1. This application under Section 34 of the Arbitration and Conciliation Act, 1996 has been taken out by Sri A.Sridhar Lakshman to set aside the award dated 27.6.2001 passed by the Arbitral Tribunal comprising Justice A.Gopala Rao, Justice T.N.C.Rangarajan, former Judges of this Court, and G.Manohar, Advocate.

2. Background facts, in a nutshell, leading to reference of the dispute to the Arbitral Tribunal are:-

M/s.Merbanc Financial Services Limited (hereinafter referred to as "the company") is absolute owner of 1853.80 square yards in Plot No.7, Sector 1, HUDA Techno Enclave in Sy. No.64 of Madhapur village, Sherilingampally, Ranga Reddy District. The applicant approached the company for development of the said plot into a multi-storied building complex. They entered into a development agreement-cum-General Power of Attorney on 6.1.1999 (for brevity, "agreement"). Under the said agreement, the applicant was authorized to construct a multi- storied building complex on the said plot. The company has to secure exemption under the provisions of Urban Land (Ceiling and Regulation) Act, 1976. As per Clause 3 of the agreement, the applicant shall invest his capital and construct the building complex as per mutually agreed plan and building specifications ensuring that the design and construction shall be sound and that it should confirm to statistical engineering practices. The applicant has to deposit security amount of Rs.20.00 lakhs. He paid a sum of Rs.5 lakhs towards security deposit at the time of the execution of the agreement. The balance security deposit of Rs.15 lakhs is payable within a fortnight from the intimation of fact of obtaining exemption order from the Urban Land Ceiling Authority by the company. As per Clause (14) of the agreement, the company has to liquidate its liability to Andhra Pradesh Industrial Development Corporation ("APIDC") and obtain original documents of title within five months from the date of the agreement. Some delay occurred in getting clearance from the Urban Land Ceiling Authority by the company. The applicant claims to have spent considerable amount in carrying out the developmental activity pursuant to the said agreement. The company took the stand that the applicant failed to pay balance security deposit amount of Rs.15 lakhs as per Clause 3(d) of the agreement and thereby, it issued letter dated 18.4.2000 terminating the agreement.

3. Thereupon, the applicant filed O.S.No.73 of 2000 on the file of the I Additional District Judge, Ranga Reddy District, seeking specific performance of the agreement dated 4.1.1999. The applicant also filed I.A.No.1185 of 2000 in O.S.No.73 of 2000 on the file of the I Additional District Judge, Ranga Reddy District under Order 39 Rules 1 and 2 C.P.C for grant of temporary injunction. Whereas the Company filed O.P.No.415 of 2000 on the file of the District Judge, Ranga Reddy District under Sections 5, 8 and 9(d) and (e) of the Arbitration and Conciliation Act, 1996 (for brevity, `the Act') seeking injunction against the applicant, pending reference to and resolution of the disputes by arbitration, from dealing with the petition schedule property or encumbering the same or changing the nature thereof, either by construction or demolition, pending decision of the arbitrators. The Company also filed I.A.No.1310 of 2000 in O.S.No.73 of 2000 on 27.4.2000 for stay of the suit. The Court stayed the suit and referred the parties to arbitration. The company nominated G.Manohar as arbitrator and the applicant nominated Justice T.N.C.Rangarajan, a former Judge of this Court, as arbitrator. The two arbitrators requested Justice A.Gopala Rao, a former Judge of this Court, to be Chairman of the arbitral Tribunal. Thus, arbitral Tribunal came to be constituted.

4. The company submitted its claim before the arbitral tribunal. The Company contended before the arbitral tribunal that it terminated the agreement in view of the defaults of the applicant and thus, the po