Bombay High Court
Nisar Properties Pvt Ltd vs Jay-Vijay Co-Operative Housing ... on 18 March, 2021
Author: B.P. Colabawalla
Bench: B.P. Colabawalla
(03)CARBPL6939.21.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Anjali Digitally signed
by Anjali T.
ORDINARY ORIGINAL CIVIL JURISDICTION
Aswale
T. Date:
Aswale 2021.03.23
14:15:33 +0530 COM. ARBITRATION PETITION (L) NO. 6939 OF 2021
Nisar Properties Private Limited ]
A company duly incorporated under the ]
Companies Act, 1956, having its registered ]
office address at 201, 2nd Floor, Lotus Pride ]
V.P. Road, Next to Railway Crossing, ]
Vile Parle (West), Mumbai - 400 056 ] ... Petitioner
Versus
Jay-Vijay Cooperative Housing Society Ltd., ]
Ltd., A Respondent registered under the ]
provisions of Maharashtra Co-operative ]
Societies Act, 1969, having its office address ]
at Anna Godbole Kanjurmarg (East) ]
Mumbai 400 099 ] ... Respondent
Mr. Vyom Shah with Ms. Dipti Das and Mr. Sunil A. Vyas i/b Fox
Mandal & Associates for the Petitioner.
Mr. G.S. Bhat for the Respondent.
CORAM : B.P. COLABAWALLA, J.
THURSDAY, 18TH MARCH , 2021 P.C. :
1 The present Petition is filed under section 37 of the Arbitration & Conciliation Act, 1996 (for short "the Arbitration SR Pasha, Sr PS Page 1 of 12 (03)CARBPL6939.21.doc Act"), challenging the order passed by the Arbitral Tribunal dated 10th February, 2021, under section 17 of the said Act. The reliefs sought in the section 17 application were as under:
a) Pending the arbitral proceedings, the Respondent Society be restrained by an order and injunction from terminating the Redevelopment Agreement dated 13th December 2012 executed between the Claimant and the Respondent;
b) Pending the arbitral proceedings, making of the arbitral Award and until execution of the arbitral Award, the Respondent Society by itself, its members, its officers, its employees, servants and/or agents or otherwise whosoever be restrained by an order and injunction from in any manner dealing with, selling, transferring, disposing of, or alienating or encumbering or mortgaging or charging or parting with possession of the Plot or from transferring or inducting anyone else into or giving possession to or creating any right, title and interest or license in favour of anyone else in respect of the Plot and members flats thereon;
c) Pending the arbitral proceedings, making of the arbitral Award and until execution of the arbitral Award, the Respondent Society be directed to disclose on oath/affidavit, details of all the acts done by the Society, deeds, documents, papers and applications signed by the Society creating any encumbrances, mortgage and/or other third party rights in relation to the Plot and members flats thereon;
d) Pending the arbitral proceedings, making of the arbitral Award and until execution of the arbitral Award, the Respondent Society be directed to deposit an amount of, or provide security to the amount of, Rs.1,50,00,000 in such manner as this Hon'ble Tribunal may deem fit;"SR Pasha, Sr PS Page 2 of 12
(03)CARBPL6939.21.doc
2 The petitioner herein initiated the arbitration proceedings for seeking a declaration that the re-development agreement dated 13th December, 2012 and the further agreement dated 13th December, 2019, are valid, subsisting and binding on both parties and sought specific performance thereof. The respondent is a Co-operative Housing Society, which is the owner of a plot of land admeasuring 1021.60 square meters bearing Survey No. 20, Hissa No.4, CTS No. 1217, Kanjurmarg (E), Mumbai 400021. There is a building standing on the said plot of land which is also owned by the said society. The said society has thirty-five members and it is an admitted position that they are still residing in the said building.
