleaded as a party Respondent to the present proceedings
possibly on account of the fact that the occupant thereof does not have any
dispute with the Developer qua Garage No.5. Out of the 5 garages, the
dispute concerns only Garage Nos.1 to 4. As observed above, in respect of
Garage No.2 there are two claimants/occupants viz. Respondent No.6 and
Respondent No.9.
17) Development Agreement dated 21 May 2024 has been
executed between the first Respondent-Society as party of first part,
Respondent Nos.2 to 4 as confirming parties and the Appellant-Developer.
The Development Agreement also seeks to join all members of the Society
as well as tenants inducted by Respondent Nos.2 to 4 as parties of third
and fourth part respectively. However, perusal of copy of the Development
Agreement produced before the learned Single Judge does not indicate that
the Development Agreement is signed by each of the members or by each
tenant. The Development Agreement however includes the names of
garage occupiers in the Third Schedule to the Agreement. Under the
Development Agreement, rights of members and tenants have been
distinctly spelt out. Under Clause 7.4.3 of the Development Agreement,
following arrangement is made :-
“7.4.3.The Developers have further agreed to provide five (5) surface car
parking free of cost on ownership basis to the five (5) Tenants of the
enclosed garages as mentioned in the annexure being Annexure “T”
hereto and as shown on the tentative plans annexed hereto as Annexure
“L-2″. Save and except these 5 tenants, no other tenants shall be entitled to
any Car parking Spaces. The Car Parking spaces allotted in favour of the
Tenants shall be irrevocable and binding on the Society and its Members,
their successors and assigns from time to time.”
Page No.13 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
18) Thus, what is agreed to be provided to the five garage
occupiers is only five surface car parking slots on ownership basis as
against allotment of shops on ownership basis to the other tenants, who
were occupying shops/basement units in the old building. It appears that
on account of non-allotment of shops to the occupiers of the garages,
Respondent Nos. 5, 7 and 8 have refused to give consent in the
redevelopment process and have not handed over possession of their
respective garages to the Developer. Otherwise, all other members of the
Society as well as the tenants inducted by the Respondent Nos.2 to 4 in
respect of shops/basement units have already vacated premises in their
possession and the building has been pulled down by the Developer.
19) As of today, the structures of Garage Nos.1 to 4 are still
standing despite demolition of the entire building. The Appellant-
Developer has got plans for construction of new building sanctioned and
the portion of land covered by the 4 garages is apparently coming in the
way of construction of some portion of the new building. On account of
this position, the Developer filed Petition under Section 9 of the Act for
seeking possession of the Garage Nos.1 to 4 for their demolition to carry
out the redevelopment process.
20) The case presents a unique conundrum, where the occupants
of Garage Nos.1 to 4 are not members of Respondent No.1-Society.
Respondent Nos.2 to 4 are members of the Society qua the 44 shops
located on the ground floor of the building as well as premises in the
basement of the building. Though Respondent Nos.2 to 4 are also allottees
of the five enclosed garages, instead of parking vehicles in those garages,
they have inducted Respondent Nos. 5 to 8 in the four garages in addition
to one more person in respect of Garage No.5. As members of the first
Respondent-Society, Respondent Nos.2 to 4 are bound by the covenants of
the Development Agreement and in that sense, they have an obligation to
Page No.14 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
make available each inch of the premises in their possession for carrying
out redevelopment process. However, Respondent Nos.2 to 4 are unable to
deliver possession in respect of four garages on account of inductees not
cooperating in the redevelopment process on account of Developer not
agreeing to allot shop premises on ownership basis to them in the new
building.
21) In the light of above unique factual position, the questions
that arise for consideration are (i) whether persons using garages for
commercial purpose can obstruct redevelopment of the building by
insisting that they must be provided shops in the new building on
ownership basis; (ii) whether alleged rights of occupants of such garages
would be subservient to the obligations of the Society under the
Development Agreement and (iii) whether the Court exercising power
under Section 9 of the Act can make interim measures to ensure vacation
of possession by such garage occupiers, who are not signatories to the
Development Agreement containing arbitration clause.
22) Respondent Nos.5 to 9 are not signatories to the
Development Agreement and therefore it is contended that there is neither
any arbitration agreement between the contesting parties nor Respondent
Nos.5 to 9 are under any contractual obligation to handover possession of
garages in their occupation to the Appellant for development. However, the
first Respondent-Society is a signatory to the Development Agreement. It is
ultimately the owner of the land and the building. It is a tenant co-
partnership housing society, in which the ownership of the land and the
building is retained by the Society and the members essentially have
occupancy rights in respect of the flats/shops/units in the building of the
Society. Section 154B-1 (17) of the Maharashtra Cooperative Societies
Act, 1960, while defining the term ‘housing society’ classifies a tenant co-
partnership housing society as under :-
Page No.15 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025“tenant co-partnership housing society” means a society the object
of which is to allot the flats already constructed or to be
constructed to its Members and where both land and building or
buildings are held either on free-hold or lease-hold basis by the
society
23) In the present case, the land and the building is held on
freehold basis by the Society and it owns both. The members (Respondent
Nos. 2 to 4) who are allotted the four garages, merely have possessory
rights therein. They have inducted third parties (Respondent Nos. 5 to 8) in
the garages.
24) The covenants of the Development Agreement are binding on
the Society and its members. The issue about a Developer seeking interim
measures against a member of the Society who is not a signatory to the
Development Agreement, and who have not consented for redevelopment,
is no more res integra. This Court has repeatedly held that a non-co-
operative member of a co-operative housing society is bound by the
collective will expressed through the general body resolutions and that
therefore the covenants of Development Agreement would bind individual
member as well. It is also equally well settled that if a particular member
of the Society is not party to the Development Agreement, Court can make
interim measures against such non-co-operative member by having
recourse to the provisions of Section 9 of the Act.
25) In Girish Mulchand Mehta (supra), the Division Bench of this
Court has dealt with a situation where the Appellants therein were non-co-
operative members to the redevelopment process initiated by the Society.
They refused to handover possession of their respective flats, inter alia, on
the ground that they were not parties to the Development Agreement. The
Page No.16 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Developer took recourse to petition under Section 9 of the Act before the
learned Single Judge of this Court, who found that the two non-co-
operative members (Appellants therein) were causing obstruction resulting
in delay in redevelopment of the Society’s building. The Single Judge
therefore allowed the petition under Section 9 of the Act appointing Court
Receiver with power to take physical possession of the flats in question and
handing it over to the Developer for the purpose of demolition and
construction of the new building. In the Appeal preferred by the said two
non-co-operative members before the Division Bench, one of the issues
formulated was whether interim measures could be passed by the Court in
exercise of power under Section 9 of the Act only against a party to an
Arbitration Agreement or arbitration proceedings. The question so
formulated is reflected in para-12 of the judgment which reads thus :-
12. The next question is whether order of formulating the interim
measures can be passed by the Court in exercise of powers under
section 9 of the Act only against a party to an Arbitration
Agreement or Arbitration Proceedings. As is noticed earlier, the
jurisdiction under section 9 can be invoked only by a party to the
Arbitration Agreement. Section 9, however, does not limit the
jurisdiction of the Court to pass order of interim measures only
against party to an Arbitration Agreement or Arbitration
Proceedings; whereas the Court is free to exercise same power for
making appropriate order against the party to the Petition under
section 9 of the Act as any proceedings before it. The fact that the
order would affect the person who is not party to the Arbitration
Agreement or Arbitration Proceedings does not affect the
jurisdiction of the Court under section 9 of the Act which is
intended to pass interim measures of protection or preservation of
the subject-matter of the Arbitration Agreement.
