Bombay High Court
Official Liquidator High Court Of ... vs Kalpataru Properties Pvt. Ltd. ... on 11 October, 2018
Author: B. P. Colabawalla
Bench: S. C. Dharmadhikari, B. P. Colabawalla
dik
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL APPEAL NO. 152 OF 2017
WITH
NOTICE OF MOTION NO. 44 OF 2017
WITH
NOTICE OF MOTION (L) 257 OF 2018
IN
COMMERCIAL APPEAL NO. 152 OF 2017
Shree Ram Urban Infrastructure Private ]
Limited (in Prov. Liqn.) through Official ]
Liquidator,High Court, Bombay appointed ]
as Provisional Liquidator of the above ]
company by an order dated 24th August, ]
2017 read with order dated 5th October, ]
2016, passed in Company Petition No.1066 ]
of 2015 having office at 5th floor, Bank of ]
India Building,Fort, Mumbai ] ...Appellant.
Vs.
1) Kalpataru Properties Pvt. Ltd. ]
Digitally
signed by
(formerly known as Kalpataru ]
Dhanappa Construction Overseas Pvt. Ltd.) an ]
Dhanappa Irappa
Irappa Koshti existing Company under the Companies ]
Koshti Date:
2018.10.11
Act, 1956, having its registered office at ]
17:54:40 111, Maker Chamber-IV, Nariman Point ]
+0530
Mumbai 400 021 ]
]
2) Vijay Infrastructure Technologies Pvt. ]
Ltd. an existing Company under the ]
Companies Act, 1956,having its ]
Registered Office at 8, Vithalwadi, ]
Kalbadevi, Mumbai 400 002 ] ...Respondents.
Pg 1 of 47
WITH
COMMERCIAL APPEAL NO. 169 OF 2017
WITH
NOTICE OF MOTION (L) 51 OF 2017
IN
COMMERCIAL APPEAL NO. 169 OF 2017
Vijay Infrastructure Technologies Pvt. ]
Ltd. an existing Company under the ]
Companies Act, 1956,having its ]
Registered Office at 8, Vithalwadi, ]
Kalbadevi, Mumbai 400 002 ] ...Appellant.
Vs.
1) Kalpataru Properties Pvt. Ltd. ]
(formerly known as Kalpataru ]
Construction Overseas Pvt. Ltd.) an ]
existing Company under the Companies ]
Act, 1956, having its registered office at ]
111, Maker Chamber-IV, Nariman Point ]
Mumbai 400 021 ]
2) Shree Ram Urban Infrastructure Ltd. ]
(formerly known as Shree Ram Mills ]
Ltd.) an existing company within the ]
meaning of the provisions of the ]
Companies Act, 1956 and having its ]
registered office at Ganpat Rao Kadam ]
Marg, Lower Parel, Mumbai 400 013 ] ...Respondents.
.....
Mr E.P. Bharucha, Sr. Counsel a/w Mr Rizwan Balsara, Mr
Prathamesh Kamat, Mr T.N.Tripathi, Ms Sapna Rachure I/b
T.N.Tripathi and Co. for the Appellant in COMAP No. 152 of 2017.
Mr Iqbal Chagla, Sr. Counsel a/w Mr F.E.Devitre, Sr. Counsel, Mr
M.S.Doctor, Sr. Counsel, Mr Gautam Ankhad, Mr Jai Chhabria, Mr
M.S.Federal, Mr C. Rashmikant, Mr Murtuza Federal, Ms Namrata
Shah, Mr Prakhar Parekh, Ms Madhavi Doshi, Ms Nidhi Malhotra
and Mr Pravin Dhage i/b M/s Federal and Rashmikant for
Respondent No.1 in both the appeals.
Pg 2 of 47
Mr Arif Bookwala Sr. Counsel a/w Ms Sai Redij i/b Joy Legal
Consultants for Respondent No.2 in COMAP No. 152 of 2017 and for
the Appellant in COMAP No. 169 of 2017.
Mr Samsher Garud I/b Jayakar and Partners for the applicant in
NMCAL No.257 of 2018 in COMAP No.152 of 2017.
CORAM : S. C. DHARMADHIKARI &
B. P. COLABAWALLA, JJ.
RESERVED ON : 11th September, 2018
PRONOUNCED ON : 11th October, 2018
JUDGMENT [ PER B. P. COLABAWALLA J. ]:
1. Admit. Paperbook is dispensed with. By consent of parties, both appeals made returnable forthwith and heard finally.
2. These commercial appeals take exception to the common Judgment and Order dated 14th / 17th July, 2017, passed by the learned Single Judge under which the learned Judge dismissed the Arbitration Petitions filed by both the Appellants under Section 34 of the Arbitration and Conciliation Act, 1996 (for short the "said Act"). The Arbitral Tribunal consisted of three arbitrators. What was challenged before the learned Single Judge was the majority Award dated 29th August, 2016 (for short the "impugned Award") passed by two arbitrators (for short the "majority view of the Arbitral Pg 3 of 47 Tribunal") allowing the claim of the 1st respondent herein (original Claimant) for specific performance of the contract between the parties and rejecting the counter-claim of the Appellant in Commercial Appeal No. 152 of 2017 (original respondent No.1 before the Arbitral Tribunal). As far as the dissenting Award of the third arbitrator is concerned, the learned arbitrator dismissed the statement of claim of the Claimant (1st respondent herein) as well as the counter-claim of the Appellant in Commercial Appeal No.152 of 2017 (Respondent No.1 before the Arbitral Tribunal). It is the majority view of the Arbitral Tribunal that was challenged by the Appellants herein before the learned Single Judge. We must also mention that after the appeals were filed, the Appellant in Commercial Appeal No.152 of 2017 went into Provisional Liquidation and the Official Liquidator has been brought on record by carrying out an amendment in the cause title of the appeal pursuant to an order of this Court passed on 16th March, 2018. The Appellant in Commercial Appeal No.169 of 2017 was Respondent No.2 before the Arbitral Tribunal. For the sake of convenience we shall refer to the parties as they were arrayed before the Arbitral Tribunal.
3. Before we narrate the brief facts of the case, it would be apposite to set out the challenge that was laid to the impugned Award Pg 4 of 47 before the learned Single Judge. In a nutshell they were as under:-
Ø It was the case of Respondent No.1 (the Petitioner before the learned Single Judge) that the impugned Award completely overlooked the nature of the agreement between the parties [namely the Memorandum of Understanding ("MOU") dated 28th June, 2004 and the addendum thereto dated 10th December, 2004] and which was not only restricted to the MOU and its addendum but also included the understanding between the parties that was arrived at in the meetings held on 10th November, 2004 and 24th November, 2004 and various other correspondence.
Ø The majority view of the Arbitral Tribunal also misread and misconstrued the essential terms of the agreement especially regarding encashable bank guarantees that were to be provided by the Claimant as also compliance of other mandatory obligations by the Claimant.
