Arbitral Proceedings U/S 9 Cannot Be Used To Reopen Redevelopment Developer Appointment: Bombay HC

The Bombay High Court on 3 July held that the validity of a housing society's decision appointing a developer for redevelopment cannot be reopened in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, and that such objections must be pursued through remedies available under law.

Justice Amit Borkar allowed a petition filed by Vaswani Projects Pvt Ltd., granted interim protection for redevelopment of the Utsahi Maratha Mandal Co-operative Housing Society at Bandra, Mumbai, and directed dissenting members to hand over possession for redevelopment. He observed:

“These facts are not disputed by the respondents. Therefore, at this stage, I do not find that the appointment of the petitioner as developer can be reopened in these proceedings. If any member had grievance about the appointment process or the resolutions passed by the Society, the law provides a remedy. Such issue cannot be gone into while deciding the present petition under Section 9.”

The dispute arose after the Society resolved on 9 February 2020 to undertake redevelopment and appointed Vaswani Projects Pvt Ltd. as developer on 10 February 2024. The parties executed a registered Development Agreement on 8 May 2025.

The developer obtained an Intimation of Disapproval on 28 February 2026 and issued a notice on 8 April 2026 calling upon members to vacate. Certain members refused to hand over possession, which led to the Section 9 proceedings.

The Court held that objections relating to Minimum Development Potential, adequacy of FSI, and compliance with the Development Agreement could not be examined in Section 9 proceedings. It said these issues relate to implementation of the redevelopment and must be decided in appropriate proceedings. It also noted that the developer's proposal dated 25 May 2026 offering enhanced benefits was only an attempt to improve project terms. It did not affect the validity of the existing Development Agreement.

Further, the Bench observed that the absence of supplementary redevelopment documents or revised Permanent Alternate Accommodation Agreements did not stop the project. The Development Agreement remained in force and had not been terminated.

Accordingly, the High Court allowed the petition and directed that redevelopment proceed, without prejudice to pending disputes concerning ownership, tenancy, succession, or entitlement to redevelopment benefits.

For Petitioner: Mayur Khandeparkar a/w Jimish Shah, Nirvi Shah, Advocates

For Respondents: Piyush Raheja, with Nitesh Menon, Anand Pai with Sahil Sayyed, and Lavanya Panicker I/by Arun Panicker, Pradeep Thorat i/by Abhilash Chitre, Sonali Humane i/by Ranjana Todankar, Santosh D. Raje with Prathamesh D. Sarang, Kaivalya M. Rawl, Brian Dlima, Durgaprasad S. Sabnis with Harsh Pathak, and Hitel Lala, Rohit Pandit with Anand B. Tiwari i/by K.D. Shukla