JAYCEE HOMES PVT LTDversusKURLA MOON ROCK MUNICIPAL EMPLOYEE CO OPERATIVE HOUSING SOCIETY LTD

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AGK
         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
             ORDINARY ORIGINAL CIVIL JURISDICTION

             ARBITRATION PETITION NO.106 OF 2026


Jaycee Homes Private Limited                … Petitioner
           V/s.
Kurla Moon Rock Municipal Employee
Cooperative Housing Society Limited         … Respondent



Mr. Sahil Mahajan with Mr. Saurabh Godbole for the
petitioner.
Mr. Amrut Joshi with Ms. Pooja Batra, Mr. Pratik Amin
and Mr. Harsh Agarwal for the respondent.



                           CORAM      : AMIT BORKAR, J.

                           DATED      : JULY 2, 2026
P.C.:

1.      The present petition is filed under Section 9 of the
Arbitration and Conciliation Act, 1996. By this petition, the
petitioner   seeks   interim   protection   pending    the     arbitral
proceedings and the execution of the award, if ultimately passed in
its favour. The petitioner has prayed for appointment of the Court
Receiver, High Court, Bombay, or any other fit and proper person,
as Receiver in respect of the property bearing Survey No.187,
Hissa No.2, corresponding to CTS No.823, admeasuring 826.50
square metres, situated at 823, Pipe Lane, New Hall Road, Kurla
West, Mumbai, together with the structures standing thereon, with
all powers under Order XL Rule 1 of the Code of Civil Procedure.


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The petitioner has also prayed for an order of temporary injunction
restraining the respondent, its servants, agents or any person
claiming through it from selling, transferring, parting with
possession, alienating, creating any third party rights, or otherwise
dealing with the said property till the arbitral proceedings are
concluded.

2.    The facts giving rise to the present petition, as stated by the
petitioner, are as follows. The petitioner is a company incorporated
under the Companies Act, 1956 and is engaged in the business of
construction and redevelopment. The respondent is the owner of
the property in question. According to the petitioner, the parties
entered into a registered Development Agreement dated 16 August
2014, under which the respondent granted development rights in
favour of the petitioner for redevelopment of the property. The
respondent also executed and registered a General Power of
Attorney in favour of a Director of the petitioner company for
carrying out the work contemplated under the agreement. It is
further stated that on 8 April 2014, the petitioner company was
converted from a limited company into a private limited company.

3.    It is the case of the petitioner that it paid an amount of
Rs.12,64,375/- towards corpus to the members of the respondent
society. Thereafter, it submitted the building plans to the Municipal
Corporation for approval. The Municipal Corporation sanctioned
the plans and issued the Intimation of Disapproval (IOD) on 22
June 2015. According to the petitioner, despite obtaining the
necessary approvals, the respondent failed to hand over possession
of the property in terms of the Development Agreement. As a



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result, the petitioner, through its Advocate's notice dated 1 August
2023, invoked the arbitration clause contained in Clause 59 of the
Development Agreement. Though the notice was admittedly
received by the respondent, no reply was given. The petitioner
therefore contends that it is entitled either to seek specific
performance of the Development Agreement or, in the alternative,
recovery of the corpus amount together with interest and
damages.

4.    The petitioner further states that it has learnt that the
respondent is taking steps to appoint another developer for
redevelopment of the property. According to the petitioner, if such
steps are permitted, its contractual rights under the Development
Agreement would be seriously prejudiced. It is in these
circumstances that the present petition under Section 9 of the Act
has been filed seeking interim protection.

5.    Mr. Mahajan, learned counsel appearing for the petitioner,
submitted that the building plans had already been approved by
the Municipal Corporation and the IOD was issued on 22 June
2015 in the name of the constituted attorney of the owner.
According to him, this clearly demonstrates that the Development
Agreement had been substantially acted upon and that valuable
contractual rights had already accrued in favour of the petitioner.

