Dilip Dattatraya Thakur vs Awadhesh Anand & Anr.

The Petitioner has filed this Petition under Section 9 of the Arbitration and Conciliation Act, 1996, asking for interim protection in relation to the property situated at J.P. Road, Andheri (West), Mumbai, bearing Survey No.171 and C.T.S. Nos.141, 141/1 and 141/2, having an area of about 651 square metres. Earlier, an old building known as “Sadhana Building” was standing on this property. The Petitioner claims that he is the owner of this property. Respondent No.1 was appointed as Developer under the registered Development Agreement dated 20 October 2023. Respondent No.2 is the entity in whose favour Respondent No.1 claims to have entered into a joint-development arrangement.

The main case of the Petitioner is that after taking development rights and possession of the property, Respondent No.1 has not done the redevelopment work. According to the Petitioner, construction has not been started, and Permanent Alternate Accommodation Agreements have not been executed with the tenants. Respondent No.1 has not paid the agreed displacement compensation and has not cleared the municipal dues. At the same time, he has created or allowed third-party rights in favour of Respondent No.2. Therefore, the Petitioner says that the development rights and Power of Attorney given to Respondent No.1 have been terminated. Respondent No.1 should not be allowed to deal with the property or continue to show as its Developer. Respondent No.1 does not agree with what the Petitioner says. His main answer is that the Petitioner has committed serious breach of the Development Agreement. According to him, the Petitioner did not obtain Probate of the Will of his deceased mother within twelve months, though this was agreed under Clause 8.0. He relies upon Clauses 6.0 and 6.2 and says that the Petitioner's title was depending upon grant of Probate. According to Respondent No.1, unless the Petitioner makes his title clear and marketable, the necessary permissions and finance for redevelopment could not be obtained.

Respondent No.1 says that there is no condition in the Development Agreement that the Commencement Certificate must be obtained within three years. According to him, the agreed period for completing the entire project is sixty months from the date on which the Commencement Certificate is obtained. He says that the full monetary consideration of Rs.4 crore has been paid to the Petitioner and possession of the property was given to him. He has obtained the Letter of Intent and Intimation of Approval and has spent substantial amounts for the project. According to him, the Commencement Certificate is expected shortly. He relies upon Clause 25.0 and says that neither party can terminate the registered Development Agreement by taking a decision on its own. Therefore, the dispute between the parties cannot be decided only by looking at the allegation of delay made by the Petitioner. The obligations which both sides accepted under the Development Agreement will have to be seen. The present condition of the property and what may happen if redevelopment remains stopped till the arbitration proceedings are completed will have to be considered.

At the beginning, it is necessary to understand what this Court is required to decide in this Petition. This Court is not holding a complete trial of all the disputes arising out of the Development Agreement. Whether the Petitioner was right in terminating the Agreement, whether Respondent No.1 committed serious breach, whether the Petitioner failed to perform his obligations and whether Respondent No.1 is entitled to damages or compensation are matters which can be finally decided in arbitration. The purpose of Section 9 is to give necessary protection to the subject matter of arbitration. This is required so that the final award which may be passed by the Arbitral Tribunal does not become useless. For this purpose, the Court has to see whether the party has made out a prima facie case, in whose favour the balance of convenience is lying and whether refusal to grant protection may cause such loss or injury which cannot be properly compensated later. This approach has been explained in paragraph 19 of the judgment in Kannamwar Nagar Aditya Cooperative Housing Society Limited v. Shraddha Platinum Builders and Developers, 2026:BHC-OS:15863, decided on 17 July 2026. The Court observed:

The same approach was followed in paragraph 19 of Om Vithal Cooperative Housing Society Limited v. Trilogy Infra Private Limited, 2026:BHC-OS:18614, decided on 20 August 2026. The Court observed that while deciding a Petition under Section 9, the validity of termination of the Development Agreement need not be finally decided. The Court has to consider whether the existing arrangement should continue till arbitration is completed or whether some different arrangement is required so that redevelopment does not remain stopped. These observations are required to be kept in mind. At this stage, the Court should not decide the entire dispute arising out of the contract between the parties. But merely because the parties have agreed to go for arbitration, the Court cannot remain without taking any steps. Section 9 is provided for giving protection to the parties during the period before and during arbitration. If the Court only protects the property, but redevelopment remains uncertain for an unlimited period, such an order may cause serious difficulty and loss.

Earlier, there was an old tenanted building known as Sadhana Building on the property. The Municipal Corporation had declared the said building as dangerous and had placed it in C-1 category. The building was demolished sometime in February-March 2020. There is no dispute that the building was demolished before the Development Agreement dated 20 October 2023 was entered into. There were fourteen tenants and occupants in the property. Out of them, eleven were occupying residential premises, two were occupying shops and one was occupying hotel premises. Since the building was demolished, all these occupants had been displaced. Therefore, when the Petitioner entered into the Development Agreement with Respondent No.1, the redevelopment was required to be done within a reasonable period. The tenants were waiting for permanent alternate accommodation in the new building. They were requiring proper arrangements for their temporary accommodation during the construction period. The Petitioner says that Respondent No.1 had approached him and the tenants by representing that he had sufficient financial capacity and experience to carry out the redevelopment. He relies upon the Offer Letter dated 12 February 2022. Under this offer, rent was offered at Rs.70 per sq. ft. for residential premises and Rs.110 per sq. ft. for commercial premises, with ten per cent escalation. Brokerage and shifting charges were offered.

