Bombay HC: Developer Can Invoke Arbitration For Possession If Society Members Refuse To Vacate For Redevelopment

Mumbai: The Bombay High Court has ruled that a developer can invoke arbitration proceedings to seek possession from society members who refuse to vacate premises for redevelopment, if their actions are contrary to the Development Agreement. The court said such a move is permissible under Section 9 of the Arbitration and Conciliation Act, 1996.

A division bench of Chief Justice Alok Aradhe and Justice Sandeep Marne was hearing an appeal filed by Pranav Constructions Limited challenging a June 20, 2025 order of a single judge that had dismissed the developer’s plea for interim relief against members of Priyadarshini Co-operative Housing Society Limited, Santacruz.

The developer had approached the court under Section 9 of the Arbitration Act, seeking direction for respondents to vacate the premises to facilitate demolition and redevelopment of the society’s building. The single judge had disposed of the petition without granting relief, prompting the developer to file an appeal.

Setting aside the lower court’s order, the HC observed: “The Society and its members are bound by the covenants of the Development Agreement. Non-vacation of premises by Respondent Nos. 2 to 4 can thus become a trigger point for invocation of arbitration by Developer against the Society.”

The court directed the respondents to execute consent letters and vacate their premises within four weeks, in line with the Development Agreement dated March 12, 2025. Failing that, the court allowed the developer to approach the Court Receiver for possession, with police assistance if required.

Senior Advocate Venkatesh Dhond, appearing for the developer, argued that all members, including commercial and garage unit owners, were bound by the Development Agreement. He said the developer had offered permanent alternate accommodation to all, and disputes over exact area allotments should not derail the redevelopment process.

Society’s advocate, Mayur Khandeparkar, supported the developer's submissions.

However, advocates for respondent occupants, Rajiv Narula and Karl Tamboly, opposed the plea alleging discrimination. They submitted that commercial occupants were being allotted only 19% more space, as opposed to 39% for residential owners.

Despite the objections, the court upheld the developer’s right to initiate arbitration and seek possession under the terms of the agreement.