Introduction
The Bombay High Court, in a recent judgment, addressed the complexities involved in disputes between Cooperative Housing Societies and Developers, particularly in redevelopment projects. This judgment is significant for its analysis of the rights and obligations under redevelopment agreements and the Court's approach towards dispute resolution in petitions filed under Section 9 of the Arbitration and Conciliation Act, 1996.

Facts of the Case
In Swashray Coop. Housing Society Ltd. & Ors. vs. Shanti Enterprises, cross petitions were filed under Section 9 of the Arbitration and Conciliation Act, 1996. The dispute involved a redevelopment project in Borivali, Mumbai. The Society engaged Shanti Enterprises for redevelopment but faced numerous delays and defaults. Consequently, the Society sought to terminate the development agreement and pursue redevelopment through other means.

Submissions of Both Parties
The Petitioner - Society emphasized the Developer's repeated defaults and noncompliance with the development and supplementary development agreements. They argued that such defaults justified terminating the agreement. Conversely, the Respondent Developer contended that the delays were partly due to the COVID19 pandemic and their substantial investment entitled them to continue the redevelopment. The Respondent Developer failed to dispute the Petitioner Society's claims regarding rent arrears and other monetary components. The Developer did not propose remedial measures for the glaring defaults in the redevelopment project.

Law Discussed and Relied Upon by the Court
The Court explored legal principles governing such disputes, referencing judgments emphasizing the importance of trust and faith in developers by societies. Specifically cited were:

1. Gopi Gorwani Vs. Ideal Cooperative Housing Society Ltd. & Ors. (2013 SCC OnLine Bom 1967): The Court held that societies cannot be compelled to continue redevelopment work with developers who breach trust due to various violations.
2. The Jal Ratan Deed Cooperative Housing Society Limited Vs. Kumar Builders Mumbai Realty Pvt. Ltd. (2015 SCC OnLine Bom. 5928): The Court permitted the society to pursue redevelopment with a new developer after losing faith in the existing developer due to repeated defaults.

Ratio Laid Down by the Court
The Court held that nonpayment of transit rent, and redevelopment delays are substantial breaches, justifying a society's decision to terminate a development agreement. Societies cannot be forced to continue with developers who have lost their trust and confidence. The Court dismissed the petition filed by the Developer and allowed the Society's petition, granting them the right to proceed with the redevelopment through alternative means¹.

By - Chaitanyaa Bhandarkar