Respondent No.1 denies that he had given any assurance that the entire project would be completed within thirty-six months. According to him, the Petitioner had approached him through a common acquaintance and offered the redevelopment work. He says that the alleged assurance of thirty-six months is nowhere written in the registered Development Agreement. On this particular issue, there is some substance in the submission of Respondent No.1. On going through the Development Agreement dated 20 October 2023, it is not written that Respondent No.1 was required to obtain the Commencement Certificate within three years. The period mentioned in the Agreement for completion of the project is different. It says that the project is required to be completed within sixty months from the date of the Commencement Certificate. The relevant portion under the heading “COMPLETION PERIOD” reads:

Therefore, from the above clause, it cannot be said that the Development Agreement contains an express condition requiring Respondent No.1 to obtain the Commencement Certificate within three years. The Court cannot add such a period in the registered Agreement when the same is not written there. The Petitioner relies upon the oral assurance of thirty-six months and the Offer Letter. These documents may have some importance when the dispute is decided in arbitration. But their effect will have to be considered along with the entire Development Agreement and the separate declarations given by the tenants. However, this finding does not mean that Respondent No.1 was given unlimited time for taking steps towards redevelopment. Under Clause 9.0, development rights were given to him for carrying out the project after obtaining necessary permissions and approvals. Clauses 15.1.2 and 15.1.7 require him to obtain the necessary approvals and complete the project according to the Development Agreement. Clause 15.1 mentions different responsibilities which the Developer was required to carry out at his own cost. Thus, even though there is no separate period of three years written for obtaining the Commencement Certificate, Respondent No.1 was still required to take genuine and reasonable steps for obtaining permissions and carrying out the redevelopment. A Developer cannot take valuable development rights, obtain possession of the property and thereafter leave the project without showing any definite progress, only by saying that the Agreement does not mention any particular date for obtaining the Commencement Certificate.

On going through the Development Agreement, it is clear that the main responsibility of carrying out redevelopment was given to Respondent No.1. Under Clause 15.1.2, he was required to apply for and obtain all necessary approvals. Under Clause 15.1.7, he was required to complete the project according to the Agreement, sanctioned plans and applicable laws. Under Clause 15.1.8, he was required to pay electricity and water charges relating to the development during the period of the Agreement. Clause 15.1.9 places responsibility upon the Developer to pay future demands and arrears relating to municipal taxes, land revenue, property taxes, LUC, and other charges payable in respect of the property after execution of the Agreement. These are responsibilities accepted by Respondent No.1 under the Agreement. They cannot be treated as optional work which he may do whenever he finds it proper. It is true that he has obtained some permissions. But merely obtaining some permissions does not mean that the main redevelopment work has moved forward.

The Petitioner says that Respondent No.1 has not obtained the Commencement Certificate and has not started construction. Respondent No.1 denies that he has remained inactive. He says that he has appointed architects, consultants, engineers, surveyors, construction contractors and security agencies. He relies upon the Letter of Intent dated 11 February 2025 issued by the Slum Rehabilitation Authority and the Intimation of Approval dated 8 April 2026.

These documents are required to be considered. Obtaining the Letter of Intent and Intimation of Approval does show that Respondent No.1 has taken some steps for redevelopment. Therefore, the allegation of the Petitioner that Respondent No.1 has done absolutely nothing cannot be accepted in full. However, obtaining these permissions does not answer the main question. The project has still not reached the stage of construction. Respondent No.1 has not produced the Commencement Certificate. There is no material showing that any substantial construction work has been carried out. In fact, in his own Affidavit in Reply, Respondent No.1 has stated that the Commencement Certificate is “under way and likely to be obtained at any point of time and within a period of sixty (60) to ninety (90) days or so from today”.

This statement shows that even when the Affidavit in Reply was filed, the Commencement Certificate had not been obtained. The statement that it may be obtained within sixty to ninety days is only an assurance about something which may happen later. It cannot be treated as proof that the statutory permission has been obtained. The Court cannot treat a future possibility as if the work has been completed.

Respondent No.1 says that he has applied for Fire NOC. He says that the municipal taxes will be cleared before obtaining the Commencement Certificate because the Municipal Corporation requires a No Pending Dues Certificate. He states that assessment taxes have been paid up to the year 2023.

