Bombay High Court
Prospective Estate And Realty Logical … vs Nirvana Lifestyle Homes Llp on 6 July, 2026
Author: Amit Borkar
Bench: Amit Borkar
CNR No : HCBM020154492026
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Sayali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO. 15449 OF 2026
Prospective Estate and Realty Logical
Solutions Private Limited ... Petitioner
Vs.
Nirvana Lifestyle Homes LLP ...Respondent
Mr. Anand Pai i/b Mhatre Law Associates, for Petitioner.
Mr. Piyush Raheja, Mr. Yash Momaya with Mr. Rishabh
Dhanuka, Ms. Vibha Joshi, Ms. Mahima Shah, Mr.
Vamsh Shetty i/b Agarwal and Dhanuka Legal, for
Respondent.
CORAM : AMIT BORKAR, J.
RESERVED ON : JUNE 18, 2026.
PRONOUNCED ON : JULY 6, 2026
JUDGMENT:
1. By the present arbitration petition, the petitioner is seeking
appointment of a Court Receiver in respect of the 152 plots forming
part of the said smaller portion of the said land admeasuring
5,26,193.79 sq. ft., equivalent to 48,885.05 sq. mtrs., bearing
Survey Nos. 156/11, 14, 15, 17, 18, lying, being and situated at
Village Amboli, Taluka Dahanu, District Palghar under Order XL
Rule 1 of the Code of Civil Procedure, 1908.
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2. Facts giving rise to the filing of the present arbitration
petition, as narrated in the petition, are as under. The petitioner is
seeking to restrain the Respondent from in any manner further
selling, transferring, alienating, encumbering, creating third-party
rights, or otherwise dealing with any balance unsold
plots/infrastructure forming part of the said smaller portion of the
said land in Village Amboli, Dahanu, without the prior written
consent of the Petitioner, owing to the alleged breaches by the
Respondent in violation of the terms and conditions of the
Registered Conveyance Deed dated 6 April 2022 and the
Addendum to Sale Deed No. 652/2022 dated 6 December 2024.
3. The Petitioner is a Private Limited Company, and the
Respondent is a Limited Liability Partnership. The petitioner is the
lawful owner of the land bearing (i) Survey No. 156 Hissa No. 15
admeasuring 2-00-00 (H-A-P); (ii) Survey No. 156 Hissa No. 17
admeasuring 2-00-00 (H-A-P); (iii) Survey No. 156 Hissa No. 11
admeasuring 3-20-00 (H-A-P); (iv) Survey No. 156 Hissa No. 14
admeasuring 4-03-00 (H-A-P); and (v) Survey No. 156 Hissa No.
18 admeasuring 4-00-00 (H-A-P), lying, being and situated at
Village Amboli, Taluka Dahanu, District Palghar. The portion of the
said land admeasuring 86,795.16 sq. meters has been divided into
260 plots bearing Plot Nos. A1 to A260 vide an order passed by the
Tahsildar’s Office, Dahanu. The Petitioner undertook the
development and construction of a RERA project namely “VIROHA
CITY” on the said land. Discussions regarding execution of a
Development Agreement were made for granting development
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rights in respect of 54 plots to the Respondent, which failed.
Thereafter, a Marketing Services Agreement was executed, and the
Petitioner agreed to refund the partially paid deposit of Rs.4.25
crores to the Respondent under the Development Agreement. Out
of Rs.4.25 crores, the Petitioner paid Rs.1.42 crores and the
balance Rs.2.83 crores was to be adjusted towards sale
consideration.
4. Thereafter, a Registered Conveyance Deed was executed and
registered in favour of the Respondent for conveyance of a smaller
portion of the land admeasuring 48,885.05 sq. mtrs. bearing
Survey Nos. 156/11, 14, 15, 17 and 18, divided into 152 plots, for
a total consideration of Rs.31,83,00,000/-. The Respondent already
paid Rs.5.83 crores and agreed to pay the balance Rs.26 crores by
post-dated cheques (PDCs). A PDC of Rs.42,80,000/- deposited by
the Petitioner got dishonoured vide Cheque No.000000001232.
The Respondent assured the Petitioner that the cheque would be
honoured and requested the Petitioner not to deposit the remaining
cheques up to 25th September 2024. No payment was honoured
despite giving a 60-day cure period. The Petitioner has complied
with its obligations under the said Deed and spent more than
Rs.2,85,36,134/- till 31 August 2023 for completion of the project
as per the Third Schedule to the said Deed. The Respondent made
an offer for execution of the Addendum to the Sale Deed, which
was executed, and the payment schedule was revised for the
outstanding amount of Rs.11,31,39,103/- within 49 months,
including 12% interest, i.e., monthly EMIs of Rs.30 lakh from
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December 2024 till December 2028 amounting to
Rs.14,45,67,699/-.