6.    Learned counsel submitted that it was the respondent which
failed to comply with the terms of the Development Agreement by
not handing over vacant and peaceful possession of the property.
According to him, without possession, the petitioner could not




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proceed with the redevelopment work. He submitted that the
petitioner was always ready to perform its obligations, but because
of the respondent's failure to fulfil its part of the agreement, the
project could not proceed. It was therefore compelled to invoke the
arbitration clause by notice dated 1 August 2023. He further
submitted that after learning that the respondent was proposing to
appoint another developer, the petitioner approached this Court
seeking protection of its contractual rights till the disputes are
decided in arbitration.

7.    Learned counsel placed reliance upon the judgment of this
Court in Jankalyan Sahakari Bank Limited v. State of Maharashtra
in Writ Petition No.5354 of 2025, decided on 15 October 2025. He
submitted that under the registered Development Agreement, the
petitioner had acquired valuable rights to develop and sell the
property after redevelopment, which created an interest in the
property itself. According to him, once such rights were created
under a registered document, the respondent could not have
unilaterally terminated the Development Agreement. He therefore
submitted that the petitioner has made out a prima facie case for
grant of the interim reliefs prayed for in the present petition.

8.    Per contra, Mr. Joshi, the learned counsel appearing for the
respondent relied upon several judgments of this Court and
particularly the decision in Ison Builders LLP v. Om Sairam Co-
operative Housing Society, 2026 SCC OnLine Bom 319. He
submitted that in a case involving similar facts, this Court had
refused interim protection to a developer who had sought to
restrain the society from appointing another developer after



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termination of the Development Agreement. He submitted that the
Court found that the developer had failed to perform its
contractual obligations within the stipulated period and that the
society had consequently lost confidence in the developer. It was
held that a developer who is in default cannot prevent the society
from proceeding with redevelopment through another developer
and that its remedy, if any, is only to claim damages before the
arbitral tribunal. In support of these submissions, reliance was
placed on paragraphs 33 to 35, 37, 44 and 46 of the said
judgment.

9.    Learned counsel appearing for the respondent, submitted
that the respondent's building was constructed in the year 1981
and had, over a period of time, become old and dilapidated.
According to him, the members were anxious to have the property
redeveloped so that they could shift to a safe building at the
earliest. After negotiations between the parties, a Development
Agreement came to be executed on 16 August 2013 under which
the respondent granted development rights in respect of its
property bearing Survey No.187, Hissa No.2, corresponding to CTS
No.823, admeasuring 826.50 square metres, situated at Pipe Lane,
New Hall Road, Kurla West, Mumbai, together with the existing
building known as "Kurla Moon Rock", upon the terms and
conditions contained therein.

10.   Learned counsel submitted that under the Development
Agreement,   the   petitioner   was   required   to   complete      the
redevelopment within two years from the date of issuance of the
Commencement Certificate, with a further grace period of six



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months. However, despite execution of the agreement, the
petitioner failed to even commence construction for several years.
During this period, the members continued to reside in the old
building, whose condition kept deteriorating. He further submitted
that the agreement contemplated that within thirty days from the
issuance of the IOD, and after the petitioner called upon the
members to vacate, the members would hand over vacant
possession of their respective premises. Although the petitioner
obtained the IOD on 22 June 2015, it never fulfilled its own basic
obligations, including payment of transit rent, brokerage and
shifting charges. According to the respondent, the petitioner did
not have sufficient financial resources to undertake the project and
therefore deliberately never called upon the members to vacate.
He further submitted that even according to the petitioner, it had
invested only Rs.12,64,375/- towards corpus, which payment itself
is disputed by the respondent.

11.   Learned counsel further submitted that sometime in the year
2016, nearly three years after execution of the Development
Agreement, the petitioner itself expressed its inability to carry out
the redevelopment and proposed that its development rights be
assigned in favour of M/s. Bhatia & Rahat Realty LLP. Considering
the urgent need for redevelopment and the poor condition of the
building, the respondent agreed to the proposal in its Special
General Body Meeting held on 3 April 2016 and granted its No
Objection Certificate. Thereafter, the petitioner assigned all its
rights and interests under the Development Agreement in favour of
M/s. Bhatia & Rahat Realty LLP and acknowledged the said



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assignment by its letter dated 27 October 2016 addressed to the
respondent.

