Sangat Sadan Cooperative Housing vs Guinea Global Next LLP & Anr.

The present Petition is filed by the Petitioner under Section 9 of the Arbitration and Conciliation Act, 1996. By filing this Petition, the Petitioner is seeking certain interim reliefs so that it can continue and complete the redevelopment of its property. According to the Petitioner, the redevelopment work has stopped since December 2023.

According to the Petitioner, the facts which led to the filing of the present Petition are as follows. The property bearing Survey No. 142, Plot No. C, Nos. 1 and 4, CTS No. 580B, situated at Village Nahur, Taluka Kurla, Mumbai Suburban District, admeasures 1089 square yards, that is, 908 square metres. There is one building on the said property consisting of two wings, namely, A and B, having a total of 20 members. On 8 March 2017, the Petitioner Society issued a public notice inviting tenders for redevelopment of the said property. On 14 February 2020, Respondent No. 1 submitted its offer for redevelopment under Section 79(A) of the Maharashtra Co-operative Societies Act, 1960. Thereafter, in the General Body Meeting held on 15 March 2020, Respondent No. 1 was appointed as the Developer for carrying out the redevelopment of the said property. In July 2020, Respondent No. 1 was incorporated as a Limited Liability Partnership under the Limited Liability Partnership Act, 2008, and is represented by its Designated Partners. On 30 September 2020, the Petitioner and Respondent No. 1 entered into a Development Agreement. Under the said Agreement, the development rights were given to Respondent No. 1 for carrying out and completing the redevelopment project in the manner and within the time provided in the Agreement. The main terms of the Agreement were that the members of the Petitioner Society were required to vacate their premises and hand over possession of the property to Respondent No. 1 within 30 days from the receipt of the Intimation of Disapproval (IOD), for the purpose of redevelopment. Respondent No. 1 was required to pay brokerage, shifting and transportation charges for transit accommodation, along with an interest-free security deposit. Respondent No. 1 was required to pay hardship compensation at the rate of Rs. 800/- per square foot in two instalments. An amount calculated at the rate of Rs. 400/- per square foot was payable at the time of vacating the premises, and the remaining amount of Rs. 400/- per square foot was payable at the time of handing over possession. Respondent No. 1 was required to obtain the IOD within six months from the date of execution of the Development Agreement. It was required to obtain the Commencement Certificate (CC) within two months from the date on which the Petitioner Society handed over possession of the property. The Agreement provided that time was an important condition for completion of the project. Respondent No. 1 was required to complete construction of the proposed new building within 30 months from the date of obtaining the Commencement Certificate, with a grace period of six months. Thus, the total period allowed for completion was 36 months. Respondent No. 1 was required to obtain the consent of the Petitioner Society before submitting the building plans to the Municipal Corporation of Greater Mumbai (MCGM). It was the responsibility of Respondent No. 1 to pay all the outgoings relating to the property, including municipal taxes, property taxes, fees, penalties and utility charges. Respondent No. 1 was required to pay relocation compensation until possession was handed over, apart from the hardship compensation agreed to be paid to the members. The Agreement provided for payment of liquidated damages if Respondent No. 1 failed to hand over possession within 36 months. It contained clauses relating to termination of the Agreement and resolution of disputes through arbitration.

On 30 September 2020, the Petitioner executed a Power of Attorney in favour of Respondent No. 1. On 3 December 2020, Respondent No. 1 applied for the first Commencement Certificate. On 6 September 2021, the Municipal Corporation of Greater Mumbai issued the Intimation of Disapproval. Immediately after receiving the same, the members vacated their premises and handed over possession to Respondent No. 1. On 2 May 2022, the first Commencement Certificate was issued, permitting construction up to the plinth level. Thereafter, the construction work commenced. In July 2022, Respondent No. 1 completed excavation and construction up to the plinth level. On 6 August 2022, the project was registered with MahaRERA under Registration No. P51800046500 in the name of “ShubhAarambh”. On 31 March 2023, a Commencement Certificate was issued, permitting construction of the ground floor for shops and the first to third upper floors. According to the Petitioner, the members of the Society addressed letters dated 27 December 2023 and 16 January 2025 to Respondent No. 1, expressing their concerns regarding the redevelopment work. By December 2023, construction of the ground floor and three slabs had been completed. However, after that, the construction work stopped. In February 2025, Respondent No. 1 stopped paying relocation compensation. One of the partners of Respondent No. 1 stated through WhatsApp that the work had stopped due to lack of funds. On 15 May 2025, the MCGM issued a notice to Respondent No. 1 regarding payment of outstanding dues. Thereafter, in October 2025, Respondent No. 2 entered into a Memorandum of Understanding with Respondent No. 1. On 5 October 2025, the Petitioner Society passed a resolution to issue a termination notice to Respondent No. 1 in accordance with Clause 52 of the Development Agreement. Accordingly, on 10 October 2025, the Petitioner issued a termination notice to Respondent No. 1. In the said notice, the Petitioner pointed out the breaches committed by Respondent No. 1 under the Development Agreement, particularly its failure to complete the redevelopment within the agreed time. On 16 October 2025, Respondent No. 1 issued a conditional No-Objection Certificate stating that it had no objection to the Development Agreement being executed, or proposed to be executed, between the Petitioner Society and Respondent No. 2. On 24 May 2026, the Petitioner Society held a Special General Body Meeting and passed a resolution by which the earlier resolution dated 5 October 2025 was partly withdrawn or cancelled. Thereafter, on 1 June 2026, the Petitioner, through its Advocate, issued a notice to Respondent No. 1, calling upon it to hand over possession of the property and to execute the necessary Deed of Cancellation and Revocation Deed. On 29 June 2026, Pankaj Mhatre, one of the partners of Respondent No. 1, sent a reply through his Advocate, seeking time to resolve the issues. Subsequently, on 27 July 2026, Pankaj Mhatre sent a reply through his Advocate. In the said reply, he stated that the delay had occurred due to personal difficulties and informed the Petitioner that he would visit the members of the Society to work out a concrete solution within ten days from 5 August 2026. According to the Petitioner, the redevelopment work has nevertheless remained stalled and the issues have not been resolved. In these circumstances, the Petitioner has filed the present Petition seeking interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996.

Mr. Joshi, learned Advocate appearing for the Petitioner, submits that interim and ad-interim reliefs are necessary to protect the members of the Petitioner Society because of the conduct of Respondent No. 1. According to him, Respondent No. 1 has failed to take effective steps to carry out the redevelopment of the property, and the construction work at the site has stopped since September 2023. This is despite the fact that the Development Agreement provides that time is an important condition and fixes a schedule for completing the construction. He submits that Respondent No. 1 has not paid the monthly relocation compensation from February 2025 till date. According to the Petitioner, Respondent No. 1 has not acquired any right which would prevent the Petitioner from terminating the Development Agreement. In these circumstances, Respondent No. 1 cannot claim to be aggrieved by such termination. Mr. Joshi submits that Respondent No. 1 has committed serious breaches of the Development Agreement and is not entitled to claim any rights or benefits under it. He submits that Respondent No. 1 was not, and is still not, ready, willing or financially capable of performing its obligations under the Development Agreement.