Ø That the Award also overlooked the terms of the agreement and the intention of parties making time the essence of the contract, more particularly in light of the fact that the subject property under the agreement was an article of commerce, and therefore, time was the essence of the contract. It was also the case of Respondent No.1 that the Pg 5 of 47 impugned Award failed to appreciate the factum of repudiation of the contract by the Claimant, which according to the Respondents, was borne out from the record.
4. It is, on all these grounds, that the impugned Award was challenged before the learned Single Judge.
5. Before us, the main point that was argued by the learned Senior Counsel appearing on behalf of the Appellant in Commercial Appeal No.152 of 2017 was that the Tribunal had grossly erred in coming to the conclusion that the Claimant was ready and willing to perform its obligations under the contract when it was clear that they never furnished and refused to provide the bank guarantees as required by the MOU dated 28th June, 2004. This was the main ground on which the arguments were canvassed before us. However, in the written submissions, the Appellant in Commercial Appeal No.152 of 2017 (Respondent No.1 before the Arbitral Tribunal) has also contended that there was nothing that prevented the Claimant from complying with the agreed terms of the MOU of providing the bank guarantees, especially since the encumbrances were cleared and only some documents were not furnished to the Claimant at the time in question. The third argument canvassed before us is that it Pg 6 of 47 was inequitable to grant the specific performance in the facts and circumstances of the present case. Though, as we have stated earlier, only the first point was seriously pressed before us, considering that these three submissions have been raised in the written submissions, we shall also deal with them so as to not give rise to any grievances that a particular contention was taken by the Appellant and not considered by us in this Judgment.
6. Having set out in a nutshell the challenge laid to the impugned Award, and in turn, to the order of the learned Single Judge, we shall now narrate the brief facts of the case, which as as under:-
(a) Respondent No.1 (the original Claimant) is a company registered under the Companies Act, 1956. Both the Appellants (Respondent Nos.1 & 2 before the Arbitral Tribunal) are also the companies registered under the Companies Act, 1956. It is not in dispute before us that both, Respondent Nos.1 & 2 are the sister concerns and are group companies and part of the S. Kumar Group. Both Respondents are owned and controlled by members of the Kasliwal family.
Pg 7 of 47
(b) Respondent No.1 is the owner of various immovable properties including the property situated at Lower Parel Division admeasuring 67,785.50 sq. mtrs. in Mumbai (the "Larger Property"). Out of this larger property, an agreement styled as a MOU was entered into between the Claimant, Respondent No.1 and with the consent and concurrence of Respondent No.2, whereunder Respondent No.1 agreed to grant, assign and convey lands (partly freehold and partly leasehold) admeasuring 20,955.40 sq.mtrs situated at G. M. Bhosale Marg, Worli, Mumbai, identified as Plot No.5-A (for short the "suit property") for developing and utilizing it. According to the Claimant, it was also granted the exclusive right to utilize the Floor Space Index ("FSI") of the said property on the basis of the existing FSI ratio of 1:1.33 (i.e. total net 3,00,000 sq. ft.).
Under the MoU, the consideration that was to be paid was Rs.86.30 Crores in tranches as mentioned therein.
(c) Thereafter, an Addendum was entered into on 10th December, 2004 where under the amount payable under the MOU was increased to Rs.105.30 Crores payable by the Pg 8 of 47 Claimant to Respondent No.1 in the manner as set out in the said Addendum. It is not in dispute that by 10th December, 2004, the Claimant had paid an amount of Rs.30 Crores which is also recorded in the said Addendum. It was averred before the Arbitral Tribunal that the Claimant was always ready and willing to perform its part of the obligations under the MOU, but however the Respondents sought to resile from their obligations therein by wrongfully demanding a higher price for the suit property and by not observing the terms and conditions of the MOU. It was also alleged that the Respondents failed to discharge the obligations under the MOU and also prepared a false record in the form of so called Meetings held on 10th November, 2004 and 24th November, 2004. It was in these circumstances that the Claimant approached the Arbitral Tribunal by filing a Statement of Claim on 23rd December, 2005 for a declaration and specific performance of the MOU dated 28th June, 2004 as amended on 10th December, 2004. Thereafter, the Claimant amended the Statement of Claim by adding the alternative prayer for payment of damages/ compensation which was allowed on 14th March, 2009.
Pg 9 of 47
(d) To the Statement of Claim as well as the amended claim, Respondent No.1 filed its Written Statement on 11th January, 2008 and supplementary Written Statement on 13th April, 2009. One of the contentions raised before the Arbitral Tribunal and which has been canvassed also before us, was that the Claimant was not ready and willing to perform its part of the contract, and therefore, was not entitled to seek specific performance thereof. According to Respondent No.1, the Claimant failed to pay the amount under the MOU and also failed to furnish the Bank Guarantees amounting to Rs. 57.50 Crores which were immediately encashable. According to Respondent No.1, time was the essence of the contract and similarly payment under the MOU was also the essence of the contract. Thus, according to the Respondents, the payment was to be done within the time frame as mentioned in the contract. Since, these payments were not made within the timely manner, Respondent No.1 had suffered huge losses and for that Respondent No.1 also filed a counter-claim against the Claimant and sought an Award of Rs.760.30 Crores.
(e) The relief sought by the Claimant was also contested by Pg 10 of 47 Respondent No.2 by filing its Written Statement on 21st February, 2008. Even according to the 2nd Respondent, the Claimant was not entitled to the specific performance of the MOU along with its Addendum, since it had failed to fulfill its commitments under the said MOU. In the supplementary Written Statement filed by the 2nd Respondent, it contended that the Respondents were ready and willing to refund Rs.30 Crores to the Claimant that was already paid to them. It would not be out of place to mention that the Claimant also filed a reply and additional reply to the counter-claim denying the contentions of the Respondents and reiterated what it stated in its Statement of Claim. On the basis of these pleadings the Arbitral Tribunal framed the following issues.
"ISSUES Issues between Claimants and Respondent No.1: On the Claim:
(1) Whether the MoU dated 28 June, 2004 and Addendum dated 10 December, 2004 are adequately stamped?
(2) Whether the Minutes of Meeting dated 10th November, 2004 and the Gist of Minutes dated 24th November, 2004 propounded by the Respondents correctly reflect what happened at those meetings?
(3) If the answer to Issue No.2 is in the affirmative, whether the arrangement / agreement between the Claimants and Respondent No.1 is reflected only in the MoU and Addendum, as claimed, or whether it is also reflected in the alleged Minutes of Meeting dated 10th November, 2004 and the Gist of Minutes dated 24th November, 2004 ?
(4) Whether the claimants were ready and willing at the material Pg 11 of 47 times to perform their obligations ?
(5) Whether the Respondents performed their obligations as required by the said arrangement / agreement ?