The requirement of obtaining a No Pending Dues Certificate may explain why the municipal dues have to be cleared before the Commencement Certificate can be granted. But the Development Agreement puts the responsibility of the relevant municipal and statutory dues after its execution upon Respondent No.1. Therefore, Respondent No.1 cannot rely upon the existence of these dues as a reason for not obtaining the Commencement Certificate, when clearing such dues is his contrresponsibility under Clause 15.1.9. The Petitioner has produced a demand notice dated 25 February 2026 issued by the MCGM. He has produced his reply dated 9 March 2026, stating that the old building was demolished in February-March 2020. The exact amount payable under the municipal demand and whether any amount is still outstanding will have to be checked. But Respondent No.1 cannot keep this matter pending when the Agreement places responsibility for such dues upon him. Thus, from the material available, it appears that Respondent No.1 has obtained certain approvals. But the redevelopment has not started. He has not produced the Commencement Certificate. He has not shown any dependable programme explaining when construction will start and when it will be completed. Merely saying that the certificate will be obtained shortly does not give sufficient assurance to the Petitioner or to the occupants who have been displaced.

There is one more important matter which requires consideration. Respondent No.1 says that the Petitioner has failed to obtain Probate of the Will of his deceased mother, late Smt. Indumati Dattatray Thakur, within twelve months from the date of execution of the Development Agreement. For this purpose, he relies upon Clauses 6.0, 6.2 and 8.0. According to Respondent No.1, the Petitioner had represented that the property was given to him under the Will dated 12 March 1981 and that Probate Petition No.895 of 2020 was pending before this Court. Clause 6.0 of the Development Agreement says that the title of the Petitioner is subject to grant of Probate. Clause 8.0 puts a specific responsibility upon the Petitioner to obtain Probate within twelve months. It reads:

By the above clause the Petitioner had agreed to obtain Probate within twelve months from 20 October 2023. He had agreed that after getting Probate, he would execute and register the formal Deed of Transfer. But the documents produced before this Court do not show that Probate has been granted or that the formal Deed of Transfer has been registered. Therefore, Respondent No.1 is justified in pointing out that the Petitioner has not so far shown that he has completed this obligation under the Agreement. The Petitioner cannot answer this objection only by saying that his name is appearing in the Property Card. Respondent No.1 has relied upon an affidavit dated 4 October 1991, which is stated to have been filed by the Petitioner before the City Survey Authority. According to Respondent No.1, the said affidavit refers to other legal heirs of the deceased, including the Petitioner's father, two sisters and brother. He says that the affidavit does not show that their respective rights were given up in favour of the Petitioner. It is true that merely because the name of a person is entered in the revenue record, it does not finally prove his ownership. Whether the Will gives exclusive ownership of the property to the Petitioner, whether the other legal heirs still have any rights in the property and what is the effect of the pending Probate Petition are matters which cannot be finally decided in the present proceedings. For deciding these issues, the Will, Probate proceedings, affidavits and other title documents will have to be examined. Therefore, at this stage, I am not inclined to give a final finding that the Petitioner has an absolute and marketable title free from all possible claims. At the same time, this circumstance does not mean that the Petitioner has no right to seek protection of the property. In the registered Development Agreement, the Petitioner is described as the Owner. His name is appearing in the Property Card. Respondent No.1 entered into the Development Agreement with him, paid the monetary consideration to him and accepted him as the person entitled to give development rights. Respondent No.1 cannot accept the Agreement executed by the Petitioner for obtaining development rights and, when disputes arise, deny the Petitioner's right to seek protection of the property.

The more important question is whether the failure of the Petitioner to obtain Probate is sufficient to explain the entire delay in redevelopment. Clause 14.3 requires the Petitioner to make out clear and marketable title and remove defects in title, including claims arising from inheritance. Therefore, Respondent No.1 is justified in saying that obtaining Probate was an important condition of the Agreement. Any delay in obtaining Probate could affect preparation of the title report and the permissions or finance required for redevelopment. However, Clause 14.5 is required to be considered. It provides that the Owner will assist the Developer in obtaining permissions and sanctions, including the Commencement Certificate. But the Developers alone will be responsible for obtaining such permissions and sanctions at their own cost. Thus, the main responsibility of obtaining the approvals was upon Respondent No.1, though the Petitioner was required to give necessary cooperation.

The Petitioner cannot avoid his obligation under Clause 8.0 by asking Respondent No.1 to proceed as if there was no requirement of Probate. Equally, Respondent No.1 cannot say that because Probate is pending, he is not responsible for every other delay. The Letter of Intent dated 11 February 2025 and the Intimation of Approval dated 8 April 2026 have been obtained even though Probate is not shown to have been granted. This shows that the pending Probate did not prevent Respondent No.1 from taking all steps towards redevelopment. The absence of Probate does not explain why Respondent No.1 has not placed before this Court any definite programme for completing the remaining approvals, executing the required agreements with the tenants and starting construction. It does not explain why the municipal dues which Respondent No.1 had agreed to pay under Clause 15.1.9 have not been cleared. The Petitioner has failed to perform one important obligation. This fact has to be considered. But because of this failure, it cannot be said that Respondent No.1 has performed all his obligations or that the entire delay has taken place because of the Petitioner.