Mr. Joshi submits that, in a WhatsApp message dated 5 February 2025, one of the partners of Respondent No. 1 LLP admitted that the LLP was facing financial difficulties and was unable to make payments within time. He submits that Respondent No. 1 compelled the Petitioner Society to consider appointing another developer to assist in completing the project. Under the proposed arrangement, the partners of Respondent No. 1 LLP would receive a few premises in the redeveloped building. According to Mr. Joshi, these circumstances show that Respondent No. 1 is unable to perform its obligations under the Development Agreement. He submits that, in the absence of any subsisting binding contract in favour of Respondent No. 1, particularly after termination of its appointment, Kuber Realty LLP has no right or claim over the property. Mr. Joshi submits that Respondent No. 1 LLP does not have the financial resources required to complete the project. After the existing building was demolished in September 2021, the construction work proceeded very slowly and stopped in September 2023. Respondent No. 1 has constructed only the ground floor and three slabs and has thereafter abandoned the work at the site. The members of the Petitioner Society have been living in rented premises since 2021. As Respondent No. 1 has failed to pay the relocation compensation, many members have been forced to shift to cheaper rented accommodation situated far away from the property. Several members are senior citizens. They have faced serious difficulties, mental stress and hardship in finding rental accommodation and shifting from one rented premises to another every year. Mr. Joshi submits that most members have been deprived of their own homes and are facing financial difficulties because of the failure of Respondent No. 1 to make the agreed payments. He submits that Respondent No. 1 has breached its obligations under the Development Agreement. Mr. Joshi submits that the Petitioner is not aware whether Respondent No. 1 LLP has created any mortgage or other charge over the property. He relies upon Clause 20 read with Clause 37(p) and Clause 47 of the Development Agreement. According to him, these clauses permit Respondent No. 1 LLP to create a mortgage only over the flats and shops forming part of the Developer's share. The said clauses do not permit Respondent No. 1 to raise funds by creating a mortgage over the entire plot or over the flats allotted to the members of the Petitioner Society. Therefore, if Respondent No. 1 has created any mortgage over the plot or the flats allotted to the members, such mortgage would not be binding upon the Petitioner Society and its members.

Mr. Joshi submits that, under the Development Agreement, Respondent No. 1 LLP has no independent right, title or interest in the property or in the Floor Space Index (FSI) attached to it. Respondent No. 1 was permitted to enter upon the property only as a licensee and only for the purpose of carrying out the redevelopment work. According to the Petitioner, legal possession of the property always remained with the Society. Mr. Joshi submits that the Petitioner has terminated the Development Agreement by issuing a termination notice. Therefore, Respondent No. 1 is no longer entitled to enter upon the property or to carry out any construction or other activity thereon. He submits that Respondent No. 1 LLP has no subsisting right, title or interest of any nature in the property. The Petitioner seeks an order of this Court restraining Respondent No. 1 from creating any third-party rights in respect of the property, entering upon the property, carrying out construction or undertaking any other activity thereon.

Mr. Joshi submits that, as of July 2026, an amount of Rs. 41,83,753/- was outstanding and payable by Respondent No. 1 towards property taxes, municipal taxes, water charges and other taxes and charges. He relies upon the bill-wise outstanding report issued by the MCGM in support of this submission. He points out that the cheques issued by Respondent No. 1 towards payment of property tax were dishonoured on the ground of insufficient funds. Mr. Joshi submits that, under Clause 21 read with Clause 25, Clause 36, Clause 37(w) and Clause 39 of the Development Agreement, Respondent No. 1 was required to pay the outstanding amounts due to the MCGM and bear the utility charges. According to him, Respondent No. 1 has failed and neglected to fulfil these obligations. The Petitioner seeks an order directing Respondent No. 1, pending the hearing and final disposal of the present Petition, to pay the outstanding amount of Rs. 41,83,753/-towards property taxes, municipal taxes, water charges and other taxes and charges as on the date of termination of the Development Agreement, together with interest and penalties payable under the Agreement. The Petitioner submits that Respondent No. 1 should be directed to pay the taxes and charges becoming due from the date of termination until it vacates the property, hands over possession to the Petitioner Society and removes all its movable articles lying on the property. According to the Petitioner, Respondent No. 1 cannot avoid its contractual responsibility to pay these amounts merely because the Development Agreement has been terminated.

Mr. Joshi submits that, after termination of the appointment of Respondent No. 1 as the Developer, an amount of Rs. 86,23,383/- collected from individual members of the Petitioner Society towards the additional area proposed to be provided to them must be returned. According to him, the agreement for purchase of additional area was dependent upon successful completion of the redevelopment project. Since the Development Agreement has been terminated and the project has not been completed, the event upon which the agreement for additional area depended can no longer take place. He submits that the agreement relating to the purchase of additional area has become ineffective and the amount collected from the members must be refunded. Mr. Joshi submits that Respondent No. 1 has not answered the specific allegations regarding breaches of the Development Agreement made in the Petition. According to him, Respondent No. 1 has mainly given general and evasive denials. He submits that the Affidavit in Reply filed on behalf of Respondent Nos. 1 and 2 proceeds mainly on the following grounds. First, it is alleged that the Petitioner suppressed the Memorandum of Understanding stated to have been executed between Respondent Nos. 1 and 2 in October 2025, to which the Petitioner was not a party. Secondly, it is contended that the termination of the Development Agreement dated 30 September 2020 was not because of any breach committed by Respondent No. 1, but was an agreed step taken under the said Memorandum of Understanding, thereby resulting in novation of the contract. Thirdly, it is alleged that the termination was not in accordance with Clause 52 of the Development Agreement. Fourthly, it is contended that the reliefs sought by the Petitioner cannot be granted in a Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996. Mr. Joshi denies all these contentions and submits that none of them provides a valid ground to refuse the reliefs sought by the Petitioner.

Mr. Joshi submits that the fact that two members of the Petitioner Society signed the Memorandum of Understanding as witnesses does not make the Society a party to it or bind the Society by its terms. He relies upon Clause 31 of the said Memorandum of Understanding, which expressly records that the witnesses signed it “only in the capacity of witnesses” and “shall not be responsible for any obligations arising out of this MOU.” He submits that the Memorandum of Understanding is neither registered nor dated. According to him, a reading of the document shows that it was entered into between Respondent Nos. 1 and 2 because Respondent No. 1 had failed to complete the redevelopment within the agreed time and was facing defaults in compliance, lack of funds and legal disputes. It was proposed that Respondent No. 1 would leave the project and Respondent No. 2 would take it over. In support of this submission, Mr. Joshi relies upon the following portion of the Memorandum of Understanding:

Mr. Joshi submits that the Petitioner Society was not a party to the Memorandum of Understanding. Therefore, according to him, there is no basis to contend that the termination of Respondent No. 1 was carried out as a step towards implementing the said Memorandum of Understanding. He reiterates that the resolution for terminating Respondent No. 1 and appointing Respondent No. 2 as the new Developer was passed only because the members of the Society had been deprived of their homes since September 2021 and there had been no meaningful progress in the redevelopment work since December 2023. The Society was left with no practical choice but to explore the possibility of continuing the redevelopment through another developer. The Petitioner denies that these steps resulted in novation of the Development Agreement. Mr. Joshi submits that, at the instance of Respondent No. 1, a draft Development Agreement was exchanged between the Petitioner Society and Respondent No. 2. However, the draft was never finalised, executed or registered because the parties could not agree upon its terms and conditions. He submits that the discussions with Respondent Nos. 1 and 2 regarding the takeover of the stalled redevelopment project did not restore the confidence of the members of the Society. The members had lost confidence in Respondent No. 2 because it had been recommended by Respondent No. 1, which had continuously failed to perform its obligations under the Development Agreement. Mr. Joshi submits that even if it is assumed that the members of the Society knew about the Memorandum of Understanding, such knowledge cannot be treated as consent to its terms. The Petitioner Society is not bound by the said document. He clarifies that Respondent No. 2 has been joined as a party to the present Petition only as a precaution, so that it cannot claim any right or interest in the property of the Petitioner Society without the matter being considered by this Court.