26) The Division Bench answered the question so formulated in
paragraphs-16 and 18 of the judgment as under :-
16. In the present case, it is not in dispute that the General Body of
the Society which is supreme, has taken a conscious decision to
redevelop the suit building. The General Body of the Society has
also resolved to appoint the respondent No. 1 as the Developer.
Page No.17 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025Those decisions have not been challenged at all. The appellants
who were members of the Society at the relevant time, are bound
by the said decisions. The appellants in the dispute filed before the
Cooperative Court have only challenged the Resolution dated 27-4-
2008, which challenge would merely revolve around the terms and
conditions of the Development Agreement. As a matter of fact, the
General Body of the Society has approved the terms and
conditions of the Development Agreement by overwhelming
majority. Merely because the terms and conditions of the
Development Agreement are not acceptable to the appellants, who
are in minuscule minority (only two out of twelve members),
cannot be the basis not to abide by the decision of the
overwhelming majority of the General Body of the Society. By
now it is well established position that once a person becomes a
member of the Co-operative Society, he loses his individuality with
the Society and he has no independent rights except those given to
him by the statute and Bye-laws. The member has to speak through
the Society or rather the Society alone can act and speaks for him
qua the rights and duties of the Society as a body (see Daman
Singh v. State of Punjab, reported in (1985) 2 SCC 670 : AIR 1985
SC 973). This view has been followed in the subsequent decision of
the Apex Court in the case of State of U.P. v. Chheoki Employees
Co-operative Society Ltd., reported in (1997) 3 SCC 681 : AIR 1997
SC 1413. In this decision the Apex Court further observed that the
member of Society has no independent right qua the Society and it
is the Society that is entitled to represent as the corporate
aggregate. The Court also observed that the stream cannot rise
higher than the source. Suffice it to observe that so long as the
Resolutions passed by the General Body of the respondent No. 2
Society are in force and not overturned by a forum of competent
jurisdiction, the said decisions would bind the appellants. They
cannot take a stand alone position but are bound by the majority
decision of the General Body. Notably, the appellants have not
challenged the Resolutions passed by the General Body of the
Society to redevelop the property and more so, to appoint the
respondent No. 1 as the Developer to give him all the
redevelopment rights. The proprietary rights of the appellants
herein in the portion (in respective flats) of the property of the
Society cannot defeat the rights accrued to the Developer and/or
absolve the Society of its obligations in relation to the subject-
matter of the Arbitration Agreement. The fact that the relief
prayed by the respondent No. 1 in section-9 Petition and as granted
by the Learned Single Judge would affect the proprietary rights of
the appellants does not take the matter any further. For, the
proprietary rights of the appellants in the flats in their possession
would be subservient to the authority of the General Body of the
Society. Moreso, such rights cannot be invoked against the
Developer (respondent No. 1) and in any case, cannot extricate the
Society of its obligations under the Development Agreement. Since
the relief prayed by the respondent No. 1 would affect the
Page No.18 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
appellants, they were impleaded as party to the proceedings under
section 9 of the Act, which was also necessitated by virtue of Rule
803-E of the Bombay High Court (Original Side) Rules. The said
Rule reads thus:–
“R. 803-E.Notice of Filling Application to persons likely to be
affected.– Upon any application by petition under the Act,
the Judge in chambers shall, if he accepts the petition, direct
notice thereof to be given to all persons mentioned in the
petition and to such other persons as may seem to him to be
likely to be affected by the proceedings, requiring all or any
of such persons to show cause, within the time specified in
the notice, why the relief sought in the petition should not
be granted”.
18. We have no hesitation in taking the view that since the
appellants were members of the Society and were allotted flats in
question in that capacity at the relevant time are bound by the
decision of the General Body of the Society, as long as the decision
of the General Body is in force. As observed earlier, the appellants
have not challenged the decisions of the General Body of the
Society which is supreme, insofar as redevelopment of the property
in question or of appointment of the respondent No. 1 conferring
on him the development rights. The appellants have merely
challenged the Resolution which at best would raise issues
regarding the stipulations in the Development Agreement. The
General Body of the Society has taken a conscious decision which
in this case was after due deliberation of almost over 5 years from
August, 2002 till the respondent No. 1 came to be finally appointed
as Developer in terms of Resolution dated 2nd March, 2008.
Moreover, the General Body of the Society by overwhelming
majority not only approved the appointment of respondent No. 1
as developer but also by subsequent Resolution dated 27th April,
2008 approved the draft Development Agreement. Those terms and
conditions have been finally incorporated in the registered
Development Agreement executed by the Society in favour of
respondent No. 1. That decision and act of the Society would bind
the appellants unless the said Resolutions were to be quashed and
set aside by a forum of competent jurisdiction. In other words, in
view of the binding effect of the Resolutions on the appellants, it
would necessarily follow that the appellants were claiming under
the Society, assuming that the appellants have subsisting
proprietary rights in relation to the flats in their possession. It is
noticed that as of today the appellants have been expelled from the
basic membership of the Society. Their right to occupy the flat is
associated with their continuance as member of the Society. It is a
different matter that the decision of expelling the appellants from
the basic membership of the. Society will be subject to the outcome
of the decision of the superior authority where the appeals are
stated to be pending. If the decision of the Society to expel the
appellants is to be maintained, in that case, the appellants would
Page No.19 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
have no surviving cause to pursue their remedy even before the Co-
operative Court much less to obstruct the redevelopment proposal.
