“Redevelopment Held Hostage by Just Two Flats”: Bombay High Court Orders Court Receiver to Execute Agreements and Take Possession, Says “The Hold-Off Is Based on Inter Se Disputes”
Safiya Malik
The High Court of Bombay Single Bench of Justice Somasekhar Sundaresan disposed of a commercial arbitration petition by directing the Court Receiver to take possession of two disputed flats and execute redevelopment agreements on behalf of the members. The Court held that the redevelopment of the entire property cannot be stalled due to inter se family disputes involving only two flats and ordered that further steps be taken in accordance with the Development Agreement. It also clarified that monetary entitlements and residential rights arising from redevelopment would not prejudice pending litigations among the concerned family members.
The petition was filed under Section 9 of the Arbitration and Conciliation Act, 1996, in relation to a Development Agreement dated July 31, 2024, executed between the petitioner, Elite Housing LLP, and the respondent co-operative housing society, Spectrum CHS Ltd. The Development Agreement covered the redevelopment of a residential property located at Road No.14-B Road, Khar West, Mumbai.
Of the 20 members in the respondent society, 18 had agreed to vacate and hand over possession under the Development Agreement. However, two members—Respondent No. 2 (Chandra Bhagwansingh Lulla) and Respondent No. 7 (Ritesh Haldar)—did not vacate, leading to delays in the redevelopment process. Flat No. 6 and Flat No. 12, held respectively by the Lulla and Haldar families, became the subject of dispute.
The petitioner contended that it had paid the initial 10% installment of hardship compensation to all members who had executed tripartite agreements. It also claimed to have settled with a previous developer by paying ₹5 crore and was ready to disburse further amounts for the disputed flats upon execution of agreements and receipt of the revised Intimation of Disapproval (IOD) from municipal authorities.
Elite sought the Court's intervention to appoint a Court Receiver and authorize execution of the redevelopment agreements for Flat Nos. 6 and 12, and to take possession of the same upon non-compliance within a specified period post-receipt of the revised IOD.
Lulla raised multiple objections to the terms of the Development Agreement, including issues related to security, area entitlement, and absence of clauses on force majeure. His counsel also emphasized that the required Permanent Alternate Accommodation Agreement had not yet been signed, nor had the revised IOD been received.
Other respondents, including Ms. Deepali Bagla (Respondent No. 3), echoed inter se disputes and raised concerns regarding lack of notice and inheritance claims. Mr. Raj Patel, appearing for Respondent No. 6, aligned with Lulla’s contentions.
With respect to Flat No. 12, the disputes revolved around internal claims within the Haldar family. Mr. Vikram Grewal, counsel for Ritesh Haldar, stated that the flat had been purchased solely by his client, and his mother’s name was added only for convenience. He claimed to have revoked the gratuitous license granted to his brother and sister-in-law (Leena) and filed an eviction suit pending in the Small Causes Court.
Mr. Sahil Saiyed, appearing for Respondent No. 8 (Leena’s husband), asserted partial ownership and demanded full compensation entitlement. Ms. Aditi Bhargave, representing Leena, submitted that she resides in Flat No. 12 with her two children and should receive transit and hardship compensation.
Despite these divergent claims, the petitioner maintained that all payments for the two flats would be deposited with the court and that redevelopment could only proceed once possession of these flats was secured.
Justice Somasekhar Sundaresan examined the record and stated: “What is writ large on the face of the record is that disagreement in handover of just two flats is holding up the redevelopment of the entire property.”
The Court recorded that: “Indeed, there are objections raised on behalf of these members about the terms of the redevelopment, their entitlements to the redeveloped area, and alleged procedural infirmities... However, it is now trite law that such objections are meant for agitation before such other forum as may have jurisdiction in the matter.”
On the question of delay, the Court noted: “The redevelopment is being prevented from proceeding further for no reason other than the fact that no documentation is being executed in respect of Flat No. 6 and Flat No. 12, and the inter se disputes among the family members is holding up the redevelopment entirely.”
In terms of balancing interests, the Court stated: “Each of the following steps forms part of an integral interwoven bundle of adjustments to address the ends of justice and the best interests of all parties, without prejudicing them in their respective positions in other litigation underway among them.”
The Court reiterated that the execution of documents by the Court Receiver would not prejudice existing or future litigation between family members: “The release of the amounts... shall not be a pointer to any assessment of merits of any of the parties... and is being directed only... to enable them to obtain and pay for alternative accommodation.”
On the role of those impeding redevelopment, the Court observed: “A party that is disengaged and disruptive cannot be criticizing the Development Agreement, which is the product of a collective engagement.”
The Court directed that the petitioner may approach the Court Receiver within one week from the upload of the order to execute tripartite agreements for Flat Nos. 6 and 12. The Court Receiver must ensure the agreements provide pari passu treatment to the flats in line with the Development Agreement.
Execution of these agreements shall bind all members of the Lulla and Haldar families with interest in the respective flats. Upon receipt of the revised IOD, Elite shall notify all members of Spectrum, marking the same to the Court Receiver, with a fixed deadline—no less than four weeks—for vacation.
Elite shall deposit all amounts due in respect of the two flats with the court registry, supported by detailed calculations. If the flats are not vacated within the stipulated time, the Court Receiver is authorized to take physical possession with police assistance and hand them over to Elite.
The Court Receiver shall pay all compensation and related amounts for Flat No. 6 to Lulla, and for Flat No. 12 to Leena, without affecting any ongoing or future litigation regarding ownership or entitlement. Upon completion of redevelopment, Elite shall hand over possession of Flat Nos. 1101 and 801 to Lulla and Leena respectively, subject to any intervening orders.
The Court clarified that all family members retain the liberty to pursue their disputes before appropriate forums. The petition was accordingly disposed of.
Advocates Representing the Parties:
For the Petitioners: Mr. Rohaan Cama, Advocate along with Mr. Kyrus Modi and Mr. Dipesh Yadav, Advocates, instructed by M/s. Narayanan & Narayanan.
For the Respondents: Mr. Kaevaan Setalvad, Senior Advocate along with Mr. Nitin Raut, M/s. G.P. Vas & Son ITA Serrao, Mr. Aseem Naphade, Ms. Rajshree Dhole, Ms. Rakshita Poojary, Ms. Deepali Bagla, Mr. Raj Patel, Ms. Srividya Venkat, Mr. Raghav S., Mr. Vikram Grewal, Mr. Nivit Srivastava, Mr. Amit Hailkar, Ms. Brena Gala, Mr. Sahil Saiyed, Mr. Amit Padwal, Ms. Aditi Bhargave, and Ms. Nitya Shah, Advocates, instructed by P. Vas & Co., Samatya Legal Associates, Bagla & Associates, J Law Associates, Maniar Srivastava Associates, and Divya Shah Associates.
Case Title: Elite Housing LLP v. The Spectrum CHS Ltd.
Neutral Citation: 2025:BHC-OS:6377
Case Number: Commercial Arbitration Petition No. 155 of 2025
Bench: Justice Somasekhar Sundaresan
[Read/Download order]
