Bombay High Court
Mr.Badal Mittal vs Lakadawala Developers Private Limited on 29 April, 2013
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 221 OF 2013
1. Mr.Badal Mittal )
2. Mr.Sunil Mittal )
3. Mr.Kishore Mittal )
4. Mr.Aasim Merchant )
all adults, having their address at )
Mittal Tower, 'B' Wing, 16th Floor, )
Nariman Point, Mumbai - 400 021 ) ..... Petitioners
Versus
Lakadawala Developers Private Limited)
101, Lathiwala Apartment, 1st Floor, )
Shivdas Chapshi Road, Near Sales )
Tax Office, Mazgaon, )
Mumbai - 400 010 ) ..... Respondent
Mr.D.D.Madan, Senior Advocate, a/w. Mr.Naushad Engineer, i/b.
M/s.Dhruve Liladhar & CO. for the Petitioners.
Mr.Nitin Thakkar, Senior Advocate, a/w. Ms.Tanvi Gandhi and Mr.Samish
Gala, i/b. M/s.Markand Gandhi & Co. for the Respondents.
CORAM : R.D. DHANUKA, J.
RESERVED ON :24th APRIL, 2013
PRONOUNCED ON : 29th APRIL, 2013
ORAL JUDGMENT :
By this petition filed under section 9 of the Arbitration and Conciliation Act, 1996, the petitioners seek an order against the respondent to deposit a sum of Rs.12.5 crores alongwith interest or such other solvent security to the extent of the said sum with interest and for appointment of the Court Receiver in respect of the property described in Ex.A and injunction in respect thereof. Some of the facts which emerge ::: Downloaded on - 09/06/2013 19:52:11 ::: 2/20 ARBP-221.2013.sxw from the pleadings and documents filed by both parties are as under :-
2. On 29th July, 2011, the petitioners and the respondent entered into a Memorandum of Understanding. It was provided that the respondent would obtain all necessary permissions, including intimation of approvals, commencement certificates, occupation certificates and the completion certificates etc. and carry out works for all the rehabilitation buildings and free sale buildings. It was provided that the petitioners would carry out the construction of rehabilitation and free sale buildings. It is the case of the petitioners that under the said MOU, in consideration for carrying out the construction of the rehabilitation and free sale buildings at the costs and expenses of the petitioners, it was agreed that the petitioners would be entitled to 53% of the entire constructed area of the free sale buildings in the Franchisee property and entitled to 55% of the entire constructed area of the free sale buildings of all the other properties. The petitioners agreed to pay a sum of Rs.1.5 crores per month to the respondent to enable the respondent to finance the cost of the transit accommodation for the slum dwellers and obtain all permissions for development upto the stage of the Certificate of Commencement of the rehabilitation and free sale buildings to be constructed on the said building. The construction was to be carried out in three phases. Clause 6 of the said MOU provided that in the event of default on the part of the petitioners in making payment of the said amount of Rs.1.50 crores every month on or before the 7 th day of every month then in that event, the respondent shall refund the entire amount ::: Downloaded on - 09/06/2013 19:52:11 ::: 3/20 ARBP-221.2013.sxw received by the respondent from the petitioners and the costs of construction incurred by petitioners on the property till the date of default within 120 days from the date of respondent entering into agreement or arrangement with third party and respondent shall be entitled to enter into such agreement with third parties for development of the property. It is agreed that the respondent shall not be liable to pay any interest to the petitioners on the said entire amount to be refunded to the petitioners.