As a matter of fact those proceedings will have to be taken to its
logical end expeditiously. Even if the appellants were to continue as
members, they would be bound by the decision of the General
Body whether they approve of the same or otherwise. In any case,
keeping in mind that the Development Agreement does not
absolutely take away the rights of the appellants in the flats in
question, as after demolition of the existing building, the appellants
would be accommodated in the newly constructed flats to be
allotted to them in lieu of the existing flats, on the same terms as in
the case of other members, provided the appellants continue to
remain members of the Society. Under the Development
Agreement, the respondent No. 1 is obliged to complete the project
within 18 months from the date of receipt of full Commencement
Certificate from the Corporation. The full Commencement
Certificate would be issued only upon the vacant possession of the
entire building is delivered to the respondent No. 1 who in turn
would demolish the same with a view to reconstruct a new building
in its place. Significantly, out of twelve (12) members, ten (10)
members have already acted upon the Development Agreement as
well as have executed separate undertaking-cum-agreement with
the respondent No. 1 Developer. They have already vacated flats in
their occupation to facilitate demolition of the existing building
and have shifted to alternative transit accommodation as back as in
February, 2009. The project has been stalled because of the
obstruction created by the appellants herein who are in minuscule
minority. The said ten members of the Society who have already
shifted their premises, they and their family members are suffering
untold hardship. At the same time, the respondent No. 1 who has
already spent huge amount towards consideration of the
Development Agreement and incurred other incidental expenses to
effectuate the Development Agreement in addition will have to
incur the recurring cost of paying monthly rent to the ten members
who have already shifted to transit accommodation. The learned
Single Judge has noted that the appellants are not in a position to
secure the amount invested and incurred including the future
expenses and costs of the respondent No. 1 herein in case the
project was to be stalled in this manner. Even before this Court the
appellants have not come forward to compensate the respondent
No. 1 herein and the other ten members of the Society for the loss
and damage caused to them due to avoidable delay resulting from
the recalcitrant attitude of the appellants. Considering the impact
of obstruction caused by the appellants to the redevelopment
proposal, not only to the respondent No. 1 Developer but also to
the overwhelming majority of members (10 out of 12) of the
Society, the learned Single Judge of this Court opined that it is just
and convenient to not only appoint the Court Receiver but to pass
further orders for preservation as well as protection and
improvement of the property which is subject-matter of Arbitration
Page No.20 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Agreement. We have already noticed that the Court’s discretion
while exercising power under section 9 of the Act is very wide. The
question is whether in the fact situation of the present case it is just
and convenient to appoint Court Receiver coupled with power
conferred on him to take over possession of the entire building and
hand over vacant and peaceful possession thereof to the respondent
No. 1 who in turn shall redevelop the property so as to provide flats
to each of the members of the Society in lieu of the existing flats
vacated by them as per the terms and conditions of the
Development Agreement, as ordered by the learned Single Judge.
For the reasons noted by the Learned Single Judge which we have
reiterated in the earlier part of this decision, we find that it would
be just and convenient to not only appoint Court Receiver to take
over possession of the property but also pass further order of
empowering the Court Receiver to hand over vacant possession of
the suit building to the respondent No. 1 to enable him to complete
the redevelopment work according to the terms and conditions of
the Development Agreement.
(emphasis and underlining added)
27) The Division Bench in Girish Mulchand Mehta took note of
Rule 803E of the Bombay High Court Original Side Rules under which the
Court is empowered to direct issuance of notice to all persons who are
likely to be affected by the proceedings. The Division Bench held that
Court’s powers under Section 9 are very wide and accordingly upheld the
order of the Single Judge directing vacation of possession of flats even
though the Appellants therein were not signatories to the Development
Agreement. What is important are the findings recorded by the Division
Bench holding that the proprietary rights all members of the Society in
respect of the flats in their possession would be subservient to right
acquired by the developer under the Development Agreement and cannot
extricate the Society of its obligations under that agreement.
28) In our view, the judgment in Girish Mulchand Mehta clearly
lays down a law that covenants of Development Agreement would bind
even non-cooperative members, who are not signatories thereto and Court
can exercise power under Section 9 of the Act to direct handing over of
possession of the flats to the developer by such non-cooperative members
Page No.21 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
for the purpose of demolition and construction of new building. The
judgment in Girish Mulchand Mehta has consistently been followed in
various decisions of this Court and in order not to increase the length of
this judgment, we find it unnecessary to discuss ratio of all of those
judgments. This is how the issue of jurisdiction of Court exercising power
under Section 9 of the Act to make interim measures against member of
Co-operative Society who is not signatory to the Development Agreement
is well settled.
29) In the present case, we need to walk one more step further to
find out whether this principle can be invoked in respect of a person who is
not only alien to the Development Agreement but is also not a member of
the Society. Respondent Nos.5 to 8 are not members of the first
Respondent-Society. They claim to be the tenants of Respondent Nos. 2 to
4, who are members of the first Respondent-Society. Respondent No.9 is
an inductee by one such alleged tenant (Respondent No. 6). Appellant-
Developer claims that Respondent No. 6 is willing to sign the PAAA. We
need not delve further into the arrangement/rights inter se between
Respondent Nos.2 to 4 (alleged landlords), Respondent No.6 (alleged
tenant) and Respondent No.9 (Occupant of Garage No.2). What
Respondent Nos.5 to 9 possess are mere garages and their alleged landlords
(Respondent Nos.2 to 4) are members of the Society whose membership is
restricted to other units/shops in the building.
30) Therefore, the issue for consideration is whether Respondent
Nos.5 to 9 can put a spoke in the redevelopment process of the building of
the first Respondent-Society by insisting that they would remain outside
the redevelopment process by continuing to hold possession of the garages
in their occupation. There is no dispute to the position that though the four
garages continue to exist, as of now, despite demolition of the entire
building, they are located on such portion of the land, on which part of the
Page No.22 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
new building would come up. Mere possibility of retention of the four
garages despite demolition of the old building would not mean that the
garages are not coming in the way of redevelopment process. Thus,
retention of structures of the four garages would undoubtedly hamper the
construction of the new building on the plot.
31) In Shree Ahuja Properties Pvt. Ltd. (supra), Single Judge of this
Court has considered the issue as to whether an occupier of a garage, who
has put the garage to commercial use, can oppose redevelopment process
of Society’s building. The developer, in whose favour the Society executed
the Development Agreement, filed a suit in which Notice of Motion was
taken out for appointment of Court Receiver in respect of the flats and
garages occupied by Defendants who were not cooperating with the
redevelopment process. So far as the garages were concerned, the issue
before the learned Single Judge was whether the garage occupiers using the
garages for commercial purpose could obstruct the redevelopment by
refusing to vacate the garages. The Single Judge of this Court held in para-
36 as under :-
36. In my view, garages will and must remain garages unless they
are converted within the framework of the law for other uses. Their
construction, existence was meant for a particular purpose. If it is
not being put to use for that purpose and is intended to be used for
some other purpose, a change of user has to be authorized. That
authority is the Planning Authority. The Municipal Corporation in
the case at hand has not issued any conversion order and in that
behalf suffice it to say that absent an order for conversion of the
motor vehicle garage, merely on the basis of long and unauthorized
use for commercial purposes, cannot justify continuance of such
use and a demand for being provided with alternate space in a
structure that does not exist today and for commercial use which is
presently unauthorized. The case of defendant nos.5 to 7 cannot
therefore succeed. They have been offered alternate residential
space to the extent of their entitlement and they cannot insist on
being allotted commercial space in the new structure in which no
provision is made for such space. Any such permanent alternate
space would necessarily have to flow from two factors; firstly, the
existence of commercial space and with the consent of the society
in a new building. Both these aspects are not to be found in the casePage No.23 of 44
1 July 2025::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025at hand. Thus, in my view, the attempt of the defendant nos.5 to 7
to secure commercial space in the new building to be constructed
by obstructing redevelopment through their refusal to vacate the
premises cannot succeed.
(emphasis added)
The learned Single Judge, while deciding Shree Ahuja Properties Pvt. Ltd.,
has relied upon ratio of the judgment of the Division Bench in
Girish Mulchand Mehta (supra).