3. The building standing on the said plot of land is in a dilapidated condition. Therefore, to redevelop the said building, on 5th May, 2012, the Society members unanimously passed a Resolution appointing the petitioner as the developer. Subsequently, on 13th December, 2012, a registered development agreement was executed in favour of the petitioner. As per the development agreement, all the members of the society were under an obligation to hand over vacant possession of their SR Pasha, Sr PS Page 3 of 12 (03)CARBPL6939.21.doc respective premises. It is also an admitted position that two members and the ULC Department refused to hand over possession of their respective premises. On 24 th July, 2013, the petitioner also executed a draft permanent alternate accommodation agreement with the Society. On 7 th August, 2013, the petitioner submitted an application for approval of the building plans and on 10th December, 2014, the Architect of the petitioner filed an application for the proposed redevelopment. Thereafter, on 25th February, 2015, the Corporation issued the IOD and sanctioned plan. One of the conditions stipulated in the IOD was that the property card had to stand in the name of the Society. At the time of execution of the registered development agreement dated 13th December, 2013, it was agreed between the parties that the petitioner will help the society in the mutation of the entry on the property card. However, before the mutation, the original owner of the property raised an objection that he is still the owner of the property. This issue apparently was resolved finally on 23rd May, 2017.
4. Considering that there was so much delay in the redevelopment, the petitioner proposed to the society to re- SR Pasha, Sr PS Page 4 of 12
(03)CARBPL6939.21.doc negotiate the commercial terms of the development agreement dated 13th December, 2012. Though there is correspondence between the parties during the period 2017 to 2019, on 26 th November, 2019, twenty-two members of the Society visited the office of the petitioner and certain revised commercial terms were tentatively finalised between the parties. Then, on 1 st December, 2019, twenty-six members of the Society in the General Body Meeting approved the revised commercial terms. These revised commercial terms are a part of an e-mail dated 13 th December, 2019 addressed by the Society to the petitioner and which the petitioner claims is the further agreement.
5. It is the case of the petitioner that majority members of the Society, having approved the resolution to modify the commercial terms of the development agreement dated 13 th December, 2012, the Society is bound by it and the original development agreement stands modified to that limited extent.
6. In this factual background, submissions were made by the parties before the Arbitral Tribunal. The arguments canvassed by the petitioner was that as per the clauses of the SR Pasha, Sr PS Page 5 of 12 (03)CARBPL6939.21.doc redevelopment agreement dated 13th December, 2012, it was mandatory for the Society not to create any third party rights. It was argued that a letter dated 3rd March, 2020, addressed by the advocate for the respondent, inter alia, informed the petitioner that if it did not start the redevelopment of the property within fifteen days, the Society would appoint a new developer. It was argued on behalf of the petitioner that the Society had committed breaches of the agreements (i) by not handing over vacant possession of their respective premises; (ii) not handing over vacant possession of their premises amounted to violation of several clauses of the IOD dated 25th February, 2015 and (iii) there was no clear and marketable title to the property as contemplated under the clause of the redevelopment agreement dated 13th December, 2012.
7. It was the contention of the petitioner before the Tribunal that it was the obligation of the Society to hand over vacant possession of the entire plot of land. It appears that there are certain slum dwellers on the said plot of land and which, according to the petitioner, was the obligation of the Society to ensure that they were removed and thereafter hand over the SR Pasha, Sr PS Page 6 of 12 (03)CARBPL6939.21.doc entire plot for redevelopment.
8. The Arbitral Tribunal examined all these aspects in great detail. The impugned order passed by the Tribunal can be found from pages 536 to 562 of the paper-book. On the basis of the pleadings in the arguments canvassed by the parties, the Tribunal, inter-alia, framed the following points for determination:
a) In view of Cl. 7.1 r/w. Cl. 22(a) whether it is Society's obligation to handover vacant possession of the "entire plot"?
b) Whether at the time of execution of the Development Agreement dated 13th December, 2012 it was assured by the officers of the Society to the Applicant, that once the IOD is obtained, the society would ensure that the area encroached by the slum dwellers is vacated?"