Mr. Joshi denies the contention that the reliefs sought by the Petitioner cannot be granted under Section 9 of the Arbitration and Conciliation Act, 1996. He submits that the reliefs sought are interim measures intended to protect the Society and its members and to enable the Society to proceed with the redevelopment of its property. According to him, the conduct of Respondent No. 1 and its failure to perform the Development Agreement have made it necessary for the Petitioner to approach this Court. Mr. Joshi submits that the members of the Petitioner Society have lost faith and confidence in Respondent No. 1 as the Developer. The General Body of the Society has decided to proceed with the redevelopment by appointing another suitable and financially capable developer. At the same time, the Society intends to pursue its claims against Respondent No. 1 for damages arising from its failure to perform the obligations under the Development Agreement. The amount of damages would be determined in accordance with the claims made and the loss suffered by the Society.

In support of his submissions, Mr. Joshi relied upon the judgments in Cox and Kings India Limited vs. Indian Railways Catering and Tourism Corporation Limited & Anr., (2012) 7 SCC 587; Chaurangi Builders & Developers Pvt. Ltd. vs. Maharashtra Airport Development Co. Ltd., 2013 SCC OnLine Bom 1530; Gopi Gorwani vs. Ideal CHS Ltd. & Lrs., 2013 SCC OnLine Bom 1967; Heritage Lifestyle & Developers Ltd. vs. Cool Breeze CHS Ltd. & Ors., 2014 (3) Mh.L.J. 376; The New Aarti CHSL vs. Estate & Investment Consultants, 2015 SCC OnLine Bom 5929; The Jal Ratan Deep CHSL vs. Kumar Builders Mumbai Realty Pvt. Ltd., 2015 SCC OnLine Bom 5928; Goregaon Sukhnivas CHSL vs. Sukushal Builders & Developers & Ors., 2016 SCC OnLine Bom 3366; SSD Escatics Pvt. Ltd. vs. Goregaon Pearl CHSL, Commercial Arbitration Petition (L) No. 1072 of 2018, decided on 14 December 2018; Karan Group Builders & Developers & Ors. vs. Dindoshi Vrindavan CHS Ltd., 2019 (4) ABR 673; Solaris Developers Pvt. Ltd. vs. Eversmile CHSL, 2019 SCC OnLine Bom 13335; Asha Sonu Samjiskar & Ors. vs. Sadguru Enterprises, Commercial Arbitration Petition (L) No. 674 of 2019, decided on 24 September 2019; Rajawadi Arunodaya CHSL vs. Value Projects Pvt. Ltd., 2021 SCC OnLine Bom 9572; Swashray CHSL vs. Shanti Enterprises, 2023:BIC-OS:13075; Ison Builders LLP vs. Om Sai Ram CHSL, 2026 SCC OnLine Bom 319; Vishwakiran CHSL vs. Super Construction Co., Arbitration Petition No. 156 of 2025, decided on 17 March 2026; Jaycee Homes Private Limited vs. Kurla Moon Rock Municipal Employee CHSL, Arbitration Petition No. 106 of 2026, decided on 2 July 2026; Sadguru Realcon Pvt. Ltd. vs. Chogledham CHSL, Commercial Arbitration Petition No. 369 of 2024, decided on 26 February 2026; Chandrakant Dagdu Vanne & Ors. vs. Heritage Lifestyle & Developers Pvt. Ltd.; and Mishal Constructions Pvt. Ltd. vs. Krishin CHSL, Arbitration Petition (L) No. 12390 of 2026, decided on 9 July 2026.

Mr. Dawar, learned Advocate appearing for the Respondents, submits that Respondent Nos. 1 and 2 executed a Memorandum of Understanding in October 2025, which was notarised on 9 October 2025 . The said MOU was witnessed by Mr. Jatin Ganatra, Secretary of the Petitioner Society, and Mr. Hemant Jayantilal Manek, a member of the Society. Clause 31 of the MOU describes them as “Witnesses (Society Committee Members)”. Both of them have signed Annexures 1 and 2 to the MOU. Mr. Dawar submits that both these persons attended the Special General Body Meeting of the Petitioner Society held on 5 October 2025 and signed the minutes of the meeting, in which a resolution was passed to terminate the appointment of Respondent No. 1 and appoint Respondent No. 2 as the Developer. According to him, the MOU records an arrangement which had been agreed upon between the Petitioner Society and Respondent Nos. 1 and 2. The important terms of the said MOU are as follows. (a) Recital H provides that Respondent No. 2 would act as the new Developer and continue the project in its existing condition, on an “as is where is” basis. For this purpose, the Petitioner Society would formally issue a termination letter, which Respondent No. 1 had agreed to accept, and thereafter hand over the project to Respondent No. 2. (b) Clause 1 provides that, after termination of the Development Agreement, Respondent No. 2 would step in as the new Developer, which would include execution and registration of a fresh Development Agreement directly with the Petitioner Society. (c) Clause 9 provides that the Petitioner Society and Respondent No. 1 would give their consent and authority to Respondent No. 2 to enter upon the project site.

Mr. Dawar submits that the above arrangement was made because the Petitioner Society had requested Respondent No. 1 to introduce another Developer who could assist in completing the project. According to him, in or around May 2025, the Petitioner Society had decided to explore the appointment of another Developer, namely, Aarambh Developers, which, according to the Respondents, was contrary to the terms of the Development Agreement. However, after examining the project and coming to the conclusion that Respondent No. 1 was a bona fide Developer, Aarambh Developers decided not to proceed with the project. Thereafter, the Petitioner Society requested Respondent No. 1 to introduce another person who could assist Respondent No. 1 in continuing and completing the redevelopment of the Society's property.

Mr. Dawar submits that, under the arrangement recorded in the MOU, Respondent No. 2 was substituted in place of Respondent No. 1 as the Developer of the Petitioner's property. According to him, the Petitioner Society agreed to this arrangement by passing the resolution dated 5 October 2025 and acted upon it by issuing the termination letter dated 10 October 2025. Respondent No. 1 accepted the arrangement by executing the MOU and issuing the No-Objection Certificate. Mr. Dawar submits that the arrangement resulted in novation of the original contract, meaning that the earlier contractual arrangement was replaced by a new one. According to him, the only remaining step was the formal execution and registration of the Development Agreement between the Petitioner Society and Respondent No. 2.

Mr. Dawar submits that Respondent No. 2 acted upon the arrangement recorded in the MOU in several ways. First, Respondent No. 2 dealt with the allottees to whom Respondent No. 1 had issued allotment letters and made payments to them. By way of example, copies of letters dated 3 November 2025, addressed by Respondent No. 2 to two such allottees and bearing their acknowledgements, have been relied upon. Secondly, by a letter dated 5 November 2025, Respondent No. 2 forwarded a draft Development Agreement to the Petitioner Society. The Society's committee members received the draft on 8 November 2025, as recorded by their endorsement on the letter. Thirdly, on 18 November 2025, Respondent No. 2 issued a public notice in the newspaper Navakal regarding the redevelopment rights in respect of the Petitioner's property. According to Mr. Dawar, the Petitioner Society did not raise any objection to the said public notice. Fourthly, Respondent No. 2 repeatedly called upon the Petitioner Society to execute the Development Agreement and Power of Attorney. These requests were made through the WhatsApp group shared with the members of the Society and through letters dated 8 March 2026 and 28 March 2026.