(6) Whether the time was of / made of the essence of the arrangement / agreement between the parties as set out in the Written Statement ?
(7) Whether the arrangement / agreement between the parties is valid, binding and subsisting ?
(8) Whether the said agreement was repudiated by the Claimants or such alleged repudiation was accepted by the Respondents in the circumstances alleged in the Written Statement ?
(9) Whether the Claimants are entitled to specific performance of the arrangement / agreement and/or whether damages are adequate ?
9(a) Whether the claim for compensation in lieu of specific performance (as claimed by the Claimants in paragraph 7A of the Statement of Claim) is barred by the law of limitation as on the date that the claim was filed ?
9(b) In the event that this Hon'ble Tribunal deciding that specific performance ought not to be granted or ought to be refused to the Claimants for any reason, whether the Claimants are entitled to a sum of Rs.1,528.93 Crore or any other amount as compensation in lieu of specific performance of the Agreement along with interest thereon at the rate of 24 % per annum or at any other rate, from the date of the award till payment and/or realization, as claimed in paragraph 7A of the Statement of Claim?
9(c) In the event that this Hon'ble Tribunal is inclined to award any amount to Respondent No.1 with respect to the Counter Claim made by it, whether the sum of Rs.30 Crores is liable to be adjusted against this amount as contended by Respondent No.1 in paragraph 3 of its Supplementary Written Statement ?
9(d) In the event that the Hon'ble Tribunal deciding that specific performance ought not to be granted or ought to be refused to the Claimants for any reason, whether the claimants are entitled to interest at the rate of 24 % per annum or at any other rate on the sum of Rs.30 Crores as claimed in paragraph 7 A of the Statement of Claim ?
Pg 12 of 47 9(e) In the event that this Hon'ble Tribunal deciding that specific performance ought not to be refused to the claimants for any reason, whether the claimants are entitled to reimbursement of Rs.1,07,78,688/- or any other amount along with interest at the rate of 24 % per annum or at any other rate, as claimed in paragraph 7A of the Statement of Claim ? (10) Whether the Claimants are entitled to any relief and, if so, what?
Issues on the Counter claim :
(11) Whether the Hon'ble Tribunal has jurisdiction to entertain / adjudicate and decide the counter claim ?
(12) Whether the Counter Claim is within limitation ?
12(a) Whether any of the claims made by way of the amended counter claim are new claims and/or contrary to and/or inconsistent with the counter claim as originally filed by Respondent No.1 on 11th January, 2008, and deserve to be dismissed ?
12(b) What is the correct interpretation of Clause 2(i) of the MoU?
(13) Whether the claimants are in breach of its obligations of the agreement/ arrangement between the parties ? (14) Whether the Respondent No.1 is entitled to damages and if so, to what extent ?
Issues between Claimants and Respondent No.2:
(15) Whether the MoU dated 28.6.2004 and Addendum dated 10.12.2004 are adequately stamped ?
(16) Whether the Memorandum of Understanding dated 28th June, 2004 is a final and definitive agreement capable of being enforced under law ?
(17) Whether the Addendum dated 10.12.2004 is not binding on Respondent No.2 ?
(18) Whether the MoU does not survive in view of the subsequent execution of the Addendum without Respondent No.2 being a party to the said Addendum ?
(19) Whether the Claimants are entitled to specific performance of Pg 13 of 47 the agreement against Respondent No.2 ?
(20) Whether the claimants are entitled to any reliefs, if so what ?
Common Issues (21) Whether any party is entitled to costs and if so, who and in what amount ?"
(f) Once these issues were framed, the Arbitral Tribunal, on the basis of the reasons mentioned in the impugned Award gave its findings as under:
"FINDINGS On overall consideration of the matter, our findings on the above issues are as under:
(1) In the affirmative.
(2) In the negative.
(3) Does not arise. The Agreement between the Claimant and the Respondents are as reflected in MoU and Addendum.
(4) In the affirmative.
(5) In the negative.
(6) In the negative.
(7) In the affirmative.
(8) In the negative.
(9) In the affirmative. Payment of damages is not adequate.
9(a) Does not arise in view of finding on Issue No.9. 9(b) Does not arise in view of finding on Issue No.9. 9(c) Does not arise in view of finding on Issue No.9. 9(d) Does not arise in view of finding on Issue No.9. 9(e) Does not arise in view of finding on Issue No.9. (10) The claimants are entitled to specific performance of contract.
(11) In the affirmative.
(12) In the affirmative. However, Counter-Claim deserves to be dismissed.
12(a) Does not arise.
12(b) Claimants consent is required for shifting of MP/PG Pg 14 of 47 reservation.
(13) In the negative.
(14) In the negative.
(15) In the affirmative.
(16) In the affirmative.
(17) Addendum dated 10.12.2004 is binding on Respondent No.2.
(18) MoU is binding on Respondent No.2.
(19) In the affirmative.
(20) In the affirmative. Claimants are entitled to specific performance of contract.
(21) As per Final Award."
(g) On the basis of these findings on all the issues, the majority view of the Arbitral Tribunal was that the Claimant was entitled to specific performance of the agreement contained in the MOU dated 28th June, 2004 read with Addendum dated 10th December, 2004. The Respondents accordingly were directed to take all necessary steps to sell, transfer and assign the suit property and convey the title thereof to the Claimants on the premises agreed between the parties and execute all documents and do all acts, and perform all obligations by doing the requisite acts, deeds and things as may be necessary and handover physical, actual and peaceful possession of the suit property to the Claimant and also execute a Deed of Conveyance with reference to the suit property. Since, Respondent No.2 was not paying the fees of the Arbitrators, the Arbitral Tribunal had directed the Claimant to pay the fees of the share of Respondent No.2 to Pg 15 of 47 each Arbitrator. Accordingly, the majority view of the Arbitral Tribunal also held and declared that the Claimant is entitled to recover the fees payable to the Arbitrators (amounting to Rs.32 Lacs) from Respondent No.2 (being its share), and Respondent No.2 was directed to pay the said amount to the Claimant. It is this majority Award that came to be challenged before the learned Single Judge.
(h) The learned Single Judge, after noting the facts of the matter including the important terms and conditions of the MOU and the addendum thereto, went on to uphold the Majority Award and dismissed the Arbitration Petitions filed by Respondent Nos.1 & 2. The learned Single Judge held that on the analysis of the evidence and the applicable law to the facts of the case, the majority view of the Arbitral Tribunal, on the issues referred to it, appear to be reasonable and correct. The learned Judge recorded that the main contest in the reference was on three crucial aspects, namely, (1) was the contract between the parties contained in only the MoU and the Addendum or were the minutes of the meeting of 10 November, 2004 and /or gist of discussions on 24 November 2004 a part of the contract? And if the contract Pg 16 of 47 was contained only in the MoU and the Addendum, what is the correct interpretation of the Addendum read with Clause 5 of the MoU? (2) Even if one assumes that the minutes and the gist of discussions on 10th November, 2004 and 24th November, 2004 were not part of the contract, was time made the essence of the contract subsequently in the meetings of 10th November, 2004 and 24th November, 2004? (3) Was there anything in the case which dis-entitled the Claimant to seek specific performance as a discretionary relief?
