Bombay High CourtGirish Mulchand Mehta vs Mahesh S. Mehta on 10 December, 2009Equivalent citations: AIRONLINE 2009 BOM 1Author:Swatanter KumarBench:Swatanter Kumar1



           IN THE HIGH COURT OF JUDICATURE AT BOMBAY




                                                                        
             ORDINARY ORIGINAL CIVIL JURISDICTION

                      APPEAL NO. 338 of 2009




                                                
                                IN
             ARBITRATION PETITION LODG NO. 493 OF 2009




                                               
    Girish Mulchand Mehta,
    Flat No. 1/257, Harini Co-operative
    Housing Society Ltd.,
    R.N.Narkar Marg, Ghatkopar (E),




                                    
    Bombay-400 077.
                      
    2. Durga Jaishankar Mehta,
    Flat No. 3/257, Harini Co-operative
    Housing Society Ltd.,
                     
    R.N.Narkar Marg, Ghatkopar(E),
    Bombay 400 077.                                             ....Appellants
          v/s.
    Mahesh S. Mehta,
      


    Sole Proprietor of M/s. Suryakirti
    Enterprises
   



    having office at 196/5400,
    "Suramya", Pant Nagar, Ghatkopar(e)
    Mumbai 400075.





    2. Harini Cooperative Housing Society
    Ltd.,
    10/257, R.N. Narkar Marg,
    Ghatkopar (E), Bombay 400 077.                              ....Respondents





    Ms. Rajni Iyer, Sr. Advocate, i/b. K.V.Tembe for the appellants.
    Mr. D.D.Madon, Sr. Advocate i/b. K.J. Hakan for respondent no.1.
    Mr. C.J. Sawant, Sr. Advocate i/b. Rahul K. Hakani for respondent no.2.




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                                             2




                              CORAM:- SWATANTER KUMAR, C.J. AND




                                                                          
                                      A.M.KHANWILKAR, J.




                                                  
                   JUDGMENT RESERVED ON: November 07, 2009.

                   JUDGMENT PRONOUNCED ON: December 10, 2009.




                                                 
    JUDGMENT (PER KHANWILKAR, J):This appeal takes exception to the Judgment dated 3rd July, 2009 in




                                      
    Arbitration Petition (L) No. 493/2009. The said petition was filed by the
                       
    Respondent No. 1 underSection 9of the Arbitration and Conciliation Act,
                      
    1996 (hereinafter referred to as 'the Act' for short). The reliefs claimed in

    the said Petition read thus:"a) That during pendency of arbitral proceeding
          between the Petitioner and the Respondent No. 1, before
          the Ld. Sole Arbitrator Shri L.H. Patil, this Hon'ble





          Court may be pleased to appoint Court Receiver High
          Court Bombay or any fit and proper person as Receiver
          of the said property i.e. plot of land bearing city survey
          No. 5728 final plot No. 257 of Ghatkopar T.P.S.III,
          R.N.Narkar Marg, Ghatkopar (E) Mumbai-400 077 and





          the building known as "Harini" standing thereon with
          all powers under order 40Rule 1 of the Code of Civil
          Procedureincluding power to take physical possession
          by physically removing the Respondent Nos. 2 and 3
          and their family members occupying flat No. 1 and Flat
          No. 3 or anybody else found occupying any part of the
          Building known as "Harini" and/or any part of the said::: Downloaded on - 09/06/2013 15:24:00 :::3property and to hand over vacant and peaceful
          possession of the said property i.e. plot of land bearing
          city survey No. 5728 final plot No. 257 of Ghatkopar




                                                                         
          T.P.S. III, R.N.Narkar Marg, Ghatkopar (E)
          Mumbai-400 077 and the building known as "Harini"standing thereon to the Petitioner for the purpose of
          demolition and construction of new building as provided
          in the said Development Agreement Exhibit "A" hereto.b) that the ad-interim measures in term of prayer clause(a) above.c) that for such other and further reliefs as the nature
          and circumstances of the case may require."2.
                       
          The Respondent No. 1 asserted that the Respondent No. 2 Society

    entered into a Development Agreement dated 7th May, 2008 authorising
                      
    him to redevelop the building standing on piece and parcel of land

    admeasuring 644.60 sq. meters bearing City Survey No.5728, Final Plot
      


    No. 257 of Ghatkopar T.P.S. III, R.N. Narkar Marg, Ghatkopar (E),
   



    Mumbai 400 077. The building standing on the said plot consists of three





    floors comprising of 12 residential flats.         Since the building was

    constructed in the year 1964, due to passage of time its condition had

    deteriorated. As a result, the members of the Society after due deliberation





    unanimously decided to redevelop the building. Further, to effectuate the

    said decision the Society appointed Respondent No. 1 to develop the said

    building. Pursuant to the decision of the Society, the Respondent No. 2::: Downloaded on - 09/06/2013 15:24:00 :::4Society entered into registered Development Agreement with Respondent

    No. 1 dated 7th May, 2008 thereby granting development rights to develop




                                                                        
    the property by demolishing the existing building "Harini" standing on the




                                                
    said property on terms and conditions referred to in the said agreement.The Respondent No. 1 paid the stamp duty of Rs. 1,75,030/- and also




                                               
    registration fees of Rs. 31,440/-.   The said agreement was executed by

    the authorised person of the Society (Respondent No. 2) and also by ten




                                        
    (10) members out of twelve (12) members as token of confirmation
                      
    thereof in favour of Respondent No. 1. The said 10 members have also
                     
    signed and executed individual undertaking-cum-affidavit thereby

    confirming the Development Agreement and undertaking to perform the

    Development Agreement. According to Respondent No. 1, consequent to
      


    the execution of the agreement, he has already spent amount of Rs.12,00,000/-. and also Rs. 2,30,000/- per month (approximately) towards





    monthly compensation paid to the 10 members who have already vacated

    their respective flats since February 2009.         It is the case of the

    Respondent No. 1 that he has already paid monthly compensation to the





    tune of Rs. 16,10,000/- and would be obliged to pay the future monthly

    compensation to the said 10 members.              Further, the plans for

    redevelopment of the building have been duly approved and accepted by::: Downloaded on - 09/06/2013 15:24:00 :::5the General Body of the Society and whereafter the Respondent No. 1 has

    taken steps to seek approval of the Competent Authority. Pursuant to the




                                                                         
    agreement, the Respondent No. 1 has purchased and loaded TDR 650 sq.