Therefore, both sides have raised serious issues regarding performance of the Agreement. The Petitioner has not shown that he has complied with the obligation of obtaining Probate. Respondent No.1 has not shown that construction has started or that there is any definite and reliable programme for completing the project. These matters will have to be considered by the Arbitral Tribunal. For deciding the present Petition, however, the Court will have to see the position of the property and what loss may be caused if redevelopment continues to remain dependent upon the same disputed arrangement.

Respondent No.1 has relied upon payment of Rs.4 crore to the Petitioner. According to him, Rs.2 crore was paid at the time of execution and registration of the Development Agreement and the remaining Rs.2 crore was paid thereafter under Clause 3.1. He says that he has obtained the development rights after paying valuable consideration and the Petitioner cannot take away those rights according to his own wish.

Payment of Rs.4 crore is certainly an important circumstance. The Petitioner has not put forward any case before this Court that the said monetary consideration was not received by him. Therefore, Respondent No.1 is justified in saying that he has paid a substantial amount under the Agreement. His claim that he has spent money on architects, consultants, permissions, security and other development-related work will have to be properly examined. However, merely because Respondent No.1 has paid consideration, it does not mean that he has an unlimited right to continue the redevelopment in every situation. The Agreement puts various responsibilities upon the Developer. A person who has paid consideration is required to perform the promises which he has accepted under the Agreement. Payment of Rs.4 crore cannot take the place of obtaining permissions, executing necessary agreements with tenants and carrying out construction.

Respondent No.1 relies upon Clause 3.2, which provides for allotment of 1,500 sq. ft. MOFA carpet area and three car parking spaces to the Petitioner. The Agreement says that the area coming to the share of the Owner will be identified and earmarked after sanction of plans and issuance of IOD or Plinth Commencement Certificate, followed by the necessary RERA registration and documents. This shows that the non-monetary consideration was connected with progress of redevelopment. It cannot be treated as an amount which was immediately payable. But it shows that the parties had agreed that redevelopment would be carried out and the Owner would receive his agreed area in the new building. Respondent No.1 relies upon Clauses 1.0 and 5.6. According to him, the development rights given to him are irrevocable rights coupled with interest. Under Clause 1.0, the Petitioner has “irrevocably and absolutely” appointed Respondent No.1 as Developer and granted development rights to him. The Agreement records that the Developer has acquired and purchased those rights.

On considering these clauses, the Petitioner's description of the arrangement as only a bare licence does not fully agree with the terms of the registered Development Agreement. Under the Agreement, Respondent No.1 has obtained valuable contr-development rights after paying consideration. Clause 5.6 records that vacant, peaceful, and physical possession of the property was handed over to the Developers for the purpose of development. The Agreement permits fencing of the property, appointment of security personnel and construction of a security cabin. Therefore, the Petitioner's submission that Respondent No.1 entered the property only as a bare licensee cannot be accepted completely. Respondent No.1 was given possession for carrying out redevelopment under the Agreement. But this does not mean that ownership of the property was transferred to him. It does not mean that he can use the property for any purpose which is not connected with redevelopment or that he can continue claiming development rights without performing his obligations. The possession given to Respondent No.1 was connected with the redevelopment arrangement. It was not a separate transfer of ownership. This difference has to be kept in mind. The financial investment and contr-rights claimed by Respondent No.1 must be considered and protected in arbitration. At the same time, these rights cannot be used to keep the property without redevelopment for an unlimited period when work has not progressed.

Respondent No.1 has relied upon the Irrevocable Consent-cum-Declaration executed by the tenants. He has produced one specimen declaration signed by Mr. Ajay C. Rajparia on 24 May 2022, which is marked as Exhibit-I to his Affidavit in Reply. According to Respondent No.1, the Petitioner has deliberately not disclosed this document before the Court.

Clause 5 of the said declaration says that the tenant would give up his tenancy rights only after registration of the Ownership Agreement for permanent alternate accommodation in the newly constructed building. The relevant part reads:

The said clause says that the Agreement will be registered under the provisions of the Maharashtra Ownership Flats Act and MahaRERA after obtaining the IOD/Commencement Certificate from the concerned authority. Respondent No.1 relies upon Clause 7 of the declaration, which states:

This declaration is required to be considered. From its terms, it appears that for the tenant who signed this declaration, payment of rent was connected with registration of the Agreement for permanent alternate accommodation. Therefore, at this stage, the entire claim of the Petitioner that transit rent became payable immediately upon execution of the Development Agreement cannot be accepted without examining the separate declarations and the conditions agreed with each tenant. However, Respondent No.1 has produced only one specimen declaration before this Court. He says that similar declarations were signed by the other tenants. But the complete set of declarations has not been produced for examination. Therefore, the conditions accepted by each tenant and the date from which rent became payable will have to be examined. The declaration signed by one tenant cannot be taken as proof of the conditions accepted by all the fourteen tenants.

There is one more aspect which requires consideration. Under the Development Agreement, Respondent No.1 was authorised to negotiate, settle and execute necessary documents for giving permanent alternate accommodation to the tenants. The declarations provide that the Ownership Agreements will be registered after obtaining the necessary approvals. Respondent No.1 has obtained the Letter of Intent and Intimation of Approval. However, he has not shown that the required Ownership Agreements or Permanent Alternate Accommodation Agreements have been executed and registered. He has not placed any supporting material to show what steps were taken for completing these formalities after obtaining the Intimation of Approval.