3. It is not in dispute that during the period between 18 th July, 2011 and 4th January, 2012, the petitioner has paid Rs.12.10 crores to the respondent under the said MOU as set out in para 17(H) of the petition. It is the case of the petitioners that in addition to the said amount, the petitioners have also expended a sum of Rs.40 lacs as expenses towards costs of construction of site office and related expenses and administration and miscellaneous expenses. It is the case of the petitioners that there was exchange of drafts of the development agreement qua Panchsheel property between the petitioners and the respondent. However, the terms of the development agreement were not finalised. By a letter dated 13 th September, 2011, the respondent informed the petitioners that final agreement in respect of the development and the construction of rehabilitation and free sale buildings on the Panchsheel property would be executed within 45 days from the date of execution of the MOU. It is the case of the petitioners that though the respondent has executed a possession letter on 20th October, 2011 in respect of the part of the ::: Downloaded on - 09/06/2013 19:52:11 ::: 4/20 ARBP-221.2013.sxw property being land bearing CTS No. 7 (part) admeasuring 18,839.67 sq.mtrs., the respondent did not handover possession thereof to the petitioner. Vide an undated letter, time for executing the final agreement in respect of the Panchsheel property was further extended till 15 th December, 2011. It is not in dispute that no final development agreement has been executed between the parties so far. It is the case of the petitioners that respondent did not obtain any commencement certificate for the construction of the rehabilitation and free sale buildings but had obtained only commencement ig certificate for construction of one rehabilitation building. It is the case of the petitioners that as the respondent was not interested on going ahead with the project, the petitioners decided to stop paying the monthly payment under clause 6 of the MOU. Accordingly w.e.f. February 2012, the petitioners stopped paying the said sum of Rs.1,50,00,000/- to the respondent payable for financing the cost of transit accommodation for the slum dwellers and obtaining all permissions for development upto commencement certificate stage of the rehabilitation and free sale buildings to be constructed on the property.
4. Vide letter dated 14th June, 2012 from the petitioners to the respondent, the petitioners stated that the petitioners alone had right to construct rehabilitation and free sale buildings on the suit lands. It came to the notice of the petitioners that the work of the construction had started on the said land. The petitioners enquired as to whether the respondent ::: Downloaded on - 09/06/2013 19:52:11 ::: 5/20 ARBP-221.2013.sxw had obtained statutory approval and permission and if obtained, why the same was not forwarded to the petitioners. The petitioners also enquired as to who was carrying out the construction at the site. The petitioners objected to the third party carrying out construction on the said lands which amounted to breach of the terms of the MOU between the parties according to the petitioners.
5. Vide letter dated 6th July, 2012 (marked without prejudice), the respondent contended that as per the provisions of MOU, the petitioners was under an obligation to pay monthly installment of Rs.1,50,00,000/-
which came to Rs.22,50,00,000/- as on 30th June, 2012 whereas the petitioners had made payment of Rs.12,10,00,000/- only and thus there was default on the part of the petitioners to fulfill and comply with that obligation. In the said letter, the respondent conveyed that it was also agreed by and between the parties that in the event of default, the respondent was liable to refund the amount and cost of construction incurred by the petitioners if any. The respondent however alleged that no cost of construction had been incurred by the petitioners. The respondent informed that the work had been commenced at site as the petitioners had committed a default to pay the finance and thus the amount paid by the petitioners stood forfeited. In the said letter, the respondent further stated that to show their bona fide, they had shown their readiness and willingness to refund the amount.
6. Paragraphs 3 and 5 of the said letter are extracted as under :-
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3. As against that you have made the payment of Rs.7,50,00,000/- (Rupees Seven Crores Fifty Lakhs only) before execution of the MOU and further sum of Rs.4,60,00,000/-
(Rupees Four Crores Sixty Lakhs Only) till this date. The total amount received by us is Rs.12,10,00,000/- (Rupees Twelve Crores Ten Lakhs Only). There was a default on your part to fulfill and comply with this obligation. It is also agreed by and between ourselves that in the event of default, we are entitled to refund the amount and cost of construction incurred by you if any. Admittedly, no cost of construction has been incurred by you.
5. In the above background, we are rather surprised to receive your letter. The work has been commenced at site as you have committed a default to pay the finance, as such the amount paid by you stands forfeited.
However, to show our bonafides we had shown our readiness and willingness to refund the amount. Without prejudice to the rights and contentions we will be refunding the sum of Rs.12,10,00,000/- (Rupees Twelve Crores Ten Lakhs Only) paid by you, in terms of clause 6 of the MOU dated 29th July, 2011, which please take note.