                                                 
    Mtrs. in favour of the Respondent No. 2 Society in lieu of the Bank

    guarantee. The Respondent No. 1 has already paid sum of Rs.72,76,464/-(excluding stamp duty of Rs. 2,18,300/-) being purchase price of the TDR

    and also got the plan for construction of new building approved and




                                     
    sanctioned from the Mumbai Municipal Corporation.                  The Mumbai
                      
    Municipal Corporation has also issued I.O.D. on 19/12/2008.                   After
                     
    issuance of I.O.D., Respondent No. 1 called upon the Respondent No. 2 to

    hand over vacant possession of the building forthwith.            However, the

    Respondent No. 2 Society expressed its inability to do so as the Appellants
      


    (original respondents 2 & 3) were opposed to executing any document or
   



    to vacate their respective flats to facilitate demolition of the existing





    building for reconstruction and redevelopment thereof.          It is stated that

    the Respondent No. 1 has already spent aggregate sum of Rs. 12 lakhs

    towards non-refundable security deposit in lieu of the corpus fund and





    approximately Rs. 2.05 lakhs towards brokerage and also paid Rs. 7500/-towards transportation/shifting so as to provide temporary accommodation

    to each of the ten members who vacated their respective flats as per the::: Downloaded on - 09/06/2013 15:24:00 :::6terms of the agreement.      It is stated that due to resistance by the

    Appellants, the Society eventually initiated expulsion proceedings against




                                                                          
    the Appellant No.1 and after following necessary procedure the said




                                                  
    Appellant No. 1 has been expelled from the primary membership of the

    Society by the General Body of the Society.           The Respondent No. 2




                                                 
    Society offered vacant possession of only 10 flats to the Respondent No.1. In so far as the two flats occupied by the Appellants, the Respondent




                                    
    No. 1 was informed to recover possession thereof from the concerned
                      
    members who were not co-operating.         The Respondent No. 1, however,
                     
    insisted that possession of the entire building should be handed over to

    him by the Respondent No. 2 in terms of the Development Agreement

    executed with the Society (Respondent No.2). Since the Respondent No.
      


    2 failed to perform their part under the Development Agreement,
   



    Respondent No. 1 issued notice raising dispute.        Eventually, as per the





    Arbitration Agreement in terms of clause-49 of the Development

    Agreement, the Respondent No. 1 appointed sole Arbitrator and called

    upon the Respondent No. 2 Society to concur with the appointment of the





    said Arbitrator to avoid unnecessary cost.          The Respondent No. 2

    concurred with the appointment of the named sole Arbitrator and agreed

    for referring dispute to the sole Arbitrator. The Respondent No. 1 filed::: Downloaded on - 09/06/2013 15:24:01 :::7Statement of Claim and Application underSection 17of the Act before

    the sole Arbitrator who in turn has heard the said application and passed




                                                                           
    order on 25/5/2009. The sole Arbitrator directed the Society to hand over




                                                   
    vacant and peaceful possession of the property within ten days from the

    date of the order failing which it would be open to the Respondent No. 1




                                                  
    to move this Court for appointment of the Court Receiver by invoking

    provisions ofSection 9of the Act. After the said order of the Arbitrator,




                                     
    the Respondent No. 2 Society through Advocate's notice called upon the
                      
    Appellants to vacate their respective flats.      It is also noticed that the
                     
    Resolution of expulsion of the Appellant No. 1 from the primary

    membership of the Respondent No. 2 Society has been approved by the

    Dy. Registrar of Co-operative Societies on 6/6/2009. Later on, even the
      


    Appellant No. 2 has been expelled by the General Body of the Society in
   



    its meeting held on 21st June, 2009 and steps have been taken to seek





    approval of the Registrar, which decision is stated to be pending.              Since

    the Respondent No. 1 realised that it was getting difficult to get vacant

    possession of the entire building and the development work was being





    delayed resulting in recurring avoidable cost towards monthly

    compensation being paid to the 10 members who have already vacated

    their respective flats in February 2009 as also the amount spent by the::: Downloaded on - 09/06/2013 15:24:01 :::8Respondent No. 1 towards consideration under the Agreement and other

    expenses, had no option but to take recourse to Petition underSection 9of




                                                                          
    the Act before this Court.   Accordingly, the Respondent No. 1 filed the




                                                  
    said   Petition in June 2009, praying for reliefs which are already

    reproduced hitherto. In this Petition besides making the Respondent No.




                                                 
    2 Society party, the Respondent No. 1 also impleaded the Appellants as

    Respondent Nos. 2 & 3 who were occupying two flats in the said building




                                     
    and were causing obstruction to the development of the property.3.     As a counter blast to the abovesaid Petition filed by the Respondent

    No. 1 underSection 9, the Appellants filed dispute dated 25th June, 2009

    before the Co-operative Court, Mumbai being Case No. AVN/CC-II/207
      


    of 2009 praying for following reliefs:-"a) that it be declared that the convening and holding of
                the purported Special General Meeting dated 27/4/2008





                of the Opponent Society and all its proceedings,
                including Resolutions passed therein, are illegal, bad in
                law, null and void ab-initio and not binding upon the
                Disputants.b) it be declared that the purported Development
                Agreement dated 7.5.2008 between the Opponent
                Society and the Developer, being Ex-A hereto is illegal,
                bad in law, null and void ab-initio and not binding upon
                the Opponent Society nor any of its members, including
                the Disputants.::: Downloaded on - 09/06/2013 15:24:01 :::9c) the Opponent Society, its office bearers, agents and
      servants be permanently restrained by an order of
      injunction of this Hon'ble Court from, in any manner,




                                                                
      implementing and/or acting upon any of the purported
      Resolutions passed in the purported Special General




                                        
      Meeting held on 27/4/2008 and the purported
      Development agreement dated 7/5/2008 being Ex-A
      hereto.d) the Opponent Society, its office bearers, agents and
      servants be permanently restrained by an order of
      injunction of the Hon'ble Court from disconnecting
      and/or causing the disconnection of (i) the water supply
      and the common electric supply to the Society's




                            
      building and (ii) the electric meter fro the common
      lights, staircase lights, water pump etc. and the
             
      electricity meters in respect of the suit flats No. 1 & 3 in
      the building of the Opponent Society at 257, R.N.
            
