HSA | Dispute Resolution & Arbitration Monthly Update | September 2025

Saldanha Real Estate Pvt. Ltd. Vs. Bishop John Rodrigues & Ors.

2025 INSC 1016

Background facts

• The subject land belonged to Bishop John Rodrigues and the Bombay Archdiocese. The Slum Rehabilitation Authority (SRA) initiated acquisition proceedings under The Slum Areas (Improvement and Clearance) Act, 1956 (Slums Act), in order to implement a redevelopment scheme with the participation of Saldanha Real Estate Pvt. Ltd. and a proposed cooperative housing society (Shri Kadeshwari CHS Ltd).
• The Bombay High Court, in its judgment dated June 11, 2024, declared the acquisition invalid, holding that the process was flawed and violative of the landowners' rights.
• Aggrieved parties—including Saldanha Real Estate, the proposed society, and the SRA—approached the Supreme Court.

Issue(s) at hand

• Whether the acquisition of the subject land under the Slums Act was valid in law.
• Whether the High Court erred in declaring the acquisition void and restraining redevelopment.
• What balance should be struck between slum rehabilitation objectives and landowners' property rights?

Arguments of the Parties

• Arguments by Mr. Shyam Divan (representing Kadeshwari Society)
  • High Court should not have entertained Church Trust's Writ Petition.
  • Notice and order were procedural and did not merit interference.
  • Church Trust acted lackadaisically in developing the land and submitting proposals.
  • Trust's proposal was belated and did not adhere to format requirements.
  • No procedural infirmity or ulterior motive in notice and order.
• Arguments by Mr. Sudhanshu S. Choudhari (representing SRA)
  • SRA was not taking sides among parties.
  • Contentions already considered and negatived by the Court in Tarabai case.
• Arguments by Mr. Nikhil Sakhardande (representing Saldanha)
  • Adopted arguments made by Mr. Divan.
  • Acquisition was a bona fide effort for redevelopment, motivated by reasonable profits.
• Arguments by Dr. Milind Sathe and Mr. Chander Uday Singh (representing Church Trust)
  • Time limit of 120 days is directory, not mandatory.
  • Period would begin when specific notice is received by the owner.
  • Directions of the Court in Cognizance for Extension of Limitation would apply.
  • No legislative requirement to submit proposal as per Regulation 33(10).
  • SRA and private parties showed no necessity to acquire land.
  • Mala-fide intention behind acquisition, with Saldanha trying to grab land at a low price.
  • Decisions taken by Kadeshwari Society are suspect.

Findings of the Court

• The SC, while delivering the judgment, undertook a detailed examination of the Slums Act, the acquisition process, and prior precedents. The Court highlighted several critical points:
  • Purpose of the Slums Act
    • The Act empowers authorities to acquire land for improving living conditions of slum dwellers.
    • However, acquisition must be genuine, necessary, and compliant with statutory safeguards.
  • Defects in Acquisition
    • The acquisition proceedings failed to demonstrate public purpose necessity with adequate reasoning.
    • Procedural lapses undermined the legitimacy of the acquisition.
    • The High Court was correct in identifying that the SRA acted beyond its authority.
  • Rights of Landowners vs. Rehabilitation Needs
    • The Court stressed that landowners cannot be arbitrarily deprived of property.
    • At the same time, the state's commitment to slum rehabilitation remains paramount.
    • Therefore, a balanced approach is necessary: slum rehabilitation schemes must withstand judicial scrutiny while respecting constitutional property rights under Article 300A.
  • The SC upheld the Bombay High Court's ruling, confirming that
    • The acquisition of CTS No. B-960 was illegal and void.
    • The SRA cannot proceed with redevelopment of the subject land under the impugned acquisition.
    • That the landowners retain their rights, free from acquisition encumbrances.
  • Implications of the Judgment
    • For Landowners
      This ruling strengthens the protection of property rights in slum redevelopment contexts. Landowners now have firmer grounds to challenge acquisitions that lack transparency or statutory compliance.
    • For Slum Rehabilitation Schemes
      While the judgment does not undermine the larger objective of slum redevelopment, it reinforces the need for procedural fairness. Authorities must clearly justify acquisitions, follow due process meticulously and ensure that "public purpose" is not a cloak for irregular developer-led initiatives.
    • For Developers & Housing Societies
      Private developers and cooperative societies must recognize that their involvement in slum schemes is subject to strict legal scrutiny. Any shortcuts in acquisition processes may jeopardize entire projects.
    • For Urban Policy in Mumbai
      The decision highlights the tension between urban development and constitutional rights. Policymakers may need to revisit the framework of the Slums Act to ensure smoother yet legally robust rehabilitation mechanisms.