32) The judgment of the Single Judge in Shree Ahuja Properties
Pvt. Ltd. was carried in appeal before the Division Bench by one of the
garage occupiers. The father of the said garage occupier was initially a
owner of a flat in the building and also a member of the Society and later
purchased Garage No.12. While the flat was sold, only the said garage was
retained and put to commercial use. While challenging the judgment of the
learned Single Judge before the Appeal Court, the Appellant-garage
occupier insisted that since the garage was being put to commercial use by
securing several licenses without objection by any party, including the
Planning Authority, he must be allotted commercial premises in lieu of the
garage in the new building to be constructed by the developer. The Division
Bench in Rajesh Mishra (supra) formulated following two questions for
consideration in para-17 of the judgment and set out the rival positions of
the parties in para-18 as under :-
17. The two issues which arise for our consideration in the present Appeal
are as follows :
ISSUE-1
(i) Are the Appellants entitled to claim commercial premises in lieu
of the suit Garage in the proposed new building on the suit
property?
ISSUE-2
Page No.24 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
(ii) Was the learned Single Judge justified in directing the Court
Receiver to take over possession of the suit Garage for the purposes
of demolition of the same ?
18. With respect to the first issue which we have framed above, as we have
noted, the Appellants contend that the suit Garage is an authorised
commercial unit, whereas the developer and the Trilok Society contend
that the same is merely a car parking space which has been illegally
converted into a commercial unit by the Appellants and their family
members.
33) The Division Bench in Rajesh Mishra considered the
definition of the term ‘garage’ in Regulation 2(68) of the DCPR 2034 and
upheld the findings recorded by the learned Single Judge by holding in
paras-21 and 22 as under :-
21. In this view of the matter, we find that there is nothing placed on
record by the Appellants which would assist us in concluding that they are
authorised to use the suit Garage as commercial premises. On the
contrary, the sanctioned plans of the garages on the suit property, the
authenticity of which has been confirmed by the MCGM, would prima
facie show that the same are constructed as garages. Regulation 2(68) of
the Development Control and Promotion Regulations, 2034 for Greater
Mumbai define ‘garage’ as follows :
“Garage” means a place within a project having a roof and walls on
three sides for parking any vehicle, but does not include an
unenclosed or uncovered parking space such as open parking
areas.”
A garage is clearly meant to be a space meant to park vehicles. That is how
it is understood in ordinary parlance, as well as under the provisions of the
development control regulations. In the face of the same, we do not think
that the Appellants can today claim as a matter of right that the suit
Garage under their occupation is an authorised commercial unit.
22. At this stage we may note that it was also the stand of the MCGM
before the learned Single Judge that the suit Garage is only a car parking
space and not a commercial unit. The MCGM has taken action in that
regard and has issued a notice and an order under section 351 of the
MMC Act, holding the user of the suit Garage as a commercial unit to be
unauthorised. These are of course the subject matter of adjudication in L.
C. Suit No. 1266 of 2014 filed by the Appellants before the Bombay City
Civil Court at Dindoshi.
Page No.25 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
34) In the present case, the learned Single Judge has distinguished
the judgments in Shree Ahuja Properties Pvt. Ltd. and Rajesh Mishra by
observing that the developer in that case had agreed to provide residential
premises to the garage occupants, which is not the agreement in the present
case. In our view, the core issue before the Single Judge and Division
Bench was about permissibility for a garage occupier to obstruct the
redevelopment process and entitlement of a developer to seek interim
measures against such garage occupier in proceedings under Section 9 of
the Act. The case did not revolve around the issue as to whether the garage
occupier’s entitlement to receive residential or commercial premises.
Allotment of residential premises to the garage occupier was just an
additional factor in that case. The core issue however was about grant of
interim measures in Section 9 proceedings against a garage occupier who
was not Society’s member and not a signatory to the Development
Agreement. In our view therefore, mere existence of agreement to provide
residential premises to the garage occupier in Shree Ahuja Properties Pvt.
Ltd. and Rajesh Mishra cannot be a reason to depart from the findings
recorded in the said judgment that garages must remain garages, unless
they are converted within the framework of law for residential/commercial
uses. In Shree Ahuja Properties Pvt. Ltd. the learned Single Judge has held
that ‘….merely on the basis of long and unauthorized use for commercial
purposes, cannot justify continuance of such use and a demand for being
provided with alternate space in a structure that does not exist today and for
commercial use which is presently unauthorized.’ Thus, the issue decided by
the learned Single Judge is about right to receive ‘alternate premises’ in lieu
of a garage. The insistence of the garage occupier in that case, who was
allotted residential premises, for a commercial shop, was just an additional
factor in that case, and we find it difficult to ignore the core ratio in the
judgment about right of a garage occupier to have ‘any alternate premises’
allotted in lieu of a garage unauthorisedly put to commercial use. These
Page No.26 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
findings are upheld by the Division Bench and would bind us. We are
therefore in agreement with the views expressed by the learned Single
Judge in Shree Ahuja Properties Pvt. Ltd. as confirmed by the Division
Bench in Rajesh Mishra that an occupier of a garage, who has put the
garage to commercial use, cannot insist for grant of alternate space in
redeveloped building and more importantly, cannot obstruct redevelopment
process by refusing to handover possession of garages in their occupation.
Also of relevance is the fact that the garage occupier in that case had
purchased the garage and was claiming ownership in the same, whereas in
the present case Respondent No. 5 to 8 are not even the owners of the
garages and merely claim tenancy rights therein. If an owner of a garage,
put the garage to commercial use, cannot to obstruct redevelopment of
Society’s building, we see no reason how a person claiming mere tenancy
rights in a garage can be put on a higher pedestal and can be permitted to
cause obstruction to redevelopment, especially when the owner of the
garage is cooperating with redevelopment process.
35) The issue of nature of occupation of garage occupier and
rights flowing out of such occupation has been dealt with by the Division
Bench of this Court in Kankubai Harakhlal Jain (supra). In that case, the
subject structure was a garage from which the business of jewellery was
being conducted. It was therefore contended that though the premises were
colloquially known as a garage but were essentially a commercial structure.
Reliance was placed on categorisation of premises in the municipal
assessment as ‘non-residential’. When the garage occupier raised a claim for
allotment of commercial structure in lieu of the garage in his occupation
and petitioned this Court, the Division Bench observed in para-4 of the
order as under :-
Page No.27 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
4. As far as the structure goes, once it is styled as a garage, then, the
user thereof cannot determine the entitlement of the petitioners.
The petitioners have failed to establish any legal right in seeking an
alternate commercial structure against their occupancy of a garage.
The term “garage” has a specific legal connotation. In the
Development Control Regulations, it is either understood as an
area or premises for repairing of vehicles or parking of vehicles by
enclosing the same. It is, therefore, understood as a parking space
enclosed or unenclosed, covered or open area. In these
circumstances, we do not think that any relief can be granted to the
petitioners once they have no legal right either to occupy a garage
and thereafter use it for commercial purpose and based on such a
user in the old building, claim alternate commercial area on a
permanent basis. Neither any law, rule, regulation or scheme has
been shown to us which guarantees such entitlement.