      Narkar Marg, Ghatkopar (E), Mumbai- 400 077.e) that pending the hearing and final disposal of this
      dispute, the Opponent Society, its office bearers, agents
      and servants be restrained by an order of injunction of
      


      this Hon'ble Court from, in any manner, implementing
      and/or acting upon (i) any of the purported Resolutions
   



      passed in the purported Special General Meeting held on
      27/4/2008 and (ii) the purported Development
      agreement dated 7/5/2008 being EX-A hereto.f) That pending the hearing and final disposal of this
      dispute, the Opponent Society, its office bearers, agents
      and servants be restrained by an order of injunction of
      this Hon'ble Court from disconnecting and/or causing





      the disconnection of (i) the water supply and the electric
      supply to the building and (ii) the electric meter in
      respect of common lights, staircase lights, water-pump
      and the electricity meters of the suit flats No. 1 & 3 in
      the building of the Opponent Society at 257, R.N.
      Narkar Marg, Ghatkopar (E), Mumbai-400 077.::: Downloaded on - 09/06/2013 15:24:01 :::10g) for urgent Ad-Interim orders in terms of prayers (e) &(f) above.h) for costs.i) for such other and further reliefs as the nature and
                circumstances of the case may require."4.    To complete the chronology of events which is relevant for

    answering the controversy on hand, it may be apposite to advert to the fact

    that the General Body of the Society was ad-idem that the building of the




                                     
    Society needs to be redeveloped. That position can be discerned from the
                       
    minutes of the meeting of the Managing Committee dated 10th August,
                      
    2002 wherein it was resolved to reinterview the developer for

    improvisation of his offer to take up the development work with clear
      


    understanding that there will be no going back on the proposal after the
   



    terms and conditions were finalized with the developer.          Moreover, that

    would be binding on all the members. Notably, the Appellants herein at





    the relevant time were members of the Managing Committee and were

    party to the said resolution. The deliberation regarding redevelopment of





    the property was taken forward thereafter as can be discerned from the

    minutes of the subsequent meetings of the General Body of the Society

    dated 22/1/2005, 2/10/2005, 3/11/2005, 25/11/2005, and 17/9/2007.               The

    minutes of the General Body dated 17/9/2007 records that the purpose of::: Downloaded on - 09/06/2013 15:24:01 :::11the meeting was to discuss and seek clarification regarding draft

    Development Agreement with the Respondent No. 1 Developer.                     The




                                                                        
    final decision to appoint Respondent No. 1 as the developer was taken by




                                                
    the General Body of the Society in its Special General Body Meeting held

    on 2nd March, 2008.     It is recorded in the said minutes that              "M/s.Suryakirti Enterprises be our final selection as developer for demolition

    and reconstruction of Harini Building".    This Resolution was supported




                                    
    by 9 members out of total 12 members of the Society.                In the said
                      
    meeting, the General Body also resolved to enter into Development
                     
    Agreement with the Respondent No. 1 for demolition and reconstruction

    of Harini Building, which was to be approved by the Society.Significantly, none of the abovesaid Resolutions have been challenged by
      


    the Appellants before any Court much less the Co-operative Court. The
   



    challenge, however, is only to the Resolution passed in the Special





    General Meeting dated 27/4/2004 and the consequences flowing

    therefrom.    In the said meeting the draft Development Agreement

    executed between the Society (Respondent No.2) and the Developer





    (Respondent No. 1) came to be unanimously approved by the seven

    members present and voted.    The minutes of the meeting makes note of

    the fact that in addition three absent members have also consented to the::: Downloaded on - 09/06/2013 15:24:01 :::12resolution. As aforesaid, the challenge of the Appellants before the Co-operative Court is only to the terms and conditions referred to in the said




                                                                           
    Development Agreement as has been executed by the authorised officer




                                                   
    of the Respondent No. 2 Society in favour of Respondent No. 1 and

    registered on 7/5/2008.5.    Be that as it may, the Respondent No. 1 instituted Petition underSection 9essentially against the Respondent No. 2 Society with whom the
                       
    Respondent No. 1 had entered into Development Agreement on the
                      
    assertion that the Society has failed to perform its part of the obligation

    under the said Agreement and it was just and convenient to grant the relief

    as prayed inSection 9Petition.      Since the grant of the proposed relief
      


    was to incidentally affect the Appellants herein, they were also impleaded
   



    as Respondents 2 & 3.         The said Respondents were required to be





    impleaded also because of        Rule 803E of the Bombay High Court

    (Original Side) Rules. The Respondent No. 2 Society, however, did not

    resist the relief claimed in the said Petition. In fact, the Respondent No.





    2 Society took the stand that inspite of its willingness to perform its part of

    the obligation under the agreement, it was unable to do so because of the

    untenable obstruction caused by the Appellants herein (who were its::: Downloaded on - 09/06/2013 15:24:01 :::13members till they    came to be expelled by the General Body).                   The

    Petition, however, was mainly resisted by the Appellants. The Principal




                                                                          
    grievance of the Appellants (Original Respondents 2 & 3) was that they




                                                  
    could not be made party in the Petition underSection 9, as they were not

    party to the Arbitration Agreement. The Court had no jurisdiction to pass




                                                 
    any direction or order against the Appellants since they were not party to

    the Arbitration Agreement. In any case, the Court cannot order their dis-possession in exercise of power underSection 9of the Act.                      The
                        
    Appellants justified their obstruction   mainly on the ground that they did
                       
    not approve of the terms and conditions specified in the Development

    Agreement executed in favour of the Respondent No. 1. It was their case

    that the offer given by the Respondent No.1 was prejudicial to the interest
      


    of the members of the Society. In that, the Developer was not only
   



    obliged to provide bigger alternative reconstructed flats but also obliged





    to provide additional corpus to the Society. In the first place, the Learned

    Single Judge found that there was an Arbitration Agreement in the shape

    of clause 49 of the      Development Agreement executed between the





    Respondent No. 1 and Respondent No. 2.            Thus, it was open to the

    Respondent No. 1 to invokeSection 9of the Act being party to the

    Arbitration Agreement.     Further,Section 9can be invoked in aid to the::: Downloaded on - 09/06/2013 15:24:01 :::14main relief/claim pending before the Arbitral Tribunal.             The Learned