Ramesh Chand (D) Thr. Lrs. Vs. Suresh Chand & Anr.

2025 INSC 1059

Introduction

• The Supreme Court of India, in its recent judgment in Ramesh Chand (D) Thr. Lrs. vs. Suresh Chand & Anr¹ ., delivered by a division bench comprising Justice Aravind Kumar and Justice Sandeep Mehta, reiterated the settled principle that an Agreement to Sell or execution of a General Power of Attorney (GPA) cannot, in itself, confer ownership rights in an immovable property. The Court, setting aside the Delhi High Court's ruling which had upheld the trial court's decree of possession and declaration, clarified that ownership is transferred only through a duly executed and registered Sale Deed under the Transfer of Property Act, 1882 and the Registration Act, 1908. This pronouncement not only reaffirms established law but also reinforces procedural safeguards intended to curb misuse of informal property transactions.

Background facts

• Claim of the Plaintiff
  The plaintiff asserted that he had purchased the suit property from his father in 1996 through a bundle of documents, namely an Agreement to Sell, a General Power of Attorney, an Affidavit, a Receipt, and a registered Will. On this basis, he contended that ownership had effectively passed to him. He further alleged that his brother, the defendant, was merely a licensee in the property who had later sold a portion of it to a third party (Respondent No. 2) without any lawful authority.
• Defense of the Defendant
  The defendant, Ramesh Chand, disputed the plaintiff's claim and argued that the property had been orally gifted to him by their father in 1973, following which he remained in uninterrupted possession. He challenged the plaintiff's reliance on the documents as legally untenable, emphasizing that none of them amounted to a valid conveyance of title.
• Lower Court Proceedings
  The trial court accepted the plaintiff's case and decreed the suit for possession, mandatory injunction, and declaration, holding that the documents produced were sufficient to establish ownership. The Delhi High Court upheld this finding in appeal, affirming the trial court's reasoning despite the absence of a registered sale deed.
• Appeal before the Supreme Court
  Aggrieved, the defendant approached the Supreme Court, contending that both the Trial Court at Delhi and the Delhi High Court had erred in law by treating unregistered instruments and a General Power of Attorney as valid conveyances of title. The central dispute before the Apex Court, therefore, was whether such documents could substitute a registered Sale Deed and confer ownership rights upon the plaintiff.

Issue(s) at hand?

• Whether execution of an Agreement to Sell, in the absence of a registered Sale Deed, transfers ownership rights in an immovable property?
• Whether a General Power of Attorney executed in favor of a party is sufficient to convey title?
• Whether possession under Section 53A of the Transfer of Property Act, 1882, or reliance on a Will, is sufficient to establish ownership?

Findings of the Court

• Agreement to Sell does not confer ownership
  The Court held that an Agreement to Sell is merely a contract that creates a right to seek execution of a Sale Deed but does not itself amount to conveyance. Referring to Section 54 of the Transfer of Property Act, 1882, the bench clarified that a sale of immovable property above ₹100 in value can only be effected by a registered Sale Deed. Since the plaintiff had no registered conveyance, his claim of ownership was legally unsustainable.
• General Power of Attorney is not a sale
  The Court emphasized that a General Power of Attorney is an instrument of agency that authorizes the holder to act on behalf of the principal. It does not transfer ownership rights. The bench noted that even if the General Power of Attorney permits actions such as mortgaging or letting the property, it cannot operate as a document of conveyance. The plaintiff's reliance on the General Power of Attorney was therefore rejected as insufficient to establish title.
• Suspicious Will cannot confer Title
  The plaintiff's reliance on a registered Will was also rejected. The Court observed several suspicious circumstances surrounding the Will, particularly the exclusion of three out of four children of the testator without any explanation. It reasoned that it was improbable for a father to bequeath his entire estate to only one child while disinheriting the others, absent evidence of estrangement. The Will, though registered, did not inspire confidence and was held incapable of conferring ownership.
• Doctrine of part performance (Section 53A TPA) inapplicable
  The bench clarified that the doctrine of part performance under Section 53A of the Transfer of Property Act merely protects possession against the transferor; it does not create ownership rights. Hence, the plaintiff could not rely on possession to validate his claim of title.
• Final Ruling
  The Court set aside the judgments of the trial court and the High Court, holding that neither the Agreement to Sell, nor the General Power of Attorney, nor the Will could operate as a substitute for a registered Sale Deed. Consequently, the plaintiff's suit was dismissed.