(i) On the analysis of the evidence before the Arbitral Tribunal and in light of the applicable law, the learned Single Judge held that the contract was contained only in the MoU and the Addendum. It was further held that the Minutes of the Meeting and the gist of discussions of 10th November, 2004 and 24th November, 2004 were not proved and these being pure finding of facts and based on the evidence that was led before the Arbitral Tribunal, was certainly a possible and a plausible view requiring no interference.
(j) The learned Judge further recorded that the majority view of Pg 17 of 47 the Arbitral Tribunal found that on the interpretation of the contract and particularly clause (5) of the MoU read with the Addendum, there was no obligation on the part of the Claimant to pay the balance consideration at any fixed time independent of the compliances on the part of Respondent Nos.1 & 2 of their reciprocal obligations. The majority view of the Arbitral Tribunal also found that the contract itself provided for extension of time and payment of interest on the unpaid amount. Besides this, the contract further provided for a "cure period" to comply with the contract. All this clearly showed that the time was never made the essence of the contract. As far as the meetings of 10th November, 2004 and 24th November, 2004 are concerned, (insofar as they relate to making time the essence of the contract) the majority view of the Arbitral Tribunal held that there was no conclusion reached between the parties in these meetings to complete the transaction by 30th November, 2004 or to extend the deadline to 20th December, 2004. The majority view of the Arbitral Tribunal also held that it was not open to Respondent No.1 and/or Respondent No.2 to unilaterally decide a particular date as the "appointed day" for completion of the transaction. Such a Pg 18 of 47 decision did not amount to granting of reasonable time to the Claimant to fulfill their obligations of payment. The majority view of the Arbitral Tribunal also held that there was no reason in the facts of the case to deviate from the normal rule that in a transaction of transfer of immovable property, normally, time is not of the essence. Taking all this into account and on consideration of all the evidence, documentary and oral, the majority view of the Arbitral Tribunal, after discussing in detail each and every circumstance alleged by Respondent Nos.1 & 2 for denying specific performance to the Claimant, did not accept the contentions of Respondent Nos.1 & 2. The majority view of the Arbitral Tribunal held that there was nothing in the conduct of the Claimant which dis-entitled them to the discretionary relief of specific performance. In a nutshell the majority view of the Arbitral Tribunal did not accept any of the contentions of Respondent Nos.1 & 2 in this behalf and preferred to go by the general rule, statutorily recognized in the Explanation to Section 10 of the Specific Relief Act, 1963 that where the transaction relates to sale of immovable property, normally, a Court or Tribunal should grant specific performance. Taking all this into consideration, and once Pg 19 of 47 the finding of facts and the applicability of law determined by the majority view of the Arbitral Tribunal were clearly possible and plausible conclusions, the same should not be reversed in a challenge under Section 34 of the said Act, was the finding rendered by the learned Single Judge.
(k) Despite this finding, it was thereafter sought to be argued before the learned Single Judge that under the Addendum (dated 10th December, 2004) read with Clause 5 of the MoU (dated 28th June, 2004) the Claimant was required to furnish immediately encashable bank guarantees (for two tranches of payment of Rs.28.75 Crores each) under sub- clauses (v) and (vi) thereof (read with the proviso thereto), which according to Respondent No.1 was not done, and therefore, the Claimant was not entitled to specific performance. The learned Judge found that this submission was plainly contrary to the terms of the Addendum read with Clause 5 of the MOU. The learned Judge held that the bank guarantees were clearly relatable under Clause 5 of the MOU which also required fulfillment of the reciprocal obligations of Respondent No.1 resting with execution and registration of conveyance/assignment and their purpose Pg 20 of 47 was to guarantee payments when such payments were ripe. The learned Judge also found that there was no merit in the submission that the linking up of the payments to performance of reciprocal obligations by Respondent Nos.1 & 2 was done away with in the Addendum. Be that as it may, the learned Judge also held that in any event this was a possible and plausible conclusion arrived at by the majority view of the Arbitral Tribunal of the relevant contractual stipulations in the agreement and no exception to that could be taken when the Award is challenged under Section 34 of the said Act. It is in these circumstances that the learned Judge thereafter proceeded to dismiss the Arbitration Petitions. It is in this context and being aggrieved by this order that the present appeals have been filed before us.
7. In this factual backdrop, Mr Bharucha, learned Senior Counsel appearing on behalf of the Appellant in Commercial Appeal No. 152 of 2017 (Respondent No.1 before the Tribunal), submitted that in the facts and circumstances of the present case it was impossible for the majority view of the Arbitral Tribunal to conclude that the Claimant was ready and willing to perform their obligations under the contract when their banker had refused to provide the Pg 21 of 47 bank guarantees as required by clause 5 the MoU. He submitted that Clause 5 of the MoU was an essential term of the agreement and the correspondence between parties would show that the bank guarantees as contemplated by the MoU were never given by the Claimant. According to Mr Bharucha, the bankers of the Claimant by its letter dated 2nd November, 2004 expressly refused to accept the points made by IL & FS (being the bankers of Respondent No.1). He submitted that the majority view of the Arbitral Tribunal wrongly concluded that there was nothing on record to show that the Claimant had refused or failed to execute the bank guarantees as per clause 5 of the MoU.
8. Mr Bharucha further submitted that the argument of the Claimant that their draft of the bank guarantee was as per the first draft submitted by Respondent No.1's lawyer completely ignored the subsequent correspondence to the contrary. He submitted that the Claimants acceptance that the first draft must prevail over all else also reveals its lack of readiness and willingness to perform its obligations under the MoU that is providing bank guarantees in the agreed form. The majority view of the Arbitral Tribunal, not having taken into consideration all the correspondence in this regard, Mr Bharucha submitted that it had ignored vital evidence in arriving at Pg 22 of 47 its decision and would, therefore, suffer from the vice of perversity which is one of the grounds on which the Award could be set aside under Section 34 of the said Act.
9. In addition to this, Mr Bharucha submitted that the Claimant was well aware of Respondent No.1's urgent requirement of the funds from the very outset. On the other hand, most of the obligations of Respondent No.1 related to certification of title of what was its own land. While encumberances were cleared, only some documents were not furnished to the Claimant and in any event the Claimant was aware that none of the encumberances could prevent Respondent No.1 from conveying the property or in any manner handing over the possession or giving right of way to the Claimant. Thus, according to Mr Bharucha, there was absolutely nothing that prevented the Claimant from complying with the agreed terms of the MoU by providing bank guarantees. This also clearly establishes that the Claimant was not ready and willing to perform its obligations under the contract, namely, giving of the immediate encashable bank guarantees as contemplated under clause 5 of the MoU, was the submission of Mr Bharucha.