The dispute arises out of the Development Agreement dated 30 September 2020 executed between the Petitioner Society and the Respondents for redevelopment of the Society's property. The Society seeks interim protection in view of the delay in the redevelopment work, stoppage of transit rent and the amounts which, according to the Society, have become payable by the Respondents under the Development Agreement. The Development Agreement was executed on 30 September 2020. The Intimation of Disapproval was obtained and the members vacated their premises in or around September 2021. The first Commencement Certificate was obtained on 2 May 2022 and a Commencement Certificate was obtained on 31 March 2023. It is stated that construction at the property has remained stalled since December 2023 and that transit rent stopped being paid from February 2025. These dates are material. The members vacated their premises in the expectation that the redevelopment would be completed within the time agreed between the parties. They have remained away from their original premises, while the redevelopment work has not progressed as expected. The agreement cannot be treated as a mere paper arrangement when it concerns the homes of the Society's members and the financial arrangements made for their stay elsewhere.

The Society's case is that, under the Development Agreement, the Respondents were required to complete the construction within 36 months from the date on which the Commencement Certificate was issued. Out of these 36 months, 30 months were given for completing the construction and another six months were given as grace period. According to the Society, the said period expired in April 2025. Even after the expiry of this period, the construction was not completed and according to the Society, the Development Agreement came to be terminated in October 2025. The Society has accordingly worked out the amounts which, according to it, became payable up to the date of termination of the agreement. At this stage, however, the case stated by the Society cannot be taken as the final decision regarding the rights and liabilities of the parties. The Respondents may have their own defence regarding the time taken for obtaining permissions, the progress of construction, the reasons for delay and whether the termination of the agreement was proper. All these matters will have to be considered by looking at the Development Agreement and the documents produced by both sides. But, when the members have vacated their homes for redevelopment, the developer is required to perform the obligations which it has accepted under the agreement. The members cannot be expected to remain without their permanent homes, or without receiving the agreed amount for staying somewhere else, for an unlimited period only because a dispute has arisen between the Society and the developer. The dispute between the parties is one matter, but the difficulty faced by the members while waiting for their homes is another matter. Both these aspects have to be kept in mind while deciding whether interim protection is required.

Before considering the different amounts claimed by the Society, it is necessary to understand the nature of the power available to this Court under Section 9 of the Arbitration and Conciliation Act, 1996. The present proceedings are not for deciding all the disputes between the parties. Those disputes are to be decided in arbitration by considering the agreement and the material which may be produced before the Arbitral Tribunal. However, Section 9 gives power to this Court to grant interim protection wherever it is necessary, so that the rights of a party do not remain only on paper while arbitration is still going on. If a party shows that some protection is required at this stage, it cannot always be asked to wait till the arbitration is completed and the final award is passed. At the same time, Section 9 does not mean that every amount mentioned in the statement or calculation submitted by a party has to be accepted without checking it. The party asking for interim relief must show, at least prima facie, that there is a contractual or legal basis for claiming such relief. The Court must consider what may happen if the relief is refused and what effect may be caused to the other side if it is granted. The purpose is to protect the rights which appear to require protection at this stage, and not to decide the final monetary claim in advance without proper examination of the matter.

The Supreme Court in Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, (2022) 20 SCC 178, has explained that the power under Section 9 is wide enough to grant proper protection where the circumstances of the case require it. The Court has to see whether a prima facie case is made out, where the balance of convenience lies and what may happen if protection is refused and the applicant succeeds. Where the material supports the need for protection, the power should not be denied only on technical grounds. However, the relief granted must be connected with the purpose for which it is sought and must be fair to both sides. Therefore, the amounts claimed by the Society towards transit rent, liquidated damages and municipal taxes cannot be considered as if all these amounts are of the same nature. Transit rent is connected with the arrangement under which the members have to stay at another place while redevelopment of their homes is going on. Liquidated damages depend upon the relevant clause of the Development Agreement, the circumstances in which the amount becomes payable and the period for which it can be claimed. Municipal taxes have to be considered by examining the actual liability, the period for which the amount is claimed and the documents supporting it. If one claim is found to be made out prima facie, it does not mean that the other claims are established. Each amount has to be considered separately, keeping in mind the purpose of Section 9 and the fact that the final decision regarding disputed amounts will be taken by the Arbitral Tribunal.

The claim for transit rent requires separate consideration because the members have vacated their premises for redevelopment and have to arrange another place to stay until they can return to their homes. In Rakesh Shriram Chaudhari @ Dhobi v. Saikaushal Buildcon, Commercial Arbitration Petition (L) No. 5458 of 2026, decided on 9 July 2026, this Court considered a claim for interim deposit of transit rent where the old premises had been vacated and possession of the new premises had not been given. The Court considered that the dispute regarding delay or the exact amount payable could be decided in arbitration, but the existence of such a dispute did not mean that interim protection was not required. The Court directed deposit of the amount claimed and permitted withdrawal upon the petitioner giving an undertaking to redeposit any amount which might be found not payable. This approach shows that an interim arrangement can be made to give immediate protection to a party while keeping the defence of the other side open. It does not mean that every transit rent claim must be allowed in full. The obligation under the contract, the period of default and the documents supporting the calculation must still be examined in each case. The judgments placed before this Court show that, in redevelopment disputes, the rights of the developer and the rights of the Society's members have to be considered by looking at the circumstances in which the dispute has arisen. The developer may have entered into the project with the expectation of earning profit from the sale component and may say that a considerable amount has been spent. If the developer believes that the Society has wrongly terminated the agreement, it may claim compensation or other relief in accordance with law. These matters cannot be ignored merely because the Society wants to take steps for redevelopment. But the members of the Society have their own important interest in the matter. They have to vacate their homes, arrange another place to stay and wait for the permanent accommodation which was promised to them. Their expectation is not merely that some construction work will take place at the site. They expect that the redevelopment will be completed within the agreed period and that the developer will make the agreed payments during the period for which they have to stay away from their homes. If construction is delayed and transit rent is not paid, the members have to face both difficulties together. Their expenses for staying somewhere else do not stop merely because the Society and the developer are involved in a dispute. A developer entering into a redevelopment arrangement knows that the work involves removal or demolition of the existing premises, construction of a new building and handing over possession to the members. The possibility of commercial difficulties or reduction in profit cannot be considered separately from the obligations which the developer has accepted under the agreement. Equally, the Society cannot say that every delay is the fault of the developer or that every amount claimed by it must be paid without proof. The proper course is to examine the agreement, the conduct of both sides, the progress of the work, the reasons given for delay and the documents supporting the monetary claims. The Court has to balance these matters on the basis of the material available. The commercial interest of the developer cannot be treated as the only interest requiring protection, and the Society's claim cannot be treated as proved only because its members are facing hardship.

