Court free to pass interim measure against third party under Section 9 of A&C Act- Bombay High Court

Court free to pass interim measure against third party under Section 9 of A&C Act-Bombay High Court

Court noted that the balance of convenience is overwhelmingly in favour of the Petitioner.

The Bombay High Court recently reiterated its decision that a court is free to pass an order under Section 9 of the Arbitration and Conciliation Act, 1996 to grant interim measures of protection against a third party which is impleaded in a petition under Section 9 of the Act.

The issue arose pursuant to a Development Agreement between Respondent 1, Pantnagar Pearl Cooperative Housing Society, and the Petitioner, Choice Developers for the redevelopment and construction of the society's building.

However, three Respondents refused to vacate their units despite receiving a notice from the Petitioner.

The Court noted that a minority section of the society cannot act against the will of the majority members of the society and obstruct the redevelopment.

Pursuant to the issue between the members, the Petitioner filed a petition under Section 9 of the Act seeking interim orders. The Development Agreement contained an arbitration clause.

Reliance was placed on the case of Girish Mulchand Mehta & Anr. vs. Mahesh S. Mehta and it was held that:

"the jurisdiction under section 9 of the Arbitration and Conciliation Act can be invoked only by a party to the Arbitration Agreement, however, Section 9 does not limit the jurisdiction of the Court to pass an order of interim measures not only against a party to an arbitration agreement or arbitration proceedings, but Court is free to exercise same power for making appropriate order against a third party impleaded in a petition filed under section 9 of the Act"

Given the case of Girish Mulchand case (supra), the court also noted that once a person decides to become a member of a cooperative society, he loses his individuality and he has no independent rights except those given to him by the Statute.

The Court, hence held that the Respondents had no right to delay, defeat and prejudice the redevelopment and therefore ordered them to vacate their units within two weeks from the date of the order.

Case Title: Choice Developers versus Pantnagar Pearl CHS Ltd. & Ors

Single Bench of Justice G.S. Kulkarni

Counsel for the Petitioner: Mr. Rajiv Singh a/w. Omprakash Jha, Basu, Gaurav i/b. The Law Point Counsel for the Respondents: Mr. Siddharth a/w. Garim

Counsel for the Respondents: Mr. Siddharth a/w. Garima Mehrotra for respondent no. 1-Society; Mr. A.M. Saraogi for respondent no. 2 and 4; Mr. S.L. Mh for respondent no. 3.