The Bombay High Court has upheld the appointment of a court receiver to oversee the stalled Kiyaara Buildcon redevelopment project in Pune’s Erandwane, allowing construction and property management to continue under judicial supervision despite a dispute between the developer’s partners.
A Division Bench of Justices G.S. Kulkarni and Dr Neela Gokhale dismissed an appeal filed by Akshay Sanjay Dhumal against a Pune commercial court order. That order had allowed another partner of Kiyaara Buildcon to manage the redevelopment, supervise construction and deal with unsold flats as receiver.
The project involves Radha Anand Co-operative Housing Society, where 16 members have vacated their homes and are living in rented accommodation. Purchasers who entered into agreements for flats are also awaiting possession. The partnership’s redevelopment project comprises 47 flats, including 18 intended for existing society members, with the remaining units available for sale.
According to the court record cited in the proceedings, Dhumal joined Kiyaara Buildcon as a partner on September 24, 2021, with a 33% share in profits and losses. The other principal partner held a 67% share. Construction was approximately 45% complete in Wing A and 80% complete in Wing B when the dispute came before the court.
The disagreement included allegations concerning financial transactions, project management and the sale of three flats. Dhumal alleged that agreements for Flats 502A, 503A and 702B were executed below the prevailing market rate, which he placed at about Rs 17,000 per square foot. He also claimed that nearly Rs 2 crore was outstanding from purchasers, while only Rs 12 lakh had been received. He sought dissolution of the partnership, accounts of the firm’s transactions and restrictions on the sale of project properties.
Dhumal’s counsel argued that appointing the rival partner as receiver created a conflict of interest. The appellant sought the appointment of an independent third party, citing the unresolved allegations of undervaluation and breach of fiduciary obligations. The respondents argued that the appointed partner had handled project approvals, construction and financial obligations, and had personally spent Rs 1.82 crore on the project. They claimed Dhumal had contributed approximately Rs 19.17 lakh and withdrawn Rs 95 lakh as a loan from the firm. A counterclaim of Rs 7.82 crore against Dhumal was also cited. The financial claims remain disputed and were not finally decided in the appeal.
The High Court said the consequences of a partnership dispute had to be assessed in light of the people affected beyond the partners themselves. It noted that the rights of society members awaiting redevelopment benefits and flat purchasers awaiting possession could not be overlooked. The Bench found no illegality in appointing an existing partner as receiver, observing that an outsider unfamiliar with the project’s commercial and construction arrangements could create further difficulties.
The court also noted that the parties had been referred to mediation three times without reaching a settlement. During further discussions, Dhumal sought five flats, while the respondents reportedly offered three. The dispute remained unresolved, placing the project in jeopardy.
The receiver’s powers remain subject to safeguards imposed by the Pune district court. Before selling flats, the receiver must deposit Rs 2 crore in court. Agreements for sale also require the prescribed procedure and the court’s prior concurrence. The High Court held that these conditions protected the appellant’s interests while permitting construction and other project obligations to continue.