    Single Judge then considered the grievance of the Appellants and found




                                                                          
    that the Resolutions passed by the overwhelming majority of members of




                                                  
    the Society were not challenged till the filing of the Petition under Section9.   Besides, the majority decision of the General Body of the Society




                                                 
    would not only bind the Society but also the Appellants. It is further held

    that essentially the relief claimed underSection 9by the Respondent No. 1




                                      
    Petition was against the Respondent No. 2 Society who was obliged to
                       
    comply with the obligation under the Development Agreement without
                      
    which the Respondent No. 1 would not be able to get Commencement

    Certificate thereby stalling the redevelopment of the building.                  The

    Learned Single Judge also noticed that it is only the two                members-Appellants herein, who were causing obstruction which was resulting in
   



    delay.    Moreover, it was causing serious prejudice not only to the





    Respondent No. 1 (Petitioner) in terms of recurring cost as the Respondent

    No. 1 has already acted upon the agreement and incurred substantial

    amount towards consideration of the agreement and other expenses, but





    even the remaining 10 members of the Society have already acted upon

    the agreement by vacating their respective flats and have shifted to transit

    accommodation for which they have been duly compensated by the::: Downloaded on - 09/06/2013 15:24:01 :::15Respondent No.1 as per the terms of the Agreement.        The Learned Single

    Judge also noted that the Appellants herein were not in a position to secure




                                                                         
    the amount invested and incurred including the future expenses and cost




                                                 
    of the Respondent No. 1 in case the project was stalled at their instance.Taking over all view of the matter, the Learned Single Judge not only




                                                
    thought it just and convenient to appoint Court Receiver but also accepted

    the request of the Respondent No. 1 to allow the Court Receiver to take




                                     
    possession of all the flats in the said building and hand over vacant
                       
    possession of the entire building to the Respondent No. 1 so as to enable
                      
    the Respondent No. 1 to complete the project in terms of Development

    Agreement and discharge his obligation of providing duly constructed

    accommodation/premises to all members including             Appellants herein
      


    (original Respondents 2 & 3) within the prescribed time.           The Learned
   



    Single Judge also noticed that the relief sought would only require the





    Appellants herein to shift to another            accommodation till the

    redevelopment of the property of the Society whereafter they would be

    once again accommodated in the newly constructed accommodation in





    lieu of their existing flats. Accordingly, the Petition was made absolute in

    terms of prayer clause (a).::: Downloaded on - 09/06/2013 15:24:01 :::166.    It is this decision which is subject matter of challenge before us.According to the Appellants, the relief granted against them was without




                                                                          
    jurisdiction in as much as they are not party to the Arbitration Agreement.They could not have been impleaded as Respondents in the Petition.Moreover, there was no justification for passing the drastic order of




                                                 
    dispossessing the Appellants from their respective flats and handing over

    those flats to the Respondent No. 1 with further liberty to demolish the




                                     
    existing building and to construct new building on the suit plot.7.    The Respondents on the other hand have supported the decision of

    the Learned Single Judge and pray that the Appeal be dismissed being

    devoid of merits and more so because the attitude of the Appellants is
      


    only to protract the issue on untenable grounds.8.        In the first place, the Respondent No. 1 had moved the sole

    Arbitrator for interim measures by invokingSection 17of the Act. The





    Arbitrator opined that the sweep ofSection 17is only to pass order against

    a party to the Arbitration Agreement to take any interim measures of

    protection in respect of the subject matter of the dispute. Accordingly,::: Downloaded on - 09/06/2013 15:24:01 :::17while passing directions against the Society (Respondent No.2 herein), he

    gave liberty to the Respondent No.1 to move the Court for appropriate




                                                                         
    order. It is not necessary for us to delve upon the issue as to whether the




                                                 
    sole Arbitrator himself could have considered the relief claimed by the

    Respondent No. 1 claimant. Indeed, the view taken by the sole Arbitrator




                                                
    has not been assailed and has been allowed to become final. In deference

    to the opinion recorded by the sole Arbitrator, the Respondent No. 1 has




                                     
    now invokedSection-9of the Act and has prayed for reliefs which are
                      
    reproduced hitherto.   The first question which arises for consideration is
                     
    the sweep ofSection 9proceedings.Section-9of the Act reads thus:"9. Interim measures, etc., by Court- A party
      


                       may,before or during arbitral proceedings or at
                       any time after the making of the arbitral award
   



                       but before it is enforced in accordance withsection 36, apply to a Court:-(i) for the appointment of a guardian for a minor
                       or a person of unsound mind for the purposes of
                       arbitral proceedings; or(ii) for an interim measure of protection in respect





                       of any of the following matters, namely:-(a) the preservation, interim custody or sale of
                       any goods which are the subject-matter of
                       arbitration agreement;(b) securing the amount in dispute in the::: Downloaded on - 09/06/2013 15:24:01 :::18arbitration;(c) the detention, preservation or inspection of




                                                                         
                       any property or thing which is the subject-matter
                       of the dispute in arbitration, or as to which any




                                                 
                       question may arise therein and authorising for any
                       of the aforesaid purposes any person to enter
                       upon any land or building in the possession of any
                       party, or authorising any samples to be taken or




                                                
                       any observation to the made, or experiment to be
                       tried, which may be necessary or expedient for
                       the purpose of obtaining full information or
                       evidence;(d) interim injunction or the appointment of a
                       receiver;(e) such other interim measure of protection as
                      
                       may appear to the Court to be just and
                       convenient,
                       and the Court shall have the same power for
                       making orders as it has for the purpose of, and in
                       relation to, any proceeding before it."9.    The purport ofSection-9has been expounded by the Apex Court in

    the case of Firm Ashok Traders & anr. vs. Gurmukhdas Saluja & ors.reported in AIR 2004 SC 1433.       It considered the scheme ofSection 9of the Act.   It has held that application underSection 9is not a suit





    although such application results in initiation of civil proceedings.              It

    went on to observe that the right conferred bySection 9is on a party to an

    Arbitration Agreement. ThatSection-9has relevance to the locus standi

    as an applicant.   A person not party to an arbitration agreement cannot::: Downloaded on - 09/06/2013 15:24:01 :::19enter the Court for protection underSection 9of the Act. In other words,

    the party to an Arbitration Agreement can invoke this jurisdiction for




                                                                           
    securing relief which the Court has power to grant before, during or after




                                                   
    arbitral proceedings by virtue ofSection 9. The Apex Court further held

    thatSection 9has nothing to do with the relief which is sought for from




                                                  
    the Court or the right which is sought to be canvassed in support of the

    relief. The Court is competent to grant reliefs to a party under Clauses (i)




