Rahul Bhargava v. Neo Developers: RERA relief does not bar Section 9 arbitration protection

The facts in brief

The appellants were buyers of commercial units in the "Neo Square" project at Gurugram, developed by M/s Neo Developers Pvt. Ltd. They had entered into Builder Buyer Agreements and Memoranda of Understanding that promised assured monthly returns. The developer then halted the assured payments, delayed construction, imposed unexplained charges and threatened cancellation of the allotments. The buyers obtained relief before the Haryana Real Estate Regulatory Authority and subsequently sought interim protection under Section 9 of the Arbitration and Conciliation Act 1996 to preserve the subject matter pending arbitration.

The Commercial Court dismissed the Section 9 petition by an order dated 10 July 2025, applying the doctrine of election: by first availing relief under RERA, the court reasoned, the buyers had elected their remedy and could not also invoke arbitration. The buyers appealed. The matter came before a Division Bench of the Delhi High Court — Justice Prathiba M. Singh and Justice Shail Jain — in FAO (COMM) 210/2025 and connected matters. The Bench held that the doctrine of election had been misapplied, restored the buyers' entitlement to Section 9 interim protection, and set aside the Commercial Court's order.

The question of election

The doctrine of election proceeds from a simple intuition: a litigant who is offered two inconsistent remedies cannot pursue both, and must choose. Applied to the real-estate setting, the Commercial Court's reasoning was that a buyer who had taken his grievance to RERA had thereby chosen the statutory route and could not later switch tracks to arbitration. On that view, the act of approaching RERA closed off the arbitral door, including the door to interim protection under Section 9.

The Division Bench had to decide whether that reasoning held. The difficulty with it is that the two remedies are not obviously inconsistent. RERA supplies a forum for adjudicating a buyer's substantive claims against a developer; Section 9 supplies an interim, protective jurisdiction to preserve the subject matter of a dispute that is to be arbitrated. The question, sharpened, was whether availing the first necessarily forecloses the second, or whether the doctrine of election bites only where the reliefs sought genuinely overlap — where pursuing one truly is inconsistent with pursuing the other.

What the Court held

Availing RERA does not denude Section 9 jurisdiction

The Division Bench rejected the Commercial Court's reasoning. It held that the mere fact that a party has availed a statutory remedy under a special enactment — here, RERA — does not, by itself, denude the court of jurisdiction to grant interim protection under Section 9, particularly where the reliefs sought do not overlap in substance or effect. The buyers' resort to the Haryana RERA had not extinguished their entitlement to seek interim protection of the subject matter pending arbitration.

The remedies are contemporaneous

The Court held that remedies under RERA and under the Arbitration Act are contemporaneous and not mutually exclusive where the reliefs are distinct and protective in nature. Section 9 addresses interim measures — the preservation of the subject matter pending arbitration — rather than the final determination of the dispute. Because Section 9 is about interim preservation and not final adjudication, it can coexist with statutory relief obtained elsewhere; the two do not occupy the same field, and pursuing the one does not amount to an election against the other.

Setting aside the Commercial Court's order

Finding that the buyers had made out a sufficient case to preserve the subject matter of the forthcoming arbitration, the Court allowed the appeals and set aside the Commercial Court's orders. The misapplication of the doctrine of election to refuse Section 9 protection was treated as a reversible error: where the subject matter needs preserving and the reliefs do not overlap, the appellate court will restore the interim protection that the Commercial Court had wrongly withheld.

The doctrinal architecture

The judgment's central proposition is that the doctrine of election does not bar Section 9 arbitration interim relief merely because a RERA remedy has been availed, where the reliefs are distinct and protective and do not overlap in substance or effect. Election presupposes inconsistency between the remedies chosen; where two remedies operate on different planes — one substantive and adjudicatory, the other interim and protective — there is no inconsistency to elect against, and the doctrine has nothing to bite on.