12.   Learned    counsel    lastly       submitted   that    despite      the
assignment, no redevelopment work commenced even till the year
2018. In these circumstances, the respondent terminated the
Development Agreement and all related arrangements with the
petitioner as well as M/s. Bhatia & Rahat Realty LLP by its letter
dated 14 February 2018. According to the respondent, this
termination has been deliberately suppressed by the petitioner in
the present proceedings. He submitted that the petitioner neither
replied to the termination notice nor challenged it before any
Court or arbitral forum. Even thereafter, the petitioner remained
completely silent for almost five years. It was only in August 2023
that the petitioner issued a notice invoking arbitration, without
disclosing the termination of the Development Agreement, and
alleged that the respondent had failed to hand over possession of
the property. On that basis, the petitioner has now sought specific
performance of the Development Agreement and the interim
reliefs claimed in the present petition.

13.   I have considered the submissions made by both sides and
have gone through the documents placed before the Court. At this
stage, while considering a petition under Section 9 of the
Arbitration and Conciliation Act, this Court has to see whether the
petitioner has made out a prima facie case, whether the balance of
convenience is in its favour and whether refusal of interim
protection is likely to cause such loss which later may not be
properly compensated by money.



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14.   There is no dispute that a registered Development
Agreement came to be executed between the parties. It is also not
disputed that by the said agreement, the respondent granted
development rights of the property in favour of the petitioner. The
material further shows that the Municipal Corporation approved
the building plans and issued the IOD on 22 June 2015. The
petitioner has placed material to show that certain amount was
paid towards corpus. Though the respondent disputes such
payment, for the present purpose it appears that at least some
amount was invested by the petitioner in relation to the
redevelopment project.

15.   However, only because there is a Development Agreement
and municipal approvals are obtained, it does not mean that the
petitioner becomes entitled to all interim reliefs claimed in the
petition. The Court is also required to examine whether the
petitioner was ready and capable of performing the obligations
undertaken under the agreement.

16.   The main submission of the petitioner is that redevelopment
could not begin because the respondent did not hand over vacant
possession of the property. At first glance, this submission appears
to carry some weight because redevelopment cannot begin without
obtaining possession from the existing occupants.        The record
indicates that under the Development Agreement, the members of
the respondent society were required to vacate their premises only
after the petitioner fulfilled certain obligations, including payment
of transit rent, brokerage, shifting charges and thereafter called
upon the members to hand over possession. The respondent has



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contended that these obligations were never fulfilled by the
petitioner. It is the respondent's case that because the petitioner
did not have financial capacity, it never called upon the members
to vacate the premises. At this stage also, no material is placed by
the petitioner to show that it had complied with obligations and
thereafter demanded possession from the respondent.

17.   One more circumstance also deserves consideration. Though
the Development Agreement was executed in the year 2013 or
2014 and the IOD was obtained on 22 June 2015, no
redevelopment work started for many years . During this long
period, the record does not show any meaningful progress in the
redevelopment project. Except obtaining the municipal approvals,
no material is pointed out to show that the petitioner was in a
position to commence the work. Merely obtaining approvals may
not establish that the petitioner remained ready and willing to
perform its obligations under the agreement.

18.   The respondent has also relied upon the later conduct of the
petitioner. The material on record shows that in the year 2016, the
petitioner itself proposed assignment of its development rights in
favour of M/s. Bhatia & Rahat Realty LLP. The respondent accepted
the proposal considering that redevelopment was getting delayed
and granted its consent. The petitioner also acknowledged such
assignment. Prima facie, this conduct appears to indicate that the
petitioner was finding difficulty in executing the redevelopment on
its own. It is true that assignment of development rights may not
amount to breach of the agreement. Still, when this circumstance
is read together with the remaining material on record, it lends



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support to the respondent's case that the petitioner was facing
financial difficulties in carrying forward the redevelopment
project.