                                      
    and (ii) ofSection 9which flow from the power vesting in Court
                       
    exercisable by reference to "contemplated", "pending" or "completed"arbitral proceedings. The Court is conferred with the same power for

    making the specified orders as it has for the purpose before it though the

    venue of the proceedings in relation to which the power underSection 9is
      


    sought to be exercised is the Arbitral Tribunal. It is thus clear that the
   



    relief sought in such application is neither in a suit nor a right arising from





    a contract. The Court underSection 9only formulates interim measures

    so as to protect the right under adjudication before the Arbitral Tribunal

    from being frustrated. Suffice it to observe that this decision is of no avail





    to answer the controversy on hand as to whether remedy underSection 9can be pursued against a person who is not party to an arbitration

    agreement or arbitration proceedings.::: Downloaded on - 09/06/2013 15:24:01 :::2010.     On plain language ofSection 9, it would appear that a party to




                                                                         
    an Arbitration Agreement can invoke jurisdiction of the Court under this




                                                 
    provision for interim measures as specified therein at any stage of Arbitral

    proceedings but before the Arbitral Award is enforced in accordance withSection 36.   The power of the Court underSection 9of the Act is very

    wide and is not controlled by the provisionsof the Code of Civil




                                     
    Procedure. Indeed, the Court has to be guided by the equitable
                       
    considerations keeping in mind that the award to be passed by the Arbitral
                      
    Tribunal is capable of enforcement.11.    In the present case, the relief which is sought by the Respondent
      


    No.1 and as granted by the Learned Single Judge is ascribable to the
   



    situations specified in sub-clauses (d) and (e) ofSection 9(ii). Sub-clause(d) envisages interim injunction or the appointment of Receiver.Obviously, the interim measures can be for management, protection,

    preservation and improvement of the property which is the subject matter





    of the Arbitration Agreement. In addition to appointment of a Receiver,

    it is open to the Court to provide such interim measures of protection as

    may appear to it, to be just and convenient. Besides, appointing the Court::: Downloaded on - 09/06/2013 15:24:01 :::21Receiver, it would be open to the Court to order removal of any person

    from the possession or custody of the property or commit the same to the




                                                                         
    possession, custody or management of the Receiver. It is also open to the




                                                 
    Court to confer upon the Receiver all such powers for realization,

    management, protection, preservation and improvement of the property,




                                                
    collection of the rents and profits thereof or such other powers as the

    Court     thinks fit.   Such order, however, has to be passed on the




                                     
    satisfaction of the Court that it is just and convenient to do so.              The
                        
    language of sub-clause (e) reinforces the position that besides appointment
                       
    of a Receiver, it is open to the Court to order such other interim measures

    of protection as may appear to the Court to be just and convenient.Section 9makes it amply clear that the Court shall have the same power
      


    for making orders as it is for the purpose of, and in relation to, any
   



    proceedings before it. In other words, the Court while considering the





    request for formulating interim measures should be guided by equitable

    consideration on case to case basis with a view to ensure that the award

    passed by the Arbitral Tribunal is capable of enforcement.12.     The next question is whether order of formulating the interim

    measures can be passed by the Court in exercise of powers under Section::: Downloaded on - 09/06/2013 15:24:01 :::229 of the Act only against a party to an Arbitration Agreement or

    Arbitration Proceedings.    As is noticed earlier, the jurisdiction underSection 9can be invoked only by a party to the Arbitration Agreement.Section 9, however, does not limit the jurisdiction of the Court to pass

    order of interim measures only against party to an Arbitration Agreement




                                                
    or Arbitration Proceedings; whereas the Court is free to exercise same

    power for making appropriate order against the party to the Petition underSection 9of the Act as any proceedings before it. The fact that the order
                      
    would affect the person who is not party to the Arbitration Agreement or
                     
    Arbitration Proceedings does not affect the jurisdiction of the Court underSection 9of the Act which is intended to pass interim measures of

    protection or preservation of the subject matter of the Arbitration
      


    Agreement.13.   The Appellants, however, place reliance on the decision of the

    Kerala High Court in the case of Shoney Sanil v/s. M/s. Coastal

    Foundations (P) Ltd. & Ors. reported in AIR 2006 Kerala (206).                     In





    that case the question considered was whether the writ-petitioner,

    admittedly, a third party to an alleged Arbitral Agreement between the

    Respondents inter se, and who had in his favour a confirmed Court sale::: Downloaded on - 09/06/2013 15:24:01 :::23and certificate of such sale and delivery of possession, following and

    arising under an independent decree, could be dispossessed, injuncted or




                                                                         
    subjected to other Court proceedings underSection 9of the Act?                The




                                                 
    Kerala High Court held that orders underSection 9 (ii)(c)can be passed

    only in relation to subject matter of dispute in arbitration which may be in




                                                
    possession of any party since it is not the intention of the Act or any

    arbitration proceedings as conceived by the law of Arbitration to interfere




                                     
    with or interpolate third party rights. It concluded that on a plain reading
                       
    ofSection 9of the Act and going by the Scheme of the said Act, there is
                      
    no room to hold that by an interim measure underSection 9, the rights of

    third party holding possession on the basis of          Court sale could be

    interfered with, injuncted or subjected to proceedings underSection 9of
      


    the Act.   Instead, it held thatSection 9of the Act contemplates issuance
   



    of interim measures by the Court only at the instance of party to





    Arbitration Agreement with regard to the subject matter of the Arbitration

    Agreement.    The Court has, however, noted that such order can be only

    against the party to an Arbitration Agreement or at best against any person





    claiming under him. The Principle expounded in this decision is that if a

    third party has independent right in the subject matter of the Arbitration

    Agreement,Section 9cannot be invoked to affect his rights. At the same::: Downloaded on - 09/06/2013 15:24:01 :::24time, the Kerala High Court has plainly opined that it is possible to pass

