Bangalore District Court
Rustumji Developments vs Zeebundeh Khaleeli on 11 November, 2024
1
Com.A.S.47/2012
KABC170103242020
IN THE COURT OF LXXXVII ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU (CCH.88)
Present: Smt. Roopa K.N., B.Sc., LL.B.,
LXXXVII Addl.City Civil &
Sessions Judge, Bengaluru.
Dated: 11th day of November, 2024
Com.A.S.No.47/2012
APPLICANTS/ 1 M/s.Rustumji Developments,
PETITIONERS Represented by its Proprietor
Mr.N H Rustumji
G-15 & 16, Richmond Towers,
12, Richmond Road,
Bangalore-560 025.
2 Mr.N.H.Rustumji,
Aged about 68 years,
S/o Late Mr.Homi Rustomji,
Proprietor,
M/s.Rustumji Developments,
G-15 & 16, Richmond Towers
12, Richmond Road,
Bangalore-560 025.
(Reptd by Sri.JHS -Adv)
AND
RESPONDENTS 1. Mrs.Zeebundeh Khaleeli
Aged about 43 years,
W/o Mr.Wusooq Khaleeli,
2
Com.A.S.47/2012
D/o Mr.Akbar Mirza Khaleeli,
R/at No.11431, 35th Avenue,
Edmonton Alberta AB, T 6J2W9
CANADA
2. Mrs. SABAH BAKHACHE
Aged about 42 years
W/o Mr Antoine Bakhache
D/o Mr Akbar Mirza Khaleeli
Residing at C/o Wilsa Malaysia
60-F2-2, Plaza Damasa Jalan,
Kuala Lumpur, Malaysia.
3. Mrs. Reihaneh Yavar Dhala,
Aged about 39 years,
W/o Mr. M.Y. Dhala,
Daughter of Mr Akbar Mirza Khaleeli
Residing at Villa Noor,
4/6, Casurina Drive Neelankarai
Chennai -- 600 041
4. Ms. Esmath Khaleeli,
Aged about 35 years
Daughter of Mr Akbar Mirza Khaleeli
Residing at No.26/2-1 Abshot Layout
Sankey Road, Bengaluru-560052.
5. Mr. Mirza Abdul Karim Namazie,
Aged about 68 years
Son of Late Mr Mirza Ghulam
Hussain Namazie
Residing at 81, Grange Road
Singapore - 249 586
Respondent Nos.1 to 5 represented
herein by their Power of Attorney
Holder Mr Akbar Mirza Khaleeli
3
Com.A.S.47/2012
Residing at No.26/2-1 Abshot Layout
Sankey Road Bangalore 560052.
6. Justice T Jayarama Chouta (Retd.,)
No.385, Sandeesh 5th Main 11th Cross,
RMV Extn. 2nd Stage, Dollars Colony
BANGALORE -- 560 094.
7. Justice B N Krishnan (Retd.,)
No.209, Double Road,
Indiranagar II Stage,
Next to Value Mart
BANGALORE - 560 038.
8. Justice N D Venkatesh (Retd.,)
No.412, 12th Main,
Rajmahal Vilas Extension
BANGALORE -- 560 080.
9. Mr Rohinton H Rustunji
Son of Late Mr Homi Rustomjee
10 Mrs. Piruja H Rustumji
Wife of Mr Homi Rustomjee
11 Mrs. Freny Rustunmji
Wife of Mr Rohinton H Rustunji
12 Mrs Beroze P. Zal
Wife of late P Zal
13 Mr Navroze Zal
Son of Late Mr P Zal
Respondents 9 TO 13 having their
address at C/o M/s.Rustumji
Developments, G-15 & 16,
Richmond Towers 12,
4
Com.A.S.47/2012
Richmond Road
Bangalore -- 560 025.
(R-1 to R-3 by Sri.MKK/PBA
R-4 & R-5 by Sri.AKS
R-6 to R-8, R-11 to R-13-Arbitrator
R-9 & R-10 - Dismissed)
Date of Institution of the 21.04.2012
suit
Nature of the suit (suit on
pronote, suit for declaration
Arbitration Suit
& Possession, Suit for
injunction etc.)
Date of commencement of -
recording of evidence
Date on which judgment
was pronounced 11.11.2024
Total Duration Year/s Month/s Day/s
12 06 21
(ROOPA K.N.),
LXXXVII ACC & SJ (CCH-88),
(Commercial Court)
Bengaluru.
JUDGMENT
This petition is filed by the petitioner under Sec.34 of Arbitration and Conciliation Act 1996 seeking set aside of the arbitral award passed by the majority members of the arbitral tribunal dtd:16.04.2012. 5
Com.A.S.47/2012
2. This petitioner was one of the respondent before the arbitration tribunal in the above arbitration proceedings. Respondents herein were the claimants. After service of notices, respondents appeared through their counsels and filed objections to the main petition. Thereafter, the original arbitration records were called for.
3. I heard the arguments of learned counsel for claimant and respondents.
4. Now the points that arise for my consideration are;
1. Whether, the present petition deserves to be allowed and the arbitral award passed by the majority Arbitrators dtd:16.04.2012 requires to be set aside under Sec.34 of Arbitration and Conciliation Act?
2. What Order?
5. My findings on the above Points are as under:
Point No.1 :- In the "Affirmative".
Point No.2 :- As per the final Order for the following reasons.6
Com.A.S.47/2012 REASONS
6. POINT No.1: For the sake of convenience parties before the Arbitral Tribunal are referred as similar in the present case. The claimants before the tribunal are now the respondents before this court and the petitioner herein was the respondent.
Claimants are the owners of schedule property before the Arbitral Tribunal situated at Richmond Road, Bengaluru City. Respondent firm was in the business of real-estate development as promoters and builders, claimants desired to develop their land in question towards which they entered into a Joint Development Agreement with respondent on 01.11.1994 and the said agreement provided reciprocal terms and conditions between the claimants and respondent. Since the respondent did not complied the terms of agreement and developed and constructed commercial building as per the agreement within the stipulated period of 180 days, the claimants terminated the agreement by issuing 7 Com.A.S.47/2012 termination notice. The said notice was duly replied by the respondent and in view of this dispute, as there was an arbitration clause in the agreement CMP was filed wherein Hon'ble High Court of Karnataka appointed 3 arbitrators.
7. The tribunal on conducting due enquiry and considering the merits of the case passed an award directing this respondent to pay the claimants a sum of Rs.15,44,75,100/- as damages together with interest at 18% p.a. Further, tribunal also passed an order of mandatory injunction directing the respondent to deliver the vacant possession of schedule property in favour of the claimants. While passing this order the tribunal observed that, the termination of agreement dtd:01.11.1994 by the claimants was legal. This became the cause of action for the present petitioner seeking set aside of the award under Sec.34 of Arbitration and Conciliation Act 1996.
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Com.A.S.47/2012
8. If we peruse the rival pleadings of both claimant and respondents before the Arbitral Tribunal, it is an undisputed fact that, claimants were the absolute owners of property bearing No.11 and both claimant and respondents entered into a Joint Development Agreement on 01.11.1994. It is also not in dispute that, schedule property could not be developed by the respondent till the claimants terminated the agreement. According to claimants, there were 3 major grounds for terminating the agreement they are
1) at no point of time either from November 1994 or May 1997 or from March 1999 this respondent choose to furnish full fledged building plan commissioned for proposed construction.
2) this respondent being a developer was in gross violation of the terms and conditions of Joint Development Agreement and he was making attempts to changing the very 9 Com.A.S.47/2012 nature of multi storied complex as shown in Joint Development Agreement into some other different venture like hotel or mall.
3) this respondent developer did not took any steps to provide security to the property which was subjected to all types of mischiefs and theft.
9. On the other hand, it was the contention of the respondent / petitioner that, the purpose of development was to put up a shopping mall or as respondent intended a hotel. According to him, as on the date of Joint Development Agreement there was a residential building which was supposed to be demolished and same was postponed due to pending of criminal case. According to respondent, he took all initiatives like assisting the claimants in getting Khatha changed in their names, clearing payment of balance income tax amount, clearing all the civil litigations pending between the respondents and 3rd parties and even he had furnished plan to the 10 Com.A.S.47/2012 respondents which were not approved by them though respondent made all his attempts to convince them and these facts led for delay of development of the land and hence, the respondent/petitioner claimed that, the unilateral termination of agreement dtd:01.11.1994 was illegal. These are the brief facts raised by both claimants and respondents before the Arbitral Tribunal.
10. On the basis of these rival pleadings Arbitral Tribunal framed total 22 issues out of which the 6 th Issue was (6) Whether, the JDA stands validly terminated by legal notice dtd:19.10.2006. In para 16 of the award the Arbitral Tribunal has observed "The 6th issue, according to us, is the most crucial one and a decision on that will also provide answers to many other issues". In view of this, the Arbitral Tribunal first took the issue No.6 for consideration and answered the same in favour of the claimants and held that, termination of the agreement dtd:01.11.1994 was valid.
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Com.A.S.47/2012
11. Before going to the further discussions on merits, it would be proper on the part of this court to restrict itself to the powers conferred to this court under Sec.34 of Arbitration and Conciliation Act 1996. For the sake of convenience Sec.34 is re-iterated as follows;
34. Application for setting aside arbitral award. (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2)An arbitral award may be set aside by the Court only if
(a)the party making the application [establishes on the basis of the record of the arbitral tribunal that:] [Substituted 'furnishes proof that' by Act No. 33 of 2019, dated 9.8.2019.]
(i)a party was under some incapacity; or
(ii)the arbitration agreement is not valid under the law to which the parties have 12 Com.A.S.47/2012 subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii)the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv)the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, 13 Com.A.S.47/2012 failing such agreement, was not in accordance with this Part; or
(b)the Court finds that
(i)the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii)the arbitral award is in conflict with the public policy of India.
[Explanation 1. [Substituted by Act No. 3
of 2016 dated 31.12.2015.] - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i)the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii)it is in contravention with the fundamental policy of Indian law; or
(iii)it is in conflict with the most basic notions of morality or justice.
12. Apart from this, this court is also duty bound by ratio laid down in plethora of decisions of Hon'ble Apex 14 Com.A.S.47/2012 Court about the grounds under which an Arbitral Award can be set aside.
In MMTC Ltd., .Vs. Vedanta Ltd., reported in; (2019)4 SCC 163 Hon'ble Apex Court had observed that, "As far as Sec.34 is concerned, the position is well settled by now that the court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Sec.34(2)(b)(ii) i.e., if the award is against to the Public Policy of India. It was also observed "Further more, (patent illegality) itself has been held to mean contravention of substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract".
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Com.A.S.47/2012
13. Further, Hon'ble Apex Court in a case of UHL Power Company Ltd., .Vs. State of Himachal Pradesh observed in para 11 "As far as Sec.34 is concerned, the position is well settled by now that, the court does not sit in appeal over the Arbitral Award". As per the legal position clarified through decisions of this court prior to the amendments to the 1996 in 2016, a violation of Indian Public Policy, in turn includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award".
14. If these legal prepositions of law rendered by Hon'ble Apex Court are perused, it is very much clear that, this court while deciding the petition filed under 16 Com.A.S.47/2012 Sec.34 of Arbitration and Conciliation Act 1996 cannot sit in appeal and re-appreciate the facts and evidence that has already been adjudicated by the Arbitral Tribunal. But at the same time, this court can set aside the Arbitral Award if the grounds under which the said relief is sought falls within the purview of Sec.34(2). Hence, the burden lies on the petitioner to prove that, the majority award passed by the arbitrators comes under the purview of Sec.34(2) of the Act and hence, same deserves to be set aside.
::HIGHLIGHTS OF ARGUMENTS OF PETITIONERS::
15. To substantiate these facts learned counsel for petitioner addressed his arguments in length and also relied on decisions which will be discussed at later point of time. During the course of his arguments the learned counsel for petitioner drawn the attention of this court to the terms of Joint Development Agreement dtd:01.11.1994. According to him, the JDA is dtd: 17
Com.A.S.47/2012 01.11.1994 under which petitioner was supposed to finish the construction of commercial building work within 180 days by removing income tax attachment and it is his argument that, the said I.T. attachment was removed by the respondent in 1999 with the help of one crore rupees given by him as security deposit and same was informed to him in February 2000. He further argued that, it was this petitioner who cleared the legal battle pertaining to 34 sale deeds executed by Swami Shradhananda and this was cleared in 1997-98. In February 2004 a gift deed was executed by mother of these respondents 1 to4 and in 2005 there was a registered partition between the respondents and in 2006 application to change Khatha in to the names of respondents was made and on 05.04.2006 Khatha was changed in the name of respondents. On 19.10.2006 the JDA was terminated unilaterally by the respondents. He further drawn the attention of this court to the documents produced by both claimant and respondents 18 Com.A.S.47/2012 before the Arbitral Tribunal. The learned counsel while addressing his arguments stressed upon the fact as to both respondents and the arbitration tribunal have failed to calculate the date from which 180 days should have been calculated for completion of construction.