10. Mr Bharucha then submitted that in the facts and Pg 23 of 47 circumstances of the present case, in any event, it was inequitable to grant specific performance. He submitted that specific performance is an equitable relief and therefore, multiple relevant factors must be kept in mind before said relief is granted. According to Mr Bharucha, in the present case, specific performance of the MoU dated 28th June, 2004 was granted by the majority view of the Arbitral Tribunal more than 12 years later, namely, on 29th August, 2016. He submitted that objective consideration ought to have been given to the fact that substantial economic changes have taken place over that time as mandated by the Hon'ble Supreme Court in K. S. Vaidyanandam Vs Vairavan, (1997) 3 SCC 1. This was not done by the majority view of the Arbitral Tribunal. For all these reasons, Mr Bharucha submitted that the impugned Award passed by the majority view of the Arbitral Tribunal suffers from perversity which ought to have been set aside by the learned Single Judge. Not having done so, the order of the learned Single Judge also suffers from serious legal infirmities, and therefore, ought to be set aside by us in appeal.
11. Mr Bookwala, learned Senior Counsel appearing on behalf of the Appellant in Commercial Appeal No. 169 of 2017 (Respondent No.2 before the Tribunal), supported the arguments canvassed by Mr Bharucha. He submitted that prior to entering into the MoU with the Pg 24 of 47 Claimant on 28th June, 2004, an earlier MoU dated 27th June, 1996 was executed between Respondent No.1 and Respondent No.2 for development of the suit property. This agreement was subsequently cancelled and that is how the MoU dated 28th June, 2004 was executed between the Claimant, Respondent No.1 and Respondent No.2 respectively. He submitted that the advocates for Respondent No.2 (Little & Co.) had inter alia written to the Claimant that they should execute a development agreement with Respondent No.1 without joining Respondent No.2 as a party, as it had no interest in the suit property. He submitted that there was novatio of the MoU dated 28th June, 2004 by way of an addendum dated 10th December, 2004. He submitted that admittedly Respondent No.2 was not a party to this addendum, and therefore, the MoU dated 28th June, 2004 read with the addendum was not enforceable and binding on Respondent No.2. According to Mr Bookwala, the Addendum modifies the essential terms of the contract that is the consideration payable to the Respondents. According to him, therefore, the parties are not ad- idem as far as the MoU read with the Addendum are concerned. He submitted that considering that Respondent No.2 was not a party to the Addendum, the Claimant cannot claim specific performance against it as it has no right, title or interest in the suit property which came to an end pursuant to a Deed of Cancellation executed between Pg 25 of 47 Respondent No.1 and Respondent No.2 dated 21st December, 2004. He submitted that there cannot be any implied consent of Respondent No.2 by virtue of the fact that either Respondent No.2 is a group company of Respondent No.1 or it being represented by the same lawyers or that the addendum was executed by a Director of Respondent No.2 who is also a Director of Respondent No.1. For all these reasons he submitted that in any event of the matter, considering that Respondent No.2 was not a party to the Addendum, (which had the effect of modifying the MoU dated 28th June, 2004), it could not be asked to specifically perform the contract that was executed in favour of the Claimant.
12. On the other hand, Mr Chagla, learned Senior Counsel appearing on behalf of the Claimant (Respondent No.1 herein) submitted that the MoU dated 28th June, 2004 was executed between the Claimant and Respondent No.2 with the consent and concurrence of its Group Company (Respondent No.2). Respondent No.2 had a prior agreement for development rights in respect of part of the suit property. He submitted that by this MoU dated 28th June, 2004, the Claimant agreed to purchase the suit property for a consideration of Rs.86.30 Crores. There is no dispute that Respondent No.2 was a party to this MoU. Thereafter, the Addendum dated 10th December, Pg 26 of 47 2004 was executed under which the only change that was made, was that the consideration was enhanced from Rs.86.30 Crores to Rs.105.30 Crores. It is also undisputed that the sum of Rs.30 Crores had already been paid by the Claimant to Respondent No.1. The balance amounts were payable as set out in the MoU read with the Addendum. He submitted that as recorded in the impugned Award and upheld by the learned Single Judge, the Claimant was at all times ready and willing to pay the balance amount including providing the bank guarantees as required. He submitted that the Award also so specifically holds, on the appreciation of the evidence and the material on record.
13. Mr Chagla then submitted that it was the case of Respondent No.1 that the Claimant had repudiated the agreement between parties by failing and neglecting to perform its obligations thereunder, namely, giving of two unconditional, irrevocable, assignable and immediately encashable bank guarantees in the sum of Rs.28.75 Crores each which is more particularly set out in clause 5 of the MoU. He submitted that after considering the evidence and material on record, the majority view of the Arbitral Tribunal rejected this contention by giving detailed reasoning. This being a purely factual matter and the view taken by the majority of the Pg 27 of 47 Arbitral Tribunal, being a possible and a plausible view, cannot be interfered with by the Court in its limited jurisdiction under Section 34 of the said Act, was the submission. He submitted that this is exactly what the learned Single Judge has done, and therefore, no fault can be found in the impugned order especially in an appeal that has been filed before this Court under Section 37 of the said Act.
14. Mr Chagla, further submitted that it was Respondent No.1's case that time was made the essence of the contract and the bank guarantees were required to be provided on or before 20th December, 2004 which according to Respondent No.1, was the date fixed for completion. This contention of Respondent No.1 was also rejected by the majority view of the Arbitral Tribunal after considering all the evidence led before it, documentary as well as oral. He submitted that in considering all these issues, the majority view of the Arbitral Tribunal has not in any way left out of consideration any vital or material evidence that would result in holding that the impugned Award suffers from any perversity, which in turn, would result in setting aside the Award. He submitted that what is important to note is that the impugned Award specifically records that it was an admitted position that neither Respondent No.1 nor Respondent No.2 either terminated the agreement and Pg 28 of 47 which agreement admittedly contained a termination clause. He submitted that the Award specifically dealt with the contention that the Claimant was not ready and willing to furnish the bank guarantees as required under Clause 5 of the MoU. After considering the relevant facts and the evidence on record, the majority view of the Arbitral Tribunal came to a finding that the readiness and willingness of the Claimant to complete the transaction was apparent from the fact that it had on 24th December, 2004 informed Respondent No.1 that the bank guarantee format required by Respondent No.1's bankers was acceptable to the Claimant. This was also recorded by the Claimant to the advocates of Respondent No.1 vide their letter dated 14th January, 2005. Thus, after considering all this material on record, the majority view of the Arbitral Tribunal came to the finding that the Claimant was ready and willing to perform its obligations under the agreement. Mr Chagla submitted that all these issues that were decided by the majority view of the Arbitral Tribunal were on the basis and after full consideration of the evidence and the material on record by giving proper and cogent reasons. He submitted that the matter relating to appreciation of evidence and the weight to be given to the evidence that was led before the Arbitral Tribunal etc. falls entirely within the domain of the Arbitral Tribunal and cannot be interfered with merely because Pg 29 of 47 the Court may take a different view under Section 34 of the said Act. The jurisdiction of the Court is circumscribed and restricted to that what is stated in the said section and an Award cannot be set aside by undertaking an exercise of re-appreciating the evidence and thereafter coming to a different conclusion. He submitted that even the order impugned in this appeal has considered and rejected the challenges to the impugned Award by applying the correct tests and the settled legal principles. The learned Judge, according to Mr Chagla, correctly held that under Section 34 of the said Act, the jurisdiction of the Court was limited and restricted, and therefore, when Court found that the analysis of the evidence and the applicablility of the law to the facts was a reasonable and a possible view, the same certainly cannot be interfered with by us under Section 37 of the said Act.