Respondent No.1 cannot rely upon the fact that the Ownership Agreements have not been registered and say that therefore the tenants have no claim for rent. He will have to explain why such agreements have not been executed when the Development Agreement had placed responsibility for taking necessary steps upon him. The effect of the tenant declarations, the obligations accepted by Respondent No.1 and the amount payable to each tenant will have to be examined in arbitration.

Respondent No.1 says that his letter dated 25 June 2025 was issued only as a gesture of goodwill and should not be treated as an admission that he had committed any default. However, the said letter refers to an extension of three months for starting rent payments and construction-related activities. It states:

The letter states:

From this letter, it does appear that Respondent No.1 was aware that rent payments and construction activities had not started in the manner which was expected. Whether this letter amounts to a legally binding admission of liability or whether it was only an assurance given as a goodwill gesture will have to be decided by looking at the other correspondence between the parties. But the contents of this letter cannot be ignored.

The Petitioner claims an amount of Rs.1,24,94,791/- towards arrears of transit rent and displacement compensation, as shown in Exhibit-J. Respondent No.1 disputes this calculation. According to him, the statement requires checking tenant-wise and the amount payable to each tenant will have to be worked out. Considering the tenant declarations and the dispute regarding the date from which rent became payable, I am not inclined to direct Respondent No.1 to deposit the entire amount of Rs.1,24,94,791/- in the present Petition. For giving such a direction, a more detailed examination of the individual agreements, declarations, period of default and payments made, if any, will be necessary. However, this does not mean that the claim of the Petitioner is rejected. The claim for arrears of rent and displacement compensation and the defence raised by Respondent No.1 will remain open for decision by the Arbitral Tribunal. The Tribunal will examine the declarations signed by the tenants, the obligations of Respondent No.1 under the Development Agreement, the correspondence exchanged between the parties and the tenant-wise calculation of the amount claimed.

The Petitioner alleges that Respondent No.1 has created third-party rights in favour of Respondent No.2 by executing the document registered under Serial No.1938/2024 dated 8 July 2024. According to the Petitioner, this document was not disclosed to him and his permission was not taken before executing the same. He says that though Respondent No.1 claims that the arrangement with Respondent No.2 has been cancelled, no registered deed of cancellation has been produced before the Court. Respondent No.1 denies that the arrangement with Respondent No.2 is against the Development Agreement. He relies upon Clause 13.3 and Clauses 16.1 to 16.3. Clause 13.3 permits the Developer to carry out the development through a joint venture and obtain financial assistance. Clauses 16.1 and 16.2 permit the Developer to obtain project or construction finance by using the Developer's Area and the rights given to him under the Agreement as security. Clause 16.3 requires the Owner to give necessary cooperation for obtaining such finance. Respondent No.1 relies upon Clause 23.4 of the Development Agreement. This clause permits the Developer to change his constitution and enter into joint-development or assignment arrangements in respect of his rights and entitlements. It says that written consent of the Owner is not required for such arrangement. But the clause puts certain conditions. Respondent No.1, namely, Awadhesh Anand, must continue to have an interest in such arrangement so that the obligations under the Agreement are properly performed. He must give written intimation to the Owner. Further, the rights and entitlements of the Owner should not be affected adversely.

On reading these clauses together, the Petitioner's submission that the Development Agreement prevents Respondent No.1 from entering into any joint-development arrangement cannot be accepted. Clause 13.3 and Clause 23.4 make provision for such an arrangement. Clause 16.2 permits the Developer to obtain finance by using his development area and rights under the Agreement. Therefore, the Petitioner cannot say that every arrangement made by Respondent No.1 with another developer or financier is prohibited. However, Clause 23.4 does not give Respondent No.1 an unlimited right to transfer the entire project or create rights which may cause difficulty or prejudice to the Owner. The conditions mentioned in the clause will have to be followed. Respondent No.1 must continue to have an interest in the arrangement so that his obligations are performed. He must give written information to the Owner. The rights and entitlements of the Owner must remain protected.

Respondent No.1 says that the arrangement with Respondent No.2 was made for getting financial assistance and completing the project. However, the documents available do not show the exact nature and extent of the rights given to Respondent No.2. They do not show how much finance was obtained, whether any security was created, whether Respondent No.1 continued to have an interest in the arrangement or whether the written information required under Clause 23.4 was given to the Petitioner. Respondent No.1 says that the arrangement with Respondent No.2 has been cancelled. But no registered deed of cancellation has been shown before this Court. In these circumstances, I am not inclined to declare the document dated 8 July 2024 as void or ineffective at this stage. For deciding that question, the document, the relevant clauses of the Development Agreement and the rights created under the said arrangement will have to be examined. However, Respondent Nos.1 and 2 cannot be permitted to create any rights or encumbrances on the basis of the said document during the arbitration proceedings. They will have to disclose the complete details of the arrangement and its present position, including whether it has been cancelled.

