"No Agreement, No Eviction": Bombay HC Slams Developer’s ‘Backdoor’ Bid to Oust Tenants. Tenants Cannot Be Directed to Comply with What They Never Signed
Sanchayita Lahkar
The High Court of Judicature at Bombay, Single Bench of Justice Somasekhar Sundaresan, declined to grant reliefs sought under Section 9 of the Arbitration and Conciliation Act, 1996. The petitioner, a developer, had sought interim measures against certain tenants occupying garages on a redevelopment site. The Court stated that the tenants, being non-signatories to the Development Agreement and statutory protectees under the Maharashtra Rent Control Act, 1999, could not be displaced under the guise of interim arbitration protection.
The Court directed that no relief would be granted as sought in the petition, and further ordered that the current status quo be maintained, ensuring that the tenants retain access to their premises during redevelopment. The Court also stated that "the Tenants, not being bound by the Development Agreement, which they are not even a party to, cannot be directed to comply with it."
The case involved a Commercial Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996. The petitioner, Ambit Urbanspace ("Developer"), had executed a Development Agreement dated May 21, 2024, with Poddar Apartment Co-operative Housing Society Limited ("Society") for the redevelopment of a property. The Developer sought eviction of Respondents Nos. 5 to 8 ("Tenants") from five enclosed garages ("Subject Garages"), on the ground that they were not members of the Society and had no contractual privity to oppose the redevelopment.
The Developer contended that the Subject Garages were to be demolished as part of the redevelopment project and that the Tenants were to be allotted open car parking spaces in the new structure. This allotment, the Developer claimed, arose from the Development Agreement, which listed the Tenants in its title clause.
However, the Tenants argued that they had never been consulted, negotiated with, or executed any agreement regarding the redevelopment. They stated that the Development Agreement did not even contain placeholders for their signatures. The Court recorded, "there is not even a placeholder for their signatures in the agreement." Moreover, a Supplemental Agreement dated October 21, 2024, also failed to name the Tenants as parties.
The Landlords (Respondents Nos. 2 to 4), being executors of the estate of the original owner, supported the Developer. They asserted that the Tenants were only entitled to use the Subject Garages for car parking and claimed that their current use for other purposes was illegal. Nonetheless, the Court noted that "the Landlords have not taken any proceedings in decades to deal with what they allege to be unauthorised and illegal usage."
The Tenants claimed statutory protection under the Maharashtra Rent Control Act, 1999, which was acknowledged by the Court. "Evidently, the Tenants are statutory protectees of the Maharashtra Rent Control Act, 1999."
No arbitration proceedings had yet been initiated, and there was no inter se dispute among the Developer, Society, and Landlords. All parties were aligned in seeking the removal of the Tenants, prompting the Court to question the legitimacy of the petition.
The Court found that the Tenants were not parties to the Development Agreement and therefore not bound by its terms. "The Tenants who have no privity to the Development Agreement do not have privity to the arbitration agreement." Consequently, the Court held that the Section 9 Petition could not be used to evict them.
The Court rejected the suggestion that the Developer and Landlords could claim entitlement over the Tenants through the Society's collective will, stating that "Tenants who are not part of such a collective or constituents of a body corporate... stand on a different footing."
Justice Sundaresan stated that the Section 9 jurisdiction was equitable and intended to preserve the subject matter of an arbitration. However, no such arbitration was initiated, and "there is also no dispute between the Developer and the Landlords."
The Court also recorded those suggestions made by it to find a compromise, such as earmarking specific units for the Tenants, were refused outright. "This was firmly rebuffed by the Landlords," the Court noted.
On the alleged illegality of use, the Court remarked, "The Section 9 Court cannot be called upon to declare conclusively whether the Subject Garages were put to unauthorised use." It added that such determinations require trial and fall under the jurisdiction of the Rent Control authorities.
The Court rejected the claim that the tenants had waived their rights through conduct. It found that "the nature of the usage of the Subject Garages by the Tenants could not be held to be without the knowledge and consent of the Landlords."
It also recorded that "grant of the reliefs sought would partake the character of final reliefs in eviction proceedings," which could not be granted in an interim application under Section 9.
The Court disposed of the petition without granting any of the reliefs sought.
It directed that "the Developer and the Society shall ensure the safety and the current free independent access to the Subject Garages during the course of the redevelopment."
It further stated, "The Tenants, not being bound by the Development Agreement, which they are not even a party to, cannot be directed to comply with it."
The court also stated “if the parties reach any other means of resolution of their current stand-off, they would be at liberty to agree on how to re-arrange their affairs and their inter-se relationship.”
The Court declined to impose costs despite the commercial nature of the petition, citing the peculiar facts and circumstances of the case.
Advocates Representing the Parties:
For the Petitioners: Mr. Mayur Khandeparkar, with Mr. Santosh Pathak, Ms. Namita Natekar, and Ms. Archana Karmokar, instructed by M/s. Law Origin, appeared
For the Respondents: Mr. Amogh Singh, with Mr. Nimish Lotlikar, instructed by Mr. Nimish Lotlikar, Mr. Ashish Kamat, Senior Advocate, with Mrs. Pooja Kane, Mr. Jitendra Jain, and Mr. Rohit Bamne, instructed by Mr. Yogesh Adhia, , Mr. Vishal Kanade, with Mr. Monil Punjabi, instructed by Mr. Sandeep Mahadik and Mr. Narayan G. Samant, and Ms. Duhita Desai
Case Title: Ambit Urbanspace vs Poddar Apartment Co-operative Housing Society Limited & Ors.
Neutral Citation: 2025: BHC-OS:5395
Case Number: COMMERCIAL ARBITRATION PETITION (L) NO.38696 OF 2024
Bench: Justice Somasekhar Sundaresan
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