7. The respondent also stated that the petitioners were not entitled to know who was carrying out construction at site. It is the case of the respondent in the said letter that the petitioners were fully aware about the commencement of the construction at site since last more than two months.
8. The petitioners vide their advocate's letter dated 9 th January, 2013 to the respondent stated that the respondent was not entitled to enter into any agreement with third party. Without prejudice to the rights and ::: Downloaded on - 09/06/2013 19:52:11 ::: 7/20 ARBP-221.2013.sxw contentions of the petitioners, the petitioners stated that they were entitled to refund a sum of Rs.12.5 crores with interest thereon. The petitioners invoked clause 20A of the said MOU which records resolution of dispute by way of mediation and nominated Mr.Mustafa Doctor, Counsel as a sole mediator/conciliator and requested the respondent to concur with the appointment of Mr.Mustafa Doctor as a sole conciliator.
9. The respondent vide letter dated 6th February, 2013 denied that the petitioners were entitled to refund of the sum of Rs.12.5 crores. The respondent conveyed that they were not in agreement with appointment of Mr.Mustafa Doctor, Counsel as conciliator.
10. The petitioners vide their advocate's letter dated 18th February, 2013 to the respondent, invoked arbitration agreement recorded in clause 20B of the said MOU and nominated Mr.Gaurav Joshi, Advocate as a sole arbitrator and requested the respondent to concur with his appointment as a sole arbitrator.
11. The learned counsel appearing for parties have informed this court that the learned arbitrator is already in place for resolution of the dispute between the parties.
12. Mr. Madan, the learned senior counsel appearing on behalf of the petitioners submits that though the petitioners had already paid a sum of Rs.12.10 crores and spent Rs.40 lacs on construction, the respondent did not show any progress in the project. The respondent also did not enter ::: Downloaded on - 09/06/2013 19:52:11 ::: 8/20 ARBP-221.2013.sxw into development agreement with the petitioners though drafts were exchanged qua the Panchsheel property. The learned counsel submits that the respondent had agreed to obtain statutory approval and permission and on the respondent obtaining such permission and approval of the building plans, the petitioners were entitled to carry out construction on the said property. The learned senior counsel submits that since the respondent committed default in obtaining approval and permission as provided in the MOU, the respondent had committed default of their obligations as a result thereof the petitioners stopped paying the subsequent installments payable under clause 6. Without intimating the petitioners, the respondent has assigned the said work in favour of the third party and commenced construction on the suit lands. The respondent has been proceeding with the construction and will dispose off its share/interest in the said property. The petitioners have recorded such apprehension in para 9 of the petition. It is apprehension of the petitioners that the respondent would dispose off its assets so as to defeat the claim of the petitioners with a view to make every attempt to frustrate the petitioners and ensure that they are not able to execute the award that is most likely going to be passed in their favour as the claim of the petitioners is an admitted one. It is submitted that the petitioners have good chances in succeeding in arbitration proceedings and if the respondents are not directed to deposit the amount admittedly received from the petitioners and if not directed to furnish solvent security of the said amount, the petitioners ::: Downloaded on - 09/06/2013 19:52:11 ::: 9/20 ARBP-221.2013.sxw would not be able to recover any amount from the respondents even if the petitioners succeeds in the arbitration proceedings. The learned senior counsel submits that the entitlement of the petitioners under the said MOU was not only for refund of the amount paid by the petitioners to the respondent but was to get a share in the constructed property as setout in the said MOU. The learned senior counsel submits that it was not a case of the money pending transaction between the parties. The petitioners were given rights to develop the property and was to get share in the property.
