Delhi High Court Restrains Third-Party Rights in 50% of Emaya Mall Project, Holds Section 9 Protection Can Preserve Arbitral Subject Matter Despite Non-Signatory Objections
Facts
The petitioner, Rajeev Behl, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection in relation to the project earlier known as Capitol City Mall and now known as Emaya Mall, situated at Plot Nos. BG-1 and BG-2, Paschim Vihar, New Delhi. The project was developed through respondent no. 2, SS Con-Build Private Limited.
The petitioner claimed a 50% share in the subject project. His case was that the Realtech Group and the Dhingra Group had jointly controlled the project, with Realtech Group holding 50% stake and Dhingra Group holding the remaining 50%. The petitioner, along with Yogesh Gupta and Pankaj Dayal, were equal shareholders/promoters of Realtech Infrastructure Limited. Under MOU-I dated 2 June 2011, the Paschim Vihar mall project was allegedly allotted to the petitioner. Later, MOU-II dated 20 September 2011 was executed between the petitioner, respondent no. 1 and respondent no. 2, recognising the petitioner as the representative of Realtech’s rights in SS Con-Build and the project.
Disputes subsequently arose within the Realtech Group and were decided by an arbitral award dated 28 January 2018 passed by Justice S.B. Sinha, former Judge of the Supreme Court. The petitioner relied on this award to contend that Realtech’s rights in the project stood vested in him. He also challenged the Divestment Agreement dated 18 January 2018, by which RIL’s alleged 50% interest in the project was transferred to respondent no. 3, Suridhi Commercial Infra Pvt. Ltd., an entity allegedly controlled by respondent no. 1.
The petitioner invoked arbitration by legal notice dated 18 February 2026 under Clause 9 of MOU-II and sought interim restraint against alienation or creation of third-party rights in 50% of the project pending arbitration.
Issues
Whether the petitioner had made out a prima facie case for interim protection under Section 9 of the Arbitration Act.
Whether the Court could restrain alienation of 50% of the saleable area of the subject project pending arbitration.
Whether objections regarding limitation, title, validity of the Divestment Agreement and interpretation of the earlier arbitral award could be decided at the Section 9 stage.
Whether interim protection could extend against respondent no. 3, despite it being a non-signatory to MOU-II.
Petitioner’s Arguments
The petitioner argued that his entitlement to 50% of the project flowed from MOU-I, MOU-II and the arbitral award dated 28 January 2018. He submitted that the award recognised that the Paschim Vihar mall project had fallen to his share and that Realtech Group’s rights in the project vested in him.
He further contended that the respondents had acted fraudulently to defeat his rights by removing him from the management of SS Con-Build, altering statutory records, allotting units and executing the Divestment Agreement dated 18 January 2018 in favour of respondent no. 3.
The petitioner argued that the Divestment Agreement was a sham and backdated transaction, allegedly executed without proper corporate approvals and for grossly inadequate consideration. He also submitted that the respondents were attempting to remove restraints on transfer of units in the mall and that further alienation would render the arbitral proceedings ineffective.
He further argued that respondent no. 3 was not an independent third party but an entity controlled by respondent no. 1 and his family members; therefore, interim protection should extend to it as well.
Respondents’ Arguments
The respondents argued that the petitioner had no independent proprietary right in SS Con-Build or the project. According to them, he was never a shareholder of respondent no. 2 in his personal capacity and was only a nominee director representing RIL.
They submitted that the arbitral award dated 28 January 2018 did not transfer RIL’s shareholding or advances to the petitioner. Therefore, the petitioner could not claim ownership of RIL’s alleged 50% interest in the project.
The respondents further argued that RIL had lawfully divested its interest in favour of respondent no. 3 under the Divestment Agreement dated 18 January 2018 and had received consideration. Since the petitioner was aware of this transaction since 2019 but did not challenge it for several years, his claims were barred by limitation.
They also argued that respondent no. 3 was not a signatory to MOU-I or MOU-II and could not be bound by the arbitration agreement. It was further contended that restraining commercial inventory would cause serious business prejudice and affect third-party allottees.
Analysis of the Law
The Court held that Section 9 jurisdiction is confined to preserving the subject matter of arbitration and does not involve final adjudication of title, validity of documents, interpretation of contracts or allegations of fraud. At this stage, the Court only examines prima facie case, balance of convenience and irreparable harm.
