The High Court of Judicature at Bombay has granted 75-year-old widow Laxmi Madhukar Athawale permission to withdraw ₹1.25 crore, plus accrued interest, from funds deposited by a developer during an ongoing arbitration process. The ruling marks a significant victory for the petitioner , who has been embroiled in a legal battle over a residential property in Goregaon, Mumbai, which she claims was sold to her despite having been previously mortgaged and sold to other parties. Justice Amit Borkar, presiding over the Commercial Division , underscored that the petitioner ’s dire medical and personal circumstances, coupled with the shift in the case’s reality following an auction of the property, necessitated immediate access to the deposited funds.

The dispute centres on Flat No. 301 in Kapil Vastu Cooperative Housing Society Ltd. , which Athawale contends she purchased using her life savings, only to later discover the unit had been encumbered by a mortgage with DBS Bank India Limited and purportedly sold to other parties in 2017 . Following the bank’s subsequent auction of the property in 2025 , which resulted in the petitioner 's dispossession, she sought relief from the court. The High Court had previously directed SSD Escatics Private Limited and its representatives to deposit ₹1.25 crore as interim security , a process that faced significant delays and ultimately required the initiation of contempt proceedings to ensure compliance.

Judicial Reasoning on Hardship and Interim Protection

In his judgment, Justice Borkar addressed the respondents ' contention that allowing the withdrawal would effectively grant final relief before the completion of arbitration . The court rejected this argument, noting that the deposit was not intended as a final award but as a mechanism for interim protection in light of a strong prima facie case. The judge emphasized the practical realities facing the petitioner , who is currently undergoing dialysis and lacks the security of the home she purchased.

“The money lying in Court comes from the very transaction relating to her purchase of the flat,” the court observed in its ruling. Justice Borkar further highlighted the necessity of balancing the interests of both parties, stating: “Keeping the entire amount in Court for an unlimited period, even after the circumstances have changed, would cause continuing hardship to her.”

The respondents argued that their initial offer of payment was tied to a settlement negotiation that never reached finality and suggested that their admission of liability was limited to approximately ₹85 lakh. However, the court found these arguments insufficient to override the earlier findings of potential fraud by the developers. The court clarified that the deposit was ordered based on substantial documentation, including receipts, company seals on the Memorandum of Understanding , and consistent payments made by the petitioner , all of which remain relevant evidence for the upcoming arbitration .

Accountability for Procedural Delays

A significant element of the court’s decision rested on the conduct of the respondents throughout the litigation process. The court pointedly remarked on the prolonged delay in depositing the ordered funds, which were only fully transferred to the Prothonotary and Senior Master in August and September 2026 , following the initiation of contempt proceedings . By the time the funds were secured, the property had already been lost through auction.

Addressing this, Justice Borkar stated: “The Respondents cannot take advantage of their delay in complying with the order of this Court, particularly when because of the delay the Petitioner remained without the protection which the Court had directed.” This judicial observation underscores the court’s resolve to prevent parties from leveraging procedural obstruction to further prejudice the interests of vulnerable litigants. The ruling serves as a reminder that interim directions are designed to provide genuine protection, and that non-compliance or foot-dragging by developers will be scrutinized heavily when courts evaluate the current state of a dispute.

Safeguarding the Arbitration Process

While granting the petition for withdrawal, the court took care to ensure that the ultimate resolution of the underlying dispute remains unaffected. The permission to withdraw the funds is explicitly subject to an undertaking by Athawale, requiring her to account for the funds and comply with any future directions for restitution or repayment that may be issued by a competent court should the final arbitral award favor the respondents .

This condition ensures that the respondents retain their right to contest the claims in arbitration , maintaining the procedural integrity of the case. The order clarifies that the release of money is an interim measure to alleviate the petitioner 's urgent financial and personal needs, rather than a final adjudication of the contractual dispute . Both sides are now expected to move forward with the arbitration process, where the evidentiary weight of the Memorandum of Understanding , the banking records, and the nature of the alleged misrepresentations will be tested in full.

The petitioner is now empowered to access the funds to address her medical treatment and accommodation requirements. This outcome highlights the judiciary’s role in adapting interim protections to address shifting circumstances, ensuring that while the legal process in commercial disputes may be protracted, the immediate humanitarian needs of the parties are not ignored. The case remains a critical example of how courts may pierce through defense tactics in instances where prima facie evidence of fraud and extreme personal hardship align, prioritizing equity alongside strict legal procedure. The next phases of the arbitration will ultimately determine the permanent liability of SSD Escatics Private Limited and its representatives, but for now, the court’s decision provides a measure of stability for the petitioner .