13. Mr. N.G. Thakkar, the learned senior counsel appearing on behalf of the respondent on the other hand submits that the claim made by the petitioners in their notice is by way of monetary claim and thus no relief by way of appointment of Court receiver and injunction can be granted in favour of the petitioners. It is submitted that in so far as prayers (c ), (d) and (e) are concerned, the same are not the subject matter of arbitration. It is submitted that to the knowledge of the petitioner, since June, 2012, third party has already been carrying on construction on the plots which were subject matter of the MOU between the parties. The learned senior counsel submits that since February, 2012, the petitioner has stopped paying installments. It is submitted that under the provisions of the said MOU the respondent has been permitted to enter into an agreement with third parties in case of any default committed by the petitioners. It is submitted that under the said document entered into between the petitioner and ::: Downloaded on - 09/06/2013 19:52:11 ::: 10/20 ARBP-221.2013.sxw respondent, the transit accommodation to 864 slum dwellers have been provided.
The learned counsel placed reliance upon the photographs annexed at Exh. 8 to the affidavit in reply in support of his plea that the new developer appointed by the respondents have already started construction and to show the stage of construction in respect of some of the buildings. It is submitted that it is pleaded by the petitioners themselves in paragraphs 5 and 7 of the arbitration petition that there is contractual charge on the property in favour of the petitioners and the said document is therefore, required to be stamped. The learned senior counsel submits that the letter dated 6th July, 2012 relied upon by the petitioners which was addressed by the respondent to the petitioners was without prejudice offer made by the respondents and would not amount to admission of liability on the part of the respondents. It is submitted that there is no averment made in the petition that the respondents were disposing of the property with an intention to defeat the claim of the petitioners. It is submitted that the free sale flats are not even constructed. No case is thus made out for attachment before judgment by the petitioner. It is submitted that by consent of parties, the arbitrator has been already appointed. The learned senior counsel placed reliance upon the judgment of the Supreme court in the case of SMS Tea Estates Pvt. Ltd.
Vs. Chandmari Tea Co. Pvt. Ltd. 2011(4) Arb.L.R. 265 (SC) and in particular paragraphs 12 which read thus :
"12. We may therefore sum up the procedure to be adopted where the arbitration clause is contained in a document which is not registered (but compulsorily registrable) and which is not duly stamped:
(i) The court should, before admitting any document into evidence or acting upon such document, examine whether the ::: Downloaded on - 09/06/2013 19:52:11 ::: 11/20 ARBP-221.2013.sxw instrument/document is duly stamped and whether it is an instrument which is compulsorily registrable.
(ii) If the document is found to be not duly stamped, Section 35 of Stamp Act bars the said document being acted upon.
Consequently, even the arbitration clause therein cannot be acted upon. The court should then proceed to impound the document under Section 33 of the Stamp Act and follow the procedure under Section 35 and 38 of the Stamp Act.
(iii) If the document is found to be duly stamped, or if the deficit stamp duty and penalty is paid, either before the Court or before the Collector (as contemplated in Section 35 or 40 of the Stamp Act), and the defect with reference to deficit stamp is cured, the court may treat the document as duly stamped.
(iv) Once the document is found to be duly stamped, the court shall proceed to consider whether the document is compulsorily registrable. If the document is found to be not compulsorily registrable, the court can act upon the arbitration agreement, without any impediment.
(v) If the document is not registered, but is compulsorily registrable, having regard to Section 16(1)(a) of the Act, the court can de-link the arbitration agreement from the main document, as an agreement independent of the other terms of the document, even if the document itself cannot in any way affect the property or cannot be received as evidence of any transaction affecting such property. The only exception is where the Respondent in the application demonstrates that the arbitration agreement is also void and unenforceable, as pointed out in para 8 above. If the Respondent raises any objection that the arbitration agreement was invalid, the court will consider the said objection before proceeding to appoint an arbitrator.
(vi) Where the document is compulsorily registrable, but is not registered, but the arbitration agreement is valid and separable, what is required to be borne in mind is that the Arbitrator appointed in such a matter cannot rely upon the unregistered instrument except for two purposes, that is (a) as evidence of contract in a claim for specific performance and (b) as evidence of any collateral transaction which does not require registration."