5. The Respondent paid a sum of Rs.19,98,55,933/- along with
interest and failed to pay the balance amount of Rs.19,87,98,471/-
accruing till 31 January 2026. The Petitioner discovered that the
Respondent had created third-party rights in respect of 76 plots
without consent, in breach of the Deed. A sum of
Rs.12,69,61,067/- along with accrued interest of Rs.4,53,83,824/-
and the EMD forfeited amount of Rs.3,00,00,000/- remains unpaid,
aggregating to a sum of Rs.20,23,44,891/-. A legal notice/
intimation granting 15 days’ time was issued as per the Deed, to
which the Respondent replied accepting its liability and calling for
amicable resolution of the dispute. The amicable resolution failed,
and the Petitioner issued an Arbitration Notice and also filed a
police complaint. The Respondent replied once again seeking an
amicable resolution; however, no bona fide steps were taken.
Hence, the present Petition has been filed seeking interim measures
to secure the Petitioner’s claim pending arbitration.
6. Mr. Anand Pai, learned Advocate for the petitioner, invited
my attention to the Addendum to the Sale Deed dated 6 April
2022, and submitted that a table contained in the said document
shows the amount agreed to be paid by the respondent, which is
towards the consideration of the Sale Deed executed by the
petitioner in favour of the respondents. A part of such
consideration was to be paid in instalments as reflected in the said
table. He submitted that the respondent has complied with
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Instalments Nos. 1 to 19 out of the said instalments payable;
however, the respondent has failed to pay the balance amount of
consideration agreed under the Sale Deed. He invited my attention
to Clause 16 of the Sale Deed, which restrains the respondent from
selling or creating third-party rights in respect of the property in
dispute until the consideration is paid by the purchaser to the
vendor. He submitted that the petitioner is entitled to the reliefs as
prayed for in the petition.
7. Mr. Piyush Raheja, learned Advocate for the respondents,
invited my attention to Clauses 5 and 6 of the Agreement dated 6
April 2022, and submitted that under the said agreement, the
terms and conditions of the Sale Deed stand modified. He
submitted that on the default committed by the respondent as per
the schedule mentioned in the said agreement, the petitioner was
to issue a 15-day notice to clear the outstanding EMI amount and,
on failure to clear the EMI amount within the prescribed period,
the parties shall enter into an agreement whereby the respondent
shall be entitled to recover the outstanding EMI from the sale
proceeds of the Viroha Project undertaken. He submitted that the
respondent is selling plots to various customers from the Viroha
Project and that the amount was agreed to be transferred to an
escrow account, and a mutually agreed percentage of the sale
proceeds shall be transferred to the petitioner towards the
outstanding amount. Therefore, the petitioner cannot claim an
injunction against the respondents from selling the property in
dispute.
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8. In rejoinder, the learned Advocate submitted that the Sale
Deed is a registered instrument and the Agreement dated 6 April
2022 is an unregistered document. The terms of the registered
document cannot be varied or modified by an unregistered
document and, therefore, he submitted that the respondent is not
entitled to sell the property in dispute.
REASONS AND ANALYSIS:
9. I have considered the submissions made on behalf of both the
parties. I have also gone through the pleadings and the documents
placed on record. At this stage, the Court is dealing with a petition
seeking interim protection pending arbitration. Therefore, the
Court is not expected to finally decide the rights and liabilities of
the parties. The Court is only required to see whether the petitioner
has made out a case for interim protection and whether refusal of
such protection may affect the subject-matter of the arbitration.
10. From the material placed before the Court, it is not in dispute
that a Registered Conveyance Deed dated 6 April 2022 was
executed by the petitioner in favour of the respondent in respect of
152 plots forming part of the land in question. It is also not
disputed that thereafter an Addendum came to be executed
between the parties revising the payment schedule for the
outstanding consideration. Therefore, the relationship between the
parties and the transaction under which the respondent acquired
rights in the property are not matters in dispute. The dispute is
regarding the manner in which the balance consideration was to be
paid and the rights of the parties after the respondent allegedly
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committed default.
11. The petitioner has relied upon the payment schedule
contained in the Addendum and has submitted that though several
instalments have been paid, the respondent has failed to pay the
remaining amount. The petitioner has also placed reliance upon
Clause 16 of the Registered Conveyance Deed. According to the
petitioner, till the entire sale consideration is paid, the respondent
is not entitled to create any third party rights or deal with the
property. It is further alleged that despite such restriction, the
respondent has created third party rights in respect of 76 plots. If
this allegation is correct, then the petitioner has shown a prima
facie breach of an important condition contained in the registered
document.
12. The respondent does not dispute that some amount still
remains payable. In fact, from the pleadings referred to by the
petitioner, it appears that in reply to the legal notice the respondent
had accepted its liability and requested that the dispute be settled.
Though the extent of liability may require examination before the
Arbitral Tribunal, the material available does indicate that the
respondent has acknowledged that some amount remained
payable. Therefore, at least at this stage, the submission of the
petitioner that substantial consideration still remains unpaid
cannot be brushed aside.
13. The respondent has opposed the relief on a different ground.
According to the respondent, Clauses 5 and 6 of the Agreement
dated 6 April 2022 have modified the original arrangement
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between the parties. It is submitted that after default, the parties
had agreed that the outstanding amount would be recovered from
the sale proceeds of the Viroha Project. It is submitted that the sale
proceeds were to be deposited in an escrow account and thereafter
an agreed percentage would be transferred to the petitioner. On
this basis, it is argued that the respondent was permitted to
continue selling the plots and, therefore, the petitioner cannot now
seek an injunction restraining further sales.
14. However, the respondent has not pointed out any material
before this Court to show that such escrow mechanism has been
implemented or that the agreed percentage of sale proceeds has
been regularly transferred towards the petitioner’s outstanding
dues. On the contrary, according to the petitioner, substantial
amounts still remain unpaid. Therefore, even if the respondent’s
interpretation is assumed for the purpose of argument, the material
presently available does not establish that the arrangement relied
upon by the respondent has been acted upon.
15. The petitioner has also argued that the Agreement dated 6
April 2022 relied upon by the respondent is an unregistered
document, whereas the Conveyance Deed is a registered
instrument. According to the petitioner, the terms of a registered
conveyance cannot be altered by an unregistered document. This
submission raises an important issue regarding the effect of the
documents executed between the parties. Prima facie there is
substance in the contention raised on behalf of petitioner.
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16. The petitioner has alleged that third party rights have already
been created in respect of 76 plots without its consent and that a
substantial amount still remains unpaid. If during the pendency of
arbitration the remaining plots are also transferred and further
third party interests come into existence, the dispute may become
more complicated. Such transfers may also make it difficult for the
petitioner to secure the fruits of award that may be passed in its
favour. This aspect cannot be overlooked while exercising powers
under Section 9.
17. The conduct of the parties also deserves consideration. The
petitioner has stated that after dishonour of one of the post dated
cheques, the respondent requested that the remaining cheques
should not be deposited and assured payment. It is also stated that
even after granting a cure period, payment was not made.
Thereafter, an Addendum was executed by revising the payment
schedule. Even according to the petitioner, several instalments were
paid by the respondent. At the same time, the material shows that
despite revision of the payment schedule, according to the
petitioner a substantial amount still remains outstanding. The
respondent has not placed before this Court any material showing
that the outstanding amount has been cleared or that there is no
default. Thus, though the respondent’s conduct does not answer
the petitioner’s case regarding continuing default.
18. The Court also cannot ignore that the property forms the
subject-matter of the dispute between the parties. Once third party
rights are created during pendency of the dispute, restoration of
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the original position may become difficult. Such difficulty is one of
the relevant circumstances while considering interim protection.
The purpose of an interim order is not to decide the rights finally
but to preserve the subject-matter so that the arbitration does not
become ineffective.
19. Looking to the material placed before this Court, the
petitioner has made out a prima facie case that substantial
consideration remains unpaid and that restrictions regarding
transfer of the property are contained in the registered Conveyance
Deed. The respondent has raised a defence based on the
subsequent Agreement and the alleged escrow arrangement. That
requires detailed examination before the Arbitral Tribunal.
20. Taking an overall view of the matter, I am satisfied that the
balance of convenience leans in favour of protecting the remaining
property until the disputes between the parties are decided in
arbitration. If no interim protection is granted and transfers are
permitted, enforcement of award may also become difficult. On the
other hand, the respondent will have full opportunity before the
Arbitral Tribunal to establish that the subsequent Agreement
governs the rights of the parties and that the transfers effected by it
were in accordance with the contractual arrangement. Therefore,
without expressing any final opinion on the rival contractual
interpretations, this Court finds that the petitioner has made out a
case for grant of appropriate interim protection pending
arbitration.
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21. In view of the foregoing discussion, and upon overall
assessment of the material on record, and the findings arrived at
hereinabove, the following order is passed:
(i) The Commercial Arbitration Petition is partly allowed;
(ii) Pending commencement and conclusion of the arbitral
proceedings, the respondent shall not create any fresh third
party rights, transfer, alienate, assign, encumber or otherwise
deal with the balance unsold plots forming part of the
property described in the petition, except with the prior
written consent of the petitioner or with the leave of the
Arbitral Tribunal, if constituted, or this Court;
(iii) The Court Receiver, High Court, Bombay, is appointed
as Receiver in respect of the balance unsold 152 plots
forming part of the property described in the petition.
However, the appointment shall be symbolic in nature. The
Court Receiver shall not take physical possession of the said
property unless specifically directed by this Court or by the
Arbitral Tribunal;
(iv) The respondent shall maintain complete accounts of all
transactions relating to the said project and shall not divert
the sale proceeds received from the project except in
accordance with law and subject to further orders that may
be passed by the Arbitral Tribunal;
(v) It is clarified that this order shall not affect the rights of
bona fide third parties, if any, created prior to the filing of the
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present petition. The validity and effect of such transactions
shall remain subject to the arbitral proceedings;
(vi) The observations made in this judgment are prima facie
in nature and confined only to the consideration of interim
relief under Section 9 of the Arbitration and Conciliation Act,
1996. The Arbitral Tribunal shall decide all issues
independently and on their own merits without being
influenced by any observations contained in this order;
(vii) The petition is accordingly disposed of in the above
terms.
(viii) There shall be no order as to costs.
(AMIT BORKAR, J.)
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