In Heritage Lifestyle and Developers Ltd, this Court considered a dispute in which the Society had terminated the Memorandum of Understanding and had taken steps to proceed with another developer. In paragraph 45, the Court considered that termination had taken place, that the Society had passed resolutions to proceed with another developer and that the proposed new developer was not a party to the arbitration between the earlier parties. The Court considered the effect which an interim order could have on the Society and the other societies forming part of the proposed joint development. In paragraph 46, the Court observed:

The reasoning in this judgment is important because it shows that the claim of the earlier developer and the need of the Society to proceed with redevelopment are not always the same issue. The developer may say that the termination was wrong and that it has suffered loss because of it. Such a claim can be considered in arbitration. But, merely because the developer has raised a dispute, it does not follow that the Society must always be prevented from taking steps for redevelopment until every dispute between the parties is decided. However, this judgment cannot be understood to mean that termination of every development agreement is valid or that a Society can ignore the procedure agreed under the contract. The observations in Heritage Lifestyle were made in the circumstances of that case. In the present matter, the validity of termination will have to be considered by looking at the agreement, the notices issued, the defaults alleged and the material placed before this Court. The judgment is relevant to the extent that, where termination has taken place and is not stayed by a competent court, the earlier developer's monetary claim may be decided in arbitration without requiring the Society to keep the redevelopment project stopped for an unlimited period. Paragraph 47 of Heritage Lifestyle refers to the fact that the members had lost confidence in the developer because there was no proper progress in the work. The Court considered whether the members could be compelled to continue with the same developer merely because the developer was claiming rights under the earlier arrangement. The concern was that redevelopment should not remain without meaningful progress for an unlimited period only because the dispute between the parties has not yet been decided.

This principle has to be applied carefully in the present case. Loss of confidence cannot be treated as proof of breach in every matter. The Court must see whether there is a reasonable basis for such loss of confidence in the conduct of the developer and whether the agreement and the record support the complaint made by the Society. It may happen that the developer has a genuine explanation for delay, such as the time taken for obtaining permissions or other matters which were not within its control. If such a defence is supported by documents, it has to be considered. But, on the other hand, a general statement that there were difficulties in the project cannot answer every allegation of prolonged delay or non-payment. In the present matter, the Society states that its members vacated their premises in or around September 2021, that construction remained stopped from December 2023 and that transit rent stopped from February 2025. The Society states that the contractual period for completing the project expired in April 2025 and that the Development Agreement was terminated in October 2025. If these dates are supported by the material on record, the matter cannot be treated as a small delay in completing some remaining work. The members have been away from their premises for a substantial period, while completion of the project and payment of transit rent have both become disputed issues. However, these dates alone cannot decide who is responsible for the delay. The Commencement Certificate, the relevant clauses of the Development Agreement, the correspondence between the parties, the work completed and the reasons given by the Respondents will have to be examined. If the Respondents have produced material to show that the delay was caused by the Society or by circumstances for which they are not responsible under the agreement, that defence will have to be considered. But, unless a sufficient explanation is shown at this stage, the mere pendency of disputes cannot be accepted as a reason for leaving the members without interim protection. The Society has a substantial basis to seek interim relief, subject to separate examination of the amounts claimed and the documents supporting them.

A similar approach can be seen in the New Aarti Co-operative Housing Society Limited. In that matter, the Court considered the steps taken by the Society after termination, including inviting tenders, appointing a project management consultant and entering into a fresh development arrangement. The Court considered that the earlier developer had not obtained an order preventing the Society from proceeding with redevelopment through another developer. In paragraph 64, the Court observed that the members of the Society could not be restrained from proceeding with redevelopment through another developer merely because the earlier developer continued to raise its claims in arbitration. The importance of this observation is that a claim under an earlier development agreement does not, in every case, give the earlier developer an automatic right to stop all work or activity on the property. The question is whether the earlier developer has shown a legal basis for seeking such restraint and whether the restraint is necessary for protecting its rights. The dispute about the validity of termination and the need to move forward with redevelopment are connected, but they do not always have to wait together until the final award is passed. Where the agreement has been terminated and such termination has not been stayed by a competent court, the earlier developer may pursue its claim in arbitration. Depending upon the facts, the Court can protect the monetary or other enforceable interest of the earlier developer without stopping the Society from taking steps required to complete redevelopment. This principle is important because an order stopping redevelopment may affect not only the Society and the earlier developer, but every member who is waiting for possession of a permanent home. If a wide restraint is granted without considering the effect on the members, the practical result may be that the project remains pending for years while arbitration continues. However, the Society cannot rely upon this principle to avoid its own contractual responsibilities or to make the earlier developer's enforceable rights meaningless without considering them. Any interim order must be made by looking at the actual situation and the rights which require protection.

In Jal Ratan Deep Co-operative Housing Society Limited, the Court considered allegations of breach and substantial delay by the developer in a redevelopment project. In paragraph 30, the Court recorded a prima facie view that the developer had committed breaches and that there was gross delay. The Court considered that, even after earlier extensions and opportunities, the work required under the development arrangement had not progressed in the expected manner. Paragraph 31 states:

In paragraph 32, the Court considered the condition of the buildings and the difficulties faced by the Society's members. It permitted the Society to take steps to appoint another developer and proceed with redevelopment, while allowing the earlier developer to pursue its claim for compensation in arbitration. This decision does not mean that the same result must follow in every redevelopment dispute. The facts of Jal Ratan Deep have to be distinguished from the present matter wherever the circumstances are different. In particular, the material presently available in this case does not state that the existing buildings are in a dilapidated condition. Therefore, that circumstance cannot be treated as existing in the present matter. The relevant principle is that, where the material shows serious delay and failure to perform the agreed obligations, the earlier developer's claim for money does not mean that the Society must continue with an arrangement which, prima facie, is not progressing as agreed. The Court must still examine whether the delay is attributable to the developer, whether the Society has followed the agreed procedure and whether termination has taken place in accordance with the agreement. But, where the material supports a prima facie finding of prolonged default, the possibility that the developer may later obtain compensation can be kept open for arbitration. That possibility does not always require the Society and its members to remain with the earlier arrangement for an unlimited period.

In Solaris Developers Pvt. Ltd, this Court considered the effect of the developer's financial difficulties and its inability to take the redevelopment project forward. In paragraph 19, the Court considered that the liabilities of the developer towards third parties were not a reason preventing the Society from taking a decision to terminate the development agreement. In paragraph 20, the Court considered that the developer was trying to bring in another investor or developer because it was unable to undertake the construction. Paragraph 21 refers to arrears of transit rent and the uncertainty faced by the Society's members. Paragraph 24 records that, if the developer believed that the Society's action had caused it loss, it could pursue a claim for damages in arbitration. Paragraph 25 emphasises that the redevelopment project should not be brought to a complete stop until all litigation comes to an end, where the agreement had been terminated and the developer was unable to perform its obligations. The relevance of this decision is that the Court has to examine the actual ability and conduct of the developer and not only the fact that a development agreement exists. The agreement is important, but it has been entered into for the purpose of carrying out redevelopment within the agreed arrangement. If the project remains incomplete for a substantial period, transit rent is not paid and the members continue to wait for their permanent premises, the Court has to consider what may happen if the situation is allowed to continue without any protection. The fact that the developer is facing financial difficulty, or is trying to obtain assistance from another person, does not prove that the termination is valid. The explanation given by the developer must still be examined. However, such difficulties cannot by themselves make the Society responsible for bearing the hardship for an unlimited period. Where the agreement has been terminated and the termination is not stayed, the developer's claim for loss or damages can be considered in arbitration, while the Society's need to take steps for redevelopment can be considered separately. The same reasoning is relevant to the claim for transit rent. The Respondents' defence can remain open, but where the contractual basis for payment is shown prima facie and the members continue to remain away from their homes, the Court has to consider whether some interim arrangement is required.