According to him though JDA was dtd: 01.11.1994 till 19.10.2006 i.e., the date of the termination of the agreement these respondents never issued any legal notice demanding this petitioner to conclude the construction work or they will terminate the agreement. Further, he argued that, the arbitration tribunal did not even considered these facts and at no point of time they have observed the failure on the part of respondents in performing their part of contract by terminating the JDA immediately after 180 days from the date of agreement. He further argued that, arbitration tribunal has awarded damages in an unscientific manner going beyond the scope of JDA. It was also argued that, the tribunal has framed improper and irrelevant issues and in-spite of 19 Com.A.S.47/2012 that, no findings were given on Issue No.4, 5 and 7. He also argued that, when the father of respondent died the respondents ought to have executed fresh GPA in his favour as the GPA issued by the father of the respondent lost its legal sanctity as soon as the father of the respondents died and this was also failure on the part of respondents which was not considered by the Arbitral Tribunal. He further argued on Sec.73 of Contract Act, Sec.16(c) of Specific Relief Act and submitted to the court that, his counter claim was also not considered by the arbitration tribunal and hence, the award passed by the majority members of Arbitral tribunal is against to the public policy and hence, same is liable to be set aside. HIGHLIGHTS OF ARGUMENTS OF RESPONDENTS 1 TO 3
16. On the other hand the learned counsel for R-1 to R- 3 argued on 3 amended act of 2015 and highlighted the ratio laid down by the Hon'ble Apex Court in a case of Associate Builders. According to him, nothing is there in 20 Com.A.S.47/2012 the award which shock the consigns of this court. He further argued that, before the Arbitration Tribunal there were 7 respondents but present petition under Sec.34 is filed only by R-1 and R-2 and same shows respondents 3 to 7 have accepted the award. He drawn the attention of this court to the para 19, 20 and 31 of cross-examination of P.W.1 wherein petitioner has admitted that, he was aware of the terms of JDA Ex.C.3 and the pendency of litigations. According to him, though petitioner contended that a plan was prepared by one B.K.Giridhar in the earlier days itself no such plans were sent to these respondents. Since the plans were not sent to respondents, they were not in a position to finalize the nature of construction to be made in the schedule property. He also argued that, though this petitioner contended that, he spent lot of money to clear the litigation expenses and others from taking financial assistance from one Chandrakanth Raju, there are no proof in support of his counter claim and hence, the 21 Com.A.S.47/2012 tribunal rightly rejected the counter claim of this petitioner. Further, petitioner has also failed to produce document to show that he had paid fee to the advocate who came from Delhi to clear the litigations of the above mentioned 34 sale deeds. According to him, Ex.C.61 to Ex.C.68 which are the plan according to this petitioner were only rough sketch and not the approved plan. It is further argued that, in 1997 itself this petitioner Rustumji was very much aware about the litigation pertaining to those 34 sale deeds and those sale deeds were never an impediment for him to start construction by getting the plan approved. Further, the delay in change of Khatha from 1997-2006 is also negligence on the part of this petitioner. According to him under Muslim Law Hiba is an oral gift and no written document was to be expected and petitioner was very much aware about these facts since he is also a Muslim by religion and with all this knowledge petitioner kept quite for a period of 12 years without moving a step further to start 22 Com.A.S.47/2012 construction as per the JDA. He expressed his surprise as to why this petitioner Rustumji did not terminated the agreement from 1997 to 2005 but he participated with the respondent. According to him, the conduct of this petitioner in not terminating the agreement till 2006 itself shows that he failed to perform his part of contract as shown in the JDA. He also drawn the attention of this court to Ex.C.16 to Ex.C.49. According to him as per clause 23.2 and 23.3 of the JDA the respondents herein duly terminated the agreement and the arbitration tribunal rightly considered these issues and passed a suitable award. He also argued on Sec.73 of Contract Act and submitted to the court that since from 1994 petitioner did not commenced building construction respondents were entitled for loss suffered is null and void, the present petition is not maintainable. Accordingly, he sought for dismissal of the petition. 23
Com.A.S.47/2012 HIGHLIGHTS OF ARGUMENTS OF RESPONDENTS 4&5
17. Counsel for respondent No.4 and 5 while addressing their arguments read the provisions of Sec.62 of Contract Act. According to him, termination of the agreement is legal and same has not been challenged by this petitioner by seeking a declaratory relief before the Arbitration Tribunal. According to him there was no injunction nor impediment against this petitioner till 2006 for commencing construction in the Schedule Premises which the petitioner did not done. He also argued on Sec.43, 63 and 69 of Partnership Act and submitted to the court that since respondents 3 to 7 before the tribunal who were the partners of respondent No.2 did not challenged the award, present petition is not maintainable. He also argued on the fact that, petitioner did not prepared plan in time and he postponed the construction for one or the other reason and forcing the respondents herein to give consent for constructing a hotel or mall in his share of the schedule premises for 24 Com.A.S.47/2012 which the respondents herein did not consented. He further argued that, under Sec.34 this court cannot re- appreciate the evidence and hence, petition may be dismissed as not maintainable. He also argued that, there was no agreement between the parties that, once this petitioner prepares the plan there needed an approval from these respondents to act further and in- spite of this this petitioner by way of writing letters was forcing these respondents to give consent to construct hotel in the schedule premises. He also argued that petitioner has not produced any proof that, he filed application before BBMP for approval of plan and approval of Khatha and even no notices were issued to respondents till 19.10.2006 when these respondents terminated the agreement. According to him the present petition deserves to be dismissed as the petitioner has not made out any reasonable grounds provided under Sec.34 of the Act and hence, he sought for dismissal of the petition.
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Com.A.S.47/2012
18. I have perused the award passed by the arbitral tribunal. As discussed above, tribunal has framed totally 22 issues out of which the last 7 issues were framed with respect to the counter claim of this petitioner and amongst the other issues, the issue No.6 was taken into consideration in the beginning itself.
19. In para 16 of the award while discussing on issue No.6 tribunal observed that, the claimants/respondents terminated the JDA dtd: 01.11.1994 by issuing notice on 19.11.2006 son 3 major grounds. Even though this petitioner was permitted by the respondents and put him with the physical possession of the schedule property, this petitioner who was the developer and who was duty bound to get a proper plan of the building prepared and present them before the sanctioning authorities within the time stipulated did not even moved a step further to getting the plan approved even after lapse of 10 years (2). Though these respondents who were the owners fulfilled their obligations of getting the 34 fake sale deeds nullified 26 Com.A.S.47/2012 by conciliation awards dtd:18.06.1997 and also the attachment of the land for tax arrears was lifted in the year March 1999, these respondents only at the instance of this petitioner developer entered into a partition amongst themselves under a registered partition deed in the month of February 2005 to show the Marketable title and called upon this petitioner to finalize the building plan and this petitioner instead of taking steps to get the plan of structure as contemplated in the JDA to built a multi storied complex of office units tried to change the very nature of the complex with an intention to construct a hotel or mall. This petitioner being a developer instead of developing the land had inducted outsiders to the schedule premises and permitted them to put up illegal structures without the consent of owners.
20. On perusal of the entire award, the whole award is based on the findings given by the tribunal on issue No.6. Now, it is the duty of this court to adjudicate the fact as to whether the arbitration tribunal has committed patent 27 Com.A.S.47/2012 illegality which go to the root of the case as a result of which the present petition filed under Sec.34 of the Act deserves to be allowed by setting aside the majority award passed by the arbitration tribunal or the tribunal was right in holding that, termination of JDA by these respondents was legal?.
21. As the whole dispute revolves around the termination of JDA by these respondents after the lapse of 12 years from the date of its execution, this court has to carefully analyse the award on this point before addressing the other issues.
22. It is an admitted fact that, both petitioner and respondents herein entered into a JDA on 01.11.1994 under which this practitioner being a developer agreed to develop the schedule property by constructing commercial building which will be later shared between himself and the respondent as shown in the JDA. A stipulated time of 18 months to complete the 28 Com.A.S.47/2012 construction is also an undisputed fact. If we peruse the arguments advanced by both parties, the only dispute between the practice is that, according to petitioner it was the respondents who caused the delay in getting the title of the property, obtaining Khatha in their name on the basis of registered partition deed, delay in clearing the litigation of 34 sale deeds executed by one Damodar, no consensus between the respondents regarding nature of building to be constructed in the schedule property, delay in giving approval for constructing a building like hotel or mall in the share of developer etc.
23. On the other hand, it is the main contention of the respondents that, petitioner failed to get the plans approved for a period of 12 years and he postponed the construction work on one or the other reasons and hence, the JDA was rightly terminated by the respondents. The learned counsel for respondents herein argued that, the period of 18 months since commenced 29 Com.A.S.47/2012 from the date of agreement namely 01.11.1994, the time of 18 months expired on 30.04.1996 and hence, as per the respondents, the petitioner was supposed to finish the construction of commercial building within 18 months from 01.11.1994 by obtaining plan and permission from competent authority and also license to construct a building. If we peruse the award, the tribunal only on the basis of arguments advanced by the claimants therein came to the conclusion that, this petitioner has failed to get the plan for multi storied complex in the Schedule premises, as per the reservation made in para 23 of the award. From para 24 to 28, the arbitration tribunal has discussed on the second ground for terminating the agreement. If these observations made on the above 2 grounds are perused, the arbitration tribunal mainly discussed on the above 2 grounds relied on the arguments advanced by the counsel for claimants therein and also the documents produced by them, and it could be clearly seen that, no 30 Com.A.S.47/2012 reference is there about the arguments advanced by the learned counsel for this petitioner before the tribunal nor about the documents which were relied by this peititoner. The discussions made in the above paragraphs are only the repetition of the oral arguments that was addressed by the learned counsel for claimants before the tribunal. It is an undisputed fact that, schedule property originally purchased by Late Sri.Mirza Ismail under deed of sale dtd:19.05.2018 and he gifted the same by way of Hiba to his only daughter Mrs.Gauhar Taj Namazie in the year 1943. She continued as an absolute owner till 26.03.1984 and on the same day she gifted the said property to her daughter Begum Shakereh Khaleeli. This Shakereh Khaleeli had 4 daughters and she took divorce from her husband and married one Murli Manohar Mishra @ Swami Sharadhananad on 07.04.1986. This Swami Shradhanand committed murder of This Shakereh Khaleeli a criminal case was registered against him subsequent to the death of Shakereh Khaleeli in 31 Com.A.S.47/2012 1991 this Swami Shradhanand under an invalid GPA dtd:29.11.1987 executed sale deeds with regard to considerable portions of this Schedule property in favour of 34 persons by executing 34 sale deeds registered on 30.03.1992 and 31.03.1992. Since these original sale deeds were not with the daughter of Khaleeli and they were in possession of one K.Damodar S/o. Krishna Reddy who along with 4 others purchased portion of schedule premises the same was brought to the notice of this petitioner in the agreement.
24. Ex.C.3 is a copy of JDA dtd:01.11.1994 entered into between the petitioner and respondents herein and this was a joint development agreement. For the sake of convenience some of the important clauses of this agreement has been re-iterated in below mentioned paragraphs.
It was agreed between the parties in the JDA that, since the Schedule property was attached by the income tax department for 32 Com.A.S.47/2012 recovery of several dues payable by Late Shakereh Khaleeli the respondents agreed that, they will clear the I.T. dues.
This petitioner was put in possession of the schedule property for the purpose of development as per the terms of the agreement and he was authorized to demolish all existing structures except the house where Late Shakereh resided till her death and it was agreed that, the said house shall be retained in tact for a period of 18 months and then it has to be demolished. It was agreed between the parties that this petitioner shall construct a multi storied complex in the schedule property as per the sanctioned plan subject to terms of the agreement.
The parties under clause 1.4 have agreed that, both of them shall jointly submit an application under Form 37(1) of I.T.Act within 33 Com.A.S.47/2012 15 days from the date of agreement seeking issue of No Objection Certificate from the appropriate authority, income tax department and this respondent agreed to submit the said form before the I.T. Department.