19.   The respondent has also placed strong reliance upon the
termination letter dated 14 February 2018. According to the
respondent, the Development Agreement already stood terminated
much before the arbitration notice dated 1 August 2023 came to
be issued. It is also submitted that this termination has not been
disclosed by the petitione. The material on record does not show
that after receipt of the termination letter, the petitioner
challenged the same before any competent forum or invoked
arbitration within a reasonable period. On the contrary, arbitration
appears to have been invoked only after five years. Whether such
termination is legal or otherwise is a matter to be decided in the
arbitral proceedings. However, the long silence on the part of the
petitioner is one relevant circumstance which cannot be ignored
while considering whether discretionary interim relief should be
granted.

20.   Learned counsel appearing for the petitioner relied upon the
decision in Jankalyan Sahakari Bank Limited and submitted that a
registered Development Agreement creates an interest in the
property and therefore such agreement cannot be terminated
unilaterally. There is no difficulty in accepting the proposition that
rights created under a registered Development Agreement deserve
protection. However, such protection cannot be granted in every
matter as a matter of routine. It always depends upon the facts of
each case and the conduct of the parties and nature of terms of



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agreement. The Court is also required to examine whether the
party seeking such protection has complied with the obligations
undertaken under the agreement. On the other hand, the
respondent relied upon the judgment in Ison Builders LLP. The
principle emerging from the said decision is that where a
developer has failed to perform its obligations within the agreed
time and the society has lost confidence in such developer, the
Court should not restrain the society from appointing another
developer.   This     principle    appears    to     have   relevance       in
redevelopment matters because the members continue to stay in
old   and    unsafe    buildings    waiting    for    redevelopment.        If
redevelopment projects remain pending for years because of
disputes between the developer and the society, greater hardship is
caused to the persons residing in such buildings. Therefore, while
protecting contractual rights, the Court also cannot ignore the
larger interest of the members who have been waiting for
redevelopment.

21.   In the present case, the respondent has placed material to
show that the building was constructed in the year 1981 and has
become old and dilapidated. This position has not been disputed
by the petitioner. The redevelopment project has remained
incomplete for almost ten years. If at this stage the respondent is
restrained from appointing another developer, the redevelopment
is likely to remain stalled till completion of arbitration, which may
take time. Such a situation is likely to cause greater prejudice to
the members of the respondent society who are still residing in the
old building. Therefore, this circumstance assumes importance



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while considering the balance of convenience.

22.   The petitioner has also sought appointment of the Court
Receiver over the property. Such relief is an extraordinary one and
ordinarily is granted only where sufficient material is placed before
the Court to show that the property is likely to be wasted,
alienated or dealt with in such a manner as may defeat the arbitral
proceedings. In the present case, the property belongs to the
respondent and continues to remain occupied by its members. The
dispute between the parties relates to enforcement of rights arising
under the Development Agreement. Appointment of a Receiver
over the entire property would amount to taking away control of
the respondent over its own property, though material justifying
such an extreme order is not available on record.

23.   Likewise, the prayer seeking injunction restraining the
respondent from appointing another developer also cannot be
granted merely because arbitration has been invoked. If such
injunction is granted, the Development Agreement would continue
despite disputes regarding its performance and regarding its
termination. Such an order would amount to granting the final
relief itself at the interim stage. While exercising powers under
Section 9, the Court should avoid passing an order which finally
decides the dispute.

24.   For all the aforesaid reasons, I do not find any merit in the
present arbitration petition and the same is accordingly dismissed.

25.   It is, however, clarified that all observations made in this
order are only prima facie and confined only to the adjudication of



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the present petition under Section 9 of the Arbitration and
Conciliation Act, 1996.

                                      (AMIT BORKAR, J.)




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