9. As can be seen from these two issues, the real dispute between the parties was whether it was the obligation of the Society to handover vacant possession of the entire plot, namely, that the Society would ensure that the area encroached upon by the slum dwellers would be vacated. The Arbitral Tribunal thereafter goes on to examine this issue in great detail. The SR Pasha, Sr PS Page 7 of 12 (03)CARBPL6939.21.doc Tribunal refers to the original development agreement entered into on 13th December, 2012 as well as the further agreement dated 13th December, 2019. It records that as per the further agreement the petitioner is liable to provide a free of cost fat admeasuring 315 square feet carpet area to each member of the Society. The Tribunal thereafter negated the contention of the petitioner that at the time of execution of the development agreement dated 13th December, 2012, it was assured by the officers of the Society that once the IOD is obtained the Society will ensure that the entire plot is vacated by the slum/hutment dwellers. This contention of the petitioner was negated by the Tribunal on the ground that such an understanding was never recorded anywhere in the development agreement dated 13 th December, 2012 or the further agreement dated 13 th December, 2019 and neither was it forming part of any correspondence on record. The Arbitral Tribunal also noted that even in the application filed under section 11 of the Arbitration Act (for appointment of the Arbitral Tribunal), no such averment was made or pleaded. The Arbitral Tribunal noted that the applicant cannot contend that only if vacant possession of the entire plot is handed over, the members of the Society will get a fat SR Pasha, Sr PS Page 8 of 12 (03)CARBPL6939.21.doc admeasuring 315 square feet and if they do not, then the petitioner would be liable to handover fat admeasuring 202 square feet (to each member) as mentioned in Exhibit-C-48 to the Statement of Claim. The Tribunal, after examining everything in great detail, opined that when the petitioner entered into the development agreement dated 13th December, 2012, it was very well aware about the area encroached by the slum/hutment dwellers. These findings can be found in paragraph 9 of the impugned order. The Tribunal held that all the material (referred to in the said paragraph) clearly established that at the time of the execution of the development agreement dated 13 th December, 2012, the petitioner was very much aware that slum dwellers had encroached upon the property way back as on 29 th May, 1995 and yet it was attempting to place the burden on the Society by submitting that at the time of execution of the development agreement dated 13th December, 2012, it was assured by the officers of the Society that once the IOD is obtained, the Society will ensure that the slum dwellers would vacate the property. The Tribunal reiterated that this is neither mentioned in the development agreement dated 13 th December, 2013 nor was if forming part of any correspondence exchanged SR Pasha, Sr PS Page 9 of 12 (03)CARBPL6939.21.doc between the parties. The Tribunal, therefore, finally came to the conclusion that, prima facie, the petitioner is guilty of suppression of material facts and documents and that it is not ready and willing to perform the obligations under the development agreement dated 13th December, 2012 and the further agreement dated 13th December, 2019. In these circumstances, the Arbitral Tribunal held that there was no merit in the section 17 application and proceeded to dismiss the same by the impugned order.
10. I have heard the learned counsel for the petitioner as well as the respondent and I have perused the papers and proceedings in the above petition. I have also gone through the impugned order in great detail. From what is narrated above, I find that the Arbitral Tribunal has adverted to all the facts and the arguments that were canvassed by the parties. The Tribunal, on the basis of the record before it, has come to the conclusion that the petitioner is not entitled to any relief as, prima facie, it is not ready and willing to perform its obligation under the development agreement dated 13th December, 2012 and the further agreement dated 13th December, 2019 and which is a sine SR Pasha, Sr PS Page 10 of 12 (03)CARBPL6939.21.doc qua non for seeking a remedy of specific performance. The Tribunal comes to this finding after analysing the facts on record. I, after going through the impugned order, do not find any patent illegality or perversity in the order passed by the Tribunal under section 17 of the Arbitration Act. In my view, the Tribunal has correctly analysed all the facts and thereafter proceeded to dismiss the application filed by the petitioner. Even if the learned counsel appearing for the petitioner was to persuade me to take a different view on the facts, that by itself, with nothing more, would not entitle me to interfere with the order passed by the Tribunal under section 17. Apart from reiterating that according to me, the view taken by the Tribunal is a correct view, it is certainly not a view which is either patently illegal or perverse. It is certainly a plausible view. If this be the case, then, there is no question of interfering with the order passed by the Tribunal under section 17.
12 In view of the foregoing discussion, I find no merit in the above Arbitration Petition. It is, accordingly, dismissed. It is needless to clarify that the views expressed by me in this order as well as the views of the Tribunal in the impugned order are only SR Pasha, Sr PS Page 11 of 12 (03)CARBPL6939.21.doc prima facie in nature. With this clarification, the above petition is dismissed. There shall be no order as to costs.
12. This order shall be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned shall act on production by fax or e-mail of a digitally signed copy of this order.
B.P. COLABAWALLA, J.
SR Pasha, Sr PS Page 12 of 12