In clause 2.1 it was agreed that this respondent shall within 180 days from the date of execution of this agreement prepare necessary plans, drawings for construction of proposed building on the schedule property and submit the same to the Corporation of Bengaluru for obtaining license and sanctioned plan. Under clause 2.2 this petitioner was given with liberty to modify the plan already submitted on submit fresh plans from time to time as decided by this petitioner.
Under clause 3.3 this petitioner agreed that construction shall be a first class commercial building as per specifications in the annexure 34 Com.A.S.47/2012 here too (no annexures were prepared by both parties to the agreement) Under clause 5 the sharing of built area was agreed which is not in dispute between the parties.
Under clause 6 it was agreed that, this petitioner shall commence the construction work within 18 months from 01.11.1994 which was the date of the agreement and he also agreed to deliver the possession of the owners constructed area to the respondents within 36 months from the date of commencement of construction.
It was also a condition that, respondent shall no incur any liability for any delay in deliver of possession of owners constructed area by a reason of non-availability of construction materials or Government restrictions or any act of god. It was also agreed that, in the event of 35 Com.A.S.47/2012 any of the above circumstances the petitioner was entitle for extension of time for delivery of the owners share and the time shall also stand extended in the event of delay in obtaining occupancy certificate.
Under clause 6.4 it was agreed that, if the delay for completing the construction is for the reasons other than what stated in clause 6.2 this petitioner shall be entitled to have 6 months grace period to complete the construction of owners share on payment of Rs.6,000/- per day as damages. It was also agreed that, if the petitioners fails to complete the construction work even within a period of this grace period these respondents were entitled to engage their own civil engineers and contractors and complete the construction of their respective area.
36
Com.A.S.47/2012 Under clause 11 the parties agreed that, petitioner shall pay sum of Rs.1 Crore as refundable security deposit to the respondents and on the date of agreement respondents received Rs.20,00,000/- through Cheque issued by the petitioner.
Under clause 13.1 these respondents agreed that, this security deposit amount has to be given back to petitioner. Further, the respondents under clause 13.2 agreed that, they will be ready to make their signature and execute necessary applications, paper, documents and do all acts deeds and things to enabling the petitioner to execute the construction work.
Under clause 13.5 and 13.6 these respondents agreed that within 45 days from the date of agreement subject to clause 14.1 to 14.4, initiate legal proceedings and prosecute 37 Com.A.S.47/2012 those suits and remove the transformer illegally erected by KEB on the schedule property and further they also agreed to make all efforts to obtain all the originals with regard to schedule property and if necessary they will file a suit against illegal withholding of such originals.
Further, under clause 13.8 these respondents agreed that within 180 days from the date of receipt of entire refundable deposit of Rs.1 Crore payable by the petitioner, they will take steps to have attachment of IT Department on the schedule property by clearing of all dues. It was also agreed that, these respondents shall deposit that 1 Crore rupee in a Nationalized Bank as Fixed Deposit.
Under clause 14.1 the petitioner herein agreed to assist the respondents to clear all litigations pertaining to schedule property and 38 Com.A.S.47/2012 under clause 15 these respondents agreed that they will deliver all documents of title including the originals relating to schedule property to Mr.Rustumji. Under clause 23 which relate to breach and consequences it was agreed between the parties that in the even of breach by either party, the other party shall be entitle to specific performance and also can recover all losses and expenses incurred as a consequence of such breach from the party committing the breach. Under clause 23.2 it was agreed that in the event petitioner fails to complete the construction and deliver the constructed area, these respondents were at liberty to terminate this agreement and get the incomplete work finished by a separate developer. Under clause 23.3 it was agreed that in case if this petitioner fails to secure necessary license and 39 Com.A.S.47/2012 plans by the competent authority within 18 months from the date of agreement, the agreement shall stand cancelled at the option of these respondents and these respondents shall refund the interest free deposit amount to the petitioner within 90 days from the date of cancellation of the agreement.
Under the same clause 23.3 it was agreed that this petitioner was entitled to deal with the schedule property in any manner he deemed fit under clause 23.5 it was agreed that, this agreement shall stand terminated at the option of these respondents and in such event all expenses incurred by this petitioner shall be refunded and in the event if the petitioner unable to commence the project within a period of 18 months from the date of agreement the agreement will be terminated by the respondents.
40
Com.A.S.47/2012 Under clause 23.6 it was agreed that, performance of the obligations and the enforcement of the rights of the parties to the agreement inter-say as well as to 3rd parties shall be dependent upon absence of adverse claims clearance of title by judicial process in the legal proceedings.
25. In the background of these terms and conditions entered into and agreed between the petitioner and the respondents if the documents available on record are perused, admittedly, as per clause 6.1 of the agreement this petitioner was suppose to commence construction work within 18 month from 01.11.1994 by clearing all the legal hurdles, IT clearance etc., and under clause 23.5 it was agreed that, if the petitioner failed to commence the project within 18 months from 01.11.94 the security deposit shall be refunded and it was also agreed under clause 13.8 that respondents shall within 180 days from the receipt of refundable deposit amount 41 Com.A.S.47/2012 should take steps to clear the IT attachment. If we peruse the documents marked before the arbitration tribunal, Ex.C.1 is a Registration Certificate of the petitioner firm, Ex.C.2 is a certificate issued by Asst. Revenue Officer wherein it was stated that, schedule property bearing Katha No.81 stands in the name of Shakhare Shradhananad, Ex.C.3 is a JDA dtd:
01.11.1994, Ex.C.4 is a GPA dtd:23.12.1994 executed by these respondents in favour of this petitioner Rustumji and others under which this petitioner and others were authorized to do all the Acts contemplated under the said GPA. Ex.C.6 is a conciliation settlement deed dtd:18.06.1997 entered into between these respondents and other 34 purchasers in whose favor Swami Shraddanand had executed sale deeds in respect of portion of schedule properties. Under this Ex.C.6 it was agreed that, all the 34 purchasers Shall withdraw the suite in O.S. 5113/1994 pending on the file of City Civil Court, Bangalore. Ex.C.7 is an another GPA 42 Com.A.S.47/2012 dtd:18.01.1999 executed by these respondents under which they authorized this petitioner Rustumji as their agent to do all acts mentioned in that GPA. Further, this petitioner was authorized under this GPA to prepare plans for development of the schedule property and submit the same for approval by the City Corporation of Bangalore. Under this GPA it was also agreed that this petitioner was authorized to do all acts and the said GPA will be in force till the scheduled property is fully and properly developed and till such time as the transfer of 60% of respondents undivided 1/3rd share conveyed with or without the proposed building. Ex.C.8 is a registered partition deed dtd:02.02.2005 under which these respondents 1 to 5 being the legal heirs of Shakhre Khaleeli entered into a family partition by getting the Schedule property divided as shown in Para 28, page 15 of the partition deed under this partition, this respondent No.5 got 1/8th share and other respondents 1 to 4 were allotted with 5/24 share in the schedule properties. 43
Com.A.S.47/2012 Ex.C.9 is a death certificate of Shakhre Khaleeli which shows she died on 28.05.1991, Ex.C.10 is a Khatha certificate issued by Bangalore Corporation on 05.04.2006 under which, it was confirmed that, Khatha in respective of property bearing No.81 i.e., the schedule property is entered in the name of these respondents 1 to 5, Ex.C.11 is a copy of GPA dtd:28.07.2004 executed by this respondent No.5 Mirza Abdul Kareem for which he appointed Akbar Mirza Khaleeli as his agent to do the Acts mentioned in the said GPA. The Ex.C.14 is another GPA executed by Respondent No.3 and 4 authorizing Akbar Mirza Khaleeli as their agent. From Ex.C.17 all other documents are the letter correspondences made between the petitioner and respondents. Ex.C.17 is a letter dtd:21.07.1999 issued by respondents 1 to 5 to K.Damodar who was the purchaser of schedule property from the hands of Shradhananada. By issuing this letter on 21.07.1999 respondents 1 to 5 demanded this K.Damodar to return all the original documents 44 Com.A.S.47/2012 pertaining to schedule property which he held in his custody. The Ex.C.18 is a reply given by K.Damodar to these respondents 1 to 5 for their letter Ex.C.17. Wherein, this Damodar admitted that, he had purchased the portion of schedule property from Shradhananda under sale deed dtd:11.06.1990 but he has also stated that at the time of obtaining the sale deed no one had given him any original title documents so that he can return it to respondents, Ex.C.19 is a notice dtd:16.12.1999 issued by respondents to the said Damodar again demanding the original documents of the schedule property, Ex.C.20 is a letter dtd:18.01.2000 issued by this petitioner addressing to Gauhar Taj Namazie. Under this letter Ex.C.20 this petitioner brought to the notice of this Gauhar Taj Namazie that, gift deed executed by her father in her favor has not been registered and same is not reflecting in the records of sub-registrar and even the gift deed executed by her father in favor of Shakhre Khaleeli is also not reflected in 45 Com.A.S.47/2012 the revenue records and also the names of 4 daughters of Shakhre Khaleeli and the manner in which the properties devolved by the principles of Shia personal law is also not reflected in the records of Sub-registrar, Bangalore. In this letter petitioner Rustumji informed Gauhar Taj Namazie that, she do not have even single original document of title establishing her ownership to the schedule property and he also made clear that he managed to get the Khatha changed in the name of current owners and also submitted necessary papers for Change of Khatha in respect of the portion of the properties which was earlier sold by Shradhananda to 34 persons. He also indicated the importance of title deed to obtain plan and other license from the competent authorities. In this letter this petitioner informed Gauhar Taj Namazie that, as on 18.01.2000, there was no action from the side of respondents to obtain original documents and getting Khatha changed in their favor. Similarly, the very same letter was sent to this 1 st 46 Com.A.S.47/2012 respondent herein on 18.01.2000. Ex.C.22 is a letter dtd:12.02.2000 issued by A.M.Khaleeli father of respondents 1 to 4 in which this A.M.Khaleeli Informed the petitioner that, since this petitioner by his letter, dtd:10.02.2000 insisted the daughters of Khaleeli to get a partition registered the gift deeds have their own intrinsic value and he requested this get to enhance his efforts to get those documents and further he informed the petitioner that, it is more desirable to go ahead with a deed of partition. He also mentioned about pending of criminal case 212/1994 which had a crucial importance. Further, he agreed that, for more than 5 years he has kept track of things and done whatever is legal and humanly possible. He also mentioned about removal of IT Attachment, Ex.C.23 is dtd:21.08.2004 and this is a letter addressed by the petitioner to Mr.Akbar Khaleeli under which this petitioner mentioned that, this Ex.C.23 was with respect of the letters issued by Khaleeli on 18.01.2000 and reply dtd:12.02.2000. Under this 47 Com.A.S.47/2012 Ex.C.23, this petitioner brought to the notice of Akbar Khaleeli that development of the schedule property as per JDA has been held-up for a considerably long period of time as the respondents failed to furnish him the documents of title. He also brought to the facts of gift deeds and inheritance of properties in favor of the 4 daughters of Shakhare Khaleeli. By writing this letter this petitioner made it clear to the respondents that, as on the date of Ex.C.23 he was constrained to place on record that, till date no action was taken from the respondents though several meetings took place and it was also clearly stated that, since the murder case was still pending he could not demolish the residential portion as respondents apprehended that, the Session Judge conducting the trial would require to personally inspect the Scene of Crime by writing this letter Ex.C.23 on 21.08.2004 petitioner requested Akbar Khaleeli to obtain documents of title so that petitioner can move further. Ex.C.24 is a letter dtd:17.04.2005 issued by 48 Com.A.S.47/2012 A.M.Khaleeli, father of respondents 1 to 4 in response to the letter of petitioner dtd:21.08.2004 under which petitioner was informed that, partition deed was submitted by the 4 daughters of Khaleeli on 02.02.2005. Ex.C.25 is a letter similar to Ex.C.24. Ex.C.26 is a letter dtd:27.07.2005 written by petitioner addressing to A.M.Khaleeli under which he informed that along with this letter Ex.C.26 he is enclosing Development plan and the drawings constitute several floor plans along with an explanatory note and under this letter, dtd:27.07.2005 petitioner requested Mr.A.M.Khaleeli to communicate at the earliest by going through the plans as petitioner is intending to submit the same for approval to the authorities. This letter Ex.C.26 consists the Annexures pertaining to the nature of building to be constructed in the scheduled premises, Ex.C.27 is a letter