Bombay HC Refers RERA Arbitration Question to Larger Bench: What Buyers Should Know

On 31 December 2020, a builder and its flat buyers signed an agreement for sale for Flat No. 1901. Like many agreements, it contained an arbitration clause. Nearly six years later, that clause has become the subject of a question the Bombay High Court says needs an authoritative answer: when a dispute between a promoter and an individual flat buyer is governed by RERA, can it ever go to arbitration?

In Rensar Infra Pvt. Ltd. v. Rais Kasam Shaikh & Ors., Arbitration Application No. 205 of 2026, Justice Amit Borkar referred that question to a larger bench, according to a LiveLaw report published on 7 October 2026. This guide explains what was referred, why it matters to anyone signing an agreement for sale in Mumbai, and what a buyer can do while the question is open. It is buyer guidance on a pending legal issue, not legal advice for any dispute.

The short answer. A 2024 Bombay High Court ruling, Rashmi Realty, held that RERA-covered disputes between an allottee and a promoter are non-arbitrable. In October 2026, a single judge asked a larger bench to decide whether that applies to every such dispute as a class, or whether each dispute must be judged by its subject matter and the relief sought. The builder's arbitration request has been deferred until the larger bench decides. The trade-off: an arbitration clause can mean a private, contract-based forum, but until the law is settled, a buyer who signs one cannot be sure which forum a future dispute will land in, so read the clause before you sign rather than after a dispute starts.

What did the Bombay High Court refer to a larger bench?

Whether RERA disputes are non-arbitrable as a class. According to the LiveLaw report, the court asked whether, having regard to Sections 79, 88 and 89 and other relevant provisions of the RERA Act, a dispute between a promoter and an individual allottee under an agreement for sale with an arbitration clause is non-arbitrable merely because RERA governs the relationship, or whether arbitrability must be examined by reference to the subject matter of the dispute.

The court also asked whether paragraph 63(i) of Rashmi Realty Builders Pvt. Ltd. v. Rahul Rajendrakumar Pagariya should be read as a general rule of non-arbitrability. It asked the larger bench to consider that in light of a later Bombay High Court decision, Abhay Damodar Kanhere, which read Rashmi Realty more narrowly, and Supreme Court decisions including Vidya Drolia, Arif Azim and NTPC v. SPML Infra.

How did this dispute reach the High Court?

Through RERA first, then a separate arbitration request by the builder. The LiveLaw report sets out the sequence, which the table summarises. The buyers complained to MahaRERA under Section 18 of the RERA Act, and MahaRERA allowed their complaint on 14 August 2024. The builder's review petition was rejected on 17 April 2025, and it appealed to the Maharashtra Real Estate Appellate Tribunal.

The builder's claims, as reported, included Rs 92.45 lakh for additional area, Rs 41.59 lakh as balance sale consideration, and a compensation claim. The buyers called the compensation claim an afterthought. The court did not decide who is right on these claims. It held that the claims could not be dismissed as sham merely because the buyers disputed them, and said questions such as provability and causation could not be decided at the Section 11 stage.

Why does the court think a larger bench is needed?

Because applying a class-wide rule would end such cases at the threshold. The report says the court observed that treating every RERA-governed promoter and allottee dispute as non-arbitrable would defeat Section 11 applications at the outset, and that arbitrability may depend on the particular dispute even where RERA remedies exist or were used earlier. It also noted that the disputes before it were not identical to the reliefs the buyers had sought before MahaRERA, even though both came from the same agreement.

The judge was also cautious about the other side of the argument. The report quotes him as saying that Section 16 of the Arbitration Act "is an important principle of arbitral autonomy" but "it cannot create jurisdiction where the law does not permit it." In other words, the court was not saying arbitration should win. It was saying the question is substantial enough to need a larger bench.

What happens to the builder's arbitration request now?

It waits. According to the report, the court directed that the papers be placed before the Chief Justice for constituting a larger bench, which may frame the questions itself or modify them, and the Section 11 proceedings will remain deferred for consideration in accordance with the larger bench's decision. The report does not give a date for the larger bench hearing.

