Back
2025 Supreme(Bom) 1781
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SOMASEKHAR SUNDARESAN, J.
Sunteck Realtors Private Limited – Petitioner
Versus
Bandra Sea Breeze Apartment Co-operative Housing Society Limited – Responden
COMMERCIAL ARBITRATION PETITION (L) NO. 30532 OF 2025
Decided On : 06-10-2025
Important Points
Subject
Civil Law - Commercial Arbitration
Act Referred
DEVELOPMENT CONTROL AND PROMOTION REGULATIONS : Reg.33(7)(b)
Headnote
(B) The failure of the Developer to establish a prima facie case for the grant of relief under Section 9 was determined based on the lack of essential agreements regarding property specifications and a firm consensus among the Society’s members. (Paras 30, 40)
Facts of the case:
The Developer, for property redevelopment, sought an injunction against the Society’s Termination Notice citing a binding relationship established under the MOAT. The Society contested, claiming that a Development Agreement was necessary to substantiate rights under the MOAT.
Findings of Court:
The Developer failed to demonstrate readiness for specific performance and the importance of executing the Development Agreement was upheld. The absence of essential terms and member approval negated the Developer's claims.
Issues: The court addressed whether protective relief under Section 9 was warranted given the absence of a finalized Development Agreement despite significant delays.
Ratio Decidendi: The court ruled that the Developer's return of the fixed deposit indicated a departure from contract adherence, which weakened their position for specific performance as stipulated in the MOAT.
Result: Petition dismissed without granting relief.
For the Petitioner:Mr. Janak Dwarkadas, Senior Advocate a/w. Mr. Sharan Jagtiani, Senior Advocate, Mr. Karl Tamboly, Mr. Samit Shukla, Ms. Rishika Harish, Ms. Delnavaz Patel, Ms. Yesha Badani i/b Trilegal,.
For the Respondent:Mr.Navroz Seervai, Senior Advocate a/w. Mr. Mayur Khandeparkar, Mr. Aseem Naphade, Mr. Nishant Chothani, Mr. Nivit Srivastava, Ms. Sneha Patil and Adv. Bhavya R. Shah i/b Maniar Srivastava Associates,
| Table of Content |
|---|
| 1. factual background of redevelopment project (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. court's analysis on the necessity of a definitive development agreement (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38) |
| 3. arguments regarding moat's binding nature (Para 15 , 16 , 17 , 18 , 19 , 20) |
| 4. decision against developer's case for protective relief (Para 39 , 40) |
| 5. final conclusion and disposal of the petition (Para 41 , 42) |
Judgement:
SOMASEKHAR SUNDARESAN, J.
1. This is a Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) in connection with redevelopment of a building envisaged under an instrument titled “Memorandum of Agreed Terms” dated January 29, 2024 (“MOAT”) executed between the Petitioner, Sunteck Realtors Private Limited (“Developer”) and the Page 1 of 27 Respondent, Bandra Sea Breeze Apartment Co-Operative Housing Society Limited (“Society”).
2. The redevelopment would cover one building occupied by the members of the Society, comprising 16 flats of 16 members including one terrace flat; two buildings occupied by tenants; and two garages and ancillary structures. The parties had envisaged redevelopment under Regulation 33(7)(B) of the Development Control and Promotion Regulation 2034 and went on to execute the MOAT pursuant to the selection of the Developer in terms of a Tender floated by the Society.
3. The Development Agreement to be executed in future would need to be consistent with the MOAT and the terms of the Tender. On September 6, 2025, the Society wrote to the Developer intimating termination of the MOAT (“Termination Notice”). The prayers in the Petition essentially seek an intervention against such termination by staying the implementation and effect of the Termination Notice. The Society resists the Petition on the premise that a new developer has already been appointed.
4. The land on which the aforesaid structures stand and were meant to be redeveloped was leasehold land, the lessor being the Page 2 of 27 Government of Maharashtra. It was envisaged that the land would be converted into freehold land for purposes of the development.
5. At the heart of the controversy to be answered in this Petition is whether there are any implications of a final Development Agreement having remained elusive for over one and half years since the execution of the MOAT, for grant of specific protective relief against the Termination Notice under Section 9 of the Act.
6. Before delving into an analysis of what whether and what protective measures may be issued, some critical facets of the factual matrix would need to be noticed:
A) Clause 2 of the MOAT contains an agreement to appoint the Developer by the Society for purposes of the redevelopment;
B) Clause 4 deals with the plot size and the confirmed carpet area occupied in the aggregate, by the members;
C) Clause 5 records that the redevelopment would utilise the entire development potential;
D) Clause 5.1.2 provides that the terms on which the tenants would be settled into the redevelopment exercise may be Page 3 of 27 incorporated in the Development Agreement;
E) Clause 6.1 records that the entitlement of the members in terms of additional area to be given to them would be 50% on the carpet area currently owned by them. The member-wise allocation of carpet area is set out in Annexure VI of the MOAT, and can be discerned from Pages 172 and 174. Other facets such as hardship compensations, displacement compensation, car parking slots and garage entitlements are all covered in other sub-provisions of Clause 6;
F) Clause 7.6 requires a Developer to convert the leasehold land into freehold land at his cost and incur the expense for payment of the premium therefor. Towards this end, the Developer was required to create a fixed deposit in the sum of Rs. 20 crores. It is evident from the record that the fixed deposit was provided on the very same date as the MOAT;
G) T