addressed to the petitioner by A.M. Khaleeli on 15.09.2005 and this letter was in response to Ex.P.26. Under this Ex.C.27 this A.M.Khaleeli expressed his opinion that as per JDA 49 Com.A.S.47/2012 dtd:01.11.1994 the term multi storied complex is only a commercial complex which refer to as commercial building which excludes a hotel. He also expressed that, there was no intention to include anything like a hotel when the agreement was signed. It was also mentioned that, though this petitioner expressed his intention to construct a hotel in the schedule premises, the respondents did not gave their approval and it was also an opinion of Mr.Kareem Namazi, respondent No.4. He also raised some other objections regarding the petitioners proposal for construction of some structures in the schedule property. Ex.C.28 is a letter dtd:23.09.2005 issued by A.M.Khaleeli to this petitioner under which A.M.Khaleeli requested the petitioner to instruct his counsel Mr.Harish to do the needful pertaining to all types of litigations pending in respect of scheduled property. Ex.C.29 is a letter issued by plaintiff to Mr.A.M.Khaleeli on 07.10.2005 and this letter was a response to Ex.C.27. Under this letter petitioner 50 Com.A.S.47/2012 informed Mr.A.M.Khaleeli that, separate copies of the plans were also forwarded to each one of the owners. Further, in this letter petitioner expressed the importance of putting up a hotel in his share which would be more financially attractive as hotel come within the ambit of Commercial complex or building. He also informed A.M.Khaleeli about keeping the house intact until the disposal of murder trail. He also informed that, till the date of Ex.C.29 i.e., 07.10.2005 he did not received any single document of title from the respondents. Ex.C.30 is a letter issued by A.M.Khaleeli addressing to petitioner in response to Ex.C.29 and in this letter A.M.Khaleeli informed the petitioner about the damages caused to the schedule property, Ex.C.31 is a letter dtd:17.11.2005 under which this petitioner informed A.M.Khaleeli that plan was sent to him in July 2005 and it is still being discussed with the questions being raised by respondent No.1. Further, petitioner informed A.M.Khaleeli that, till the date of Ex.C.30 i.e., after lapse of almost 5 months he 51 Com.A.S.47/2012 was not able to crystallize the plans in view of the conflicting views within the Co-sharers and lack of desire to approve the plan and for that reason it became necessary for him to revamp the plans in view of the new directions given by BBMP. He also indicated that, it is been 11 years and he had invested a huge amount for the project but respondents are strongly mitigating against him which caused loss of funds amounts to Rs.30,00,000/-. Ex.C.32 is a letter dtd:17.01.2006 in response to Ex.C.31 under which A.M.Khaleeli re-iterated that, the petitioner agreed to stick to his ideas of office cum commercial complex to be constructed as per the JDA and he appreciate the positive approach of the petitioner towards the project and he was confident that, they could go ahead fast in the new year. It was also mentioned in the letter by A.M.Khaleeli that petitioner requested him to give an idea of what the family wanted in terms of Office and other commercial spaces for which, A.M.Khaleeli said he would give some ideas when he 52 Com.A.S.47/2012 meets the petitioner again but that could be finalized only after sanction of building plans as per the JDA. It was also said that, the meeting was fixed for 03.01.2005 and both petitioner and A.M.Khaleeli discussed and agreed that if the project is entrusted to a reputed firm like Shapurji who already had a presence in the city it will make the project more attractive. In Ex.C.32 A.M.Khaleeli informed this petitioner that, he told him in a meeting that, in view of the recent and unnecessary differences, they had arising out of the petitioners idea of hotel. It would be appropriate for the petitioner to write and confirm that this idea would be given up. He also expressed his dissatisfaction about the meeting held on 03.01.2006. Ex.C.33 is an another letter dtd:20.01.2006 addressed to petitioner by A.M.Khaleeli, Ex.C.34 is a letter by petitioner to A.M.Khaleeli dtd:15.02.2006. Under this Ex.C.34 this petitioner informed thie A.M. Khaleeli that, as per the request of A.M.Khaleeli and other Co-owners he has shelved the idea of putting up a 53 Com.A.S.47/2012 hotel on scheduled property. Under this letter Petitioner also informed A.M.Khaleeli about making of fresh plans and it was notified that still respondents were suppose to give him the requirements of commercial space for the Co-owners and in the end of the letter petitioner made it clear that he is also not intending to delay the construction. Ex.C.35 is a letter dtd:10.03.2006 issued by A.M.Khaleeli to petitioner under which he requested the petitioner to complete the clubbing of the properties and draw up plans for sanction. The Ex.C.36 is a letter dtd:24.03.2006 written by petitioner to A.M.Khaleeli under which petitioner indicated the disturbances caused by the Co-owners who were causing delay to execute the plan. In the said letter petitioner also questioned A.M.Khaleeli about the letter issued by respondent No.4 dtd:12.03.2006 under which respondent No.4 authorized A.M.Khaleeli to represent her interest. Under this letter, petitioner had also informed A.M.Khaleeli that some of the Co-owners are making narrow and self-serving 54 Com.A.S.47/2012 interpretation of the agreement towards the definition of commercial complex can only be an office building. He again asked for consent to construct a building in the schedule property. Further, he requested A.M.Khaleeli to provide revised power of attorney. Ex.C.37 is a letter dtd:18.05.2006 by A.M.Khaleeli address to petitioner. Ex.C.38 is a letter dtd:13.07.2006 issued by A.M.Khaleeli to petitioner wherein some discussions were made regarding the nature of construction to be made in the developer share and also an idea of petitioner to construct a hotel Ex.C.39 is also a letter from A.M.Khaleeli under which he resisted the idea of petitioner to construct a mall. Ex.C.40 is a letter issued by the petitioner to A.M.Khaleeli on 20.09.2006 and in his letter this petitioner Rustumji referred to a meeting held between himself, A.M.Khaleeli, Sabah and Reihaneh on 11.08.2006 and he also asked for clarification from A.M.Khaleeli what these 2 ladies wanting regarding his suggestions of modifications in the plan. Petitioner also 55 Com.A.S.47/2012 requested A.M.Khaleeli to represent all the other co- owners so as to get approval for the plan as he was feeling difficulty because of various differences in the opinions of co-owners about construction of office complex in the schedule property. This petitioner also brought to the notice of A.M.Khaleeli about the disagreement in the views of other co-owners pertaining to nature of construction to be made in the schedule premises and in the said letter he informed A.M.Khaleeli that, question of plan will arise only when all the co- owners under a single entity informs what their eventual expectations are. Ex.C.41 finally is a legal notice issued by the respondents 1 to 5 to this petitioner on 19.10.2006 under which respondents 1 to 5 terminated the JDA dtd:01.11.1994 for the reasons narrated in Ex.C.41. Ex.C.43 is a public notice issued by respondents regarding revocation of GPA executed in favour of this petitioner. Ex.C.45 is a reply legal notice dtd:07.11.2006 issued by this petitioner in response to 56 Com.A.S.47/2012 Ex.C.41. Ex.C.47 is also a reply issued by petitioner to the respondents on 19.12.2006. Ex.C.48 dtd:23.11.2006, Ex.C.49 dtd:15.12.2006 are the notices issued by the respondents to this petitioner. Similar Ex.C.15 is a reply notice dtd:11.01.2007 issued by these petitioner to the respondents and Ex.C.51 is a reply notice dtd:12.02.2007 issued by respondents. Ex.C.52 is a notice issued by respondents to petitioner dtd:05.03.2007. Ex.C.53 is a notice dtd:09.04.2007 issued by respondents to the petitioner. Ex.C.54 is a notice issued by petitioner to respondents. Ex.C.55 is an agreement for construction entered into between this petitioner and one Mohammed Shafiq Arshad dtd:10.05.1997. Ex.C.58 is a copy of agreement of sale executed by these respondents 1 to 5 in favour of one M/ s.Tasneem Fathima, Ex.C.59 is a letter addressed by petitioner to one M/s.Arshad and Tasnim Fathima on 29.11.2000 under which petitioner agreed to hand over a 57 Com.A.S.47/2012 super built-up area of 8000 Sq.Feet to both of them after completion of construction.
26. If we peruse the documents produced by these respondents before the arbitral tribunal Ex.R.1 is the statement of expenses, Ex.R.2 is a letter dtd:16.06.2004 issued by Akbar Khaleeli to W/o. Respondent No.5. Ex.R.3 and Ex.R.4 are the letters issued by Akbar Khaleeli to defendant No.5 on 16.06.2004, Ex.R.7 is an e- mail dtd:05.07.2005 sent by defendant No.1 to this petitioner. Ex.R.7 is similar to Ex.R.5. Ex.R.8 is another e-mail dtd:29.07.2005 sent by Zeebundeh Khaleeli to this petitioner under which she informed this petitioner that, as she is going to California for 2 weeks she will keep in touch after she come back. Ex.R.9 is also an e- mail dtd:09.10.2005 issued by Zeebundh Khaleeli to this petitioner under which she informed the petitioner that she had some questions in respect of the plans sent to her and she requested the petitioner for a timely feedback. Further, in the said e-mail she raised 4 58 Com.A.S.47/2012 questions about the number of floors to be divided as per the plan, Whether respondents are excluded from taking space in the rest of the building where the petitioner want to make a hotel. What is the opinion of this petitioner on the first three floors being just office space without any shops, retailers etc. Would they have the same property management company as decided by this petitioner. Ex.R.10 is a letter dtd:10.10.2005 issued by this petitioner to Zeebund Khaleeli in response to Ex.R.9 in which this petitioner informed her that Akbar Khaleeli is setting out his views on the plan and a copies of the letters have been forwarded to all the Co-owners requesting them for clarification. Ex.R.11 is an e-mail dtd:25.10.2005 sent to Zeebundh Khaleeli by one Noshir Ex.R.12 is an e-mail sent by Zeebundh Khaleeli to petitioner on 27.10.2005 in which she clarified that, there was miscommunication between herself and her sister Saba and it was also mentioned that, Saba had some dispute regarding office space .Vs. Retail in 59 Com.A.S.47/2012 percentages and for that, Zeebundh Khaleeli sought apology from the petitioner and undertake that there will be no further mixed messages. She also mentioned "After EID you will have a clear picture of what we all want; with my father expressing his views obehalf of all of us". Further, in this e-mail she requested the petitioner to clarify the doubts about the four doubts mentioned in the mail. Ex.R.13 is a letter dtd:18.11.2005 issued by A.M.Khaleeli to this petitioner in response to his letter dtd:07.10.2005 and in the same letter A.M.Khaleeli expressed "Merely because some oweners out of sence of consideration are; trying to see whether it is at all possible to meet your importunities without mangling the agreement does not mean that they have agreed or that we are moving towards a consensuses. He also expressed his dissatisfaction towards the idea of petitioner to construct a hotel in the Schedule property. Ex.R.14 is a letter dtd:28.11.2005 in which petitioner in response to Ex.R.13 informed A.M.Khaleeli that since 60 Com.A.S.47/2012 there is no consensuses from the side of co-owners as to what they want since there is a continuous desire. They are preventing him from putting up a hotel in his built up share. In this letter petitioner discussed certain facts about construction of hotel and other commercial buildings, drawing of plans etc. Ex.R.15 is a letter written by respondent No.4 dtd:29.11.2005 to one Rustumji and in this letter respondent NO.4 raised some objections with this Rustumji and stated that, Rustumji is entitle to her share only after construction as per the JDA. Further, in para 3 of this letter she has stated that, since agreement clearly states that fixtures and fittings will be the same for entire building for all owners and will be divided according to the agreed ratio how it is possible with the plan of petitioner for proposed part hotel. She also agreed that, petitioner sent plans for proposed building in July 2005 for which she did not agreed, much less approve and she asked the petitioner, where are the revised plans. In Para 5 of this letter she has stated that, 61 Com.A.S.47/2012 any plan for development of the property must be approved by the owners unanimously and a one line drawing of any project cannot be accepted. She also stated "there are 6 people involved here including yourself and everyone's aspirations must be met. Any and all plans pertaining to the above listed property should be agreed on". Ex.R.16 is an e-mail sent from Zeebund Khaleeli to petitioner on 10.12.2005 in which she had stated from "last few months she tried to understand the implications of having a hotel built in our property in disagreement with our original contract. Questions were asked on aspects of your proposal based on the unclear plans that you have sent us. I have come to the conclusion that, your idea of a hotel is both Ill- defined and too subjective for my liking. Please desist from sending in any new plans to the Corporation without our approval. My father will continue to communicate with you and handle all matters". Ex.R.17 is an e-mail dated 13.01.2006 issued by Nadereh 62 Com.A.S.47/2012 Namazie to this petitioner. Wherein she discussed about the idea of this petitioner to construct a hotel and sought confirmation by the petitioner in writing and to take steps to club the properties and go ahead with the building plans etc., Ex.R.80 is a letter dtd:10.03.2006 sent by this petitioner to Corporation Inspector along with 34 sets of Conciliation agreements pertaining to schedule property. Ex.R.19 is a copy of plaint in O.S.10430/1994. Ex.R.90 is a copy of plaint in O.S.10520/1988. Ex.R.20 is a certificate issued by City Corporation, Bangalore in respect of Khatha standing in the name of Shakhare Shradhananda, Ex.R.21 is an endorsement issued by Asst. Revenue Officer saying that, Khatha has been transferred in the name of these respondents 1 to 5.