    orders underSection 9against a third party if such person is claiming




                                                                         
    under the party to the Arbitration Agreement. Thus understood,Section 9can be invoked even against a third party who is not party to an arbitration

    agreement or arbitration proceedings, if he were to be person claiming




                                                
    under the party to the arbitration agreement and likely to be affected by

    the interim measures. The Appellants herein will have to substantiate that




                                     
    they were claiming independent right in respect of any portion of the
                       
    subject matter of the Arbitration Agreement on their own and not claiming
                      
    under the Respondent No. 2 Society who is party to the Arbitration

    Agreement. In absence thereof, the Court would certainly have jurisdiction

    to pass appropriate order by way of interim measures even against the
      


    Appellants herein, irrespective of the fact that they are not party to the
   



    Arbitration Agreement or the Arbitration Proceedings.14.     Reliance was placed on another decision of the Delhi High Court

    in the case of Impex Trading GMBH v/s. Anunay Fab. Ltd. & ors.reported in 2008 (1) Arb. LR 50 Delhi.       In this case relief was sought

    against the bankers of the Respondent No. 1 and Petitioner respectively.The Court found as of fact that the Bankers (Respondents 2 to 4) were::: Downloaded on - 09/06/2013 15:24:01 :::25regulated in their working by various articles of the UCP500.                    The

    liability of the Bank under the document was independent of any dispute




                                                                          
    as to breach of contract between the seller and the buyer. On this finding,




                                                  
    the Court went on to hold that Petition underSection 9of the Act against

    the Bankers who are not even party to the Consignment Agreement and




                                                 
    the Arbitration Clause is not maintainable and deserves dismissal qua

    them. Once again that was not a case of person claiming under the party




                                      
    to the Arbitration Agreement, unlike in the present case where the
                       
    Appellants were members of the Respondent No.2 Society and would be
                      
    therefore bound by the Award against the Society. The fact that the

    Appellants have proprietary rights in the flats occupied by them does not

    mean that they were claiming such right dehors the rights of the Society in
      


    the said flats. For, the Society is the owner of the land and structure
   



    standing thereon. The flats occupied by the Appellants are part thereof





    and in fact, allotted to the Appellants in the capacity of members of the

    Society. In that sense, the Appellants are persons claiming rights in the

    flats situated in the property which is the subject matter of the Arbitration





    Agreement, under the Respondent No.2 Society who is party to the said

    Arbitration Agreement.     Accordingly, even this decision will be of no

    avail to the Appellants.::: Downloaded on - 09/06/2013 15:24:01 :::2615.   The Appellants would then rely on the decision of the Apex Court




                                                                           
    in Ramesh Himmatlal Shah v/s. Harsukh Jadhavji Joshi reported in




                                                   
    AIR 1975 SC 1470 to contend that the flats in question occupied by them

    have been allotted to them by the Housing Society which allotment is




                                                  
    coupled with the right to transfer their shares of the Society and interest in

    the said flat which is the property of the Society. In the said decision, the




                                      
    Apex Court has observed that the right so enjoyed by the member is the
                       
    species of the property namely the right to occupy a flat of this type,
                      
    which assumes significant importance and acquires under the law a stamp

    of transferability in furtherance of interest of commerce.           It went on to

    observe that there is no fetter in any of the legal provisions against such a
      


    conclusion and for which reason the attachment and sale of the property
   



    of the member in execution of the decree are valid under the law.                 The





    legal position expounded by the Apex Court in the said decision will be of

    no avail to the case on hand. The crucial question is whether the members

    can be heard to say that their rights in the flats occupied by them were





    dehors the rights of the Society therein and that they were not claiming

    under the Society at all.    In our considered opinion such stand of the

    members(Appellants herein) cannot be countenanced.::: Downloaded on - 09/06/2013 15:24:01 :::2716.    In the present case, it is not in dispute that the General Body of the




                                                                          
    Society which is supreme, has taken a conscious decision to redevelop the




                                                  
    suit building. The General Body of the Society has also resolved to

    appoint the Respondent No.1 as the Developer. Those decisions have not




                                                 
    been challenged at all. The Appellants who were members of the Society

    at the relevant time, are bound by the said decisions. The Appellants in




                                     
    the dispute filed before the Cooperative Court have only challenged the
                      
    Resolution dated 27/4/2008,      which challenge would merely revolve
                     
    around the terms and conditions of the Development Agreement.                   As a

    matter of fact, the General Body of the Society has approved the terms

    and conditions of the Development Agreement by overwhelming majority.Merely because the terms and conditions of the Development Agreement
   



    are not acceptable to the Appellants, who are in minuscule minority





    (only two out of twelve members), cannot be the basis not to abide by the

    decision of the overwhelming majority of the General Body of the Society.By now it is well established position that once a person becomes a





    member of the Cooperative Society, he looses his individuality with the

    Society and he has no independent rights except those given to him by the

    statute and Bye-laws.   The member has to speak through the Society or::: Downloaded on - 09/06/2013 15:24:01 :::28rather the Society alone can act and speaks for him qua the rights and

    duties of the Society as a body (see Daman Singh & ors. v/s. State of




                                                                          
    Punjab reported in AIR 1985 SC 973). This view has been followed in




                                                  
    the subsequent decision of the Apex Court in the case of State of U.P. v/s.Chheoki Employees Cooperative Society Ltd. reported in AIR 1997




                                                 
    SC 1413.     In this decision the Apex Court further observed that the

    member of Society has no independent right qua the Society and it is the




                                      
    Society that is entitled to represent as the corporate aggregate. The Court
                       
    also observed that the stream cannot rise higher than the source. Suffice
                      
    it to observe that so long as the Resolutions passed by the General Body of

    the Respondent No. 2 Society are in force and not overturned by a forum

    of competent jurisdiction, the said decisions would bind the Appellants.They cannot take a stand alone position but are bound by the majority
   



    decision of the General Body. Notably, the Appellants have not challenged





    the Resolutions passed by the General Body of the Society to redevelop

    the property and more so, to appoint the Respondent No.1 as the

    Developer to give him all the redevelopment rights.        The propriety rights





    of the Appellants herein in the portion (in respective flats) of the property

    of the Society cannot defeat the rights accrued to the Developer and/or

    absolve the Society of its obligations in relation to the subject matter of::: Downloaded on - 09/06/2013 15:24:01 :::29the Arbitration Agreement.      The fact that the relief prayed by the

