Builder's Arbitration Clause vs MahaRERA: Bombay HC Sends Question to Larger Bench

A builder tried to pull a flat dispute out of MahaRERA. The Bombay HC couldn't settle it.

On 7 October 2026, a Bombay High Court Single Judge, Justice Amit Borkar, refused to decide a question that keeps coming up between buyers and builders: when your flat agreement has an arbitration clause, can the builder force your dispute out of MahaRERA and into a private arbitrator? He found the existing High Court rulings so divided that only a larger bench can settle it, and referred the question up.

The case is Rensar Infra Pvt. Ltd. v. Rais Kasam Shaikh, Arbitration Application No. 205 of 2026. Rensar Infra had filed under Section 11 of the Arbitration Act asking the court to appoint a sole arbitrator for a dispute arising from an agreement for sale dated 31 December 2020, which contained an arbitration clause. Rather than appoint one, the judge parked the application until the larger bench rules. That reporting comes from LiveLaw, IBC Laws and LegalDeli.

What an arbitration clause is, and why builders put it there

An arbitration clause is a line buried in your agreement for sale that says any dispute between you and the builder will be settled by a private arbitrator, not a court or a public authority. The arbitrator is usually one person, often chosen in a way the builder's draftsman set up, and the hearings are private.

Builders like this for obvious reasons. Arbitration is private, it can be slower and more expensive for an individual buyer, and it keeps your complaint out of MahaRERA, where orders, penalties and recovery warrants are public and the process is cheaper for you. MahaRERA was built to be the buyer's forum. If a builder can divert you into arbitration, a lot of that protection quietly disappears. That is exactly why whether these clauses can override MahaRERA matters to your money.

Three High Court rulings, three different answers

The reason the law is stuck is that Bombay High Court benches have not agreed with each other. In Rashmi Realty Builders, the view was that RERA disputes are non-arbitrable, meaning an arbitration clause cannot pull them out of the RERA forum. In Abhay Damodar Kanhere v. Morya Infraconstruct, a different line was taken. Then in September 2026, Laxman Vaid v. Shree Siddhivinayak reaffirmed non-arbitrability.

A separate ruling in Laxman Vaid v. Shree Siddhivinayak Infrastructure & Realty, dated 21 September 2026, reiterated that individual allottee-promoter disputes within the RERA framework are non-arbitrable despite an arbitration clause, per ANM Global. So you have one line of judgments leaning firmly towards "RERA wins" and at least one that read it differently. Until a larger bench harmonises them, no Single Judge can treat any one of them as the last word. That is the unsettled state the referral is trying to fix.

Sections 79, 88 and 89, and why they pull against each other

The conflict sits on three RERA provisions. Section 79 bars civil courts from hearing matters that the Authority, the adjudicating officer or the Appellate Tribunal can decide. Section 88 says RERA applies in addition to other laws, not instead of them. Section 89 gives RERA an overriding effect where it clashes with anything else.

Read together, they send mixed signals. Section 89 and the civil-court bar in Section 79 point towards RERA crowding out private arbitration. Section 88 suggests RERA sits alongside other laws, which could leave room for an arbitration clause to survive. The question the judge actually referred, per LegalDeli, is whether arbitrability should be examined claim-by-claim, looking at the subject matter, the relief sought and the Authority's statutory powers, rather than declaring every promoter-allottee dispute non-arbitrable as one class. That is a narrower, more careful question than a blanket yes or no.

What this means for you while the larger bench is still out

The safer working assumption, until the larger bench rules, is that the MahaRERA forum remains open to you. The weight of recent Bombay HC reasoning, including the September 2026 Laxman Vaid judgment, treats individual buyer-builder disputes as non-arbitrable despite a clause in the agreement. Legal commentary, including from the Chambers of Janak Dwarkadas, is blunt that builders should not count on an arbitration clause to divert buyer disputes away from MahaRERA.

But do not flip that into "arbitration is dead, I can ignore it." The law is genuinely unsettled, and the referral itself is about whether some claims might be arbitrable. So protect both fronts. Do not sign anything that waives your MahaRERA proceedings on the assumption arbitration is barred, and do not let a MahaRERA complaint go quiet because a builder waved an arbitration notice at you.

Check your own agreement, and act on the right things

Pull out your agreement for sale and look for a clause that mentions "arbitration", "sole arbitrator" or "disputes shall be referred to." Note where it is and what it says. You are not trying to interpret it, just to know it exists so nothing surprises you later. If a builder sends you an arbitration notice or files a Section 11 application, reply in writing that you are pursuing your statutory remedy before MahaRERA and are not consenting to arbitration. Keep copies and get it to a lawyer.

If your real grievance is delayed possession or a refund, your MahaRERA claim under Section 18 stands on its own feet. Our guide to Section 18 delay interest at SBI MCLR plus 2% walks through what you can claim, and the delay interest calculator gives you a rough figure before you file.

Your practical next step

Do not wait for the larger bench. File or continue your complaint on the MahaRERA portal (maharera.maharashtra.gov.in) if your dispute is about delay, refund, defects or disclosure, because the Section 79 bar and the recent rulings keep that door open. Ask any lawyer you consult one direct question in writing: "Given the Rensar Infra referral and the September 2026 Laxman Vaid judgment, does my MahaRERA complaint survive this arbitration clause?" Get the answer on record.

If you have already won a MahaRERA order and the builder is now citing arbitration to stall payment, that is a separate fight about enforcement, not arbitrability. The steps in filing a non-compliance application when a refund order is not paid show you how to push recovery. Watch the Bombay HC's cause list for the larger bench, but run your MahaRERA case now.