27. In this background I have perused the entire majority award passed by the Arbitrators. As I stated earlier, the Arbitration Tribunal framed totally 22 Issues out of which Issue No.6 was "Whether, the JDA stands 63 Com.A.S.47/2012 validly terminated by legal notice dtd:19.10.2006? Issue No.4 was framed casting burden on these respondents who were the original owners. The tribunal framed Issue No.4 casting burden on these respondents. The tribunal framed Issue No.4 "Whether the original owners as described in the claim petition have complied in full with their obligations under the JDA dtd:01.11.1994? Issue No.5 is; "Whether the respondents had utterly failed to comply with their obligations under JDA? Issue No.7 was; "Whether, a period of 180 days within which the building plan was required to be obtained, as mentioned in the JDA, was not considered to be mandatory clause by either of the parties in view of the subsequent developments. Issue No.15; Whether respondents were all along ready and willing to perform their part of the obligations? The arbitration tribunal though framed 22 issues at the outset Issue No.6 was taken for consideration to know whether the JDA was terminated legally by the respondents by issuing notice 64 Com.A.S.47/2012 dtd:19.11.2006 the ground for termination of the agreement has already been discussed in the above paragraphs. While dealing with Issue No.6, the Arbitral Tribunal had also discussed the oral evidence of this petitioner who was examined as R.W.1 and admissions obtained from him during his cross-examination. As this court cannot re-appriciate the evidence of the parties while deciding Sec.34 petition, it can only see whether Arbitral Tribunal has committed any patent illegality and the award was passed beyond the scope of JDA dtd:01.11.1994. If we peruse the observations made by the tribunal in respect of Issue No.6 ,no doubt it is true that, the arbitral tribunal relied on the admissions of R.W.1 the petitioner where he admitted that, the plan for construction was prepared in 1995-96 and another set after the date and Ex.C.59 the tribunal observed in page 741 of the award that the fact that, there was an agreement to not to demolish the house where Shakihare Khaleeli was residing does not mean that this petitioner 65 Com.A.S.47/2012 developer had prepared the plan and obtained permission and license within 18 months still the owner would have asked him not to demolish that structure. The whole argument of these respondents being the claimants before the arbitral tribunal was that though this petitioner was suppose to obtain necessary plan and sanction for constructing a commercial building in the schedule property within 18 months he did not done so for more than a decade which made the respondents to terminate the agreement by issuing the above notice. In the same page No.741 of the award the tribunal had observed that, the 4 daughters of Shakhare Khaleeli entered into partition only at the insistence of this petitioner in a hope that, at least thereafter the developer would show some progress in the development of land and hence in 2005 they effected a family partition. The other ground of arguments advanced by counsel for respondents herein was that, this petitioner, being a developer though bound by the clause in the JDA that he 66 Com.A.S.47/2012 must complete the construction of commercial building within 190 days did not chosen to do so instead he started forcing the respondents to give consent for him to construct either a hotel or mall in the developers share for which these respondents never agreed and he also denied that, there was no consensus between these respondents for approving the plans furnished by this petitioner as petitioner never came up with any proper plan of construction so that these respondents can accept it. According to petitioner he got prepared a plan much earlier, and it was shown to the father of respondents and the said plan was prepared by one B.K.Giridhar. Tribunal also relied on the admission of R.W.1 i.e., the petitioner and in page 743 it has been observed that, on the basis of those admissions tribunal has opined that no steps were taken by this petitioner to prepare plans till termination of the agreement but anyhow, it was observed that a rough drawings were sent by this petitioner to Mr.Khaleeli for the first time to reveal 67 Com.A.S.47/2012 his intention to change the very nature of the structure. The Arbitral Tribunal by referring to clause 23.3 of the JDA came to an opinion that, this petitioner being a developer not even getting a plan as per the JDA did not got it approved by an expert and alone present it before the corporation authorities. Tribunal refused to accept the arguments of respondents that the delays for not obtaining the approved plan was due to delay caused by the claimants in clearing their litigations, obtaining Khatha etc.,
28. As per clause 1.4 of the JDA it was agreed between the parties that, they will jointly submit an application under Form 371 of the I.T.Act within 15 days from 01.01.1994 i.e., the date of agreement seeking issue of NOC from the appropriate authority seeking issue of NOC from the appropriate authority. In clause 13 of the JDA which dealt with obligations of these respondents who were the first party, it was agreed that, these respondents shall on the execution of JDA and payment of security 68 Com.A.S.47/2012 deposit after receipt of NOC from IT Department execute a registered GPA in favor of this petitioner empowering him to proceed with obtaining licenses and sanctioned plans and under clause 13.2 these respondents also duty bound to sign and execute all necessary applications, papers and documents authorizing this petitioner to do all the acts to perform the terms of agreement. If the documents relied by the petitioners are perused, Ex.C.5 is the I.T. clearance document issued by IT department on 28.02.1995 which shows that, immediately after execution of JDA on 01.11.1994 efforts were made by the parties to clear the Income Tax arrears due on Schedule Property.
29. Coming to the question of Khatha of the Schedule Property it is an admitted fact that, scheduled property earlier stood in the name of Late Shakhare Khaleeli the mother of respondents 1 to 5 and she died on 28.05.1991 and after her death as per Ex.C.10 Khatha was mutated in the name of respondents 1 to 5 on 05.04.2005. 69
Com.A.S.47/2012 Admittedly, JDA is dtd:01.11.1994 and the Khatha in respect of the scheduled property was mutated in the name of these respondents 1 to 5 on 05.04.2005 as per Ex.C.10 that means from 01.11.1994 till 05.04.2005 Khatha of Scheduled Property was not in the name of these respondents 1 to 5 so that, the petitioner can place documents before the Corporation for getting the plan approved. No explanation is offered by these respondents before the Arbitral Tribunal as to what prevented them from getting the Khatha changed into their names from the date of death of their mother in 1991 till 2005. This shows that, these respondents slept all along for a period of 14 years without getting the Khatha changed in their names and only in 05.04.2005 they entered into a partition and thereafter, got the Khatha changed in their names. The conduct of these repondents 1to 4 in not getting the Khatha of the schedule property changed in their names till 2005 and they were silent from 01.11.1994 till 05.04.2005 without terminating the 70 Com.A.S.47/2012 agreement immediately after 180 days from 01.11.1994. This conduct of respondents shows that, they were very much aware that, terms of JDA to construct commercial building in the scheduled property without obtaining Khatha was highly impossible and it seems for that reason they did not terminated the agreement immediately after 180 days from the date of agreement. The learned counsel for respondents while addressing his arguments before this court argued that, when Khatha of the scheduled property was in the name of Shakhare Khaleeli change of Khatha in the name of respondents was not at all an impediment for this petitioner to commence construction. It is most unfortunate to hear such arguments because, the respondents being an educated class of people must have forgotten or ignored the fact that after the death of their mother being legal heirs they should have either got the Khatha changed in all of their names or they should have entered into a family partition dividing their respective shares and 71 Com.A.S.47/2012 getting the Khatha of their shares respectively which they did not done till 2005. At least respondents could have terminated the agreement immediately after 180 days if in their opinion change of Khatha in their names was not at all required for getting the plans approved by the Corporation. The tribunal failed to consider the fact that the said plans were prepared in 1995 could not be fiven into effrect because of various events such as death of Mirza Gulam Hussain Namazie in 1998 and also due to continuation of IT attachment over schedule property till 1999-2000. The letter was addressed to these respondetns 1 to 4 on 17.4.2005 by this petitioner with complete set of plans with detailed note giving specifications and those plans were prepared by the architects shown in Ex-CF24,25,26 and also we can refer cross examination of RW-2 dated 12.11.2121, ExP-8 and letter of PA holder of respondents 1 to 4 dated 15.9.2005 confirmation of receipt of those plans and their statement that "agreement of all concerned would have to be 72 Com.A.S.47/2012 factored in and that it may take months to receive and then integrate the ideas and interest of all concerned with regard to the plans sent" under ExC-026. Hence, this arguments of learned counsel for respondents cannot be accepted. FurtherEx-R98 letter dated 9.10.2005 written by Zeebundh Khaleeli acknowledging receipt of plans and asking certain questions regarding proposed building on the basis of those plan corroborate the fact that, plans were duly sent by this petitioner which were not accepted by the respondents.
30. Coming to the question of other arguments of respondents both before the tribunal and this court, it was argued that, since Hiba is a oral gift there was impediment for this petitioner to go for construction without expecting change of Khatha and on the basis of Khatha standing in the name of Late Shakhareh. Before the tribunal these respondents have admitted that, at the instance of this petitioner the four daughters of Shakhareh who were the original owners entered their 73 Com.A.S.47/2012 names in the Corporation as per Ex.R.1 on 24.09.1998 as rightly argued by learned counsel for petitioner there is no explanation offered by the respondents as to why they did not terminated the agreement in 1998 itself when the petitioner insisted for family partition and change of Khatha.
31. Coming to the question of grounds that, failure on the part of petitioner in not obtaining plans for constructing commercial building in the scheduled property and the fact regarding clearance of Civil Litigation pending in respect of 34 sale deeds executed by Swami Shradhananada. The learned counsel for respondent argued that, since these sale deeds are marketable title never came in the way of this petitioner to commence his construction and the petitioner deliberately caused delay in obtaining plan for construction. In my opinion, if at all these 34 sale deeds which were executed by Swami Shradhananda in respect of portion of the schedule property was so irrelevant and 74 Com.A.S.47/2012 unimportant what made these respondents to add a clause in the agreement towards clearance of all civil litigations pertaining to these 34 sale deals is a question remained unanswered by the respondents. In this regard petitioner has produced Conciliation settlement deed dtd:18.06.1997, JDA is dtd:01.01.1994 and this Conciliation settlement was entered into between the respondents and 34 purchasers is dtd:18.06.1997 which shows that this Conciliation Settlement was entered into by these respondents with 34 purchasers after lapse of 180 days from the date of JDA dtd:01.01.1994. If at all these Civil Litigations pertaining to 34 sale deeds were not so important and they were never an impediment for this petitioner to go with the construction work what prevented these respondents to terminate the agreement prior to 18.06.1997 is a question which remained unanswered by the respondents. According to respondents herein, either I.T. clearance, change of Khatha in their names, partition between the 75 Com.A.S.47/2012 respondents , clearance of civil litigations were not at all an impediment for this petitioner to go with the construction work by getting the plan approved by City Corporation, they could have terminated the agreement immediately after 180 days from 01.01.1994 which they did not done. Hence the arguments of respondents that, the entire delay in developing the land was only on the part of this petitioner cannot be accepted.