The reasoning turns on the distinctive character of Section 9. Section 9 is not a forum for deciding the merits of a dispute; it is a jurisdiction to grant interim measures that preserve the subject matter until the arbitral tribunal can adjudicate. Because RERA and arbitration remedies are contemporaneous and not mutually exclusive, and because Section 9 concerns interim preservation rather than final relief, the buyer who has obtained substantive relief before RERA does not thereby surrender the ability to keep the subject matter of the arbitration intact. The two remedies layer; they do not collide.

The decision refines the corpus's existing arbitration-versus-statutory-remedy line. Where Emaar MGF v. Aftab Singh and Newtech Promoters addressed the relationship between arbitration clauses and the consumer and RERA frameworks at the level of substantive remedy and arbitrability, Rahul Bhargava addresses the interim-measures dimension specifically. It answers a narrower but practically important question that the broader cases did not squarely resolve: whether the protective jurisdiction of Section 9 survives a buyer's resort to RERA. The answer — that it does, subject to non-overlap — fills a doctrinal gap the bar had flagged as unsettled.

What the judgment did not decide

The judgment is an interim-measures ruling; it does not finally adjudicate the buyers' substantive claims against the developer. The Court was satisfied that a sufficient case had been made to preserve the subject matter of the forthcoming arbitration, but the merits of the dispute — the developer's liability for the halted assured returns, the delay, the charges and the threatened cancellations — remain for the arbitral tribunal. The decision restores a protective jurisdiction; it does not resolve the underlying contest.

Nor does the judgment hold that RERA and arbitration remedies can always be pursued in parallel without limit. Its holding is expressly qualified by the requirement of non-overlap: the remedies are contemporaneous "where the reliefs do not overlap in substance or effect". Where a party were to seek, through Section 9, the very relief it had already obtained or sought before RERA, the analysis might differ. The judgment leaves room for the doctrine of election to operate in a case of genuine overlap; what it forecloses is its mechanical application to defeat distinct, protective interim relief.

After the judgment

The ruling supplies an appellate-level corrective that will be cited wherever a Commercial Court or an arbitrator is urged to shut out Section 9 relief on election grounds after a RERA — or other statutory — remedy has been pursued. For real-estate buyers, the practical effect is significant: pursuing RERA does not forfeit arbitration interim relief, and buyers can layer protective remedies, subject to the non-overlap qualification. The decision strengthens their ability to preserve the subject matter of a dispute pending arbitration even after engaging the statutory regulator.

The judgment also clarifies the interim-measures dimension of the RERA-arbitration debate that the bar had flagged as unsettled, and it is likely to be cited across the real-estate and assured-return dispute space. Should the broader RERA-versus-arbitration concurrency question travel further, Rahul Bhargava will stand as the Delhi High Court's articulation of how the two regimes coexist at the interim stage — contemporaneous, not mutually exclusive, where the reliefs are distinct.

Related on Valkya

• Emaar MGF v. Aftab Singh: the arbitration–consumer interface
• X Corp v. Union of India: the Sahyog Portal and Section 79(3)(b)
• Pawan Kumar Singh v. State of U.P.: no power to alter sections at cognisance

Sources

1. Verdictum — Rahul Bhargava v. M/s Neo Developers Pvt. Ltd. (2025:DHC:11842-DB) case report: https://www.verdictum.in/court-updates/high-courts/delhi-high-court/2025dhc11842db-rahul-bhargava-v-ms-neo-developers-pvt-ltd-1602586
2. LiveLaw — RERA relief does not bar arbitration protection: Delhi High Court sets aside Commercial Court's order for misapplication of the doctrine of election: https://www.livelaw.in/amp/high-court/delhi-high-court/rera-relief-does-not-bar-arbitration-protection-delhi-high-court-sets-aside-commercial-courts-order-for-misapplication-of-doctrine-of-election-514411
3. LiveLaw — Buyers of commercial units not barred from seeking arbitration reliefs after availing RERA remedies: Delhi High Court: https://www.livelaw.in/high-court/delhi-high-court/buyers-of-commercial-units-not-barred-from-seeking-arbitration-reliefs-after-availing-rera-remedies-if-petition-is-filed-after-change-in-circumstances-delhi-hc-304657