Kamal Gupta & Anr. vs. Ms L.R. Builders Pvt. Ltd. & Anr.

2025 INSC 975

Background facts

• An oral family settlement was reached in 2015 between two brothers i.e., Kamal Gupta and Pawan Gupta for restructuring the family business. The understanding between the brothers later came to be crystallised into a Memorandum of Understanding/Family Settlement Deed ('Family MOU') on July 9, 2019. Notably, Rahul Gupta i.e., the son of Kamal Gupta was not a signatory to the Family MOU.
• Disputes arose between the brothers. Since the Family MOU contained an arbitration clause, Pawan Gupta along with another party filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 ('the Act') for the appointment of a sole arbitrator for adjudicating the disputes between the parties.
• In the proceedings filed under Section 11(6) of the Act, an application for intervention was filed by Rahul Gupta, a non-signatory to the Family MOU, seeking permission to intervene in the said proceedings so as to oppose the maintainability of the same and also claimed to have a substantial interest in the Family MOU's outcome.
• Pawan Gupta and another filed an application under Section 9 of the Act seeking interim measures and a similar application for intervention was filed by Rahul Gupta and another in these proceedings as well. By an order dated March 22, 2024, the Delhi High Court:
  • Appointed a sole arbitrator to adjudicate the disputes between the brothers
  • Directed the petition under Section 9 of the Act to be treated as an application under Section 17 of the Act to be decided by the Sole Arbitrator; and
  • Dismissed the intervention applications filed by Rahul Gupta being a non-signatory to the Family MOU.
• Months later, Rahul Gupta and other non-signatory companies filed new applications in the now disposed of Section 11(6) proceedings. Vide the application filed, the parties sought permission to: (a) attend the arbitration;(b) revive the earlier applications; and (c) access all related documents.
• The Delhi High Court, reversing its earlier stance, issued an order dated November 12, 2024, allowing the non-signatories to attend the arbitral proceedings and issued other directions regarding the division of properties. The Hon'ble High Court justified its decision on the ground that Rahul Gupta's presence would ensure transparency and enable him to safeguard his claimed interests.
• Aggrieved by this order of the Delhi High Court, the signatory parties i.e., Pawan Gupta and Kamal Gupta, challenged the legality of the High Court's order dated November 12, 2024 order before the Supreme Court, contending that the order of the High Court violates the framework of an arbitration being a private dispute resolution mechanism between the contracting parties.

Issue(s) at hand?

• Whether it is permissible for a non-signatory to an agreement leading to arbitration proceedings to remain present in such arbitration proceedings?
• After appointment of an arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996, whether it is permissible for the Court in such disposed of proceedings to issue any further ancillary directions concerning the arbitration proceedings that have commenced pursuant to appointment of the arbitrator?

Findings of the Court

• The Hon'ble Supreme Court examined the scope of Section 35 of the Act, which states that an arbitral award is final and binding on the 'parties and persons claiming under them.' By necessary implication, the Supreme Court deduced that non-signatories cannot be bound by an arbitral award. Thus, consequently, the Apex Court held that if the arbitral award cannot bind such non-signatories, there exists no legal basis to allow them to remain present during the proceedings. The Hon'ble Court categorically held that permitting non-signatories to attend arbitral hearings would undermine the finality contemplated under Section 35 of the Act and in the present case, Rahul Gupta's interests, even if substantial, did not confer a right to participate in confidential proceedings.
• The Hon'ble Supreme Court highlighted the importance of confidentiality in arbitral proceedings. By referring to Section 42A of the Act, which mandates confidentiality to be maintained by the arbitrator, arbitral institution, and parties, it was held that allowing non-signatories to attend proceedings would constitute a direct breach of this confidentiality. The legislative intent behind Section 42A of the Act, explained the Hon'ble Apex Court, was to preserve the sanctity and privacy of arbitral proceedings, which would be diluted if non-signatories, who have no privity to the arbitration agreement, were permitted to participate.

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Footnote

1. Civil Appeal No. 6377 of 2012 - Supreme Court

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