Respondent No.1 has objected to joining Respondent No.2 as a party to the present Petition. According to him, Respondent No.2 is not a party to the main Development Agreement and therefore should not have been joined. This objection cannot be accepted for the limited purpose of the present interim proceedings. The Petitioner alleges that Respondent No.2 is claiming rights through an arrangement made by Respondent No.1 in respect of the very same property which is the subject matter of arbitration. The relief sought against Respondent No.2 is mainly to prevent it from dealing with the property or creating additional rights during the dispute. Therefore, Respondent No.2 is a proper party for deciding these limited protective reliefs. However, this finding does not decide whether Respondent No.2 has any independent contrliability or whether the arrangement made in its favour is ultimately valid and enforceable.

The next objection raised by Respondent No.1 is based upon Clause 25.0 of the Development Agreement. According to him, the parties have agreed that neither party can terminate the Agreement unless both parties agree in writing. He says that even if there is any breach, the only remedy available to the party suffering such breach is to seek specific performance and recover costs and expenses. Clause 25.0 reads:

The words used in this clause are clear. The parties have agreed that if there is any breach, the aggrieved party can seek specific performance of the Agreement. They have agreed that neither party can terminate the Agreement unless both parties agree in writing. This clause cannot be ignored only because one party is alleging serious breach by the other.

The Petitioner says that Respondent No.1 has committed serious and continuing breaches of the Agreement and that by his conduct he has shown that he is not willing to perform his obligations. According to the Petitioner, a party who has failed to perform the main obligations cannot insist upon continuing the Agreement only by relying upon Clause 25.0. He says that he issued a final notice dated 21 July 2026, giving fifteen days to Respondent No.1 to correct the defaults. Since Respondent No.1 did not comply with the notice, the Petitioner accepted the alleged repudiation and treated the Development Agreement and Power of Attorney as terminated and revoked.

Respondent No.1 does not accept that he has repudiated the Agreement. According to him, he has taken substantial steps for redevelopment and is ready and willing to complete the project. He says that the Petitioner has no legal right to terminate the Agreement on his own and that the notice dated 21 July 2026 has no legal effect. There is some substance in the objection raised by Respondent No.1 regarding Clause 25.0. The legal effect of this clause will have to be carefully examined. The Court cannot ignore it. The parties have agreed about the remedy available in case of breach. They have restricted the right of either party to terminate the Agreement without written consent of the other. At the same time, the legal effect of the conduct of a party who is alleged to have refused or made incapable of performing his entire promise will have to be considered. Section 39 of the Indian Contract Act, 1872 provides:

The Supreme Court in K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa Batil, 2025 INSC 1298, has considered the legal position regarding unilateral termination of a contract. In paragraph 43, the Supreme Court held the difference between an Agreement which gives a party the right to terminate and an Agreement which does not contain such a right. It held that a party cannot terminate a non-determinable Agreement on its own only because it wishes to do so. The Supreme Court explained that where there is no right to terminate and a party still brings the Agreement to an end, such action may amount to breach by repudiation. The judgment requires the Court to examine the terms of the Agreement and the nature of the alleged default before reaching any conclusion.

The above judgment is relevant for considering the present dispute. However, it does not mean that this Court should finally decide the entire issue of termination in a Petition under Section 9. Whether Clause 25.0 prevents termination in the circumstances stated by the Petitioner, whether Section 39 of the Contract Act can apply even though the said clause is there, whether Respondent No.1 has refused or made incapable of performing the Agreement in its entirety and whether the Petitioner has properly accepted such repudiation are questions which require detailed examination.

There is another question whether the Petitioner, by his own conduct, had agreed to continue with the Development Agreement even after the alleged defaults. For deciding this, the different communications exchanged between the parties, the letter dated 25 June 2025, the notices issued in February and July 2026 and the replies given by the parties will have to be considered together. The Arbitral Tribunal will be the proper forum for deciding these questions. Therefore, I am not inclined to give a final declaration that the Development Agreement has been validly terminated. At the same time, I am not accepting the submission of Respondent No.1 that the Agreement must continue to be acted upon in every respect till the arbitration is finally completed. If such an arrangement continues, the entire redevelopment may remain dependent upon the present Developer for an uncertain period, even though construction has not started. There is a difference between finally deciding that an Agreement has come to an end and making some temporary arrangement which allows the property to be redeveloped while keeping all contr-claims open. Section 9 gives power to the Court to make such interim arrangements for protecting the subject matter of arbitration. For preventing redevelopment from remaining stopped, the Court need not finally decide whether the termination notice is valid or not.

The Petitioner has stated in paragraph 35 of the Petition that he is not asking this Court to finally declare that the Agreement stands terminated. His purpose is to obtain protection of the property till the disputes are decided in arbitration. The reliefs sought by him, particularly permission to undertake redevelopment through another Developer, will certainly affect the development rights claimed by Respondent No.1. Therefore, these reliefs will have to be considered with proper safeguards. They cannot be granted by treating the dispute regarding termination as finally decided.

