- Case
- Santanu Sengupta v. Macrotech Developers Limited (Bombay High Court, 04-04-2025)
- Law
- Arbitration and Conciliation Act, Insolvency and Bankruptcy Code.
Facts: Several high networth individuals who own apartments in Lodha Worli, developed by Macrotech Developers Ltd., filed arbitration petitions seeking interlocutory relief. The petitioners claimed they fully paid all applicable dues for 'Federation Common Area Maintenance Charges' ("FCAM Charges") to access amenities like the gymnasium and club house. Macrotech, however, alleged the petitioners were in default and cut off their access to these amenities. The petitioners disputed the FCAM charges, alleging opacity and inflated amounts, while Macrotech argued that other residents paid without grievance and that denying access was necessary to address inequity.
Procedural Posture: This is a judgment on a batch of petitions filed under Section 9 of the Arbitration and Conciliation Act, 1996, before the High Court of Judicature at Bombay, seeking interim relief pending arbitration.
Issue: Whether the petitioners are entitled to interim relief in the form of unhindered access to common amenities, pending resolution of disputes regarding FCAM charges through arbitration, and what provisional arrangements should be made to balance the interests of both parties.
Holding: The Court disposed of the petitions with directions for provisional arrangements pending arbitration. Macrotech was directed to provide a provisional computation of FCAM charges based on a specified formula, and upon payment of these charges by the petitioners, to restore their access to the common amenities. The Court also appointed a sole arbitrator to adjudicate the disputes.
Reasoning: The Court sought to balance the competing interests of the parties. It noted the existence of serious disputes regarding the FCAM charges and the need for a deeper probe by the Arbitral Tribunal. To adjust equities, the Court directed Macrotech to provide a provisional computation of FCAM charges based on the initial rate of Rs. 4.50 per square foot escalated by 10% per annum on a compounded basis from October 2017. Upon payment of these provisional charges, Macrotech was directed to restore the petitioners' access to the common amenities. The Court also directed Macrotech to provide a statement of third-party usage of common areas and details of unsold inventory to the Arbitral Tribunal for a fair determination of the FCAM charges. The Court emphasized that all issues on merits were kept open to be agitated before the Arbitral Tribunal.