In SSD Escatics Pvt. Ltd, the Court considered an order passed by the Arbitral Tribunal after termination of the development agreement. Paragraphs 31 to 34 deal with the alleged breaches, the conduct of the parties, the Society's loss of confidence, the possibility of damages and the protection which could be given while arbitration was going on. The judgment shows that the Court has to consider the overall situation before deciding what interim relief should be granted. The result should not depend only on one party saying that the agreement has been terminated or on the other party saying that it has contractual rights which must be protected. The Court should consider whether the relief sought is wider than what is required to protect the applicant. If the developer's interest can be protected by deposit of money, security or by keeping its monetary claim open for decision in arbitration, it may not always be necessary to restrain the Society from taking every step towards redevelopment. On the other hand, if the material shows that a serious legal right may be irreversibly affected by the proposed action, that circumstance must be considered before granting relief to the Society. This approach is important in the present matter because the Society has claimed different amounts under different heads. The Court is not required to accept the entire calculation only because it has been submitted. Nor is it necessary to reject every request for interim protection merely because the Respondents dispute the figures. The proper course is to identify which obligations are supported prima facie by the agreement and the documents, which parts of the calculation require examination and what protection can fairly be granted at this stage. If a disputed amount can be secured by a suitable arrangement without deciding the claim, the Court may consider such an arrangement according to the facts of the case. The final liability of either side must remain open for decision by the Arbitral Tribunal.

The more recent decision in ISON Builders LLP, considers delayed redevelopment and the balance between the rights of the Society's members and those of the developer. In that matter, the developer had approached the Court seeking interim protection against termination of the development agreement and against the Society taking steps to appoint another developer. The Court considered the observations of the Division Bench in Huges Real Estate Developers LLP v. Khernagar Adarsh Co-operative Housing Society Limited, 2025 SCC OnLine Bom 2921, regarding the need to balance the members' right to alternate accommodation with the developer's interest in the redevelopment contract. The Division Bench's observations reproduced in paragraph 36 include the following:

The Division Bench observed:

These observations show the difference between the interests of the two sides. A developer enters into a redevelopment arrangement for a commercial purpose and may expect to earn profit from the project. If it is found that the termination was illegal and that the developer suffered loss because of it, the claim may be considered for monetary relief in the appropriate proceedings. But, where the residents are waiting for their permanent homes and the redevelopment has remained held up for a long period, the loss caused to them because of continued delay may not be fully removed by giving them money at a later stage. The Court is not saying that the developer has no rights or that its investment and contractual interests have no value. The point is that these rights have to be considered along with the purpose of the redevelopment agreement. The agreement is not meant only to give the developer an opportunity to earn profit. It provides the basis on which the members expect their homes to be reconstructed and possession to be given to them. In a proper case the Court may protect the developer's monetary claim without allowing redevelopment to remain stopped merely because the developer has challenged the termination. It must be kept in mind that these observations were made in circumstances where the condition of the existing structures and the members' need for alternate accommodation were relevant considerations. The present case has to be decided on its own facts and documents. Even so, the broader principle remains relevant. The Court has to consider the practical harm which may follow if redevelopment remains stopped, and the matter cannot be decided only by looking at the commercial interest of the developer. Paragraph 37 of ISON Builders applies these principles to the facts of that case. The Court observed that the Society's members were waiting for redevelopment and that the developer's interest was mainly connected with earning profit from the project. It considered that, if the termination was found to be invalid, the developer could pursue a claim for damages. Paragraph 38 refers to Swashray CHSL v. Shanti Enterprises, Borivali Anamika Niwas CHSL v. Aditya Developers, 2019 SCC OnLine Bom 10718, and Rajawadi Arundaya CHSL v. Value Project Pvt. Ltd., 2021 SCC OnLine Bom 9572. These decisions deal with the difficulties faced by members when redevelopment remains delayed for a long period and the Society is unable to make proper progress through the developer appointed.

The principle which follows from these decisions is that a Society cannot be kept dependent on a developer for an unlimited period where the material shows repeated defaults and no reasonable progress towards completion. The question cannot be decided only by counting the number of months of delay. The Court has to consider the obligations accepted under the agreement, the progress made, the reasons given for delay and the hardship caused to the members. If the developer has a genuine defence and the delay is shown to have occurred for reasons for which it is not responsible, those matters must be considered. But, if the material shows that the project has not progressed as agreed and the members continue to suffer, the existence of a monetary or contractual claim by the earlier developer does not require the Court to stop all redevelopment activity. I agree with the broad principle that redevelopment should not ordinarily be stopped only because a dispute about termination is pending, where the earlier developer's maintainable claims can be considered and protected through monetary relief or some other suitable arrangement. However, these judgments do not give an right to every Society to terminate its agreement and appoint another developer without following the agreed procedure. The legality of termination has to be considered from the documents and the terms of the particular agreement. It must be seen whether any order passed by a competent court has stayed the termination or placed any restriction on steps.

In the present case, the Society relies upon the expiry of the contractual period in April 2025, the alleged lack of progress and the termination in October 2025. These matters have to be considered along with the explanation of the Respondents and the actual record. If the Society's case of serious delay and non-performance is supported prima facie and the termination remains operative, the Court need not compel the members to continue with the earlier developer for an unlimited period merely because arbitration is pending. At the same time, any order allowing steps towards redevelopment must not be treated as a final finding that the termination is valid. The final rights and claims of both sides will remain subject to the appropriate proceedings.

One possible argument against the Society's request is that, if the Society is allowed to appoint another developer, the earlier developer's claim for specific performance of the Development Agreement may be affected. A similar concern was raised in paragraph 19 of The Jal Ratan Deep Co-operative Housing Society Limited. The developer in that case submitted that, if the Society was permitted to proceed as requested, its claim for specific performance would become infructuous. Reliance was placed on N. Srinivasa v. Kuttukaran Machine Tools Limited, (2009) 5 SCC 182. This submission cannot be ignored. If an agreement is still in force and a party has a genuine and maintainable claim for specific performance, the Court should not pass an interim order which destroys that right without considering the legal and factual position. The Court has to examine whether the agreement has been terminated, whether the termination has been stayed, what progress has been made by the developer, what obligations remain unperformed and what effect the proposed interim relief may have. It must consider whether the developer's interest can be protected through a narrower order or whether allowing the Society to proceed may cause prejudice which cannot be addressed later. However, the possibility of a claim for specific performance does not mean that the Society must be restrained from taking steps for redevelopment in every case. The judgments discussed above show that the contractual right claimed by the developer has to be balanced against the actual position of the members who are waiting for their homes. If the termination has taken effect, has not been stayed by a competent court and is supported prima facie by material showing serious delay or default, the Society's need to proceed with redevelopment cannot be ignored merely because the earlier developer has invoked arbitration. The developer may pursue its claim in accordance with law, and the Arbitral Tribunal may decide whether the termination was valid and what consequences follow from it. The order under Section 9 must be limited to what is necessary at this stage. If the validity of termination or the claim for specific performance requires a final decision in arbitration, this Court should not decide those issues in the present proceedings. Equally, it should not assume that the earlier developer's claim requires the Society to stop redevelopment altogether. The final validity of termination, if disputed, will remain open for decision in the appropriate proceedings. Ultimately, the approach has to be to protect those rights which require immediate protection without deciding the final dispute in advance. The Society's members should not be left without any remedy merely because the Respondents dispute the claim. The Court has to examine the material supporting each head of claim, consider the explanation given for delay and non-payment and pass an order which is fair in the circumstances. Any direction for deposit, payment, or security will operate as an interim arrangement and will not decide the final liability of the parties. The claims and defences of both sides, including the validity of termination and the exact amounts payable, will remain open for decision by the Arbitral Tribunal.