Respondent No.1 relies upon Clause 24.10 of the Development Agreement. According to him, the parties have agreed that construction work should not be stopped or obstructed during the pendency of any dispute and that the Petitioner would not seek an injunction which may interfere with such construction work.

The purpose of this clause appears to be that disputes between the parties should not unnecessarily stop construction work which is being carried out under the Development Agreement. But the facts in the present case are different. Respondent No.1 has not produced any Commencement Certificate. The documents before the Court do not show that any substantial construction work has started. Therefore, the present request of the Petitioner is not for stopping any substantial construction work which is going on. The Petitioner is asking for protection against creation of third-party rights and wants to take steps for completing the redevelopment through another arrangement. The question is whether, in the present circumstances, Respondent No.1 should be permitted to keep control over the entire redevelopment process till the arbitration is finally completed. Clause 24.10 cannot be read from the other obligations under the Development Agreement or from the power available to the Court under Section 9. This clause cannot be used as a reason for keeping the project without any progress for an unlimited period. It cannot be treated as giving Respondent No.1 an absolute right to continue dealing with the property even though serious disputes have arisen regarding performance of the Agreement. However, I am not finally declaring that Clause 24.10 has stopped operating. Its meaning and legal effect will remain open for consideration by the Arbitral Tribunal.

The question now is whether, after considering the entire material, the Petitioner has made out a case for interim protection. For this purpose, the Court has to consider the condition of the property, the progress made by Respondent No.1, the alleged defaults of both parties, the position of the tenants and the loss which may happen if redevelopment is not allowed to proceed.

The Petitioner has shown that the old building was demolished in February-March 2020 and that the fourteen tenants and occupants were displaced because of the demolition. They are still waiting for permanent alternate accommodation in the new building. Therefore, the need for redevelopment is immediate and it continues even today. Respondent No.1 has obtained the Letter of Intent and Intimation of Approval. These are important steps and cannot be ignored. His explanation regarding the time required for statutory permissions, arranging finance, clearing municipal dues and completing other formalities cannot be rejected only because construction has not started. But the fact remains that even after obtaining the Intimation of Approval in April 2026, Respondent No.1 has not produced the Commencement Certificate. His own Affidavit in Reply says that the certificate is likely to be obtained within sixty to ninety days. No clear financial arrangement or dependable programme for starting and completing construction has been shown. Respondent No.1 has not shown that the required Permanent Alternate Accommodation Agreements with the tenants have been executed.

The Court cannot decide this issue only by accepting the future assurance given by Respondent No.1. An assurance that the work will start shortly has to be considered along with the progress made so far. In the present matter, the parties have exchanged several notices and replies, but construction has still not reached the stage of commencement. The Court will have to consider what may happen if the same arrangement is allowed to continue throughout the arbitration proceedings.

Respondent No.1 says that he has spent substantial amounts and has obtained development rights after paying valuable consideration. This claim requires protection. If Respondent No.1 proves before the Arbitral Tribunal that the Petitioner has wrongly terminated the Agreement or prevented him from performing his obligations, the Tribunal can consider his claim for investment, damages, compensation or any other relief available under the Agreement and law. However, the Petitioner and the tenants cannot be asked to wait for an unlimited period only because Respondent No.1 has a monetary claim. The time lost by the persons who have been displaced from their homes cannot be brought back by granting damages at a later stage. The Petitioner is required to protect the property and take reasonable steps for redevelopment. The tenants have lost possession of their old premises. They require a proper and workable arrangement for getting permanent accommodation.

In Kannamwar Nagar Aditya Cooperative Housing Society Limited, this Court considered a case where the Developer had repeatedly given assurances regarding payment of rent and completion of construction, but the work had not progressed satisfactorily. In paragraph 28, the Court held that a fresh assurance cannot be considered without looking at the earlier assurances which were not followed by performance. In paragraph 29, the Court observed that the money invested by the Developer may be compensated by an arbitral award, but the long period for which members remain deprived of their homes cannot be compensated with the same ease. The Court observed in paragraph 41 that redevelopment should not be allowed to remain uncertain when there is no reasonable confidence that the project will proceed within a workable period. In paragraph 43, the Court permitted the Society to take steps for completing the redevelopment while keeping the monetary claims and other disputes open for arbitration. The relevant directions are contained in paragraph 43 of that judgment. The Court restrained the Developer from creating third-party rights and permitted the Society to appoint another Developer or undertake self-redevelopment, subject to obtaining statutory permissions.

The decision in Om Vithal Cooperative Housing Society Limited is relevant. In paragraph 22, this Court considered the explanation given by the Developer regarding delay because of statutory permissions and construction requirements. The Court did not ignore those difficulties. However, it held that the conduct of the parties and the condition of the project would have to be examined. The Court considered the continued non-payment of rent, insufficient progress of construction and uncertainty regarding finance. In paragraph 25 of that judgment, the Court observed that when additional time is given to a Developer, such time is given for completing the work within the extended period. It does not give the Developer an unrestricted right to continue delaying the project without any consequence. In paragraphs 27 and 28, the Court made it clear that the final question regarding validity of termination should be decided in arbitration, but the interim arrangement should ensure that redevelopment does not remain stopped for an unlimited period.