(emphasis added)
36) The findings recorded by the Division Bench in Kankubai
Harakhlal Jain have been taken note of by the Division Bench while
deciding Rajesh Mishra (supra).
37) In M/s. Calvin Properties and Housing (supra), the learned
Single Judge of this Court has decided the petition under Section 9 of the
Act by making interim measures of appointment of Court Receiver inter
alia in respect of a garage and handing it over for completing the process of
redevelopment. The Single Judge relied upon judgment of the Division
Bench in Girish Mulchand Mehta and held that interim measures under
Section 9 of the Act can be made even against a party who is not a
signatory to the arbitration agreement. It has held in para-28 as under :-
28. On perusal of the prayers in the arbitration petition, it is clear
that petitioner seeks appointment of Court Receiver and
mandatory injunction against respondent Nos.2 to 6C in respect of
the premises in their occupation. It is thus clear beyond reasonable
doubt that any order if passed in this petition as prayed, respondent
Nos.2 to 6C would be affected. Such parties are thus rightly
impleaded as parties to the present petition and are given an
opportunity of being heard and to oppose this petition. Without
going into the larger issue whether respondent No.2 to 6C are party
to the arbitration agreement or not, not being signatories to thePage No.28 of 44
1 July 2025::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025development agreement, in view of the fact that each of these
respondents are claiming through respondent No.1 society in
respect of the properties of the society in which these members
have subservient rights and in view of the fact that any orders that
would be passed in these proceedings would seriously affect the
rights of the respondent Nos.2 to 6C, such interim measure can be
granted by this Court under Section 9 of Arbitration Act against
such parties even if they are not parties to the arbitration
agreement. In my view there is no merit in the submission made by
the learned counsel appearing for respondent Nos.2 to 5 and
reliance placed by the learned counsel appearing for the
respondents on the Judgment of Supreme Court in case of
Indowind Energy (supra) would be thus of no assistance to the
respondents.
38) Going further, the learned Single Judge in M/s. Calvin
Properties and Housing, has considered the issue as to whether a garage
occupier can be granted compensation in the redevelopment process and
held that inter se disputes between the garage occupier with the developer
or Society needed to be decided in appropriate proceedings and that the
Court exercising jurisdiction under Section 9 of the Act cannot adjudicate
upon merits of all individual claims of members of the Society. This Court
held in para-35 as under :-
35. On perusal of the record, it appears that the grievance made by
respondent Nos.2 to 6C is regarding the area offered by the petitioner
to respondent Nos.2 to 6C in lieu of existing area in their occupation.
The dispute has been raised also in respect of the compensation in lieu
of the garage occupied by one of the member. In support of this
submission, respondent Nos.2 to 5 placed reliance on the Judgment of
Supreme Court in case of Nahalchand Laloochand Pvt. Ltd. Vs.
Panchali Co-operative Housing Society Ltd. (supra) on the issue
whether flat includes a garage or not. In my view, 31 members of the
society not having disputed the provisions of development agreement
and the society not opposing the reliefs prayed by the petitioner,
dispute if any interse between respondent Nos.2 to 6C with the
developer or with the society will have to be decided finally in
appropriate proceedings. During the course of argument upon making
enquiry from the learned counsel appearing for respondent No.2 to 5
as to whether they were agreeable to appear before the arbitral
tribunal and make their claim if any in arbitration proceedings against
the developer or the society, respondent Nos.2 to 5 did not agree to
appear before arbitral tribunal and to seek redressal of their grievance
Page No.29 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
against the developer or the society. In my view, in these proceedings
under Section 9 of Arbitration and Conciliation Act, this Court
cannot adjudicate upon the merits of individual claims of the
respondents members of the society and the same can be adjudicated
only in appropriate proceedings. In these proceedings only interim
measures can be granted by this Court. This Court is thus not
adjudicating on the issue raised by respondent Nos.2 to 6C whether
they are entitled to any larger area as claimed. In view of the fact that
more than 3/4th majority of members have passed resolution and
have agreed to appoint the petitioner as developer on the terms and
conditions agreed upon and recorded in development agreement, in
my view, respondent Nos.2 to 6C cannot stop the redevelopment
project.
39) In our view, therefore the principles that can be deduced on
combined reading of the judgments in Girish Mulchand Mehta, Kankubai
Harakhlal Jain, Shree Ahuja Properties Pvt. Ltd., Rajesh Mishra and
M/s. Calvin Properties and Housing are as under:-
(i) An occupier of a garage, who has put the garage to commercial
use, cannot insist on allotment of any space in the redeveloped
building.
(ii) Occupier of such a garage cannot obstruct the redevelopment
process of the building and such obstruction can be removed by the
Court by appointing Court Receiver with power of taking over
possession of garage and handing it over to the Developer for
demolition and construction of the new building.
(iii) The Court exercising power under Section 9 of the Act can
make interim measures against a person who is not party to the
Development Agreement by directing him to handover possession of
his premises for completion of redevelopment process.
Page No.30 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
(iv) Existence of any dispute inter se between members of Society or
between a member and his inductee would not deter the Court
exercising power under Section 9 of the Act from ensuring that the
redevelopment process continues unhindered despite existence of
such dispute.
40) In our view, therefore the Court exercising power under
Section 9 of the Act would be perfectly justified in making interim
measures against an occupier of a garage even though such garage occupier
may not be signatory to the Development Agreement.
41) It must also be borne in mind that a garage is usually
sanctioned in a building being used as parking facility to the owner of
flat/shop in that building. The garages cannot be independently sold to a
person not occupying any flat/shop/unit in the building. In the present
case, therefore the existence of the five garages in the building are
essentially interlinked with the ownership of flats/units by Respondent
Nos.2 to 4 in that building. Respondent Nos.5 to 8 claim that they are
inducted as tenants in respect of the garages by Respondent Nos. 2 to 4 and
in that sense, they admit that Respondent Nos. 2 to 4 continue to possess
some rights in respect of the garages in question. By recognising that right,
Respondent Nos.5 to 8 have apparently been paying rent to Respondent
Nos.2 to 4. This right of Respondent Nos.2 to 4, which is recognised by
Respondent Nos. 5 to 8, is clearly interlinked to the other shops/units
owned by Respondent Nos.2 to 4 in the Society’s building. Thus, the
concerned garages are essentially constructed for the purpose of providing
parking facility to Respondent Nos.2 to 4, who own other shops/units in
the building. Respondent Nos.2 to 4, as members of the first Respondent-
Society, are bound by the covenants of the Development Agreement and
they do not even dispute this position. They are contractually bound to
Page No.31 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
handover possession of their premises in respect of which they have right
in the building of the Society. Once they handover possession of
shops/units, they are also equally bound to handover possession of garages
meant for those shops/units. It cannot be that Respondent Nos.2 to 4
would handover only the possession of shops and units but continue to
hold possession of the four garages. Respondent Nos.5 to 8 as well as
Respondent No.9 claim privity of contract with Respondent Nos.2 to 4. It
is their private arrangement, which will not have any impact on the
contractual obligation that binds Respondent Nos.2 to 4 qua the Society
and the developer. Therefore, irrespective of the arrangement which
Respondent Nos.2 to 4 may have made with Respondent Nos. 5 to 8, once
possession of all the shops/units in the building is handed over for
redevelopment, it is inconceivable that either Respondent Nos. 2 to 4, or
any party claiming through them, can ever continue to hold on to the
possession of the four garages constructed for parking facility of
Respondent Nos.2 to 4. In our view, therefore the garages constructed for
parking of vehicles must go alongwith shops/units for whose benefit the
garages have been constructed. The rights, if any, of Respondent Nos.5 to
8 or of Respondent No.9 in respect of the four garages in question would
always remain subservient to the developer’s right under the development
agreement and also to the contractual obligations of the Society.