I now consider the claim of the Petitioner Society regarding payment of transit rent. It prima facie appears that payment of transit rent has stopped from February 2025. The Society states that the unpaid transit rent from March 2025 till the date of the statement is Rs.1,30,60,400.16/-. However, the Society has given a separate calculation by considering the period only till termination of the Development Agreement, which is stated to have taken place in October 2025. According to this calculation, the unpaid transit rent till termination comes to Rs.53,92,556.16/-. Thus, both amounts relate to different periods and cannot be considered as amounts payable for the same period. At this stage, the Court is required to consider the claim only till the stated date of termination, without deciding whether transit rent is payable for any period thereafter.

Transit rent has an important place in a redevelopment project. The members of the Society are required to vacate their existing premises so that the old building can be demolished and a new building can be constructed. After vacating their premises, the members and their family members have to arrange another place for their stay. For this purpose, they have to pay rent and meet other expenses every month. Under the redevelopment arrangement, the developer agrees to pay transit rent so that the members can meet these expenses till they receive possession of their new premises. Therefore, payment of transit rent is not a voluntary payment made by the developer out of generosity. It is an obligation which forms part of the redevelopment arrangement. The members have agreed to vacate their homes on the understanding that the developer will perform the obligations accepted by it under the agreement. The obligation to pay transit rent has to be considered in this background. A member who has vacated his home cannot be expected to arrange another place for staying without the agreed financial support, particularly when the developer has obtained vacant possession for redevelopment. If transit rent is not paid for a long period, the member has to spend money from his own pocket for alternate accommodation, though the need for such accommodation has arisen because of the redevelopment project. This causes actual financial difficulty to the members. Such difficulty continues for every month during which the agreed amount remains unpaid. The loss cannot be treated as imaginary or as something which may arise only in future, merely because the member may be able to claim the amount in arbitration.

In the present case, the Society states that its members vacated their premises in or around September 2021 and that payment of transit rent stopped from February 2025. It is stated that construction at the property has remained stopped since December 2023. If these facts are supported by the documents placed on record, it would show that the members have remained away from their original premises for a considerable period and have been required to bear the expenses of alternate accommodation without receiving the agreed transit rent. The obligation of the developer cannot be considered only by looking at the total amount claimed by the Society. The Court must consider the purpose for which the payment was agreed and the difficulty which is caused to the members when the payment is not made after they have handed over possession of their homes. In this regard, reference can be made to the decision of this Court in Chandrakant Dagdu Vanne and Others. In that case, the Court considered the claim for unpaid transit rent in proceedings filed under Section 9 of the Arbitration and Conciliation Act, 1996. The Court explained the purpose of transit rent in paragraph 15 as follows:

The above observation is relevant for considering the obligation in the present case. Transit rent is agreed to be paid because the members are required to stay elsewhere during redevelopment. It is not a separate benefit which the members can be expected to give up whenever a dispute arises between the Society and the developer. If the developer has agreed under the Development Agreement to pay transit rent, its obligation has to be considered with reference to the terms of the agreement and the circumstances in which the members vacated their premises. In paragraph 17 of Chandrakant Dagdu Vanne, this Court observed that the purpose of exercising jurisdiction under Section 9 is to ensure that one party does not continue to suffer because the other party has failed to perform its contractual obligation, while the final dispute remains pending. In paragraph 18, the Court considered the contractual obligation, the long delay in redevelopment, the statement showing the outstanding dues and the fact that no reply had been filed disputing the calculation. After considering all these circumstances together, the Court held that a strong prima facie case for interim protection was made out. The Court accordingly directed payment of Rs.42,17,076/- towards unpaid transit rent, subject to the final outcome of the arbitration proceedings. The importance of the above decision is not only that a direction for payment of a particular amount was passed. It shows that, while exercising jurisdiction under Section 9, the Court can consider whether the obligation to pay transit rent is admitted or is prima facie established and whether such obligation requires interim protection. Merely because arbitration is pending, it does not mean that the members must remain without payment till the final award is passed. If such an approach is adopted, the members who have vacated their homes may have to bear the entire cost of alternate accommodation throughout the arbitration proceedings, even though the payment was agreed to meet that very expense.

A similar approach can be seen in Rakesh Shriram Chaudhari @ Dhobi. In that case, the developer opposed the claim for transit rent by relying upon allegations regarding the conduct of the petitioner and the delay which was said to have been caused by him. The Court did not decide those disputed allegations in the proceedings under Section 9. The Court considered that such disputes could be decided by the arbitral tribunal, but their existence alone did not require rejection of the entire claim for transit rent at the interim stage. The Court directed deposit of the claimed amount and permitted withdrawal upon the petitioner furnishing an undertaking to redeposit any amount which the arbitral tribunal found was not payable. The rights and contentions of both parties were kept open. The above decision is relevant because it shows the difference between granting interim protection to a claim and deciding whether the amount is payable. If the developer disputes the amount or raises a factual defence, the Court is not required to decide all such questions immediately as if it is conducting the arbitration. The Court can consider whether the contractual documents show a prima facie obligation and whether the claim requires protection till the dispute is decided. Depending upon the nature of the dispute and the material placed before it, the Court may direct payment of the amount or direct deposit of the amount, with suitable conditions to protect the interests of both sides.

The principles laid down by the Supreme Court in Essar House Private Limited are relevant. The Supreme Court has explained that Section 9 gives the Court power to grant interim measures of protection, including measures for securing an amount which is in dispute. This power is wide, but it has to be exercised judicially and not in an arbitrary manner. The Court has to consider whether a prima facie case is made out and weigh the effect of granting relief against the effect of refusing it. The procedural requirements applicable to ordinary civil proceedings cannot be applied so rigidly that the Court becomes unable to protect the interests of the parties even when the facts justify interim relief.

Applying these principles, the Court has to consider what would happen if no protection is granted in respect of transit rent at this stage. The members would have to continue arranging alternate accommodation from their own money, even though the developer had agreed to pay transit rent under the redevelopment arrangement. If the Society succeeds in arbitration, the members would still have suffered the financial burden during the entire period taken by the arbitration. A later award of money may compensate them for the amount found due, but it would not remove the immediate difficulty caused by non-payment of the agreed monthly amount. On the other hand, if a direction is made in respect of the amount which has accrued till the stated date of termination, the rights of the developer can still be protected by making the direction subject to the final award and keeping open the question whether any part of the amount was not payable. The objection that the Society's claim must wait till the final decision in arbitration cannot be a sufficient reason to refuse interim protection. At this stage, the Court is not required to declare every contractual claim as proved or to grant a final decree for all amounts which may become payable in future. The limited question is whether the claim for unpaid transit rent for a particular period, supported by the statement placed on record, should receive interim protection. If the Development Agreement provides for payment of transit rent, the members have vacated their premises under the redevelopment arrangement and the documents support the calculation, the Court can grant appropriate interim relief without deciding the entire dispute.