The builder's appeal against the MahaRERA order was pending before the Appellate Tribunal at the time described in the report. We have not checked its present status, so do not read this article as describing the outcome of that appeal.

Which earlier rulings will the larger bench weigh?

Several Bombay High Court and Supreme Court decisions. The LiveLaw report lists Rashmi Realty Builders Pvt. Ltd. v. Rahul Rajendrakumar Pagariya, 2024 SCC OnLine Bom 3871, as the decision holding that RERA-covered allottee and promoter disputes are non-arbitrable. It lists Abhay Damodar Kanhere v. Morya Infraconstruct Pvt. Ltd., Arbitration Petition No. 148 of 2024, as reading that ruling more narrowly. It also refers to Laxman Mura Vaid v. Shree Siddhivinayak Infrastructure and Realty, which followed Rashmi Realty, and notes the referring judge's view that a later decision of a coordinate bench does not bind as if it were a larger bench ruling merely because it came later.

On the Supreme Court side, the report cites Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1, Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313, and NTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385. The report says the court treated non-arbitrability as something that can still be examined at the Section 11 stage on a limited, prima facie basis, so the existence of an arbitration agreement does not end the inquiry.

What does this mean if your agreement has an arbitration clause?

That the forum question is not settled in Bombay. Until the larger bench rules, there are two lines of Bombay High Court authority to argue from: the broad reading of Rashmi Realty, and the narrower, dispute-specific reading in Abhay Damodar Kanhere that the referring judge relied on. A dispute that looks simple when you sign can turn into a fight about where it should be heard before anyone discusses what it is about.

For a buyer, the practical lesson is to read the dispute resolution clause in the draft agreement for sale before signing, alongside the clauses on additional area, price escalation and compensation that often drive disputes later. Our explainer on what a RERA agreement for sale must say walks through the main clauses, and our report on a Telangana High Court case on arbitration notices to flat buyers shows the same tension in another state.

Does this affect a buyer's RERA complaint?

The referral does not decide that. In this case the buyers had already used the RERA route and won before MahaRERA, and the arbitration request came later from the builder for different claims. The reference asks whether that second route is open at all. Until the larger bench answers, a buyer weighing a dispute should take advice on both forums, and keep every document from booking onwards, because both a RERA authority and an arbitrator would rely on the same paper trail. Our guide to refund or interest for delayed flats under Section 18 covers the RERA side.

A seven-point checklist on arbitration clauses before you sign

1. Find the dispute resolution clause in the draft agreement for sale and read it in full.
2. Note who appoints the arbitrator and where the seat of arbitration is.
3. Check whether the clause carves out matters for the RERA authority or other forums.
4. Read the clauses on additional area and price changes, which can drive later claims.
5. Ask the builder in writing to explain the clause before signing.
6. Keep every receipt, demand letter and email from booking onwards.
7. If a dispute arises, take legal advice on both the RERA and arbitration routes before you respond to any notice.

Frequently asked questions

What did the Bombay High Court refer in Rensar Infra?

According to LiveLaw, Justice Amit Borkar asked a larger bench whether a dispute between a promoter and an individual allottee under an agreement with an arbitration clause is non-arbitrable merely because RERA governs it, or whether arbitrability depends on the subject matter, and how Rashmi Realty should be read.

Has the larger bench decided the question yet?

Not as reported. LiveLaw says the court directed that the papers be placed before the Chief Justice for constituting a larger bench, which may frame or modify the questions, and that the Section 11 proceedings will remain deferred until the larger bench decides. No hearing date was reported.

What did the buyers do before the arbitration request?

The report says the buyers complained to MahaRERA under Section 18, and MahaRERA allowed the complaint on 14 August 2024. The builder's review petition was rejected on 17 April 2025, it appealed to the Appellate Tribunal, and it invoked arbitration on 25 July 2025.

What should a Mumbai buyer check in an agreement for sale?

Read the dispute resolution clause before signing, including who appoints any arbitrator and the seat of arbitration, along with clauses on additional area and price changes. Keep every document from booking onwards and take advice on both RERA and arbitration routes if a dispute arises.

Last updated 2026-11-04. PropNewz Team.