“We Have Not Stayed Adoptions”: Bombay High Court Clarifies, Court To Continue Hearing Matters
Bombay High Court’s Ruling on Mandatory Injunction: A Boost for Homebuyers’ Rights?
The recent decision by the Bombay High Court on Section 9 of the Arbitration and Conciliation Act is
significant for housing societies and builders. The court held that a court exercising powers under
Section 9 of the A&C Act can grant mandatory injunction at an interim stage when the builder is
found to be in multiple breaches which results in the co-operative society losing its confidence in the
builder.
Here are some of the key takeaways:
- Court can grant mandatory injunction at interim stage: The High Court of Bombay has held that a
court exercising powers under Section 9 of the A&C Act can grant mandatory injunction at an interim
stage when the builder is found to be in multiple breaches which results in the co-operative society
losing its confidence in the builder. This ruling clarifies the circumstances under which a court can
grant mandatory injunction at an interim stage. - Multiple breaches by builders can warrant mandatory injunction: The court’s decision highlights the
importance of builders fulfilling their obligations under the Development Agreement and the
Supplementary Development Agreement. If a builder repeatedly defaults on these obligations, it can
erode the housing society’s confidence in the builder, which can warrant a mandatory injunction. - A mandatory injunction can be a powerful tool for housing societies: The court’s decision underscores
the importance of mandatory injunction as an extraordinary relief that can be used by housing
societies to protect their interests. By granting a mandatory injunction, the court can compel a builder
to fulfil its obligations and prevent further harm to the housing society. - Developers must pay transit rent and other dues: The court’s decision also highlights the importance
of developers paying transit rent and other dues owed to housing societies. Failure to pay these dues
can be considered a breach of the Development Agreement and can lead to termination of the
agreement. - Prima facie case required for interim injunction: The court’s decision also clarifies that a prima
facie case is required for an interim injunction to be granted. This means that the plaintiff must
demonstrate that there is a reasonable likelihood of success on the merits of the case.
Overall, the Bombay High Court’s decision on mandatory injunction for housing societies clarifies the
circumstances under which a court can grant mandatory injunction at an interim stage and underscores
the importance of builders fulfilling their obligations under the Development Agreement and the
Supplementary Development Agreement. The decision also highlights the importance of developers
paying transit rent and other dues owed to housing societies and the requirement of a prima facie case
for an interim injunction to be granted. Section 9 of the Arbitration and Conciliation Act is a provision
that provides a mechanism for parties in arbitration to seek interim relief and protect their interests.
The question of whether Section 9 of the Act will increase house buyers’ rights is a complex one that
depends on various factors. Here are some possible ways in which Section 9 of the Act could impact
house buyers’ rights: Act could potentially increase house buyers’ rights by providing a mechanism for
parties in arbitration to seek interim relief and protect their interests. The recent decision by the
Bombay High Court on mandatory injunction for housing societies highlights the power of mandatory
injunction as an extraordinary relief that can be used by housing societies to protect their interests.
The wider powers of the court under Section 9 than under the CPC could also potentially benefit
house buyers who are involved in arbitration proceedings.
Under Section 9 of the Arbitration and Conciliation Act, there are two types of injunctions that can be
granted: mandatory injunctions and discretionary injunctions. Here are the differences between the
two:
Mandatory injunctions:
- A mandatory injunction is an order that requires a party to perform a specific act or duty.
- It is granted when the court finds that the party has breached a contractual obligation or has caused
harm to the other party. - A mandatory injunction is an extraordinary relief that is granted only in exceptional circumstances.
- It is granted when the court finds that the party seeking the injunction has a clear legal right to the
relief sought and that the harm caused by the breach cannot be adequately compensated by damages.
Discretionary injunctions: - A discretionary injunction is an order that requires a party to refrain from doing a specific act or
duty. - It is granted when the court finds that the party seeking the injunction has a strong case and that the
harm caused by the breach cannot be adequately compensated by damages. - A discretionary injunction is a more common form of relief than a mandatory injunction.
- It is granted when the court finds that the balance of convenience and inconvenience favours the
party seeking the injunction.
This decision underscores the importance of builders fulfilling their obligations under the
Development Agreement and the Supplementary Development Agreement and highlights the power
of mandatory injunction as an extraordinary relief that can be used by housing societies to protect
their interests.
Section 9 of the Arbitration and Conciliation Act serves an important purpose in the context of dispute
resolution. Features of section 9-
Interim relief: Section 9 empowers the court to grant interim relief before or during the
arbitral proceedings or after the passing of the arbitral award.
Restrictions on court’s powers: Section 9 also lays down restrictions on the court’s powers to
grant interim relief after the constitution of the Arbitral Tribunal unless such circumstances
exist which may render a remedy under Section 17 inefficacious.
Protection of parties’ interests: Section 9 is aimed at safeguarding the interests of the parties
involved in the dispute resolution process.
Difference between Section 9 and Section 17: While Section 9 empowers the civil court to
grant interim relief, Section 17 empowers the Arbitral Tribunal to grant interim relief during
the arbitral proceedings.
Prerequisites for granting interim relief: The court must be satisfied that the party seeking
interim relief has a strong case and that the harm caused by the breach cannot be adequately
compensated by damages.
DIFFERENCE BETWEEN SECTION 9 AND 17-
Power to grant interim relief: The civil court has the power to grant interim relief to parties
involved in the dispute resolution process.
Wider powers than CPC: The Supreme Court has held that the powers of the court under
Section 9 of the Act are wider than the powers under the provisions of the CPC. This means
that the court has more discretion in granting interim relief under Section 9 than under the
CPC.
Discretionary power: The court has the discretionary power to provide any interim protections
other than the ones listed under Section 9(1)(ii)(e) if it deems it fit, just, and convenient.
Prerequisites for granting interim relief: The court must be satisfied that the party seeking
interim relief has a strong case and that the harm caused by the breach cannot be adequately
compensated by damages.
Additional pre-requisites: The court must also assess if circumstances exist which may render
a remedy under Section 17 inefficacious and if the petitioner manifestly intended to initiate
arbitral proceeding.
