HC relief for Rakeysh Omprakash Mehra in redevelopment dispute

In a relief for filmmaker Rakeysh Omprakash Mehra, the Bombay High Court has dismissed the application filed by real estate developer Avenue Seasons Properties LLP (the developer) seeking that the dispute between them should go before co-operative court or arbitral tribunal.

The case pertains to redevelopment of Pali Hill Neptune Co-operative Housing Society by Avenue Seasons. The society comprises two buildings and two bungalows owned by Mehra and Nissa Hoosain Nensey. As per the redevelopment agreement, the bungalow owners would be provided apartments. One PS Bharathi, a member of the housing society, is also a co-petitioner in the case.

Mehra and Nensey challenged this before the HC, claiming that they were being arbitrarily treated at par with flat owners, and as per a declaratory order from the HC they are owners of their respective bungalows.

The developer filed an application claiming that there was an arbitration clause in the development agreement and hence under Section 8 of the Arbitration and Conciliation Act, the suit be sent either to the Co-Operative Court and/or for reference of disputes to arbitration.

The developer had also filed a second application under

Section 9 of the Arbitration and Conciliation Act seeking appointment of a court receiver to take possession of the premises.

According to developer’s counsel, Virag Tulzapurkar, the plaintiffs (Mehra, Bharathi and Nensey) were members of the society, thus party to the development agreement and were bound by the arbitration clause in the agreement.

However, Snehal Shah and Nausher Kohli, advocates for the plaintiffs, argued that the arbitration agreement was limited to the disputes between the society and developer only. The plaintiffs stated they were not signatories or parties to the agreement.

Justice Gautam Patel observed that an arbitration agreement is an “expression of volition and consensus ad idem of the contracting parties”.

The court noted that in the present case, certain members had signed the agreement and some members had not. Hence, the non-signatory members cannot be bound by it, observed justice Patel while dismissing the developer’s applications.

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