15. Mr Chagla, further submitted that even though Respondent Nos.1 and 2 did not seriously press the argument that time was the essence of the contract, this issue also has been adequately dealt with not only by the majority view of the Arbitral Tribunal but also by the learned Single Judge in the impugned order. He submitted that there is a subtle distinction in the jurisdiction of the Court under Section 34 of the said Act, and that under Section 37 Pg 30 of 47 thereof. Whilst examining a challenge to an arbitral Award under Section 34 of the said Act, the Court's jurisdiction is limited and circumscribed to what is stated in the said section, whereas the jurisdiction under Section 37 is even more limited, namely, that the Appellate Court would only consider whether there was any infirmity in the Judgment and Order under appeal and not in the Award. Mr Chagla submitted that in the facts of the present case the order of the learned Single Judge certainly does not suffer from any infirmity that would require interference by us in an appeal under Section 37 of the said Act. He, therefore, submitted that there is no merit in either of the appeals and the same ought to be dismissed with compensatory costs.
16. We have heard the learned counsel for parties at length and have perused the papers and proceedings in both appeals including the impugned Award dated 29th August, 2016 as well as the impugned Judgment and Order dated 14th / 17th July, 2017.
17. The main issue that was canvassed before us by Mr Bharucha was that it was impossible for the majority view of the Arbitral Tribunal, and in turn learned Single Judge, to conclude that the Claimant was ready and willing to perform their obligations Pg 31 of 47 under the contract, when their own banker had refused to provide the bank guarantees as required by clause 5 of the MoU dated 28th June, 2004. The other two contentions that were raised, though not seriously pressed, were that (1) the time was the essence of the contract and since the payment was not made or the bank guarantees were not furnished within the stipulated time, the Claimants were not entitled to specific performance and; (2) in any event, in the facts and circumstances of the present case, it was inequitable to grant specific performance. Even though the latter two points were not seriously pressed before us, for the sake of completeness, we shall deal with all the aforesaid three points.
Whether the Claimant was ready and willing to perform its obligations under the contract ?
18. As far as the issue of readiness and willingness is concerned, the majority view of the Arbitral Tribunal framed this issue as Issue No.4. Thereafter, the Arbitral Tribunal recorded the submissions of the respective parties on this issue. In a nutshell, the majority view of the Arbitral Tribunal recorded in the impugned Award that it was the assertion of the Claimant that at all material times they were ready and willing to perform their part of the Pg 32 of 47 contract and to fulfill all their obligations thereunder. In support of this assertion the Claimant stated that it had paid an amount of Rs.30 Crores by December 2004 and the Respondents had confirmed receipt of this payment. It further asserted that the Claimant had applied for a loan of Rs.90 Crores (including for the bank guarantees of Rs.57.50 Crores) for the purchase of the suit property and towards the construction cost and which was sanctioned by its bankers. In any event, according to the Claimant, as far as its financial position was concerned, it was never in doubt and for this purpose the Claimant relied upon its balance-sheet to show that it was a profit making company and had enough money to pay for the suit property.
19. On the other hand, it was Respondents' contention that the Claimant was never ready and willing to perform its part of the contract. The Respondents asserted that the Claimants had no sufficient amounts to perform its part of the agreement and this was apparent from the fact that the Claimants had failed to submit the bank guarantees as provided in Clause 5 of the MoU.
20. After considering these submissions (which we have stated only in a nutshell), the majority view of the Arbitral Tribunal was unable to uphold this contention. The discussion on this issue Pg 33 of 47 can be found from pages 67 to 78 of the impugned Award. On going through the reasoning and findings of the majority view of the Arbitral Tribunal on this issue, we find that it has taken all the material on record into consideration and come to the finding that it has. The majority view of the Arbitral Tribunal has specifically recorded that for showing the readiness and willingness, the Claimant has relied upon several circumstances and actions taken by it to complete the transaction. It recorded that the following acts taken by the Claimant show its conduct towards the specific performance of the contract. They are as under:
"(i) From July 2004 onwards, the claimant took various steps to prepare a design of the proposed building;
(ii) In November-December 2004, the claimant continuously reminded and called upon the respondents to comply with their obligations so that the contract can be specifically performed;
(iii) The claimant initiated the process of designing an iconic building by engaging renowned architect M/s Hafiz Contractor and got prepared building plans and lay outs in the beginning of 2005:
(iv) As soon as the claimant received third party objections pursuant to public notice issued in December, 2004, they were immediately forwarded to the respondents' advocate;
(v) Vide letters dated 14th January, 2005 (Exh.C-118) and 11th February, 2005, (Exh.C-119), F & R (Claimants' Advocates) called upon Little & Co. (Respondent's Advocates) to complete the transaction reasserting claimant's readiness and willingness. There was no reply from Little & Co.;
(vi) The claimant also assisted the respondents in raising finances from IL & FS and agreed to execute a quadripartite agreement whereunder the respondents were permitted to execute mortgage of Plot No.5A for obtaining loan of Rs.50 Crores (though no such Pg 34 of 47 agreement was executed thereafter)."
