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Bombay High Court
Anoop V. Mohta
OBEROI CONSTRUCTIONS PVT.LTD -Appeallant
Versus
WORLI SHIVSHAHI CO-OP.HOUSING -RESPONDENTS
Arbitration Petition (Lodg.) 233 Of 2007
Decided On: 07/11/2007
Arbitration - Initialled MOU - Arbitration and Conciliation Act, 1996, Section 9
Fact of the Case:
The petitioners invoked section 9 of the Arbitration and Conciliation Act, 1996 based on an initialled draft of Memorandum of Understanding (MOU) between the parties. The respondents denied the existence of a binding contract based on the MOU and correspondences.
Finding of the Court:
The court found that there was no binding agreement between the parties as the initialled MOU was subject to the signature of the parties and approval by the members of the society. The court dismissed the petition and vacated interim orders.
Issues: Existence of a binding contract based on the initialled MOU, invocation of section 9 of the Arbitration Act
Ratio Decidendi: The court held that the initialled MOU was not a final agreement and required approval from the society members. It also stated that there was no arbitration clause to invoke section 9 of the Arbitration Act.
Final Decision: The petition was dismissed, and interim orders were vacated. No costs were awarded.
( 1 ) THE petitioners have invoked the provision of section 9 of the Arbitration and Conciliation Act, 1996 (for short, "arbitration Act") based on a initialled draft of Memorandum of Understanding (MOU ).
( 2 ) THE petitioners averred that on 1st march, 2004 MHADA gave an in-principle approval for handing over to the respondents approximately 11,827. 74 (approximately) square meters of land as more particular described in the petition.
( 3 ) IN April, 2004, the respondents had invited bids from various developers for redevelopment under Development Control Regulation no. 33 (9) of the Development Control regulations read with MHADA Act.
( 4 ) IN April-May, 2004, the petitioners submitted their offer to acquire rights, title and interest in respect of the property of the respondents and deposited a sum of Rs. 2,00,00,000/- (Rupees Two crores only) with the respondent. Various other developers also submitted their offers. Meetings were held between the office bearers/representatives/ members of the respondents and the representatives of the petitioners. The respondents requested certain revisions in the offer submitted by the petitioners. The petitioners submitted various revised offers from time to time.
( 5 ) ON 7th August, 2005, the petitioner's offer was accepted. The petitioners were then granted rights in terms of the petitioner's offer dated 30th June, 2005 read with their letters dated 22nd July, 2005, 23rd August, 2005, 19th September, 2005, 30th September, 2005 and 25th October, 2005.
( 6 ) ON 6th December, 2005, the respondents by their another letter dated 6th December, 2005 informed the petitioner that they were in process of drafting terms and conditions to be incorporated in the MOU and requested the petitioner to send them the proposed lay out and floor plan. The petitioners by their letter dated 6th December, 2005, accepted the grant of rights by the respondents to the petitioners.
( 7 ) ON 8th January, 2006, the respondents got prepared a MOU and by their letter dated 8th January, 2006 forwarded the same to the petitioners for their approval and requested for their comments.
( 8 ) ON 22nd January, 2006 some of the respondents' members also visited the projects undertaken by the petitioners on 22nd January, 2006 and expressed satisfaction with the projects done or being done by the petitioners. Floor plans of the flats were also discussed with the members of the respondents. Thereafter various meetings were held and discussions took place between the representatives of the petitioners and the respondents for the purpose of crystalizing the detailed terms and conditions to be incorporated in the MOU.
( 9 ) IN January-October, 2006, the petitioners appointed architect being Mr. Pravin naik who had commenced liasioning with mhada, the Urban Development Department of the Government of Maharashtra and the Municipal Corporation. Architects from singapore, viz. Subrana were appointed as design Architect for planning and designing the buildings. A meeting was held on 7th February, 2006 at the office of Architect Shahshi Prabhu where the typical floor plan was explained. In February, 2006, a detailed survey of the plot was done in order to undertake the process of architectural planning and designing. In or about March, 2006, drawing showing different stages of the development was prepared and explained. At the request of the respondents, Sterling Engineering and Consultancy Services Pvt. Ltd. studied the scheme and by their letter dated 16th March, 2006 issued their confirmation to work on their project. Larsen and Turbo ltd. vide their letter dated 16th March, 2006 accorded their consent to the construction of the buildings. The Managing Committee members of the respondents visited the Head office of the petitioners and had meeting with the representatives from the architect and the engineering department. On 15th April, 2006, various sketches and drawings were sent to the respondents. The drawings w
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