42) If we recognise a principle that an occupier inducted by a
member of a co-operative housing society can claim independent right
against a developer, we would be causing violence to the ratio of the
Division Bench judgment in Girish Mulchand Mehta. If the right of
independent member of the Society remains subservient to the contractual
obligations of the Society towards the Developer, we do not find any
reason why a mere occupier inducted by such member would have higher
right than the member himself qua the Developer. We can site numerous
illustrations in support of our finding that every right of a person claiming
Page No.32 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
through the original member would remain subservient to the contractual
obligation of the society towards a Developer. The first illustration can be
that of a licensee (gratuitous or otherwise) inducted by a member of the
Society. If member of the Society agrees to handover possession of his flat
in pursuance to a Development Agreement executed by the Society and his
licensee refuses to vacate the flat, the Court exercising power under Section
9 of the Act would have the necessary jurisdiction to secure possession of
the flat from such licensee and hand it over to the Developer for
completion of the redevelopment process, notwithstanding the fact that
there is no arbitration agreement between the licensee and developer. The
rights, inter se, between the member and the licensee needs to be agitated in
independent proceedings. The second illustration we can refer to is where
there is a dispute between a senior citizen and his child and provisions of
the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 are
invoked or where there is a dispute between husband and wife and
provisions of Protection of Women from Domestic Violence Act, 2005 are
invoked. If in those proceedings, an injunctive relief is secured protecting
occupation of a flat in a Society which has gone for redevelopment, such
injunctive order would not obstruct the redevelopment process and while
the rights inter se between senior citizen and child or husband and wife can
be adjudicated independently, the possession of a flat in question needs to
be handed over to the Society, who is under contractual obligation with the
Developer to complete the redevelopment process. In such cases, the so-
called rights of senior citizen or of the spouse would always remain
subservient to the developer’s right and also to the contractual obligations
of the Society and would not extricate the Society of its obligations under
the development agreement. Following these principles in our view the
alleged tenancy rights claimed by Respondent Nos.5 to 8 or by Respondent
No.9 would not extricate the Society of its contractual obligations under
the Development Agreement. The Court exercising power under Section 9
of the Act in such cases would be perfectly justified in making interim
Page No.33 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
measures for securing possession of the premises in question without
awaiting resolution of dispute inter se between a senior citizen and child or
between the spouses.
43) Also of relevance is the fact that no steps have been taken by
Respondent Nos.5 to 8 to establish their tenancy rights qua the garages in
question by filing any proceedings before the Small Causes Court under the
provisions of the Rent Act. There is a dispute between Respondent Nos.2
to 4 and Respondent Nos.5 to 8 about existence of such tenancy rights.
Respondent Nos.2 to 4 claim that tenancy cannot be created in respect of
mere garages, whereas Respondent Nos.5 to 8 claim that having accepted
rent for them and having not objected to commercial use for several years,
Respondent Nos.2 to 4 are estopped from questioning the tenancy rights.
In the light of this dispute, it was necessary for Respondent Nos.5 to 8 to
secure a declaration from Rent Court about existence of their tenancy
rights. However, no steps have been taken by Respondent Nos.5 to 8 for
establishment of their tenancy rights. Mere failure on the part of
Respondent Nos.2 to 4 to secure eviction decree against Respondent Nos.5
to 8 cannot be a reason enough to relieve the society of its contractual
obligation of handing over every inch of space and constructed portion on
the plot of land to the developer for completing redevelopment process as
per the Development Agreement. The society would ultimately incur the
liability towards the developer for delay in execution of the development
process. The Society, being the owner of land and building, must perform
the contractual obligation by handing over possession of the entire land
and building for completion of the redevelopment process. It is for
Respondent Nos.5 to 8 or for Respondent No.9 to initiate such remedies as
may be available in law against their alleged landlords (Respondent Nos.2 to
4) in respect of the alleged rights created in their favour in respect of the
four garages. However, till such right gets established or adjudicated, it will
Page No.34 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
be too far-fetched to hold that the redevelopment process should be put on
hold. What is sought to be done in the present case is that the four garage
occupiers, whose right to use the garages for commercial purposes as well
as tenancy rights are questionable, continue to hold the redevelopment
process of Society’s building to ransom. This cannot be countenanced in
law and Court exercising power under Section 9 of the Act would not be
without jurisdiction in ensuring that possession of the four garages are
handed over to the developer for demolition and construction of the new
building.
44) The Development Agreement provides for allotment of four
surface car parking spaces in lieu of the four garages. Ordinarily, the four
car parking spaces would go to Respondent Nos.2 to 4 for use as parking
facility in respect of the other flats/shops/units that would be allotted to
them in the building. However, the Development Agreement provides for
granting possession of such surface car parking spaces to Respondent
Nos.5 to 8 and Respondent No. 9. This is an internal arrangement between
Respondent Nos.2 to 4 and Respondent Nos.5 to 8, to which apparently
Respondent Nos. 2 to 4 have not objected. In other words, Respondent
Nos.2 to 4 are agreeable to an arrangement where the garage occupiers
would receive allotment of four surface car parking spaces. We need not
delve into the legality of this arrangement, which is not the scope of the
present Appeal.