32. Coming to the question of other aspects this court has already discussed about the letter communications between this petitioner and father of respondents 1 to 4, Mr.Akbar M.Khaleeli. If these letters are perused, till the agreement was terminated by the respondents by issuing notice dtd:20.09.2006 there were communications between the petitioner and respondents and there were continuous exchange of views regarding construction of hotel or mall in the scheduled property and till 20.09.2006 these respondents were continuously in touch with this petitioner by making letter 76 Com.A.S.47/2012 correspondences expressing their disagreement with the petitioners view for constructing a hotel in his 60% share. What prevented these respondents to terminate the agreement much earlier to 20.09.2006 i.e., immediately after completion of 180 days when his petitioner failed to perform his part of obligations as per the terms of JDA is never explained by the respondents both before the Arbitral Tribunal and also before this court. Since the land in question belong to Late Shakhare Khaleeli who died in 1991 i.e., much prior to the execution of this JDA Ex.C.3 it was the duty of these respondents to obtain title documents and furnish the same to the petitioner to get the plan approved. It is true that, a GPA was executed by these respondents in favor of this petitioner to obtain all title deeds and clear all the litigations pending in respect of scheduled property. As discussed above, respondents 1 to 4 entered into family partition on 02.02.2005 that means, after lapse of 11 years from the date of JDA and conciliation settlement entered into between the 77 Com.A.S.47/2012 respondents and 34 purchasers was on 18.06.1987 that means, after lapse of 3 years from the date of JDA and the letter correspondences made by Akbar M. Khaleeli father of respondents 1 to 4 shows till 2006 when the agreement was terminated the respondents had true intention to continue the relationship with this petitioner and they never had an intention to terminate the agreement. If we peruse clause 23 of the JDA which deals with breach and consequences it was agreed that, in the event breach by either party and the other party shall be entitled to specific performance and also entitled to recover all losses and expenses. In the event if this petitioner fails to complete the construction and deliver the constructed area after 180 days mentioned in the agreement, the first party i.e., the respondents shall be at liberty to terminate this agreement and get the balance work done by another developer. It was also agreed that, in case this petitioner fails to secure necessary license and plans from Corporation within the stipulated period 78 Com.A.S.47/2012 of 18 months from 01.01.1994, the respondents shall refund all the refundable deposit to the petitioner within 90 days from the date of cancellation of this agreement. If this clause 23 is perused these respondents have categorically agreed that, if the petitioner breaches the terms of JDA they shall terminate the agreement. If clause 23.1 is read in whole it was the intention of the parties that, agreement shall be terminated by these respondents immediately after completion of 180 days if the petitioner breaches the contract. When these respondents have agreed to clause 23.1 what prevented them to wait for a long time of almost 12 years to terminate the JDA and have also had continuous contact with this petitioner by making several communications and correspondences, is a million dollar question for which no explanation is offered by the respondents. The conduct of respondents in being so generous and soft heartedness towards this petitioner for a period of 12 years without terminating the agreement though they 79 Com.A.S.47/2012 had every right to do so clearly indicates their intention that, respondents were very well aware that, they were negligent in delaying the process of effecting partition between themselves, difference of opinions among respondents in giving consent to the petitioners plan of constructing a hotel or mall in the schedule premises, delay in getting the civil suits cleared and getting the original documents from one Damodar pertaining to those 34 sale leads etc. Admittedly, this Ex.C.3 JDA dtd:01.01.1994 is never an unilateral agreement but, it is a bilateral joint development agreement where both petitioner and respondents were vested with some reciprocal duties and obligations to perform within the stipulated time. If the letter correspondences and the documents are perused, the main delay was on the part of these respondents like delay in entering into partition which was entered in the year 2005, clearing the legal battle from 34 purchasers in the year 1997, getting Khatha changed into their names in 2005, as per 80 Com.A.S.47/2012 Ex.C.10 and not coming into consensus for giving consent to this petitioners plan to construct a hotel in his share of 60% in the schedule premises. If at all the intention of these respondents were honest, fair and clear they could have terminated the agreement as soon as they came to know that, respondent is forcing them to change the very nature of the property itself. Till the agreement was terminated under Ex.C.40, dtd:29.09.2006 these respondents though disagreed with the idea of this petitioner to construct a hotel in the schedule property but till issuance of termination notice they did not expressed their intention to terminate the JDA and they slept over their rights from 01.01.1994 and one fine day suddenly they were enlighten and they woke up i.e., on 20.09.2006 and realized that, there was delay only on the part of this petitioner in not getting the plans and constructing the schedule property as if till 20.09.2006 these respondents were not at all aware about the fact as to why this petitioner was causing delay 81 Com.A.S.47/2012 in constructing a commercial building in the schedule premises. Since Ex.C.3 JDA dtd:01.11.1994 was a bilateral agreement these respondents were equally duty bound to perform their part of obligations and they had every right to terminate the agreement immediately after 180 days from the date of agreement and as soon as they realize that, petitioner has failed to perform his part of obligations under the JDA. This conduct of respondents in delaying termination of the agreement for a period of 12 years and keeping silent for so many years without terminating the agreement has been just brush aside by the arbitral tribunal and these facts have been totally ignored and it was held that, the reason for termination of the agreement was solely because of the negligence on the part of this petitioner and there was no single negligence on the part of these respondents. It may be true and correct on the part of respondents that, petitioner did not produced plan as per the JDA but the only point that clinches the mind of this court is, why the 82 Com.A.S.47/2012 agreement was not terminated within 180 days from the date of agreement. The arbitral award if perused, same is unilateral and it is full of observations made only against this petitioner and his negligence and no discussions are made on the facts of negligence on the part of respondents in performing their part of terms under Ex.C.3 and the award though clearly shows the fact that, respondents were also failed to perform their part of agreement obligations under Ex.C.3, same has never been considered and discussed by the arbitral tribunal which amounts to patent illegality as contemplated under Section 34 of the Arbitral Tribunal. The arbitral tribunal had discussed in length about the intention of this petitioner to construct a hotel in the schedule premises for which these respondents disagreed. In my opinion, under JDA when parties agreed that, a commercial building has to be constructed and if at all the petitioner expressed his intention to construct a hotel in the developers share and if the respondents were having 83 Com.A.S.47/2012 disagreements for constructing a hotel, they could have resisted the intention of the petitioner at the first instance itself when this petitioner expressed his intention to construct a hotel but, these respondents kept quiet till 2006 making only letter correspondences and giving reply after reply to the letters of petitioners expressing their disagreement for constructing hotel in the scheduled premises. In my opinion, nothing much is required to say that, these respondents never had an intention to terminate the agreement for the reason that the petitioner was asking permission from them for changing the nature of the property. The tribunal has not at all taken the conduct of respondents in keeping quiet till 2006 without terminating the agreement for the reason that, the petitioner is intending to change the nature of property agreed to construct under JDA. In view of these observations, I hold that, the findings given by the arbitral tribunal on Issue No.6 holding that, termination of JDA was legal on the part of these 84 Com.A.S.47/2012 respondents amounts to patent illegality since respondents also were equally responsible for causing delay in executing the terms of JDA not only on the part of this petitioner.
33. The learned counsel for respondents while addressing his arguments argued that, before the arbitral tribunal petitioner herein has represented himself as M/s.Rustumji Developments and this petitioner represented himself as a partner along with respondents 3 to 7 who were also shown as partners of respondent No.1 which is a partnership firm. Arguments were advanced in length on the fact that, though 6 partners were there in respondent No.1 firm and though award was passed against respondents 1 to 7, this petition under Section 34 has been filed by only respondents 1 and 2 before the tribunal and not by other respondents which shows that, respondents 3 to 7 before the Arbitral Tribunal have indirectly admitted the award. In my opinion, these facts are not at all relevant to consider the 85 Com.A.S.47/2012 fact whether the arbitral award passed by the tribunal is liable to be set aside or not. It is not relevant whether this petitioner represented himself as an independent or a partnership firm as Arbitral Tribunal never considered these issues as these facts were never raised as a dispute between these respondents. If the conduct of respondents are perused from 01.01.9094 till 2006 they did not had any dispute as to whether this petitioner Rustumji is an independent developer or represents a partnership firm as a proprietor or managing partner what so ever and the respondents were only concerned with development of schedule property. When such being the case, the fact as to why other respondents before the tribunal have not challenged the award is totally irrelevant for disposing this Section 34 petition. Learned counsel for petitioner while addressing his arguments drawn the attention of this court to para 35 of the award where the tribunal has not given findings on issue number 4 Issue No.4 was framed as to "whether 86 Com.A.S.47/2012 these respondents respondents have complied in full with their obligations and then the JDA". If we peruse para 35 of the award it was mentioned "The 4th issue is whether the original owners - parties to the JDA, had complied in full with their obligations under the JDA? Our answer ought to be in the affirmative. It could be seen that, while considering Issue No.6, tribunal has come to conclusion that, petitioner has failed to perform his part of obligations under JDA and hence, tribunal answered Issue No.4 in favour of the claimants therein.
34. Coming to the question of arguments of petitioner that, tribunal had not given findings on Issue No.3 and 7, I have perused para No.33 of the award. Issue No.3 is framed as "Whether time is the essence of contract". This court is unable to understand in whose favor the tribunal casted the burden to prove whether, time is the essence of contract? This court is also confused to understand as to whether burden was on the petitioner or on the respondents to prove Issue No.4. 87
Com.A.S.47/2012 Since the agreement was terminated by these respondents themselves, this Issue No.3 ought to have been framed casting burden on the claimants to prove that, time was the essence of contract. Issue No.7 is also framed as "Whether, a period of 180 days ..........developments? Even there is no clarity while framing this issue as to the burden of proving this Issue No.7 was a claimant or respondent. Similarly, Issue No.8 and 9 are framed without clarity as to whose burden it is to prove these issues? If the findings given on Issue No.3 and 7 are perused, in para 33 the award of counsel for claimants before the tribunal has been reiterated and in page 77 it was "Almost same thing can be said in dealing with the third Issue" "Whether time is the essence of contract?". Besides this any answer on this question, in the light of the facts of the case, would only be of academic interest. This court is unable to understand the term expressed by the tribunal "What is academic interest?" The tribunal has 88 Com.A.S.47/2012 simply held that, 2nd respondent failed to comply the request of claimants in getting the plan prepared in 45 days. It can also be seen that, there is no observation by the tribunal as to whether, Issue No.3 and 7 are answered in favour of claimant or in negative. If we peruse the observations made in para 37 of the award while answering Issue No.8 tribunal expressed that, it is inclined to agree with the arguments of claimants but, nowhere in the said paragraph the tribunal has discussed about the documents of respondents and same shows an exparte opinion has been formed by the tribunal in favour of the claimants therein and there was no discussion made on the documents of this petitioner nor the fact of delay caused by the respondents and failure on their part of performing the terms of JDA has been discussed.
Counsel for RESPONDENT NO.5 relied on following decisions pertaining to specific performance of contract and specific relief act 1 (2019) 9 SCC 132 RITU Versus GROVER AND ANOTHER 89 Com.A.S.47/2012 2 2020 3 SCC 280 C.S.VENKATESH Versus A.S.C.MURTHY (DEAD BY LEGAL REPRESENTATIVES AND OTHERS 3 2020 (7) Kar.L.J. DEVARAJ Versus 415 SMT.DAYARATHINI AND OTHERS 4 2021 (6) Kar.L.J. C.VASUDEVAMURTHY 345(DB) Versus S.S.AMARNATH AND OTHERS 5 2011 12 SCC 658 BIHAR STATE ELECTRICITY BOARD Versus PATNA ELECTRIC SUPPLY COMPANY LIMITED AND OTHERS 6 2022 SCC Online U.N.KRISHNAMURTHY (SINCE 840 DECEASED) Thr. Lrs.
Versus A.M.KRISHNAMURTHY 7 ILR 2014 KAR 233 SMT.PADMINI RAGHAVAN Versus MR.H.A.SONNAPPA SINCE DEAD BY HIS LRS AND OTHERS 8 2023 SCC ONLINE UNIBROS SC 1366 Versus ALL INDIA RADIO 9 O.M.P.(COMM) POWER GRID CORPORATION 134/2023 OF INDIA LIMITED Versus RANJIT SINGH AND COMPANY LLP 90 Com.A.S.47/2012
35. In my opinion, the finding of the tribunal in answering Issue No.6 unilaterally itself amounts to patent illegality and hence, question of all the other observations made by the tribunal on other issues does not warrant any discussion as a result of which, the award passed by the majority of the arbitrators deserves to be set aside and forf this reason I hold that, the decisions relied by the learned counsel for R5 are not applicable to the case in hand.
36. Coming to the question of another important aspect of award directing these petitioners to jointly and severally pay these respondents a sum of Rs.15,44,75,100/- as damages with 18% per annum. I have further gone through the findings of tribunal on Issue No.13 and 14. From para 51 the tribunal has discussed as to how it arrived into a calculation to award damages in favour of these respondents. Para 51 of the award the tribunal observed that, claimants therein i.e., the respondents in all claimed a sum of 91 Com.A.S.47/2012 Rs.71,93,27,730/- in their claim petition where they have annexed statement of claim as Annexure-1 and the claimants have also furnished particulars of the break-up of the figures claimed. The tribunal observed that, according to respondents time was the essence of contract and the developer failed to perform his obligation and he should have completed the construction of the structure by may 1999 and delivered 40% of the office units to the original owners which the petitioner did not done and according to them, if at all those 40% would have delivered to them they would have earned sum of Rs.65,13,06,495/- and since the developer has failed to fulfil the obligation he is liable to pay damages from May 1999 to October 2006 to the tune of Rs.65,13,06,495/- and it was also held that, claimants before the tribunal can forfeit security deposit of Rs.1 Crore paid by this petitioner from this amount. The tribunal also observed that, this petitioner not only refused to comply with the demand of the respondents 92 Com.A.S.47/2012 but he asserted that the termination was illegal and he continues to have right as a developer of the schedule property. Tribunal observed that, the claimants therein have claimed ground rent by way of damages, mentioned in para -B of Annexure -1 of the claim petition.