14. The learned senior counsel placed reliance upon this judgment in support of his plea that since the document is required to be stamped recording creation of nature of charge as claimed by the petitioners and is thus also required to be ::: Downloaded on - 09/06/2013 19:52:11 ::: 12/20 ARBP-221.2013.sxw registered compulsorily and not having been registered and insufficiently stamped, no reliance can be placed by the petitioners on the said MOU and the same being inadmissible, this court also shall not consider the said document for passing any orders under section 9 of the Arbitration & Conciliation Act, 1996.
The learned counsel submits that the construction in respect of the building Panchsheel is going on. Obtaining of necessary certificates for the free sale building is in process. It is submitted that the stamp duty has to be borne by the petitioner under clause 24 of the said MOU. The learned counsel therefore, submits that till the document is sufficiently stamped in accordance with the provisions of the Bombay Stamp Act and till such defect is cured, the petitioner cannot place reliance upon the said document nor this court can consider the said document.
15. In rejoinder, Mr. Madan the learned senior counsel on behalf of the petitioners submits that it was not money lending or finance transaction between the petitioner and the respondents. Under the said document, the petitioner was entitled to share in the property as recorded in the said document. The final agreement was to be entered into subsequently. The learned senior counsel submits that under clause 6 of the said document, irrespective of the fact whether the petitioner has committed default or not in making the payment of amount of Rs.1.50 Crores every month, the respondents were under obligation to refund the entire amount received by them from the petitioner and also the cost of construction incurred by the petitioners on the property till the date of default ::: Downloaded on - 09/06/2013 19:52:11 ::: 13/20 ARBP-221.2013.sxw within 120 days from the date of respondent entering into agreement or arrangement with third party. It is submitted that it is the case of the respondents that the respondents have already entered into arrangement with third parties for construction of plots in question at least since April/May, 2012 and thus the respondents were liable to refund at least the amount of Rs.12.10 Crores admittedly recovered by the respondents from the petitioner in terms of clause 6 of the said document. The learned senior counsel submits that by the said letter dated 6th July, 2012, the respondents have agreed to refund the sum of Rs. 12.10 Croes which indicates admission of liability on the part of the respondents and such admission was not without prejudice to the rights and contentions of the respondents. The learned counsel submits that there is no provision for forfeiture of the amount paid by the petitioners to the respondents. It is submitted that in view of the respondents having committed default in obtaining various permissions, under the said document, the petitioners were entitled to withhold subsequent installments from the month of February, 2012. The learned Senior counsel submits that under clause 11 of the said MOU the petitioner was under
an obligation to construct all the rehabilitation and free sale buildings on the property in accordance with the sanctioned plan at their cost, charges and expenses and were required to commence the work of construction thereof only after all requisite permissions and no objections for commencement of the work thereof for both rehabilitation and free sale building on the said property were obtained by the respondents. The learned senior counsel invited my attention to clause 15 of the said document in support of his plea that both the parties had ::: Downloaded on - 09/06/2013 19:52:11 ::: 14/20 ARBP-221.2013.sxw agreed to enter into final agreement with respect to development and construction of the rehabilitation and free sale buildings for each part of each phase of the property within 45 days from the date of execution of the said document. Though various drafts were exchanged, respondents did not enter into final agreement. It is submitted that in any event, stamp duty was payable only when the final agreement would have been executed under clause 15 of the said document. The learned senior counsel submits that though the Letter of Intent was issued for Panchsheel building on 21st April, 2009, respondents did not take any steps for commencement of construction of the building for ig free sale flats. It is submitted that though in the affidavit in reply it has been alleged that intimation of approval came to be issued on 5th January, 2012, the same was never informed by the respondent to the petitioners. The respondent never called upon the petitioner to execute any agreement. As far as issue of the insufficiency of stamp raised by the respondent is concerned, the leaned senior counsel appearing for the petitioner submits that in the said MOU, the petitioner was entitled to payment/consideration and part of sale price to the extent of 53%.
It is submitted that the claim of the petitioner is admitted by the respondents.
