Authority: High Court of Judicature at Bombay

Order Date: 24 September 2026

Case Overview

  • Parties: Applicant – Flying Earth LLP (a LLP registered under the LLP Act, 2008). Respondents – (1) Date Bungalow Cooperative Housing Society Limited; (2) Shivji Bhojraj Gada; (3) Rekha Shivji Gada; (4) Hiruben Lakhamshi Gala; (5) Leena Mansukh Gala.
  • Background: The Society, a cooperative housing society, resolved on 14 Jan 2024 to redevelop its deteriorated building. A Project Management Consultant (Mr. Kapil Bakshi) was appointed on 25 Feb 2024. After public advertisement (25 Aug 2024) and receipt of 16 offers, Flying Earth LLP submitted a revised offer on 1 Oct 2024 and modified plans on 18 Oct 2024. The Society selected Flying Earth LLP as developer by majority vote on 24 Nov 2024. A Letter of Intent was issued on 12 Dec 2024.
  • Approvals: The Deputy Registrar, Co‑operative Societies, approved the appointment on 27 Jan 2025. The Development Agreement containing an arbitration clause was executed on 22 Mar 2025 between Flying Earth LLP and the Society (and 13 of the 17 members). A Power of Attorney in favour of the Applicant was executed on 23 Mar 2025. Subsequent consent from one dissenting member (Sunil Paradkar) was obtained on 28 Jul 2025.
  • Subsequent Events: Flying Earth LLP incurred stamp duty, hardship compensation, statutory premiums and consultant fees. The four individual respondents (Nos. 2‑5) initiated various proceedings to obstruct redevelopment, none of which succeeded. The BMC approved redevelopment concessions on 11 Oct 2025 and issued an Intimation of Disapproval (IOD) for up‑to‑seven floors on 24 Nov 2025. Fourteen of the seventeen members consented to vacate; the four respondents refused.
  • Section 9 Proceedings: Applicant invoked the arbitration clause on 23 Dec 2025 and filed a Section 9 petition on 29 Jan 2026. The Co‑operative Court rejected an interim injunction sought by Respondent 5 on 7 Mar 2026. The High Court allowed the Section 9 petition on 9 Mar 2026, directing the respondents to vacate after receipt of the Full FSI IOD (obtained on 8 May 2026). Notices were issued on 9 May 2026. The Maharashtra State Co‑operative Appellate Court dismissed an appeal on 21 May 2026, confirming the order.
  • Section 11 Application: The Applicant filed the present Section 11 application on 23 Dec 2025 seeking appointment of an arbitrator for disputes arising from the Development Agreement. The core issue before the Court was whether an arbitration agreement existed between the Applicant and the individual respondents (Nos. 2‑5) who had never signed the Development Agreement.
  • Arguments: Applicant argued that the respondents, as members of the Society, were bound by the Development Agreement and its arbitration clause. Respondents contended that they never signed the agreement, never consented to Clause 27 (arbitration), and that mere membership or benefit from redevelopment does not create arbitration consent. They relied on precedents: Avenues Seasons Properties LLP v. Nissa Hoosain Nensey (2024), Space Master Realtors v. Mulund Sandhyaprakash Co‑operative Housing Society Ltd. (2026), and the Supreme Court judgment in Cox and Kings Ltd. v. SAP India Pvt. Ltd. (2023).
  • Court’s Reasoning:

1. An arbitration agreement clearly exists between Flying Earth LLP and the Society because the Development Agreement was executed by the Society and contains an arbitration clause (Section 7 satisfied).

2. The individual respondents did not sign the Development Agreement, never accepted Clause 27, and were dissenting members who opposed the redevelopment. Their presence at meetings, abstention from voting, and refusal to vacate do not constitute consent to arbitrate.

3. The Court distinguished between interim relief under Section 9 (which may affect non‑signatories) and the existence of an arbitration agreement under Section 11. Absence of consent means no arbitration agreement with the dissenting members.

4. Precedents (Avenues Seasons, Space Master Realtors) were applied, emphasizing that non‑signatory dissenting members cannot be compelled to arbitrate.

Final Outcome

  • The Court appoints Mr. Harsh Moorjani as the Sole Arbitrator to adjudicate disputes arising out of the Development Agreement dated 22 Mar 2025 between Flying Earth LLP and Date Bungalow Cooperative Housing Society Ltd only.
  • The application for arbitration against Respondents 2‑5 is dismissed; no arbitration agreement exists with them.
  • Procedural directions:
  • The parties must communicate the arbitrator’s contact details within one week.
  • The arbitrator must file a statutory Statement of Disclosure under Section 11(8) & Section 12(1) within two weeks and forward it to the parties.
  • Parties shall appear before the arbitrator to fix pleadings, witness examination, and hearing schedule, providing functional email, mobile and landline numbers.
  • Arbitration costs and fees are to be borne equally by the parties, subject to any final award.
  • All merits, including limitation issues, remain open for determination by the arbitral tribunal.

Topics: Arbitration, Redevelopment Dispute, Cooperative Housing Society