Mumbai, October 20, 2026: The Bombay High Court has restrained a group of property owners from obstructing a redevelopment project in Chembur, holding that contractual disagreements cannot be used to pressure a developer into accepting fresh commercial terms when an existing agreement provides for arbitration.
Justice Amit Borkar passed the order on October 19 while partly allowing a petition filed by Bindu Raheja & Sons LLP against Stephen Francis Coutts and seven others under Section 9 of the Arbitration and Conciliation Act, 1996.
Dispute Over Flat Sizes And Parking
The dispute concerns the redevelopment of a property known as “Delana” under a registered Development Agreement signed on November 29, 2024. Under the agreement, the owners were entitled to eight flats measuring 600 square feet each and four parking spaces. The developer was also responsible for settling claims raised by non-consenting occupants.
The dispute arose after the owners questioned the agreed terms in November 2025, claiming that the developer had promised flats measuring 900 square feet each. On December 17, 2025, they wrote to the housing society asking it to withhold further redevelopment permissions, citing a dispute with another occupant.
Society Withholds Final NOC
Although the dispute with the occupant was settled through consent terms on June 18, 2026, the owners allegedly did not withdraw their communication. The society consequently withheld its final No Objection Certificate (NOC).
The owners subsequently issued a legal notice demanding eight flats of approximately 1,000 square feet each and two parking spaces per flat. The developer rejected the demands, alleging an attempt to renegotiate the existing agreement.
Having invested over Rs 15 crore in the project, the developer approached the High Court seeking protection against further obstruction.
Court Rejects Objection To Interim Relief
Rejecting the owners’ objection that the developer had not yet issued an arbitration notice, the court said interim relief could be granted before arbitration commenced if there was a genuine intention to pursue the proceedings.
Justice Borkar observed, “when a registered Development Agreement is in force and the parties have agreed to resolve their disputes through arbitration, one party cannot use correspondence with the Society merely to force the other party to accept fresh commercial terms.”
Agreement Bars Obstruction Of Construction
The court also relied on Clause 85 of the agreement, which prohibited stopping construction over contractual disputes, except those concerning the property’s title. It held that disagreements over flat sizes and additional benefits did not fall within this exception.
The court restrained the owners from obstructing redevelopment or creating third-party rights contrary to the agreement. It directed them to withdraw their December 17 communication within seven days and asked the developer to initiate arbitration within 14 days.
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Interim Protection For 90 Days
The interim protection will remain effective for 90 days, subject to the commencement of arbitration. The court left disputes over additional flat area and parking to arbitration and clarified that the society could independently decide whether to issue the final NOC.
It also permitted the developer to pursue legal remedies after being informed that the owners had terminated the agreement.
The petition was accordingly disposed of.
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