The learned senior counsel submits that even if respondents claim for damages against the petitioners, the respondents would have to prove said claim before the learned arbitrator. It is submitted that the payment of Rs. 100/- as stamp duty on the said MOU is accordingly made. It is submitted that it is not in dispute that the possession was never handed over by the respondent to the petitioner.::: Downloaded on - 09/06/2013 19:52:11 :::
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16. The question that arises for consideration of this court in this proceedings is whether the petitioner has made out a case for attachment before judgment under order 38 rule 5 of the Code of Civil Procedure, 1908, which principles are applicable to the application under section 9 of the Arbitration & Conciliation Act, 1996. The question also arises is whether the petitioners have made out prima facie case that they have good chances of succeeding in the arbitration proceedings.
17. It is not in dispute between the parties that under clause 6 of the said MOU, the petitioners have already paid sum of Rs.12.10 Croes to the respondents. The Petitioner have stopped paying further installments from February, 2012. It is not in dispute that under the provisions of the said MOU, it was an obligation on the part of the respondents to obtain all permissions and no objections for construction of the rehabilitation and free sale on the property including obtaining IOD and commencement certificate thereof and make payments of the deposits etc. to apply for occupation certificates and building completion certificates etc. in respect of each of the rehabilitation and free sale buildings.
On perusal of the record, it is clear that the respondents have not obtained permission from the concerned authorities for construction of free sale buildings on the property. Respondent has not produced any document to show whether any permission/approval had been obtained by the respondent in respect of all rehabilitation buildings.
18. The petitioner was under an obligation to commence the construction of ::: Downloaded on - 09/06/2013 19:52:11 ::: 16/20 ARBP-221.2013.sxw the rehabilitation and free sale buildings only after all requisite permissions and no objections for commencement of the work in both rehabilitation and free sale buildings were obtained by the respondent. The Petitioner was under an obligation to complete the construction of the said buildings within 36 months from the date of receipt of commencement certificate for each building. The Petitioner vide their letter dated 14th June, 2012 had called upon the respondents to inform about the statutory approvals and permissions, if any obtained by the respondents and to forward the same to the petitioner. The respondents vide their letter dated 6th July, 2012 alleged that as the petitioners had failed to make payment of finance, the question of forwarding copy of the approvals and permissions to the petitioner did not arise. The respondents also refused to disclose the names of the third party who was carrying out construction at site.
In my prima facie view, the petitioner has not committed any default by stopping payment of further installments since February 2012 onwards. Be that as it may, in view of clause (6) of the said MOU , in my prima facie view, even if there was default on the part of the petitioner in making payment of Rs.1.50 Croers every month, the respondents were under an obligation to refund the amount received from the petitioners and also cost of the construction incurred by the petitioners on the property till the date of default within 120 days from entering into an agreement or arrangement with the third party. It is the case of the respondents themselves that at least since April,/May 2012, the respondents have allowed third party to commence construction on the plots in question. In my view, there is no provision for forfeiture of any amount received from the petitioners under the ::: Downloaded on - 09/06/2013 19:52:11 ::: 17/20 ARBP-221.2013.sxw said MOU by the respondents. The letter addressed by the respondent on 6 th July, 2012 to the petitioners by which the respondents have agreed to refund sum of Rs.12.10 Crores in terms of clause (6), would have to be read in the context of their obligation to refund the said amount in terms of clause (6) of the said MOU.
19. On perusal of the provisions of the said MOU and the correspondence entered into between the parties, I am of the prima facie view that it was not a money lending and/or finance transaction between the petitioners and respondents under the said MOU. The Petitioners were entitled to develop ig the said rehabilitation and free sale buildings at their cost, charges and expenses and in lieu thereof, the petitioner was entitled to 53% of the entire contractual area of the free sale buildings to be constructed by the petitioner on the property and balance 47% of the constructed area of the free sale building was to come to the share of the respondents in addition to various other rights recorded therein. I am thus not inclined to accept the submission of the learned counsel for the respondent that the claim of the petitioner would be simplicitor money claim and thus no injunction and/or appointment of the Court Receiver can be granted in the present proceedings filed under section 9 of the Arbitration & Conciliation Act, 1996.