The Court found that the petitioner’s claim was based on interconnected documents and proceedings, including MOU-I, MOU-II, the arbitral award dated 28 January 2018, and pleadings in earlier company proceedings. These materials were sufficient to show a bona fide and arguable claim requiring adjudication.
On limitation, the Court held that the issue was a mixed question of law and fact. The petitioner’s case was that the obligation to divide and deliver shares in the project arose only upon completion of the project and execution of the conveyance deed in December 2024. The respondents disputed this. The Court held that this could not be conclusively decided in Section 9 proceedings.
On non-signatories, the Court held that whether respondent no. 3 was a veritable party to the arbitration agreement was also a matter for the Arbitral Tribunal. However, the Court held that Section 9 powers are not necessarily confined only to signatories, and appropriate interim orders may be passed against non-signatories where required to preserve the subject matter of arbitration.
Precedent Analysis
The Court relied on Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd., holding that Section 9 exists to preserve the subject matter of arbitration so that arbitral proceedings do not become infructuous.
It referred to Ariat International Inc. v. Sunglass Palace India Pvt. Ltd., reiterating that Section 9 relief is preservative and cannot finally decide merits or grant final relief.
The Court also relied on Adhunik Steels Ltd. v. Orissa Manganese and Minerals Pvt. Ltd. and Essar House Pvt. Ltd. v. Arcellor Mittal Nippon Steel India Ltd., on the principles of prima facie case, balance of convenience, irreparable injury and preservation of disputed assets.
On limitation and jurisdictional objections, the Court referred to ITW Signode India Ltd. v. Collector of Central Excise and Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., holding that limitation is generally a mixed question of fact and law and may be decided by the Arbitral Tribunal.
On interim orders against non-signatories, the Court relied on Blue Coast Infrastructure Development Pvt. Ltd. v. Blue Coast Hotels Ltd. and Gatx India Pvt. Ltd. v. Arshiya Rail Infrastructure Ltd., holding that Section 9 does not absolutely bar orders affecting third parties where such orders are necessary to protect the arbitral subject matter.
Court’s Reasoning
The Court held that the petitioner had established a prima facie arbitral claim. MOU-I recorded that the Paschim Vihar project had fallen to the petitioner’s share, MOU-II recognised him as the person entitled to represent and realise Realtech’s interest in the project, and the earlier arbitral award contained observations supporting his claim.
The Court observed that the respondents’ objections involved disputed issues, including whether the petitioner acquired RIL’s interest, whether MOU-II survived, whether the Divestment Agreement was valid, whether claims were time-barred, and whether respondent no. 3 was bound by the arbitration agreement. These issues required evidence and could not be finally decided in Section 9 proceedings.
The Court also noted that disputes concerning the project were pending before multiple fora, including enforcement proceedings, NCLAT proceedings, writ petitions and contempt proceedings. This showed that disputes over title, management and alienation of the project continued to subsist.
The Court held that if further third-party rights were created during the pendency of arbitration, any eventual award could become difficult to enforce and could lead to multiplicity of proceedings. Therefore, preservation of the remaining disputed subject matter was necessary.
Conclusion
The Delhi High Court allowed interim protection in favour of the petitioner. It held that the petitioner had established a prima facie case, the balance of convenience lay in his favour, and further creation of third-party rights would cause irreparable prejudice.
The Court restrained the respondents, their directors, officers, agents, assigns and all persons claiming through them from creating any third-party rights in respect of 50% of the total saleable area of Capitol City Mall/Emaya Mall at Plot Nos. BG-1 and BG-2, Paschim Vihar, New Delhi. The Court clarified that all observations were prima facie and that the Arbitral Tribunal would decide all issues independently.
Case: Rajeev Behl v. Bhupesh Kumar Dhingra & Ors.
Court: Delhi High Court
Case Number: O.M.P.(I) (COMM.) 129/2026 & I.A. 8254/2026
Judge: Justice Mini Pushkarna
Date: 3 July 2026
Result: Section 9 petition disposed of; respondents restrained from creating third-party rights in 50% of the total saleable area of the Emaya Mall project.