37. In page 793 the tribunal observed that, as per Annexure-I submitted by the claimants in their claim petition they have claimed damages for the period from November 2006 till October 2008 which is the date of claim petition total a sum of Rs.4,66,50,907/- and this sum is arrived by the petitioner for two years period as total amount of ground rent @ rate of Rs.30/- per square feet, per month for the entire extent of land which amounted to Rs.23,76,550/-. Further, claimants have alleged that, though they issued another notice in March 2007 complaining that the developer was trying to obstruct them from using the schedule land and had put up a sign board after removing the owners name asserting his illegal occupation they claimed damages as 93 Com.A.S.47/2012 per item number 'C' of Annexure-I claiming Rs.3,13,70,328/- as damages for the period from November, 2006 to October, 2008. The tribunal observed that, the delay was only on the part of the petitioner in performing the terms of agreement and by observing so, tribunal though declined to accept the claim of claimants claiming damages for the period prior to termination of notice, at the same time held, they are entitle for damages for the period after the termination of notice. The tribunal relied on the decision rendered by Hon'ble Apex Court in; ONGC Corporation .Vs. Saw Pipes Ltd., reported in; (2003)5 SCC 705 along with Sec.73 and 74 of Contract Act held that, in the present case breach of the terms of contract was only by the present petitioner who was the developer and the breach was serious in nature and it was held that, the developer prolonged the issue and bent upon establishing hotel or mall contrary to terms of JDA and taking all these factors into consideration tribunal held that, respondents action 94 Com.A.S.47/2012 in forfeiting these petitioners refundable deposit of Rs.1 Crore as legal and the said amount was considered as damages up to the date of termination and further, the tribunal calculated the damages from November, 2006 till the end of march 2012 and held that, these respondents are entitled for total damages of Rs.15,44,75,100/- with interest at the rate of 18% per annum.
38. The tribunal, while discussing on awarding damages referred to clauses 23.2, 6.4 and 6.5 which shows that, the amount of refundable deposit was available for appropriation by owners if the developer, having started construction of the structure makes delay in handing over the constructed portion of the owners share. I have gone through these clauses of JDA. In clause 6.4 and 6.5 it was agreed that, in the event of any delay in completing the construction for reasons other than what are stated in the above clauses the second party i.e., the petitioner herein shall be entitle to have 6 months grace period to complete the construction 95 Com.A.S.47/2012 of the owners constructed area on payment of Rs.6,000/- per day of delay by way of damages and first party shall be entitle to appropriate the same out of refundable deposit and pay the balance deposit against the delivery of owners share, under clause 6.5 it was agreed that, if this petitioner defaults in completing construction of the owners constructed area within 6 months grace period referred to in clause 6.4 the respondents herein were at liberty to get the work done by other developers and deduct the said amount by refundable deposit paid by this petitioner. If these 2 clauses i.e., 6.4 and 6.5 are perused, the same are applicable only in the event if this petitioner had commenced the construction. Similarly clause 23.2 also provided that, if this petitioner failing to complete the construction and deliver owners share after the period mentioned in this agreement, the respondents shall be at liberty to terminate this agreement. Nowhere in these 3 clauses the parties have agreed that, if the construction itself not commenced petitioner shall 96 Com.A.S.47/2012 pay the respondents rent at the rate of Rs.30/- per Sq. Ft. per month to the tune of Rs.23,76,550/- per month.
39. If we peruse the averments of claim petition before the tribunalabove observations made by the arbitral tribunal while awarding the damages, it is very much clear that, the claimants themselves have claimed damages of Rs,71,93,27,73,00 and in this regard issue no 13 and 14 were also framed. The calculations that was relied the tribunal was solely on the basis of Annexure-I of the claim petition which was prepared by the claimants / respondents before the tribunal. What caused shock to the conscience of this court is, how these respondents while filing their claim petition arrived to such calculations when no such clause in JDA dtd:01.11.1994. More Shocking is the order of the tribunal in awarding the entire damages claimed by the claimants in Annexure-1 that too without having any documentary proof and beyond the scope of JDA since nothiing is agreed between the parties regarding manner 97 Com.A.S.47/2012 in which damages has to be calculated if there is breach on the part of this peitioner. In plethora of decisions relied by both parties to this petition, Hon'ble Apex Court has held as to under what grounds the Arbitral award can be set aside by the civil court. As rightly argued by learned counsel for petitioner, awarding of such a huge amount of damages contrary to the clauses of JDA dtd:01.11.1994 is nothing but an award passed beyond the scope of the very JDA which amount to patent illegality and against to principle of Morality and Justice. This court feels that, nothing more is required to shock the conscience of this court after observing the damages awarded by the tribunal and also the reason for arriving into the calculation of the damages in the absence of a single piece of document. The tribunal has awarded the damages only on the basis of prayer made in the claim petition without having any substantive piece of evidence.
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40. At this stage I would like to discuss about the decisions relied on both learned counsel for petitioner and respondents which are as follows;
CITATIONS OF PETITIONER 1 2018(6) SCC 287 BOARD OF CONTROL FOR CRICKET IN INDIA Versus KOCHI CRICKET PRIVATE LIMITED AND OTHERS 2 2019 SCC ONLINE SC 1520 Hindustan CONSTRUCTION COMPANY LIMITED AND ANOTHER Versus UNION OF INDIA AND OTHERS 3 2009 17 SCC 796 FIZA DEVELOPERS AND INTER-TRADE Versus AMCI (INDIA) PRIVATE LIMITED AND ANOTHER 4 (2018) 9 SCC 49 EMKAY GLOBAL FINANCIAL SERVICES LIMITED Versus GIRDHAR SONDHI 5 (2019) 9 SCC 462 CANARA NIDHI LIMITED Versus M.SHASHIKALA AND OTHERS 6 (2015) 3 SCC 49 ASSOCIATIVE BUILDERS Versus DELHI DEVELOPMENT AUTHORITY 7 2023 SCC ONLINE SC UNIBROS Versus 1366 ALL INDIA RADIO 99 Com.A.S.47/2012 8 2024 SCC ONLINE DEL POWER GRID CORPN. OF 5435 INDIA LTD.
Versus RANJIT SINGH & CO.
List of citations filed by defendants No.1 to 3 I. NATURE OF JOINT DEVELOPMENT AGREEMENT
1) 2005 (5) SCC 162-K Raheja Development Vs. State of Karnataka Developer has only a possessory interest and right to construct and is not an owner of the property - Paras 17 to 20
2) 2008 (10) SCC 345 - Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd.& another Landowner is "consumer" vis- à-vis "builder" - Paras 16 to 38 II. NATURE OF POSSESSION OF AN AGENT:
3) 1989 (4) SCC 603 - Southern Roadways Ltd., Madurai Vs. S.M Krishnan Revocation of agency terminates agent's right of possession of property - Paras 12 to 22
4) 2011 (3) SCC 710-Bharat Petroleum Corporation Ltd.
Vs. Chembur Service Station Principal need not sue to recover possession of property from agent. Principal is entitled to 100 Com.A.S.47/2012 injunction to prevent entry to property - Paras 27 to 39 and 46 III. INTERPRETATION AND SPECIFIC PERFORMANCE OF CONTRACT:
5) AIR 2001 SC 1462 - Her Highness Maharani Shantidevi P. GaikwadVs. Savjibhai Haribhai Patel & others Terminated agreement not specifically enforceable, contract for construction cannot be specifically enforced, when agreement is unambiguous statements made by parties not relevant -
Paras 12 to 66 IV. FORFEITURE OF SECURITY DEPOSIT:
6) AIR 1997 SC 2701 - State of Gujarat Vs. Dahyabhai Zaverbhai When work abandoned by contractor, forfeiture of security deposit not illegal - Paras 4 to 6 V. DAMAGES / PENALTY UNDER CONTRACT:
7) AIR 1963 SC 1405 - Fateh Chand Vs. Balkishan Dass Paras 8 to 19
8) 1969 (2) SCC 554 - Maula Bux Vs. Union of India Paras 4 to 11
9) 2003 (5) SCC 705 - Oil & Natural Gas Corporation Ltd.
Vs. Saw Pipes Ltd. Paras 32 to 69 101 Com.A.S.47/2012
10) 2011 (10) SCC 300- Phulchand Exports Ltd. Vs. O.O.O. Patriot ,Paras 31 to 38 Citations furnished by advocate for defendant No.4 and 5 SL. PARTICULARS PROPOSITION/ PAGE NO. RELEVANT NO.
PARAS
1. Union of India V. PAM The Supreme 22-27 Development Private Court affirmed Limited that a party participating in (2014) 11 SCC 366 arbitration proceedings (Hon'ble Supreme without objecting Court of India) to the arbitrator's jurisdiction or Relevant Para: 17 appointment is deemed to have waived the right to raise such objections later.
2 Vistrat Real Listates The High Court of 28-33
Private Limited v. Delhi held that
Asian Hotels North once a valid
Ltd. arbitration
agreement exists
(2022) SCC OnLine between the
Del 1139 (Hon'ble parties, the issue
High Court of Delhi) of whether a
third party needs
Relevant Para: 14 to be impleaded
in the
proceedings is
covered by the
Doctrine of
102
Com.A.S.47/2012
Competence84-
13560-8342-
5934-4728-3322-
27PAGE NO.136-
152-Competence.
The arbitrator
authority to has
the determine
whether the
involvement of a
third party is
necessary for the
arbitration
proceedings.
3 Surya Alloy Industries The Delhi High 34-47 Ltd. v. The Delhi High Court emphasized Court Union of India that once parties and Anr. agree to arbitration, they (2023) SCC OnLine must submit to Del 8149 (Hon'ble the jurisdiction High Court of Delhi) of the arbitral Relevant Para: 11, 12 tribunal for & 13 resolving their disputes. Despite the respondents' objections and claims that pre-
arbitral
procedures were
not followed, the
court ruled that
the disputes
should be
adjudicated by an
arbitral tribunal,
referencing legal
precedents to84-
103
Com.A.S.47/2012
84-13560-8342-
5934-4728-3322-
27PAGE NO.136-
15213560-8342-
5934-4728-3322-
27PAGE NO.136-
152 support that
once arbitration
is agreed upon,
parties cannot
later resist it by
relying on
contractual pre-
arbitral
procedures.
4. I.S. Sikandar vs. K. In the absence of 42-59 Subramani & Ors., a declaratory relief to declare (2013) 15 SCC 27 termination being (Hon'ble Supreme bad in law, Court of India) cannot seek a Relevant Para - 37 relief for specific Performance
5. M/s New Bihar Biri Parties cannot 60-83 Leaves Co. & Ors. vs. approbate and State of Bihar & Ors. reprobate on (1981) 1 SCC 537 terms of a Contract.
(Hon'ble Supreme
Court of India)
6 Anglo American The ambit of 84-
Metallurgical Coal Pty. "Public Policy" 135
Ltd vs. MMTC Ltd. cannot be applied
when the
(2021) 3 SCC 308 Arbitrator has
considered the
(Hon'ble Supreme evidence on
104
Com.A.S.47/2012
Court of India) record, and when
the Arbitrator's
Relevant Para-46, 48, approach is not 49 perverse, the Award cannot be interfered with.
7 Welspun Speciality Damages awarded 136- Solutions Limited vs. by the Tribunal 152 ONGC, cannot be interfered if the (2022) 2 SCC 382 : same was 2021 SCC awarded after due consideration and OnLine SC 1053 the interference (Hon'ble Supreme of the Court Court of India) under Section 34 is very limited.
Relevant Para - 32, 33, 34, 42
8. Sughar Singh vs. Hari Grant of Specific 153-
Singh Performance is 170
discretionary and
(2021) 17 SCC 705 not automatic
and the
(Hon'ble Supreme discretion ought
Court of India) to be exercised
judiciously,
Relevant Para-Para-28 soundly and
reasonably
9 S.V. Samudram v. The Supreme 171-
State of Karnataka Court reaffirmed 192 and Anr. that courts have no jurisdiction to (2024) 3 SCC 623 modify arbitral awards under (Hon'ble Supreme Section 34 of the Court of India) Arbitration and 105 Com.A.S.47/2012 Conciliation Act.
Relevant Para: The court 21,22,27,32, 34 & 40 emphasized that any interference is limited to setting aside the award on specific grounds but does not allow modification.