45) It is sought to be argued on behalf of Respondent Nos.5 to 8
that allotment of open parking spaces to them under the Development
Agreement would ultimately result in extinction of tenancy rights in
respect of the four garages. In our view, the alleged inter se rights between
the members of the society (Respondent Nos. 2 to 4) and their inductees
(Respondent Nos.5 to 8/9) qua the garages need not hold the
Page No.35 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
redevelopment process of the building. Whether Respondent Nos.5 to 8 are
tenants in respect of the garages and what relief they can seek against
Respondent Nos. 2 to 4 is something that must be resolved in some other
proceedings. Existence of such dispute would not relieve the Society of its
contractual obligations under the Development Agreement. As discussed
in an illustration above, if there is a gratuitous licensee who claims tenancy
rights against a member of the Society, existence of disputes inter se
between such licensee and member will not extricate the society of its
contractual obligations under the Development Agreement. Similar would
be the position governing inter se disputes between Respondent Nos.2 to 4
on one hand and Respondent Nos.5 to 8 and Respondent No. 9 on the
other. Infact as compared to a mere licensee claiming tenancy rights
against the member of the Society, the position of Respondent Nos.5 to 8 is
far worse as they have the uphill task of crossing two hurdles (i) to establish
that any tenancy can ever be created in respect of a mere garage, which is
not sanctioned by the planning authority for use for commercial purpose
and (ii) whether such tenancy was indeed created or not. We do not wish to
delve any deeper into this aspect as that is not the scope of the present
appeal and will leave all the issues concerning the disputes of existence of
alleged tenancy rights open to be decided in appropriate proceedings. If
indeed Respondent Nos.5 to 8 succeed in establishing tenancy rights qua
the garages and in the redevelopment process, they loose right of securing
alternate premises (although they are being provided with four open car
parking spaces) it is for Respondent Nos. 5 to 8 to sue their alleged
landlords (Respondent Nos.2 to 4) and seek such reliefs against them as
may be permissible in law. But in no case, a garage occupier can ever be
permitted to stall the redevelopment process of the Society’s building. Mere
likelihood of extinction of alleged tenancy rights on account of
redevelopment process cannot be a reason to hold up the entire
redevelopment process.
Page No.36 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
46) There is yet another reason why mere threat or possibility of
Respondent Nos. 5 to 8 loosing tenancy rights upon allotment of surface
car parking spaces in the new building need not detain the redevelopment
process. If a person who has purchased a garage can be directed to vacate
the same in exercise of power under Section 9 of the Act (as is done in
various judgments discussed above), we do not see any reason why
Respondent Nos. 5 to 8, whose tenancy rights in respect of mere garages is
questionable and who are yet to establish their tenancy rights, can obstruct
the redevelopment process of society’s building.
47) In a case where there is no dispute about entitlement for
allotment of alternate premises in a redeveloped building, necessary
arrangements can be made between the warring parties during currency of
redevelopment process. In fact, this Court has consistently taken a view
that a person who is actually in possession of old premises cannot be
dispossessed only on account of redevelopment of the building and it is
often ensured that such person is not only put back in possession of the
new premises, but is also paid the transit rent for making temporary
arrangement during currency of construction of new building. By making
such arrangement, the Court ensures that redevelopment process does not
result in dispossession. In a typical case between a member of the Society
and a licensee/relative in occupation, this Court has repeatedly ensured
that while PAAA is executed in favour of the member, possession of new
flat/shop is handed over and transit rent is paid to the licensee/relative in
occupation by leaving open the dispute of eviction to be decided by a
Court of competent jurisdiction. However, this arrangement is possible
only where there is absolutely no dispute about grant of alternate premises
in lieu of old premises and the only dispute is who would receive
possession thereof. In the present case however, the whole dispute is
whether any alternate flat/shop/unit can be allotted in lieu of mere
parking space/garage. Prima facie, a garage occupier putting the garage to
Page No.37 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
unauthorised commercial use, cannot be provided with alternate premises
in the new building. Therefore development of Society’s building cannot be
held up till dispute between the garage occupiers and their owners
(members) is resolved and it would be for garage occupiers to adopt
appropriate remedies by suing their inductor/member of the Society for
appropriate reliefs for grant of alternate premises or for damages. However,
under no circumstances, such garage occupiers can withhold the process of
redevelopment of the building of the Society.
48) It is strenuously contended on behalf of Respondent Nos. 5 to
8 that interim measures under Section 9 of the Act cannot be made where
there is no intention on the part of the Appellant-Developer or Respondent
Nos.2 to 4 to proceed with arbitration. Reliance is placed on judgments of
the Apex Court in Sundaram Finance Ltd. (supra) and Firm Ashok Traders
(supra). No doubt the law is well settled that the Court must be satisfied
before passing interim order under Section 9 of the Act that there is
intention on the part of the parties to go for arbitration and such intention
must be manifest from the beginning. In para-9 of the impugned judgment,
the learned Single Judge has observed that upon a suggestion made by the
Court about willingness of parties to proceed with arbitration, the same
was turned down. Though para-9 of the judgment does not attribute
expression of such unwillingness to any particular party, the learned Single
Judge has observed that there is no inter-se dispute for which arbitration
can be invoked. While there can be no dispute about the proposition that
power under Section 9 of the Act for making interim measures can be
exercised only where parties ultimately proceed for arbitration, however, in
the present case it is difficult to hold that there is no possibility of any
arbitration between the parties. There is a contractual clause for recovery
of damages for delay in handing over of possession. Whether such
damages are indeed payable in the present case and which party is liable to
Page No.38 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
pay such damages is something which needs to be decided in the
arbitration. However, what needs to be ensured as of now is that the entire
redevelopment process is not held up only on account of existence of
alleged disputes between the members (Respondent Nos.2 to 4) and their
inductees (Respondent Nos.5 to 8 and Respondent No. 9). We are therefore
not impressed by the submissions made on behalf of Respondent Nos. 5, 7
and 8 that the arbitration petition deserved dismissal on account of
unwillingness shown by the parties before the learned Single Judge to go
for arbitration. The Appellant-Developer has expressed willingness to
commence arbitration for seeking damages for delay in execution of the
project.
49) Respondent Nos.2 to 4 have also filed their own independent
Appeal [Commercial Arbitration Appeal (L) No.16482/2025] challenging
the impugned judgment of the learned Single Judge to the limited extent of
the observations made and findings recorded relating to tenancy rights of
Respondent Nos. 5 to 8 and Respondent No.9 and need for their eviction
only through the Rent Court. As observed above, neither the learned Single
Judge while exercising jurisdiction under Section 9 of the Act nor this
Court while exercising appellate jurisdiction needs to decide dispute
relating to tenancy rights between Respondent Nos.2 to 4 and Respondent
Nos.5 to 8/9. The same needs to be adjudicated by a Court of competent
jurisdiction. Therefore it needs to be clarified that nothing observed by the
learned Single Judge in the impugned judgment and order dated
1 April 2025 would be read to mean as if tenancy rights of Respondent
Nos. 5 to 8 qua the garages is upheld. The issue is left open to be decided in
appropriate proceedings and the Court deciding such objections would not
be bound/influenced by any of the findings recorded in the impugned
judgment.
Page No.39 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
50) Mr. Sawant has relied on judgment of Full Bench of this
Court in Central Warehousing Corporation, Mumbai (supra) in which it is
held that the Court of Small Causes has the exclusive jurisdiction to try
and decide the case covered by Section 41(1) of the Presidency Small
Causes Courts Act and that mere existence of arbitration agreement
between the parties as well as non-obstante clause in Section 5 of the
Arbitration Act does not oust exclusive jurisdiction of the Court of Small
Causes. All that is held by the Full Bench of this Court is that issues
relating to tenancy, eviction etc. cannot be decided in arbitration, when
premises are protected under special statute. The judgment, far from
assisting the case of Respondent Nos.5 to 8, actually militates against
them. What they need to do is to file a declaratory suit in the Court of
Small Causes seeking declaration of their tenancy rights in respect of the
four garages and claim appropriate reliefs against their alleged landlords.