20. In so far as the issue raised by the respondents whether the said MOU is insufficiently stamped or not or is compulsorily required to be registered or not and whether the said document can be considered by this court for the purpose of considering the reliefs under section 9 of the Arbitration & Conciliation Act, 1996 ::: Downloaded on - 09/06/2013 19:52:11 ::: 18/20 ARBP-221.2013.sxw is concerned, I am of the view that these questions can be raised by the respondent in the arbitration proceedings before the learned arbitrator. In my view the arbitration agreement can be delinked with the other provisions of the said MOU and this court thus can consider to grant interim measures. In my view the arbitration agreement is valid and separable from the other provisions of the MOU.
21. It is not the case of the respondents that even arbitration agreement recorded in the said MOU is void or unenforceable. This court thus having found that the arbitration agreement is valid and separable, in my view this court can consider the interim measures in this application under section 9 of the Arbitration & Conciliation Act, 1996. The Supreme Court in the case of SMS Tea Estaets Pvt.Ltd. Vs. Chandmari Tea Co. Pvt. Ltd. (supra) has held that the only exception is where the respondents in the application demonstrates that the arbitration agreement is also void and unenforceable and if such objection is raised, the court will consider such objection before proceeding to appoint arbitrator. Even if the document which is compulsorily required to be registered but it is not registered, the arbitrator appointed can not rely upon unregistered instrument except for two purposes i.e. (a) as evidence o f contract in the claim for specific performance and (b) as an evidence of any collateral transaction which does not require registration.
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22. It is not in dispute that the possession has not been handed over by the respondent to the petitioner. It is also not in dispute that in the said MOU, it is agreed that final agreement shall be executed between the parties with respect to the development and construction of the rehabilitation and free sale buildings for each portion of each phase of the property within 45 days from the date of execution of the said MOU which document admittedly has not been executed.
In my prima facie view, there is no substance in the submissions made by the respondents about the insufficiency of the stamp and or about registration of the said MOU which would be bar a in granting any interim measures in favour of the petitioners in this petition.
23. In my prima facie view, on plain reading of clause (6) of the said MOU and also the correspondence exchanged between the parties, the respondents have committed default in refunding the amount paid by the petitioners. The respondents have not only agreed under clause (6) to refund the said amount to the petitioners but in correspondence have offered the said amount to the petitioners. It is not in dispute that the respondents have permitted third party to carry out the construction on the plots which were subject matter of the said MOU in respect of which the petitioner had interest therein. If the respondents creates third party rights in respect of the said property and if the petitioner succeeds in the arbitration proceedings,the petitioner would not be able to recover any amount from the respondents. The petitioners have already disclosed their apprehension in paragraph 9 of the arbitration petition. In my prima facie view, the ::: Downloaded on - 09/06/2013 19:52:11 ::: 20/20 ARBP-221.2013.sxw petitioners have made out a case for grant of interim measures. In my prima facie view, the petitioners have good chance of succeeding in arbitration proceedings. The claim of the petitioners is thus required to be protected by grant of interim measures by directing the respondents to deposit sum of Rs.12.10 Crores in this court within eight weeks from today or in the alternative to furnish security in the sum of Rs. 12.10 Crores to the satisfaction of the Prothonotary & Senior Master.
24. I, therefore, pass the following order :
The respondents are directed to deposit sum of Rs. 12.10 Croes in this court within eight weeks from today or in the alternative to furnish solvent security to the extent of Rs.12.10 Croes to the satisfaction of the Prothonotary & Senior Master within eight weeks from today. This order shall be in force till disposal of arbitration proceedings and for a period of four weeks thereafter.
In the event of the respondents committing any default in complying with the directions issued aforesaid, the petitioners would be at liberty to apply for further interim measures. Arbitration Petition is disposed of in the aforesaid terms. There shall be no order as to costs.
(R.D. DHANUKA,J.) ::: Downloaded on - 09/06/2013 19:52:11 :::