Bombay HC Calls Larger Bench for doctrinal claritydefine boundaries of RERA vs Arbitration
Judgment dated 7.10.2026 of the High Court of Bombay in Arbitration Application No.205 of 2026 (OS) in Rensar Infra Private Limited Vs. Rais Kasam Shaikh and others
On 27 January 2011, a Development Agreement was entered into between the Society, its members and Respondent No. 3. Thereafter, on 18 December 2015, a Joint Development Agreement was entered into between the Society, its members, Respondent No. 3 and the Applicant. On 31 December 2020, Respondent Nos. 1 and 2 entered into the said Contract with the Applicant and Respondent No. 3 in respect of Flat No. 1901. In the year 2021, disputes arose between the parties. As a result, the Society and its members filed Commercial Arbitration Petition No. 10 of 2022 against the Applicant and Respondent No. 3 before this Court under Section 9 of the Arbitration and Conciliation Act, 1996. On 3 January 2022, this Court passed an order directing the Applicant and Respondent No. 3 to hand over fit-out possession of the respective flats allotted to the twelve members of the Society in the building, subject to payment of their outstanding dues. The said order dated 3 January 2022 was challenged by the Applicant and Respondent No. 3 before this Court. The said proceedings were disposed of by a Consent Award dated 27 July 2022.
On 20 May 2025, the Applicant issued a Demand Notice to Respondent Nos. 1 and 2. Respondent Nos. 1 and 2 replied to the said notice by their letter dated 18 June 2025. Thereafter, on 25 July 2025, the Applicant issued a notice to Respondent Nos. 1 and 2 under Section 21 of the Arbitration and Conciliation Act, 1996. By the said notice, the Applicant invoked the arbitration agreement contained in the said Contract. Respondent No. 1, through its Advocates, gave a reply dated 22 August 2025 to the notice issued on behalf of the Applicant. Disputes have arisen between the parties and the parties have not been able to agree upon the constitution of the arbitral tribunal.
Section 11 petition was filed for resolution of disputes arising out of the Agreement for Sale dated 31.12.2020 for the flat. The said contract provided for arbitration clause.
I am aware that arbitration proceedings are intended to be completed quickly and unnecessary reference to a larger Bench may cause delay. The Supreme Court has held that the referral Court should not conduct a mini trial. However, the present reference is not proposed for deciding the Applicant’s damages or contractual rights. It is only for settling an important question which affects the existence of arbitral jurisdiction in a category of disputes. In these circumstances, some delay for getting an authoritative answer would be better than passing another judgment which may lead to another reference. Therefore, in the present Section 11 proceedings, I do not hold that every dispute 35 Uploaded on – 07/10/2026 Downloaded on – 10/10/2026 16:45:19 arbap-205-2026-J.doc between a promoter and individual allottee under an Agreement for Sale governed by RERA is non-arbitrable. At the same time, I do not hold that every such contractual dispute is arbitrable only because the Agreement contains an arbitration clause. 64. The question which, in my opinion, requires consideration by a larger Bench may be framed as follows: “Whether, having regard to Sections 79, 88 and 89 and the other relevant provisions of the Real Estate (Regulation and Development) Act, 2016, a dispute arising between an individual promoter and allottee under an Agreement for Sale containing an arbitration clause is, merely because the relationship and transaction are governed by RERA, non arbitrable as a class, or whether the arbitrability must be examined by reference to the subject matter, nature of relief and the matters which the statutory authorities under RERA are empowered to determine;