This case
reinforced the
narrow scope of
judicial review
over arbitral
awards.
10 Konkan Railways Courts ought not 193-
Corporation Limited to interfere with 207
v. Chenab Bridge the arbitral award
Project Undertaking in a casual and
cavalier manner.
(2023) 9 SCC 85 The mere
possibility of an
(Hon'ble Supreme alternative view
Court of India) on facts or
interpretation of
Relevant Para: 19,22, the contract does 29 not entitle courts to reverse the findings of the Arbitral Tribunal.
The jurisdiction under Section 34 of the Act is exercised only to see if the Arbitral Tribunal's view is 106 Com.A.S.47/2012 perverse or manifestly arbitrary.
Section 34
jurisdiction will
not be exercised
merely because
an alternative
view on facts and
interpretation of
contract exists.
11 Bharti Airtel Ltd. Vs. Scope of Section 208-
Jamshed Khan and 34 - Cannot 223
Anr 2023 SCC OnLine modify Award.
Del 7201: (2024) 308
DLT 590 (Hon'ble High
Court of Delhi)
Relevant Para 33, 34,
36, 48, 49, 50, 51, 52
12. Batliboi Scope of each 224-
Environmental sub-section under 259
Engineers Limited v. Section 34. The Hindustan Petroleum court cannot Corporation Limited & interfere with the anr award and substitute its (2024) 2 SCC 375: view with the 2023 award and interpretation (Hon'ble Supreme accepted by the Court of India) arbitrator, the reason being the Relevant Para-34, 35, court does not sit 36, 38, 39, 41 in appeal over the findings and decision of the 107 Com.A.S.47/2012 arbitrator, while deciding an application under Section 34 of the A&C Act.
13. Project director, The Supreme 260-
National Highways No. Court held that 293 45 E and 220, Section 34 of the National Highways Arbitration Act Authority of India v. offers limited M. Hakeem and Anr. grounds for setting aside an (2021) 9 SCC 1 award, aligning with the (Hon'ble Supreme UNCITRAL Model Court of India) Law to ensure minimal court Relevant Para: 42,43 interference in & 48 arbitration. 14. Maharashtra State The Supreme Electricity Court upheld the 294- Distribution Company Arbitral 339 Limited v. Datar Tribunal's award, Switchgear Limited affirmed by both and Ors. the Single Judge and Division Bench, noting no legal question was involved, and rejecting the Appellant's attempt to re- argue the case. 15. Reliance The Supreme 340-
Infrastructure Limited Court ruled that 404 v. State of Goa the High Court (2024) 1 SCC 479 exceeded its 108 Com.A.S.47/2012 jurisdiction by (Hon'ble Supreme reassessing the Court of India) tribunal's award and evidence.
Relevant Para: 78
CITATIONS FROM RESPONDENT No.4
Seri Particulars Proposition / Page
al Relevant Para Nos.
No.
16. Kinnari Mullick & Scope of Section 1-9 Anr. vs. 34(4) of the Act Ghanghyam Das Damani, Para-15, 16 (2018) 11 SCC 328 17 The Project Cannot modify 10-64 Director, NHAI vs. an Award under M. Hakeem & Anr., Section 34 of the Act.
Civil Appeal No.
2756/2021 Para-46
(Supreme Court)
18 Punjab State Civil Court does not 65-70
Supplies sit as an
Corporation Ltd. & Appellate Forum Anr. vs. M/s proceedings Ramesh Kumar & under Section 34 Co, and cannot award the claim Civil Appeal No. of the 6832/2021 Respondent.
109
Com.A.S.47/2012 Para-7, 11, 12 19 I.S.Sikandar vs. K. In the absence 71-
Subramani & Ors ot a declaratory 120
relief to declare
Civil Appeal No. termination bad
7306/2013 in law, cannot
make a relief for
Specific
Performance.
20 M/s New Bihar Biri Parties cannot 121-
Leaves Co. & Ors, approbate and 144
vs. State of Bihar & reprobate on
Ors., terms of a
(1981) 1 SCC 537 Contract
21. Shenbagam & Guidance of the 145-
Ors.vs. KK Hon'ble 145- 170
Rathinavel, Courts on when
Specific
Civil Appeal No. Performance to
150/2020 be granted.
22. Anglo American The pre- 171-
Metallurgical Coal amended 236
Pvt Ltd vs. MMTC provisions of the
Ltd., Arbitration and
Concilaition Act,
Civil Appeal No. 1996 would
4083/2020 apply and Public
Policy under
Section 34 of the
Act, explained.
Para-41
110
Com.A.S.47/2012
23 Welspun Speciality Concept of 237-
Solutions Limited Damages 266
vs. ONGC, referring to
ONGC vs. Saw
Civil Appeal No. Pipes
2826-2827/2016
Para - 32, 33
24. Delhi Airport Metro Principles of 267-
Express Pvt Ltd. Vs. Section 34 of the 320 Delhi Metro Rail Act - reiterated.
Corporation Ltd., Para-21, 22, 23, Civil Appeal No. 24, 25, 26, 42 5627/2021
25. Sughar Singh vs. Scope of grant of 321-
Hari Singh, Specific 344 Performance Civil Appeal No. Para-10 5110/2021 26. Sushil Kumar Concept of when 345- Agarwal Meenakshi Specific 363 Sadhu & Ors., Performance can be granted in a (2019) 2 SCC 241 Joint Development Agreement Para-13, 18, 31 27 M/s Padia Timber Cross Offer is 364- Company vs. The not a Contract 387 Board of Trustees of Vishakhapatnam Port Trust Through its Secretary, Para - 56, 57, 58 111 Com.A.S.47/2012 Civil Appeal No. 7469
28. South East Asia Scope of Section Marine Engineering 34 proceedings 388-
and Constructions 409 Ltd. (Seamec Ltd.) Para-13, 15 vs. Oil India Limited, Civil Appeal No.673/2012 29. PSA SICAL Scope of 410- Terminals Pvt. Ltd. proceedings 492 Vs. The Board of under Section 34 Trustees of V.O of the
Chidambranar Port Arbitration Act.
Trust Tuticorin and Ors. -
Relevant Para-
Civil Appeal Nos. 83-87
3699-3700 of 2018
30. S.V.Samudram v. An award passed 30,
State of Karnataka by the Arbitrator 31, & Anr. cannot be 33, Supreme Court of modified. 34, India 36, Civil Appeal 37, No.8067/2019 39, 2024 SCC Online 41, SC 19 42, 43, 48, 61 112 Com.A.S.47/2012 31 2023 SCC ONLINE UNIBROS SC 1366 Versus ALL INDIA RADIO 32 O.M.P.(COMM) POWER GRID CORPORATION OF 134/2023 INDIA LIMITED Versus RANJIT SINGH AND COMPANY LLP
41. I have carefully perused all the decisions relied by both petitioner and respondents mentioned above. Hon'ble Apex Court in a case of Associate Builder .Vs. Delhi Development Authority reported in; (2015)3 SCC 49 has observed that, an Arbitral Award could be set aside if it is contrary to a-
b-
c- Justice or morality, or
d- If it is patently illegal
42. It is also observed that, the illegality must go to the root of the matter and if the illegality is of trivial nature, it cannot be held that, award is against public policy. Award could also be set aside if it is so unfair 113 Com.A.S.47/2012 and unreasonable that, it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void in para 22 Hon'ble Apex Court while relying on decision rendered by the same court in Renusagar Power Co. Ltd., V.S. General Electric Co., 1994 Supp(1) SCC 644 and re-iterated para 59 of the Judgment where it was observed that, "such patent illegality, must go to the root of the matter. The public policy violation, indisputably, should be so unfair and unreasonable as to shock the conscience of the court. Where the arbitrator, however, has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute would come within the purview of Sec.34. In para 24 of the Associate Builders case Judgment Hon'ble Apex Court while relying on Delhi Development Authority Vs. Sharma's case summarized the law as mentioned in para 24 and re- iterated para 21 of the Judgment in Delhi 114 Com.A.S.47/2012 Development Authority case their in para 21 (d) it was held that, one of the principles to set aside the Award as (d) it is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that, it is patently illegal and opposed to the public policy of India.
43. With these principles and statutory provisions, particularly Section 34 (2) of the Act, let us consider whether the arbitrators were justified in granting the relief claimed in the claim petition of the claimants or whether the petitioner having filed the present petition under section 34 has made out reasonable grounds to set aside the award in respect of those clients passed against him and rejection of his counterclaim.
44. In the light of above Judgments if the present case is perused no doubt JDA was entered into between the parties on 01.11.1994 which was a bilateral and 115 Com.A.S.47/2012 reciprocal agreement and not an unilateral one. Hence, there were obligations on both 1st party and 2nd party to the agreement to do and not to do certain acts and perform their obligations provided exclusive right to the respondents herein to terminate the agreement as soon as this petitioner failed to perform the terms of agreement within 180 days. Since the contract was silent as to from which date 180 days time has to be taken into consideration, both parties have continued the process of fulfilling their respective demands under the agreement and either of them chosen to terminate the agreement till 2006 when suddenly the respondents terminated the JDA making allegation against the petitioner for causing delay in obtaining plan, license etc. At this stage I would like to relay on Sec. 63, 64, and 65 of Indian Contract Act which reads as follows;
63. Promisee may dispense with or remit performance of promise. -- Every promisee may dispense with or remit, 116 Com.A.S.47/2012 wholly or in part, the performance of the promise made to him, or may extend the time for such performance,lor may accept instead of it any satisfaction which he thinks fit.
64. Consequences of rescission of a voidable contract. -- When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is the promisor. The party rescinding a voidable contract shall, if he had received any benefit thereunder from another party to such contract, restore such benefit, so far as may be, to the person from whom it was received.
65. Obligation of person who has received advantage under void 117 Com.A.S.47/2012 agreement, or contract that becomes void. -- When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it.
45. If we peruse the above provisions of law regarding contracts, the conduct of the respondents in continuing the agreement without termination the same for almost 12 years, shows that though they had an option to recind the same, they did not recind it and as per Section 64 the petitioner herein who is other party is not expected to perform any promises therein contained in the agreement to which he is a party.
46. This court has already discussed about the reciprocal negligence and delay mainly caused by these 118 Com.A.S.47/2012 respondents which did not allowed the petitioner to perform his part of obligations. Further, the conduct of respondents in delaying obtaining Khatha, entering into family partition, lifting of civil litigations, obtaining original sale deeds all are the obligations on the part of respondents to be fulfilled within 180 days from the date of agreement but, as discussed above, family partition itself took place in 2005 i.e., after lapse of 11 years from the date of agreement. Since the Hon'ble Arbitral Tribunal did not considered these facts but, considered only the arguments of claimants and gone beyond the scope of JDA and awarded a huge sum of money as damages amounts to patent illegality and same shocks the conscience of this court which compels this court to set aside the majority Arbitral Award passed against this petitioner. However, the Arbitral Tribunal rightly held that, petitioner herein has not produced any proof to prove he is entitle for counter claim. Since this court has come to the opinion that, award passed by the majority 119 Com.A.S.47/2012 arbitrators has to be set aside, question of discussing further on the counterclaim of the petitioner does not arise as this court cannot partly set aside the Award or remand the matter to the Arbitral Tribunal. Since, this court has formed an opinion to set aside the award passed by the majority of the Arbitrators, the Award passed by the learned Arbitrator Sri.B.N.Krishnan which is a minority award which was passed in favour of this claimant wherein claimants / respondents herein were directed to refund Rs.1 Crore and another Rs.50,00,000/- by way of re-reimbursements to this petitioner with interest at the rate of 18% per annum cannot be accepted as this court cannot partly set aside the award by upholding the minority award passed by single arbitrator. In view of all these facts I hold petitioner has made out reasonable grounds to allow this petition filed under Sec.34 of Arbitration and Conciliation Act 1996. Accordingly, I answer Point No.1 in the "Affirmative".
120
Com.A.S.47/2012
47. POINT NO.2:- for the aforesaid reasons, i proceed to pass the following:
ORDER The petition filed by the petitioner under Sec.34 of Arbitration and Conciliation Act, 1996 is hereby allowed. Consequently the impugned award dtd:16.04.2012 passed by the Arbitral Tribunal is hereby set aside.
Office to issue Soft copy of this Judgment to both sides by e-mail if furnished. (Dictated to the Stenographer, typed by her, corrected and then pronounced by me in open Court on this the 11th day of November,2024).
(ROOPA K.N.) LXXXVII ACC & SJ (CCH-88) (Commercial Court) Bengaluru