In Redevelopment Process, Permanent Alternate Accommodation Must Be Handed Over & Transit Rent Must Be Paid To Person Actually In Possession Of Old Premises: Bombay High Court

The High Court was considering two appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the judgment passed by the Single Judge in a Petition filed by the Respondent seeking interim measures under Section 9.

The Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne said, “This Court has consistently taken a view that redevelopment process cannot be utilized for the purpose of seeking eviction of an occupant from the old premises and that possession of the permanent alternate accommodation must be handed over and the transit rent must be paid to the person, who was actually in possession of the old premises. Such an arrangement ensures that possession of the person in occupation of old premises is not disturbed only on account of demolition of the building for its redevelopment.”

The Bench referred to the judgments in Vipul Fatehchand Shah Vs. Nav Samir CHS (2023) and Harshad Shah Vs. Labharti Realties & Ors (2023).

Advocate Mayur Khandeparkar represented the Appellant while Advocate Rohaan Cama represented the Respondents.

Factual Background

The controversy revolved around a Flat situated in the building ‘Spectrum’. The flat was claimed to have been purchased by one Ritesh, but at the time of applying for society membership, it was claimed that the name of mother was also included in respect of the flat. Ritesh claimed that after marriage between his brother Rohitesh with Leena, he permitted the duo to occupy the flat as gratuitous licensees. When the mother passed away, Ritesh claimed exclusive ownership.

Apparently due to some marital discord between the couple, Leena claimed that her husband-Rohitesh no longer occupied the flat and she resided along with her two children. The building in which the flat was situated was taken up for redevelopment. Ritesh was willing to handover possession of the flat to the developer. However, Leena staked a claim to receive rental compensation from the developer. The developer filed Commercial Arbitration Petition under Section 9 seeking interim measures for appointment of Court Receiver in respect of the flat for securing its possession and the same was allowed. It was further directed that upon completion of construction of the Flat , possession thereof would be handed over to Leena.

Reasoning

Highlighting the fact that the possession of the person in occupation of old premises is not to be disturbed only on account of demolition of the building for its redevelopment, the Bench said, “Merely because redevelopment process requires handing over of possession of old premises to the developer, the same would not mean that the person in actual possession of old premises would lose such possession. In our view therefore redevelopment process undertaken by the Respondent No.1-Developer cannot result in dispossession of Leena, who is described as a gratuitous licensee by Ritesh.”

The Bench was of the view that the redevelopment process undertaken by the Respondent Developer cannot result in dispossession of Leena, who is described as a gratuitous licensee by Ritesh. The Bench noted that the Leena’s occupation of old premises as well as securing of benefits by her under redevelopment process would be subject to the outcome of the eviciton suit against Leena initiated by Ritesh. “However, since Leena would be handing over possession of the premises, it is Leena alone who must be put in possession of alternate accommodation. Similarly, transit rent needs to be paid to Leena, who would be dispossessed and needs to make interim arrangement in some other house during currency of the redevelopment process”, it added.

It was further noted that the name of the Appellant-Ritesh is entered in the records of the Society as a member and he claims ownership in respect of the flat in question. The Bench explained that PAAA needs be executed in the name of the person, whose name is reflected in the records of the Society. Similarly, the amounts towards hardship compensation (corpus) also needs to be paid in the name of Appellant-Ritesh. “Execution of PAAA as well as payment of hardship compensation (corpus) in the name of Appellant-Ritesh shall however be subject to claim of alleged shares in the flat raised by his two brothers- Rohitesh and Rajesh”, it stated.

The Bench also made it clear that once permanent accommodation becomes available for possession, Leena would secure possession thereof subject to pendency of eviction proceedings against her. The person claiming ownership in respect of flat and whose name is reflected in the Society records (Ritesh) would have PAAA executed in his name and shall also receive the hardship compensation (corpus) in respect of the old premises. “Mere execution of PAAA in the name of the Appellant-Ritesh would not affect the claim of Leena towards possessory right in respect of the old as well as new premises, subject to outcome of eviction proceedings”, it said.

Setting aside the direction by the Judge for execution of tripartite Agreement in respect of the Flat in the name of Court Receiver, the Bench ordered, “Execution of such Agreement in the name of Ritesh would be subject to claim of ownership raised by any other party”, it held while further ordering, “The amount of hardship compensation (corpus) and all amounts, except transit rent and brokerage, shall be paid by Respondent No.1 -Developer to the Appellant - Ritesh subject to the claim of ownership in respect of Flat No.12 by any other party.”

Cause Title: Ritesh Haldar v. Elite Housing LLP and Ors (Neutral Citation: 2025:BHC-OS:9704-DB)

Appearance

Petitioner: Advocates Mayur Khandeparkar, Nivit Srivastava, Sneha Patil, Yash Chedda, Brena Gala, Rohit Bamne

Respondents: Advocates Rohaan Cama, Kyrys Modi, Shanmukh Puranik

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