Member Of Society Can Be Directed To Vacate Premises U/S 9 Of Arbitration Act For Smooth Redevelopment: Bombay High Court

These Appeals have been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging the order dated 20 June 2025 passed by the learned Single Judge disposing of Arbitration Petition filed under Section 9 of the Arbitration Act without grant of any relief in favour of the Petitioner therein.

An Arbitration Petition was filed by the Developer seeking vacation of the premises occupied by the Respondents for the purpose of redevelopment. The Respondents opposed the Application. The Single Judge dismissed the petition without granting relief. Aggrieved, the Developer has filed the present Appeal.

The Appellant submitted that the so-called dispute between Respondent Nos.2 to 6 and the Society about entitlement of the members to a particular area in the new building cannot be a subject matter of adjudication in proceedings filed under Section 9 of the Arbitration Act.

Per contra, the Respondents submitted that without inviting tenders, the Society has handed over the redevelopment rights to the Developer without offering any choice to the Society members and without discussing the redevelopment benefits with the members.Arbitration agreement can be invoked only against a member who has signed the Development Agreement.

The court noted the Bombay High Court in Girish Mulchand Mehta and another Versus Mahesh S. Mehta and another held 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

It further noted that in Ambit Urbanspace, the court dealt with the interim relief under section 9 of the Arbitration Act against occupier who was not a member of the society. In the present case, the Respondent is both a garage occupier and a Society member. Furthermore, the Developer also agreed to provide permanent alternate accomodation. Therefore, the Ambit Urbanspace is relevant to the extent that the rights of the members are subservient to the society's obligations under the Development Agreement.

It held that the court under section 9 of the Arbitration Act is empowered to direct eviction of non-cooperative members from the premise for smooth redevelopment as the Development Agreement binds even such members.

It further held that grievances if any of the Respondents against any decision taken by the Managing Committee with respect to the redevelopment process cannot be adjudicated under section 9 of the Arbitration Act nor such disputes prohibits the court from granting interim relief. Members are bound by the terms of the Development Agreement.

It concluded that the court can intervene if they act contrary to the terms. Personal objections regarding appointment of developer, redevelopment process and grant of additional area must be resolved outside the framework of section 9 of the Arbitration Act. Accordingly, the present appeals were allowed.

Case Title: Pranav Constructions Limited Versus Priyadarshini Co-operative Housing Society Limited and others

Case Number:2025:BHC-OS:10901-DB

Judgment Date: 14/07/2025

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