Jurisdiction U/S 9 A&C Act Is Equitable; Must Be Exercised With Fair & Just Direction Of Court: Bombay High Court
The Bombay High Court was hearing a Commercial Arbitration Petition filed under Section 9 of the A&C Act by a Developer namely Ambit Urbanspace.
The Bombay High Court emphasised that the jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) is equitable jurisdiction which must be exercised with fair and just direction of the Court.
The Court was hearing a Commercial Arbitration Petition filed under Section 9 of the A&C Act by a Developer namely Ambit Urbanspace.
A Single Bench of Justice Somasekhar Sundaresan observed, “To sum up, I am not persuaded that this is a fit case of a bona fide invocation of Section 9 of the Act seeking interim protective measures to preserve the subject-matter of a dispute. A dispute is not perceptible or even ephemeral – evidently there is none. The jurisdiction under Section 9 is an equitable jurisdiction to be exercised with a fair and just discretion of the Court. In the circumstances of the case, I am not convinced that these principles have been demonstrated to warrant the Court’s intervention to exercise discretion to make arrangements for removal of statutorily protected Tenants from their premises permanently, and hand them open car parking spaces, and to label such action as “temporary displacement.”
The Bench remarked that whether the Landlords, who are identified as “Confirming Parties” and not as “Members” in the Development Agreement, could also be treated as a defaulting “member” is for the Developer to take advice on as the Court’s jurisdiction under Section 9 would not be necessary for enabling this measure as a temporary interim measure.
Advocate Mayur Khandeparkar appeared on behalf of the Petitioner while Senior Advocate Ashish Kamat and Advocate Vishal Kanade appeared on behalf of the Respondents.
Factual Background
The Petitioner-Developer executed a Development Agreement with Poddar Apartment Co-operative Housing Society Limited (Respondent) to redevelop a building, seeking protective measures from the High Court, pending arbitration being invoked. The protective measures were sought against tenants occupying premises in the property on a standalone basis, distinct and separate from the building, who were not members of the Respondent society.
The landlord of the tenants was a member who did not initiate any proceedings for eviction in any forum and naturally had interests that were aligned with the Developer in eviction of the tenants, invoking jurisdiction under Section 9. The tenanted premises in dispute were five enclosed garages. In lieu of the same, the tenants were proposed to be simply given open car parking spaces in the redeveloped building and that too under an agreement to which they were not signatories. The Developer via Petition sought eviction of the tenants.
Reasoning
The High Court after hearing the contentions of the counsel, said, “In sharp contrast, in the facts of the matter at hand, far from having an eviction decree, despite continued usage of the Subject Garages for over at least twenty years, the Landlords have not even filed any proceedings alleging violation of the tenancy agreement and the allegedly unauthorised and illegal change of user.”
The Court noted that any determination of the legitimacy of use would be a mixed question of fact and law that only proceedings under the Rent Act could answer.
“Worse, the Tenants rights would not at all be kept intact. Their tenancy rights would be wiped out and worse, they would be downgraded from enclosed premises that they have been operating from, to an open car parking slot”, it added.
The Court further observed that it would simply not be open to the Landlords to pretend that the Tenants had a right to only park vehicles when, to their knowledge, for years, the tenants have been using the Subject Garages for purposes far different from parking cars.
“The Tenants are not objecting to the redevelopment. They are open to redevelopment but want their interests and rights as tenants to be respected and recognised, commensurate with their actual use. I am afraid it would not be open to the Landlords to pretend that this is not a case of a backdoor eviction or that they are victims of the allegedly illegal occupation”, it also remarked.
The Court concluded that to try to give them an ostensible “choice” of an open parking space and to quote the larger good of the majority would not present a fit case to exercise a discretion in favour of removing the Tenants.
Accordingly, the High Court disposed of the Petition, refused to grant any relief, and directed the parties to ensure the safety and the current free independent access to the garages during the course of the redevelopment.
Cause Title- Ambit Urbanspace v. Poddar Apartment Co-operative Housing Society Limited & Ors. (Neutral Citation: 2025:BHC-OS:5395)
Appearance:
Petitioner: Advocates Mayur Khandeparkar, Santosh Pathak, Namita Natekar, and Archana Karmokar.
Respondents: Senior Advocate Ashish Kamat, Advocates Vishal Kanade, Amogh Singh, Nimish Lotlikar, Pooja Kane, Jitendra Jain, Rohit Bamne, Yogesh Adhia, Monil Punjabi, Sandeep Mahadik, Narayan G. Samant, and Duhita Desai.