As observed above, mere existence of disputes inter-se between the owner
of garages (Respondent Nos. 2 to 4) and their inductees (Respondent Nos.
5 to 8) to claim their tenancy rights, cannot be a reason for obstructing
redevelopment process of Society’s building. Reliance by garage occupiers
on the judgment of the Apex Court in Suresh Shah (supra) is again
inapposite. In that judgment, it is held that a dispute is non-arbitrable
where the matters relating to eviction or tenancy are governed by special
statute and where tenants enjoy statutory protection against eviction. The
judgment is cited in support of the submission that proceedings under
Section 9 of the Act cannot be invoked to seek eviction of a statutory
tenant. However, in the present case, there is dispute about tenancy rights
of Respondent Nos.5 to 8. That dispute needs to be adjudicated. Infact, the
dispute is of twin nature, as held above, viz. (i) whether there can be
tenancy in respect of a parking garage and (ii) whether the tenancy has
indeed been created or not. It is only after a declaration of tenancy in
favour of Respondent Nos.5 to 8 is made by a Court of competent
jurisdiction that eviction of such protected tenant can be effected through a
Page No.40 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
Court of competent jurisdiction. As of now, what is being effected is mere
temporary displacement of every member, tenant and occupier of
flats/shops/units/premises/garages so as to undertake redevelopment
process of the building. The tenants, whose tenancy is not disputed, are
already provided alternate premises in the newly constructed building. As
of now, since there is dispute about tenancy rights of Respondent Nos.5 to
8 on account of their occupation of mere garages and therefore a provision
is made for surface car parking spaces to them in the newly constructed
building. Respondent Nos. 5 to 8 need to get their rights adjudicated
against Respondent Nos.2 to 4 in appropriate Court of law. All that is
being ensured, as of now, by exercise of power under Section 9 of the Act,
is to ensure that occupancy of Respondent Nos.5 to 8 in respect of the
garages does not come in the way of redevelopment of the Society’s
building. This can, by no stretch of imagination, be termed as eviction of
Respondent Nos.5 to 8.
51) The building of the Society was in a dilapidated condition.
The MCGM had issued notice under Section 354 of the MMC Act for
pulling down the building. The entire building has accordingly been pulled
down except the four garage structures. Merely because the Appellant-
Developer was in a position of demolishing the entire building without
disturbing the four garages, it would not mean that the redevelopment of
the building can be carried out by retaining the structures of the said four
garages. As observed above, the plans for new building are to be prepared
in such a manner that some portion of the new building will have to be
constructed on the land on which the garages currently stand. In our view
therefore handing over possession of the four garages to the Appellant for
demolition is necessary so as to ensure that the Society and its members
fulfill their contractual obligations under the Development Agreement.
The learned Judge has repeatedly made reference to the attempts made by
the Court to ensure that some premises in the new building could be
Page No.41 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
reserved for Respondent Nos.5 to 8 and Respondent No. 9 and such
attempts have not fructified in positive outcome. If that was the position,
the Court could have made appropriate interim arrangements by exercising
jurisdiction under Section 9 of the Act rather than disposing off the
petition without grant of any relief and by directing the Appellant-
Developer and the Society to carryout construction of the new building
without affecting the structure as well as free independent access to the
four garages. While doing so, it appears that the Court has not noticed the
fact that the construction of the new building is not possible without
demolition of the four garages.
52) In our view therefore case was made out by the Appellant-
Developer for grant of interim measures under Section 9 of the Act. If the
interim measures are not made in the facts and circumstances of the
present case and if the structures of the four garages are permitted to be
retained at the site, the same would seriously hamper construction of the
new building, some portion of which needs to be constructed at the site
where the garages are located. The course of action of construction of new
building on the balance portion of the land by retaining the four garages
and independent access thereto, envisaged by the learned Judge in the
impugned order, would put the entire construction of the new building in
jeopardy where the plans will have to be modified completely and it might
then become difficult for the Appellant-Developer to accommodate such
large number of members and tenants. On the contrary, if Respondent
Nos.5 to 8 and Respondent No. 9 are directed to handover possession of
the premises in their occupation, their rights, to some extent, would still
stand protected as they would receive four surface car parking spaces in the
newly constructed building. They can either bargain with Respondent No.
2 to 4 or with the society to monetise such car parking spaces.
Alternatively, they can initiate necessary proceedings against Respondent
Nos.2 to 4 for alleged denial of their rights under the redevelopment
Page No.42 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
process based on their alleged tenancy claims. If interim measures are not
made in favour of the Appellant-Developer, the entire project would get
stuck. Appellant carries the responsibility of paying transit rent to over 80
members and tenants. Thus, for protecting the interests of the four garage
occupiers, who are yet to establish their claim of tenancy and whose
commercial use of garages is questionable, over eighty members and
tenants of the building would ultimately suffer. Therefore grant of interim
measures in the present case is warranted.
53) The Appeal accordingly succeeds, and we proceed to pass the
following order :-
(I) Judgment and order dated 1 April 2025 passed by the learned
Single Judge in Commercial Arbitration Petition (L) No.
38696/2024 is set aside.
(II) Commercial Arbitration Petition (L) No.38696/2024 is partly
made absolute in terms of prayer Clause (b) which reads thus :-
(b) That pending the culmination of Arbitral Proceedings
and till such time the Award passed therein becomes
enforceable, this Hon’ble Court be pleased to pass an order
directing Respondent No. 5 to 8 and Respondent No. 9
(illegally occupying Garage No.2) to immediately vacate
their respective Garages viz, garage No.1, 2, 3 and 4 situated
at Poddar Shopping Centre, S. V Road, Kandivali (West),
Mumbai -400 067 and handover the quiet, vacant and
peaceful possession to the Petitioners and if required the
Petitioners be provided with police assistance at the time of
taking over the vacant possession of their respective Garages
by directing the local police station/official to provide
required police assistance for eviction of the Respondent
No. 5 to 8 and Respondent No.9.
Page No.43 of 44
1 July 2025
::: Uploaded on – 01/07/2025 ::: Downloaded on – 01/07/2025 22:32:52 :::
Neeta Sawant Com. Arbitration Appeal (L)-12585-2025-FC
A/w. Com. Arbitration Appeal (L)-16482-2025
(III) Respondent Nos. 5 to 8 would be at liberty to execute and
register the Agreement for Permanent Alternate Accommodation
with the Appellant.
(IV) It is clarified that nothing observed by the learned Single Judge
in the impugned judgment and order dated 1 April 2025 as well as
by this Court in the present judgment shall affect the alleged tenancy
claims between Respondent Nos.2 to 4 and Respondent Nos. 5 to 8
or Respondent No. 9 in respect of the four garages in question and
the said issue shall be decided independently in appropriate
proceedings.
54) With the above directions, both the appeals are disposed of.
[SANDEEP V. MARNE, J.] [CHIEF JUSTICE]
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2025.07.01
18:15:43
+0530
Page No.44 of 44
1 July 2025
::: Uploaded on - 01/07/2025 ::: Downloaded on - 01/07/2025 22:32:52 :::