    Respondent No. 1 inSection-9Petition and as granted by the Learned




                                                                         
    Single Judge would affect the propriety rights of the Appellants does not




                                                 
    take the matter any further. For, the propriety rights of the Appellants in

    the flats in their possession would be subservient to the authority of the




                                                
    General Body of the Society. Moreso, such rights cannot be invoked

    against the Developer (Respondent No.1) and in any case, cannot extricate




                                     
    the Society of its obligations under the Development Agreement. Since the
                      
    relief prayed by the Respondent No.1 would affect the Appellants, they
                     
    were impleaded as party to the proceedings underSection 9of the Act,

    which was also necessitated by virtue of Rule 803E of the Bombay High

    Court (Original Side) Rules. The said Rule reads thus:-"R803E. Notice of Filling Application to persons likely to be
          affected.--Upon any application by petition under the Act, the Judge in
          chambers shall, if he accepts the petition, direct notice
          thereof to be given to all persons mentioned in the petition
          and to such other persons as may seem to him to be likely to
          be affected by the proceedings, requiring all or any of such





          persons to show cause, within the time specified in the
          notice, why the relief sought in the petition should not be
          granted."17.   The Respondents have also placed reliance on the decision of the::: Downloaded on - 09/06/2013 15:24:01 :::30Delhi High Court in the case of Value Advisory Services v/s. ZTE

    Corporation & ors. in OMP. No. 65/2009 decided on 15th July, 2009.One of the issue considered in this decision is whether in exercise of




                                                 
    powers underSection 9of the Act, the Court can make an order against or

    with respect to any party other than a party to the arbitration agreement.The     Court     observed     that     no      general         principle          of

    maintainability/applicability or non-maintainability/non-applicability can




                                    
    be laid down. It will have to be determined by the Court in the facts of

    each
                      
           case whether for the purpose of interim measure of protection,
                     
    preservation, sale of any goods, securing the amount in dispute and order

    affecting the third party can be made or not.          Similar view can be

    discerned from another decision of the Delhi High Court in the case of
      


    Arun Kapur v/s. Vikram Kapur 2002-DLT-95-42.                    The Court was
   



    considering the distinction between the      scope of       application underSection 9andSection 17of the Act.    It observed that it is settled thatSection 9is attracted only if the nature of dispute is subject matter of

    Arbitration proceedings or agreement. It does not contemplate any such





    relief which does not stem from the Arbitration Proceedings or the

    disputes referred to in arbitration for adjudication.         It observed thatSection 9is distinct fromSection 17in as much as Petition under Section::: Downloaded on - 09/06/2013 15:24:01 :::3117 is moved before the Arbitrator for an order against a party to the

    proceedings, whereasSection 9vests remedy to a party to arbitration




                                                                         
    proceedings to seek interim measure of protection against a person who




                                                 
    need not be either party to the arbitration agreement or to the arbitration

    proceedings.18.      We have no hesitation in taking the view that since the Appellants




                                     
    were members of the Society and were allotted flats in question in that
                       
    capacity at the relevant time are bound by the decision of the General
                      
    Body of the Society, as long as the decision of the General Body is in

    force.    As observed earlier, the Appellants have not challenged the

    decisions of the General Body of the Society which is supreme, in so far
      


    as redevelopment of the property in question or of appointment of the
   



    Respondent No.1 conferring on him the development rights.                       The





    Appellants have merely challenged the Resolution which at best would

    raise issues regarding the stipulations in the Development Agreement.The General Body of the Society has taken a conscious decision which in





    this case was after due deliberation of almost over 5 years from August

    2002 till the Respondent No. 1 came to be finally appointed as Developer

    in terms of Resolution dated 2nd March, 2008.       Moreover, the General::: Downloaded on - 09/06/2013 15:24:01 :::32Body of the Society by overwhelming majority not only approved the

    appointment of Respondent No. 1 as developer but also by subsequent




                                                                           
    Resolution dated 27th April, 2008 approved the draft Development




                                                   
    Agreement. Those terms and conditions have been finally incorporated in

    the registered Development Agreement executed by the Society in favour




                                                  
    of Respondent No.1. That decision and act of the Society would bind the

    Appellants unless the said Resolutions were to be quashed and set aside




                                      
    by a forum of competent jurisdiction.        In other words, in view of the
                       
    binding effect of the Resolutions on the Appellants, it would necessarily
                      
    follow that the Appellants were claiming under the Society, assuming that

    the Appellants have subsisting proprietary rights in relation to the flats in

    their possession. It is noticed that as of today the Appellants have been
      


    expelled from the basic membership of the Society. Their right to occupy
   



    the flat is associated with their continuance as member of the Society. It





    is a different matter that the decision of expelling the Appellants from the

    basic membership of the Society will be subject to the outcome of the

    decision of the superior authority where the appeals are stated to be





    pending.   If the decision of the Society to expel the Appellants is to be

    maintained, in that case, the Appellants would have no surviving cause to

    pursue their remedy even before the Co-operative Court much less to::: Downloaded on - 09/06/2013 15:24:01 :::33obstruct the redevelopment proposal.             As a matter of fact those

    proceedings will have to be taken to its logical end expeditiously. Even if




                                                                             
    the Appellants were to continue as members, they would be bound by the




                                                     
    decision of the General Body whether they approve of the same or

    otherwise. In any case, keeping in mind that the Development Agreement




                                                    
    does not absolutely take away the rights of the Appellants in the flats in

    question, as after demolition of the existing building, the Appellants would




                                     
    be accommodated in the newly constructed flats to be allotted to them in
                       
    lieu of the existing flats, on the same terms as in the case of other
                      
    members, provided the Appellants continue to remain members of the

    Society. Under the Development Agreement, the Respondent No. 1 is

    obliged to complete the project within 18 months from the date of receipt
      


    of   full Commencement Certificate from the Corporation. The full
   



    Commencement Certificate would be issued only upon the vacant





    possession of the entire building is delivered to the Respondent No.1 who

    in turn would demolish the same with a view to reconstruct a new building

    in its place.   Significantly,   out of        twelve (12) members, ten (10)