21. According to the majority view of the Arbitral Tribunal all the above circumstances clearly proved that the Claimant, at all material times, was ready and willing to perform its part of the contract. As far as the issue of non-furnishing of the bank guarantees are concerned, the same was considered by the majority view of the Arbitral Tribunal from pages 71 to 78 of the impugned Award. The majority view of the Arbitral Tribunal took into consideration clause 5 of the MoU and came to the conclusion that the proviso set out under sub-clause (vi) of clause 5 of the MoU required the Claimant to furnish unconditional, irrevocable bank guarantees acceptable to the Respondents in terms of the draft guarantees inter alia guaranteeing the payments under sub-clauses (v) and (vi) of clause 5 of the MoU. In this regard, on page 73 of the impugned Award, the majority view of the Arbitral Tribunal recorded the submissions in this regard of both the parties. Thereafter it went on to analyze the evidence and the documents that were placed before it on this issue. The majority view of the Arbitral Tribunal has referred to detailed correspondence between the parties starting from an email of 19th August, 2004 all the way up to February 2005. It has also referred to the evidence of the parties on this issue. The majority view of the Arbitral Tribunal records that the Claimant's witness No.2, Parag Munot, stated that Pg 35 of 47 Mr Khurana, Regional Manager of Oriental Bank of Commerce ("OBC") [bankers of the Claimant] had confirmed to him that the bank guarantees containing the new proposed clause was acceptable to OBC. This witness also stated that he informed Mr V.K.Jain of the Respondents on 24th December, 2004 that the revised clause submitted by IL & FS was acceptable to OBC. After considering all the correspondence and the evidence led before it, the majority of the Arbitral Tribunal took a view that from the available record, documentary and oral, it was clearly proved that all attempts were made by the Claimant to perform its obligations under MoU. Regarding furnishing of bank guarantees is concerned, after analysing the evidence and other material on record, the majority view of the Arbitral Tribunal came to the conclusion the Claimants had made every attempt to comply with clause 5 of the MoU. Correspondence between the parties, their advocates and bankers related only to the format of the bank guarantees to be submitted. The record showed that the formats suggested by and/or the advocates of the Respondents were also considered by the Claimant as well as their bankers. The majority view of the Arbitral Tribunal therefore came to the conclusion that there was nothing on record to show that the Claimant had either refused or failed to execute the bank guarantees as per clause 5 of the MoU. These findings in the Pg 36 of 47 impugned Award, and as held by the learned Judge, are certainly a possible and a plausible view of the matter requiring no interference.
22. Even we find that that in the facts and circumstances of the present case, the format of the bank guarantee that was sought by the Respondents was acceptable to the Claimant and which was duly informed to the Respondents' advocates by the Claimant's advocates vide their letters dated 14th January, 2005 and 11th February, 2005 respectively. Paragraph 4 and paragraph 3 of these two letters read thus:
[LETTER DATED 14TH JANUARY, 2005] "4. As conveyed to your clients' representative Mr V.K. Jain on 24th December 2004, our clients confirm and accept the following clause suggested by your clients vide their fax dated 22nd December 2004 to our clients' Mr Narendra Lodha in the guarantees to be procured by them in terms of proviso under sub-clause 5(vi) of the captioned M.O.U. read with Addendum thereto.
"This guarantee can be assigned by the beneficiary in favour of the lenders subject to the regulations, if any, stipulated by the Reserve Bank of India".
The draft of the guarantee was otherwise approved and accepted by your clients in all other respects."
[LETTER DATED 11TH FEBRUARY, 2005] "3 Our clients have already informed you and your clients that they are and have at all material times been ready and willing to provide the bank guarantees as required by the agreement between the parties and to make the payments as agreed. The "assignment clause"
which your clients required to be included in the said bank guarantees is also acceptable to our clients and this has already been informed to you and to your clients. Your clients are aware that they have not yet fulfilled their obligations under the agreement Pg 37 of 47 between the parties. This has been pointed out in the previous correspondence."
23. Looking to all this, the majority view of the Arbitral Tribunal came to the conclusion that there was nothing on record to indicate that the Claimant had either refused or failed to execute the bank guarantees as per clause 5 of the MoU. The majority view of the Arbitral Tribunal was of the opinion that the contention of the Respondents that the Claimant had failed to execute the bank guarantees as provided in clause 5 of the MoU was only an afterthought and was raised only with a view to wriggle out of the transaction. On going through the discussion of the majority view of the Arbitral Tribunal on this issue, we are in full agreement with the findings of the learned Single Judge that this is certainly a possible and a plausible view that has been taken by the majority view of the Arbitral Tribunal. Nothing has been brought to our notice that would make us come to the conclusion that the finding given by the majority view of the Arbitral Tribunal on this issue either suffers from any perversity that would lead us to interfere either with the findings given in the impugned Award, or in turn, with that of the learned Single Judge.
24. What is also important to note is that when one reads Pg 38 of 47 clauses 4 and 5 of the MoU dated 28th June, 2004, it is clear that there were reciprocal obligations of the Respondents in order for them to receive the payments as well as the bank guarantees. They have been spelt out in clause 4 of the MoU which inter alia provides that the Respondents were to handover clear, vacant and physical possession of the developable land duly demarcated and surveyed; to provide a land to the developer with common right of way being 12 mts. wide, each from (i) G.M. Bhosale Marg, (ii) Ganpatrao Kadam Marg, and (iii) N.G. Bhansode Marg, so as to access the developable land as shown on the plan annexed thereto; to execute such documents as may be prepared and approved by the advocates for the parties in respect of grant of development rights and/or transfer of the developable land; to execute irrevocable Power of Attorney in favour of the Claimant and or its nominees and execute at its costs and expenses all deeds, documents etc. for development and ultimate transfer of the developable land as may be approved by the advocates for the parties; and to execute such other documents and Deeds (including production of original title deeds), for perfection of the title and rights of the Claimant to the developable land as may be approved by the advocates for the parties. When one reads clauses 4 and 5 together it is clear that the Claimant had to execute and furnish the bank guarantees as provided in clause 5 read along with Pg 39 of 47 its proviso, simultaneously on the respondents' fulfilling its obligations as set out in clause 4 of the MoU dated 28th June, 2004. It is not even the case of the Respondents before us that they had fulfilled their obligations as set out in clause 4 and/or were ready and willing to do the same and despite this, the Claimant refused to furnish the bank guarantees as required under clause 5. In fact as recorded by the majority view of the Arbitral Tribunal, and in our view correctly so, we find that the Claimant was always ready and willing to perform its part of the contract by furnishing the bank guarantees in the format required by the Respondents. This is quite clear from the correspondence exchanged between the parties and the evidence led before the Arbitral Tribunal. Such being the scenario, we do not think that the learned Single Judge was in error in rejecting the arguments of the Respondents that the Claimant was never ready and willing to perform its part of the contract. In any event, as stated earlier, the view taken in the impugned Award by the majority view of the Arbitral Tribunal is certainly a possible and a plausible view which would not entitle either the learned Single Judge to interfere with the same under Section 34 of the said Act nor us under Section 37 of thereof. We find that on this issue the majority view of the Arbitral Tribunal has considered all the evidence and has not left out of consideration any material evidence that Pg 40 of 47 would have the effect of leading to any perversity in the findings given in the impugned Award. For these reasons, we are unable to accept the arguments made by Mr Bharucha on this issue.
Whether time was essence of the contract.