At the same time, the material on record shows that transit rent stopped from February 2025, whereas the amount of Rs.1,30,60,400.16/- is described as the amount payable from March 2025 till the date of the statement. Therefore, it has to be verified how the month of February 2025 has been considered under the contractual payment schedule and in the statement of account. No amount which is not due and unpaid can be included in the calculation. Equally, an amount which has become due under the agreement cannot be left out merely because the period has not been correctly described in the statement. Any payment made by the developer for the relevant period will have to be given credit. These issues do not require the entire claim to be rejected. They require the Court to identify the period for which interim relief is being considered and ensure that the amount directed to be paid is supported by the agreement and the documents. The difference between the two calculations cannot be ignored. However, it cannot become a reason to reject the entire claim when the amount for a shorter period is separately stated and can be verified from the record.

The balance of convenience is required to be considered. The members of the Society have vacated their homes and require money to meet the expenses of alternate accommodation. The developer, on the other hand, can raise its objections before the arbitral tribunal and seek adjustment if it establishes that any amount claimed was not payable. The direction concerning transit rent which has accrued till termination can expressly remain subject to the final outcome of arbitration. In this manner, the members are not left without interim protection, while the developer continues to have the right to dispute its final liability. It is necessary to examine Exhibit J along with the Development Agreement and the individual amounts payable to the members. If the documents support the sum of Rs.53,92,556.16/- as unpaid transit rent till the stated date of termination in October 2025, and there is no reliable material showing that the amount has been paid or that there is a material error in its calculation, the Society would have made out a prima facie case for interim relief. In such circumstances, the amount cannot be kept unpaid merely because the arbitral tribunal has not yet decided the final rights of the parties. The direction would only be an interim arrangement to protect the members from continued hardship. It would not mean that every part of the claim has been established.

The amount of Rs.53,92,556.16/- is stated to be the unpaid transit rent calculated till the date of termination in October 2025. The higher amount of Rs.1,30,60,400.16/- relates to the period extending beyond that date, till the date covered by the later statement. The Society has shown the two amounts separately and has used the lower amount while calculating its total claim of Rs.1,17,16,309.16/- towards transit rent, liquidated damages and municipal taxes till termination. Therefore, for deciding the present claim for interim relief, the Court is not required to decide the entire transit rent amount calculated till the later date. It is sufficient to consider the shorter period and the amount stated for that period. There is a difference between the claim for transit rent till termination and the claim for the period after termination. The first relates to the amount which, according to the Society, had become due while the Development Agreement was in force. The second may require consideration of the effect of termination, the terms governing transit rent and the rights and liabilities which may continue even after termination. The Court cannot combine both periods without first examining the contractual basis for each claim. Therefore, the question whether transit rent is payable after October 2025, including the difference between the two amounts mentioned in the statement, is kept open for the arbitral tribunal to decide in accordance with the Development Agreement and the evidence produced by the parties. The interim direction in respect of Rs.53,92,556.16 will remain subject to adjustment of any amount which the Respondents establish has been paid for the same period. The Society cannot receive payment twice for the same contractual dues. Equally, the Respondents cannot avoid the obligation merely by raising a general dispute, without showing what payments were made, which months are disputed or how the calculation is said to be wrong. The statement of outstanding dues has to be considered along with the contractual rate, the period for which each member was entitled to receive transit rent and the payment records maintained by the parties. The Court is not deciding whether the Society is entitled to the higher amount of Rs.1,30,60,400.16/-. The Court is not deciding what effect the termination has upon the claim for transit rent for the later period. These are separate questions from the claim for the amount which had become due till the stated date of termination. By limiting the present consideration to the shorter period, the Court avoids deciding the claim for a later period in advance, while at the same time considering the immediate financial difficulty said to have arisen because of non-payment. Having regard to the nature of transit rent, the fact that the members have vacated their premises for redevelopment, the period for which payment is stated to have remained outstanding and the principles considered in Chandrakant Dagdu Vanne and Rakesh Shriram Chaudhari @ Dhobi, I am of the view that the claim for transit rent till the stated date of termination deserves interim protection, provided the amount is supported by the Development Agreement and the corresponding statement of dues. Such protection is required so that the members are not left to bear the entire expense of alternate accommodation while arbitration is pending. The amount of Rs.53,92,556.16/- may be directed to be paid as an interim arrangement, subject to adjustment of any payment which is proved to have been made and subject to the final outcome of the arbitration proceedings. All questions relating to transit rent for the later period and the final liability of the parties shall remain open for decision by the arbitral tribunal.

The next claim is for liquidated damages. As stated in the Society's note, under the Development Agreement, if the developer fails to hand over possession within 36 months, he is required to pay liquidated damages at the rate of Rs.10,000/- per day. The Society has calculated this amount for the period from April 2025 to October 2025, which is stated to be 214 days, and has claimed Rs.21,40,000/-. However, the dates mentioned in the note are not the same. Paragraph 5 states that the period of 36 months ended in April 2025, whereas paragraph 8 states that it ended in April 2026. It is mentioned that the first Commencement Certificate was issued on 2 May 2022 and the Commencement Certificate was issued on 31 March 2023. From which date the period of 36 months is to be counted will depend upon the terms of the Development Agreement and whether the later Commencement Certificate has any effect on the calculation. The calculation in the note alone does not make this position clear. The Court cannot ignore the difference between April 2025 and April 2026, as both dates cannot be treated as one and the same. The amount of liquidated damages will have to be calculated from the correct date as provided in the agreement. Therefore, the claim of Rs.21,40,000/- is not being decided by this order. However, the Society has raised a specific claim under the agreement and has stated the rate as well as the period for which the amount is claimed. If the agreement and the supporting documents support this claim, it would be proper to protect the amount so that the claim does not become ineffective only because the arbitration proceedings take time. In these circumstances, the amount of Rs.21,40,000/- shall be secured during the arbitration proceedings. However, the amount shall not be released to the Society at this stage. Whether the amount is payable and the period for which it is to be calculated are left open for the arbitral tribunal to decide finally.

The Society has claimed Rs.41,83,753/- towards municipal taxes, which are stated to have become due up to May 2025. For this claim, the Society has relied upon Exhibit K at page 358 of the Petition. Whether the Respondents are liable to pay these taxes and how much they are required to pay will depend upon the relevant terms of the Development Agreement and the municipal tax documents. The Court will have to examine whether the agreement makes the Respondents responsible for these taxes and whether the amount claimed has been paid or reimbursed. The short note refers to Exhibit K as the basis for calculating the municipal taxes. If the said exhibit in the Petition supports the amount claimed and the relevant clause of the agreement makes the Respondents responsible for paying these taxes, the Society has made out a prima facie claim. However, from the material presently summarised, the Court cannot decide the liability in respect of each tax entry or whether the entire amount is payable to the Society at this stage. Therefore, the amount of Rs.41,83,753/- shall be secured during the arbitration proceedings. By directing that this amount be secured, the Court is only protecting the amount claimed by the Society. It does not mean that the Court has decided that the entire amount is payable to the Society. The arbitral tribunal will decide the liability after considering the agreement, the tax documents and any objections raised regarding the calculation.

The three amounts mentioned in the short note are as follows:

The total of these three amounts comes to Rs.1,17,16,309.16/-. The addition is correct according to the figures mentioned in the note. However, merely because the total has been correctly calculated does not mean that the entire amount is proved to be payable in law. As stated above, an interim direction for payment of transit rent can be made if the calculation is supported by the documents and there is no material to show that the amount has been paid. As regards liquidated damages and municipal taxes, certain questions still remain to be considered. Therefore, these amounts are required to be secured during the arbitration proceedings until the liability is decided.

In view of the above discussion, and after considering the material referred to, the Petition deserves to be partly allowed. The directions which follow are interim arrangements and shall remain subject to the final outcome of the arbitration proceedings.