    members have already acted upon the Development Agreement as well as

    have executed separate undertaking-cum-agreement with the Respondent

    No. 1 Developer. They have already vacated flats in their occupation to::: Downloaded on - 09/06/2013 15:24:01 :::34facilitate demolition of the existing building and have shifted to alternative

    transit accommodation as back as in February 2009.               The project has




                                                                           
    been stalled because of the obstruction created by the Appellants herein




                                                   
    who are in minuscule minority.       The said ten members of the Society

    who have already shifted their premises, they and their family members




                                                  
    are suffering untold hardship.     At the same time, the Respondent No. 1

    who has already spent huge amount towards consideration of the




                                      
    Development Agreement and incurred other incidental expenses to
                       
    effectuate the Development Agreement in addition will have to incur the
                      
    recurring cost of paying monthly rent to the ten members who have

    already shifted to transit accommodation. The learned Single Judge has

    noted that the Appellants are not in a position to secure the amount
      


    invested and incurred including the future expenses and costs of the
   



    Respondent No.1 herein in case the project was to be stalled in this





    manner. Even before this Court the Appellants have not come forward to

    compensate the Respondent No.1 herein and the other ten members of the

    Society for the loss and damage caused to them due to avoidable delay





    resulting from the recalcitrant attitude of the Appellants. Considering the

    impact of obstruction caused by the Appellants to the redevelopment

    proposal, not only to the Respondent No. 1 Developer but also to the::: Downloaded on - 09/06/2013 15:24:01 :::35overwhelming majority of members (10 out of 12) of the Society, the

    learned Single Judge of this Court opined that it is just and convenient to




                                                                         
    not only appoint the Court Receiver but to pass further orders for




                                                 
    preservation as well as protection and improvement of the property which

    is subject matter of Arbitration Agreement. We have already noticed that




                                                
    the Court's discretion while exercising power underSection 9of the Act is

    very wide.   The question is whether in the fact situation of the present




                                     
    case it is just and convenient to appoint Court Receiver coupled with
                       
    power conferred on him to take over possession of the entire building and
                      
    hand over vacant and peaceful possession thereof to the Respondent No. 1

    who in turn shall redevelop the property so as to provide flats to each of

    the members of the Society in lieu of the existing flats vacated by them as
      


    per the terms and conditions of the Development Agreement, as ordered
   



    by the learned Single Judge. For the reasons noted by the Learned Single





    Judge which we have reiterated in the earlier part of this decision, we find

    that it would be just and convenient to not only appoint Court Receiver

    to take over possession of the property but also pass further order of





    empowering the Court Receiver to hand over vacant possession of the suit

    building to the Respondent No. 1 to enable him to complete the

    redevelopment work according to the terms and conditions of the::: Downloaded on - 09/06/2013 15:24:01 :::36Development Agreement.19.   Our attention was invited to the decisions of our High Court in the




                                                 
    case of Raja Construction Co. v/s. Sahara Cooperative Housing

    Society Ltd. & ors. in Notice of Motion No. 2753/2007 decided on




                                                
    August 31, 2007 and another decision of the Division Bench in the case of

    Whiz Enterprise Private Ltd. v/s. State of Maharashtra & ors. in WP




                                     
    (L) No. 28/2009 decided on 30/7/2009. We are conscious of the fact that
                       
    in both these decisions the member who was in minority did not bother to
                      
    challenge the decision of the General Body of the Society. Even in the

    present case, the Appellants have not challenged the relevant decisions of

    the Society to redevelop the suit property and to appoint the Respondent
      


    No.1 as the Developer.     At best, the Appellants have challenged the
   



    Resolution dated 27th April, 2008 which in turn relates to the approval of





    the Development Agreement, which has already been executed between

    the Respondent No. 1 Developer and the Respondent No. 2 Society.Indeed, in those cases the relief was not on an Application underSection





    9of the Act, but for the reasons recorded hitherto the relief to be granted

    in this petition would nevertheless be the same.::: Downloaded on - 09/06/2013 15:24:01 :::3720.   It was also argued that the property was in good condition and there

    was no need to redevelop the existing building. In the first place, as noted




                                                                         
    earlier, the decision of the General Body of the Society to redevelop the




                                                 
    suit property has not been challenged at all. Besides, no provision in theCooperative Societies Actor the rules or any other legal provision has




                                                
    been brought to our notice which would curtail the right of the Society to

    redevelop the property when the General Body of the Society intends to do




                                     
    so. Essentially, that is the commercial wisdom of the General Body of the
                       
    Society. It is not open to the Court to sit over the said wisdom of the
                      
    General Body as an Appellate Authority. Merely because some members

    in minority disapprove of the decision, that cannot be the basis to negate

    the decision of the General Body, unless it is shown that the decision was
      


    the product of fraud or misrepresentation or was opposed to some
   



    statutory prohibition. That is not the grievance made before us. In the





    present case, the General Body took a conscious decision after due

    deliberations for over five years to redevelop its property. Even with

    regard to the appointment of the Respondent No.1 as the Developer, the





    record shows that it was decided by the General Body of the Society after

    examining the relative merits of the proposals received from the

    developers and interviewing them.       Even the proposed development::: Downloaded on - 09/06/2013 15:24:01 :::38agreement to be entered with the Developer(Respondent No.1) was

    approved by the General Body. The Appellants raised untenable pleas to




                                                                            
    cause obstruction and have belatedly filed proceedings in the Cooperative




                                                    
    Court as a counter blast only to protract the redevelopment work to be

    carried out by the Respondent No.1 herein.21.   Accordingly, we find no infirmity in the conclusion reached by the




                                       
    Learned Single Judge in making the Petition absolute in terms of prayer
                        
    clause (a) in the fact situation of the present case.22.   In our opinion, this Appeal is devoid of merits. The same deserves

    to be dismissed. At the same time, we would clarify that any observation
      


    in this decision shall not be treated as an expression of opinion one way or
   



    the other in the pending proceedings. The same will have to be proceeded

    on its own merits in accordance with law.23.   Hence, this Appeal is dismissed with costs.CHIEF JUSTICE



                                                       A.M.KHANWILKAR, J::: Downloaded on - 09/06/2013 15:24:01 :::