25. This was an issue that was specifically framed by the Arbitral Tribunal as Issue No.6. The discussion on this issue can be found from pages 32 to 50 of the impugned Award. The Arbitral Tribunal recorded the submissions of respective parties on this issue. It was the case of the Respondents before the Arbitral Tribunal that the contract required time bound performance and thus time was the essence of the contract which was evidenced from various clauses of the MoU as also contemporaneous record made between the parties. Alternatively, it was argued by the Respondents that time was made the essence of the contract by various letters and communications written by the Respondents and/or their advocates, to the Claimant and/or their advocates. In a nutshell, it was the case of the Respondents that the Claimant failed to observe timely payment as contemplated under the contract and thus there was deemed repudiation of the contract by the Claimant which was accepted by the Respondents and as such there is no question of specific Pg 41 of 47 performance thereof.
26. On the other hand it was the contention of the Claimant before the Arbitral Tribunal that time was never made the essence of the contract either under the original MoU or the Addendum nor was it made the essence at a later stage in accordance with law. It was further contended by the Claimant that the present transaction, relating to sale of immovable property, the same, as per the settled law, time was never treated as an essence of the contract unless specifically done so. In the facts of the present case, according to the Claimant, various clauses of the MoU required the Respondents to perform several obligations which they failed to perform. In view of non-performance of these obligations by the Respondents, the contract could not be completed nor payment under the agreement could be made by the Claimant, was its submission. According to the Claimant, the Respondents sought to take undue advantage of their own default by putting forward false pleas and by contesting the prayer of the Claimant for specific performance of the contract.
27. After hearing the parties on this issue, the majority view of the Arbitral Tribunal considered this issue on principle as also on the facts of the case. It firstly went on to examine the legal position.
Pg 42 of 47 It examined the statutory provisions in relation thereto. After examining the statutory provisions, the majority view of the Arbitral Tribunal referred to several Judicial Precedents including the Judgments of the Privy Council as well as that of the Supreme Court. After setting out the Judicial Pronouncements, the majority view of the Arbitral Tribunal referred to the pleadings between parties as well as the rival submissions and thereafter considered this issue on merits. After applying the statutory provisions and the legal principles that have been set out in Judicial Pronouncements, the majority view of the Arbitral Tribunal held that on the facts and circumstances of the present case, time was never made the essence of the contract. It held that it is settled law that in case of transfer of immovable property, normally time is not the essence of the contract and the present case was not an exception to this general rule. Whilst coming to this conclusion, we find that the majority view of the Arbitral Tribunal has in detail adverted to the statutory provisions, legal principles laid down thereunder and whether same would apply to the facts of the present case. In doing so the majority view of the Arbitral Tribunal has considered several clauses of the MoU and also the correspondence that has been exchanged between parties. The majority view of the Arbitral Tribunal has given a specific finding that the so called meeting that was held on 24th Pg 43 of 47 November, 2004 fixing a deadline of 20th December, 2004 for completion of the transaction by the Claimant was not acceptable. The majority view of the Arbitral Tribunal has given a categorical finding that the earlier meeting held on 10th November, 2004 and the so called gist of the discussions prepared on 26th November, 2004 on the basis of the meeting dated 24th November, 2004, was not proved by the Respondents. The majority view of the Arbitral Tribunal noted that in fact the case of the Claimant was that on 24th November, 2004 no date of completion of the transaction was ever agreed or fixed. This being so, coupled with the fact that the Respondents were unable to prove that any such deadline was agreed to in the meeting on 24th November, 2004, they could not be allowed to proceed on the basis that the completion date of the transaction was fixed on 20th December, 2004. Taking all this material into consideration, the majority view of the Arbitral Tribunal finally held that time was never made the essence of the contract. On this issue, we find that the majority view of the Arbitral Tribunal has discussed the same in great detail as set out by us earlier. Here also, we find that the majority view of the Arbitral Tribunal has taken all the material evidence into consideration before coming to its finding on this issue. There is nothing that has been brought to our notice that the majority view of the Arbitral Tribunal has failed to consider and which would Pg 44 of 47 have such an impact that would render us to come to a finding that the conclusions arrived at in the impugned Award suffer from any perversity. Even assuming that we were to take a different view of the matter on this issue, that would not allow us to set aside the impugned Award on this ground. The majority view taken by the Arbitral Tribunal is clearly a possible and a plausible view that cannot be interfered with either under Section 34 or Section 37 of the said Act. Accordingly, we find that even this argument of the Respondents cannot be accepted.
It was inequitable to grant the specific performance.
28. Lastly it was contended that in the facts of the present case it was inequitable to grant the specific performance. Mr Bharucha argued this point by stating that specific performance of the MoU dated 28th June, 2004 was granted by the majority view of the Arbitral Tribunal more than 12 years later on 29th August, 2016 and which was highly inequitable considering such a long lapse of time. He submitted that in this time considerable substantial economic changes had taken place, and hence the majority view of the Arbitral Tribunal ought not to have granted the relief of specific performance.
Pg 45 of 47
29. We are unable to accept this submission. Merely because it has taken long time to dispose of the matter with anything more, would not dis-entitle the Claimant from seeking the relief of specific performance, especially if all other ingredients with reference to the same are duly complied with by the Claimant. If we were to accept the submission of Mr Bharucha then in practically every matter the releif of specific performance would have to be declined due to the delays of litigation. This can never be the law and in fact is not the law laid down by the Supreme Court in the case of K.S.Vaidyanandam Vs Vairavan (supra). Hence, the reliance placed on it by Mr. Bharucha, and more particularly paragraphs 10 and 11 thereof, is wholly misconceived.
30. As far as the appeal filed by the Appellant in Commercial Appeal No.169 of 2017 is concerned (Respondent No.2 before the Arbitral Tribunal), we find that for the reasons discussed above, even this appeal has no merits. It is not in dispute that Respondent No.2 was a party to the MoU dated 28th June, 2004. All that was done by the Addendum dated 10th December, 2004 was the price to be paid by the Claimant to the Respondents was increased from Rs.86.30 Crores to Rs.105.30 Crores. Further it is also Respondent No.2's case before Pg 46 of 47 us that it has absolutely no right, title, interest in the suit property. This being the case, all that Respondent No.2 is required to do under the Award is to ensure that the property is properly conveyed to the Claimant along with Respondent No.1. We, therefore, do not think that Respondent No.2 can contend that they cannot be directed to do anything to ensure that the property is properly conveyed to the Claimant.
31. For all the aforesaid reasons and in view of the foregoing discussions, we find no merits in either of the appeals. They are, accordingly dismissed. However, there shall be no order as to costs. In view of disposal of both the Commercial Appeals, nothing survives in the Notice of Motions. They are, accordingly, disposed of. ( B. P. COLABAWALLA J. ) ( S. C. DHARMADHIKARI J. ) Pg 47 of 47