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2026 Supreme(Online)(Bom) 3688

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION APPLICATION (L) NO.37441 OF 2025
WITH
INTERIM APPLICATION (L) NO.11418 OF 2026
IN
ARBITRATION APPLICATION (L) NO.37441 OF 2025

INFRA Poonam Developers LLP ...Applicant
V/s.
Jasbir Singh s/o. Ajit Singh and Ors. ...Respondents

Mr. Aman Saraf with Ms. Sakshi Agarwal i/b. Mr. Bipin J. Joshi for the Applicant.
Mr. Ziyad Madon with Mr. Chittesh Dalmia for Respondent No.6

CORAM: SANDEEP V. MARNE, J.

Judgment reserved on: 30 MARCH 2026.
Judgment pronounced on: 07 APRIL 2026.

Advocates:
For the Appellants/Petitioners: Aman Saraf, Sakshi Agarwal, Bipin J. Joshi
For the Respondents: Ziyad Madon, Chittesh Dalmia

The court maintains discretionary power to condone delays in filing for an arbitrator's appointment under the relevant act. This power is reserved for exceptional cases where a party demonstrates that the delay resulted from active, necessary efforts to preserve the subject matter of the potential arbitration.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 11(6), 21 - Limitation Act, 1963 - Sections 5 and Article 137 - Appointment of arbitrator - Limitation for filing application under Section 11(6) commences after failure to comply with the notice invoking arbitration - Power to condone delay under Section 5 apply to Section 11(6) applications; however, such discretion is to be exercised only in exceptional cases where a strong case is established. (Paras 11, 12, 13, 16)

(B) Condonation of delay - Sufficient cause - Where the claimant is actively engaged in parallel legal proceedings essential for the preservation of the subject matter of the dispute, such engagement demonstrates that the party was not dormant or negligent, justifying the condonation of delay. (Paras 18, 22)

Facts of the case:
The applicant initiated proceedings for the appointment of an arbitrator regarding a partnership dispute stemming from a property development project. A notice invoking arbitration was issued; however, the application for the appointment of an arbitrator was filed after the statutory limitation period. During the interim period, the applicant was involved in multiple legal actions to prevent the loss of the property to governmental authorities.

Findings of Court:
The court determined that the applicant was continuously diligent in its efforts to protect the subject matter of the arbitration. The engagement in multi-layered litigation to preserve the project qualified as an exceptional circumstance, precluding the inference of negligence or indolence on the part of the applicant.

Issues: Whether the application for the appointment of an arbitrator was maintainable after the limitation period, and whether the applicant provided sufficient justification for the court to exercise its discretion in condoning the delay.

Ratio Decidendi: The court established that while procedural adherence to limitation periods is essential, the court retains the authority to condone delays in extraordinary circumstances. When a party is required to prioritize urgent legal actions to preserve the integrity of the arbitration subject matter, such efforts constitute a strong and sufficient cause for the condonation of delay under the relevant limitation provisions.

Result: Delay of 258 days condoned. Application allowed. Sole arbitrator appointed.

JUDGMENT:

1) This is an Application filed by the Applicant under Section 11 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) for appointment of an Arbitrator for adjudication of disputes between the parties arising out of Deed of Alteration of Partnership dated 10 April 2013. Since there is delay of 258 days in filing the Application, the Applicant has filed Interim Application (L) No.11418 of 2026 for condonation thereof.

2) The Applicant is a registered Limited Liability Partnership Firm. The subject matter of dispute between the parties is the property known as -Panwala chawl Nos. 2 and 3 situated at City Survey No.1/112 of Parel Sewri Division, Building No.75-75A and 75-B, Dr. S.S. Rao Road, Lalbaug, Mumbai (suit property). The property originally belonged to a private trust, which are acquired by M/s. R.B. Builders and Developers (the Firm) pursuant to order passed by this Court. At that time, there were 7 partners namely Respondent Nos.1 to 7 in the Firm. The acquisition was for the purpose of redevelopment of the suit property. The Maharashtra Housing and Area Development Authority (MHADA) issued NOC for redevelopment of the property in the year 2008, which was modified in the year 2010. The Municipal Corporation granted Intimation of Disapproval (IOD) dated 4 August 2010. A Memorandum of Understanding came to be executed between the Respondents and sister concern of the Applicant (Poonam Infra) for transfer of development rights for consideration of Rs.20.70 crores. It is the case of the Applicant that its nominee made a payment of Rs.4 crores to the Firm. Deed of Admission of Partner dated 30 April 2011 was executed, under which Applicant’s nominee -Poonam Infra, a partnership firm was added as 8th partner in the Firm having 15% profit and loss sharing ratio. Poonam Infra was to make contribution of its share for carrying on construction and redevelopment of the project. The Firm obtained commencement certificate dated 9 December 2011. Construction commenced and was completed upto the plinth level. A stop work notice was issued in the year 2012, which was revoked in the year 2013. According to the Applicant, it later realised that its sister concern- Poonam Infra cannot be a partner of another Firm and accordingly, Deed of Alteration of Partnership Firm dated 10 April 2013 was executed, under which the Applicant was made 8th Partner in the Firm. According to the Applicant, MHADA issued show cause notice to the Firm for revocation of NOC. On 29 December 2016 MHADA directed the Firm to effect redevelopment work and pay rent to the tenants, which the Firm was unable to pay. Thereafter litigation took place between the Society, Firm and MHADA relating to the redevelopment project.

3) In the light of above background, the Applicant decided to withdraw itself from the project and sought refund of amount of Rs.29,63,67,674.97. The notice issued by the Applicant was responded by the Respondents denying the contents therein. The Applicant apparently filed police complaints. By notice dated 20 June 2020, the Applicant invoked arbitration clause. Since no response was received, the Applicant filed Arbitration Petition No.241 of 2023 under Section 9 of the Arbitration Act seeking interim measures. On 20 July 2020, this Court granted ad-interim measures retraining the Respondents from creating third party rights or from putting up any construction or altering the status of the property. Statement made on behalf of the MHADA for not taking coercive steps was also recorded. According to the Applicant, due to outbreak of Covid-19 Pandemic, it could not make any fruitful movement in the matter. In 2023, the Applicant started making efforts to protect its interests in the project. It made several representations to various authorities. In the meantime, MHADA passed order on 11 January 2024 for acquisition of the property by blacklisting the Firm. The Applicant filed Writ Petition No.722 of 2024 before this Court chal

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2026 Supreme(Online)(Bom) 3688

Cases Referred (4)