The Court referred to Pioneer Constructions v. Sahakarnagar Co-operative Housing Society Limited, 2026 SCC OnLine Bom 2711. In paragraph 33 of the Om Vithal judgment, the following observation from Pioneer Constructions was quoted:

The same judgment records that the Court must make a prima facie examination of which party is responsible for the breach. It does not say that whenever a Society or Owner terminates a Development Agreement, such termination must be accepted. In paragraph 36, the Court considered the explanation given by the Developer. It held that though those explanations may have importance while deciding the dispute in arbitration, the material available before the Court did not show sufficient progress so as to require the Society to continue with the same Developer till the arbitration was completed. In paragraph 47, the Court observed that if the Society was not permitted to proceed with redevelopment, the entire project could remain dependent upon the final result of arbitration. On the other hand, if the Society was permitted to proceed through another Developer, the earlier Developer would not lose his right to make a claim. The validity of his claim and the monetary consequences could still be decided by the Arbitral Tribunal.

The above decisions relate to redevelopment agreements involving cooperative housing societies. The present case is different because it concerns an individual Owner and an old tenanted property. Therefore, these judgments cannot be applied in exactly the same manner without considering the terms of the present Development Agreement. In particular, Clause 25.0 and the obligation of the Petitioner to obtain Probate make the present dispute different in some important respects. However, the principle that redevelopment should not remain stopped for an uncertain period is certainly relevant. The Petitioner and the fourteen occupants cannot be asked to wait for an indefinite period only because there is a dispute between the Owner and the Developer. The Court will have to balance the contr-and financial rights of the Developer with the need to protect the property and make redevelopment possible.

From the material available, I find that Respondent No.1 has taken some steps for obtaining the necessary approvals. However, he has not shown sufficient progress in construction or any reliable arrangement for starting and completing the project. His expectation that the Commencement Certificate will be obtained within sixty to ninety days is not sufficient to require the Petitioner to continue with the same arrangement during arbitration. The failure of the Petitioner to obtain Probate is certainly a serious matter. But that circumstance does not remove the uncertainty regarding progress of the redevelopment. Therefore, the balance of convenience is in favour of permitting the Petitioner to take steps for redevelopment, but with proper protection to Respondent No.1. The claims of Respondent No.1 regarding payment of Rs.4 crore, additional expenditure, investment, alleged loss of development rights and the consequences of termination will remain open for decision. Respondent No.1 will be entitled to produce all supporting documents and accounts before the Arbitral Tribunal.

If the Petition is rejected and Respondent No.1 is allowed to continue as the only Developer, the property may remain without construction till the parties get a final decision in arbitration. On the other hand, if the Petitioner is permitted to proceed with redevelopment, the claim of Respondent No.1 can still be examined by the Arbitral Tribunal. If such claim is proved, appropriate monetary or other relief can be granted. Therefore, the second course will cause less prejudice to the property and to the persons who are suffering because of delay in redevelopment. The Petitioner has therefore made out a sufficient prima facie case for protection of the property and for taking steps towards redevelopment. However, the relief will have to be limited in such a way that the validity of termination is not finally decided and any genuine claim of Respondent No.1 is not taken away. The Petitioner will have to maintain proper and complete accounts. All documents and records relating to the project will have to be preserved. At this stage, no final finding regarding ownership of the property, validity of termination or the final liability of either party is necessary.

In view of the above discussion, the Petition deserves to be partly allowed. The Petitioner has made out a case for preserving the property and permitting steps for redevelopment. However, the Petitioner's claim regarding the validity of termination, the Respondent's claims regarding development rights and investment, the question of Probate and title, and the monetary claims of both sides must remain open for arbitration.

It is necessary to make it clear that permitting the Petitioner to proceed with redevelopment does not amount to a final declaration that the Development Agreement dated 20 October 2023 has been validly terminated. It is an interim arrangement made because the property cannot be allowed to remain undeveloped for an uncertain period. The Arbitral Tribunal will decide whether the Petitioner's notice dated 21 July 2026 validly brought the Agreement to an end or whether Respondent No.1 continues to have enforceable rights under it.

The right of Respondent No.1 to claim refund, damages, compensation, reimbursement of expenditure or any other relief arising from the Agreement is preserved. Similarly, the Petitioner's claims relating to breach, transit rent, municipal dues and other losses are preserved. Respondent No.1 will be entitled to place before the Arbitral Tribunal all documents showing the amount paid, expenditure incurred, payments made to authorities, payments made to consultants and any finance obtained for the project. The parties must preserve the original documents relating to the project. The Petitioner must, on his part, take steps for obtaining Probate and completing the formal transfer of title as agreed under Clause 8.0. Respondent No.1 must disclose the approvals and financial transactions undertaken by him and must not use the Development Agreement or the Power of Attorney to create rights in the property during the pendency of the arbitration.

The following order is, therefore, passed: