Prospective Estate And Realty Logical … vs Nirvana Lifestyle Homes Llp on 6 July, 2026

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    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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