A Division Bench of the High Court of Judicature at Bombay has granted crucial interim protection to a group of five doctors, effectively halting the sale or transfer of a Goregaon-based real estate project. The ruling comes as a significant reprieve for the medical professionals, who had been locked in a two-decade-long legal battle after investing Rs. 60 lakh into a commercial premises project that never reached fruition. Justices A. S. Gadkari and Kamal Khata overturned a June 2026 order by a Single Judge that had previously denied the doctors' request for the appointment of a Court Receiver to preserve the subject matter of the dispute.

The conflict stems from a Memorandum of Understanding signed on 27 June 2005 . Under this agreement, the five appellants—Dr. Devidas R. Sheregar, Dr. Alka Jain, Dr. Manoj S. Aithal, Dr. Suresh Shetty, and Dr. Shishir Shetty—invested their capital in the Krishna Ambika Arcade project. The developers, led by Zeenal Constructions Private Limited and director Prakash Barot, had committed to delivering 4,360 square feet of commercial space within two years of receiving an Intimation of Disapproval (IOD) . However, more than 21 years later, the project remains incomplete, the developers failed to secure the necessary construction approvals, and the appellants' significant investment remained trapped without interest or accountability.

Project Stagnation After Two Decades

The appellants had approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996 , seeking to prevent the respondents from creating third-party rights over the land known as Dave’s Estate. The core of their grievance was that the developers were actively attempting to alienate the property by negotiating development rights with other entities, which would effectively destroy the doctors' prospects of ever receiving the specific commercial premises they had paid for. The respondents had argued that the original agreement had effectively terminated through the passage of time and the conduct of the parties involved.

The High Court dismissed these arguments as " bald and baseless ." In its comprehensive judgment, the court noted that the developers’ failure to obtain the IOD meant that the statutory limitations on the project were never triggered, and thus, the limitation period for the dispute had not lapsed. The judges emphasized that the primary purpose of interim relief under the Arbitration Act is the preservation of the subject matter, warning that the disposal of the land would leave the doctors with no remedy other than a potentially hollow claim for damages.

Judicial Findings of Prima Facie Fraud

The Division Bench utilized strong language when describing the conduct of the developers, noting that they had retained the doctors' money interest-free for over two decades while simultaneously failing to deliver on their contractual obligations. The judgment stated, “Perusal of the record indicates that, the Respondents have attempted to play fraud on the Appellants. They have outrightly cheated the Appellants. In our view, the Appellants, who are a group of doctors by profession, had together invested their hard-earned money with the Respondents, who continue to use the monies of the Appellants interest free for over 21 years.”

The court further highlighted that the potential for fraud was evident from the very inception of the transaction, linking the developers’ actions to the definitions of cheating under Sections 215 and 420 of the Indian Penal Code . While the bench was clearly disturbed by the evidence presented, Justice Kamal Khata, writing for the court, expressed that the intention was to protect the contractual rights of the appellants rather than to initiate criminal proceedings at this juncture. Although the judges acknowledged they possessed the power under Article 226 of the Constitution of India to initiate suo motu criminal action, they elected to refrain from doing so, holding out a final opportunity for the parties to reach a fair settlement.

Intervention to Prevent Irreparable Loss

During the appeal process, the bench attempted to facilitate a mediation between the investors and the developers, as well as the third parties currently negotiating to purchase rights to the site. However, these efforts proved unsuccessful because the respondents allegedly offered an inadequate settlement sum, failing to account for the inflationary impact of the money held for over two decades. The court concluded that allowing the transfer of the land would render the doctors’ claims for specific performance entirely futile.

By setting aside the Single Judge ’s order, the Division Bench has mandated that the status quo be maintained regarding the land at Dave’s Estate. The respondents are now strictly restrained from creating any third-party rights , title, or interest in the property, ensuring that the asset remains intact while the arbitral proceedings continue. This decision underscores the High Court ’s commitment to preventing entities from using the court’s procedural mechanisms to shield themselves from liabilities incurred through sustained bad-faith dealings. The court has expressed a final, stern hope that the legal counsel for the respondents will successfully persuade their clients to arrive at an equitable resolution, acknowledging that the doctors have been deprived of their assets for long enough. The appeal stands allowed in terms of the prayer clauses, providing the necessary legal shield to ensure the doctors' investment is not permanently extinguished.