Back
High Court of Judicature at Bombay
THE HONOURABLE MR. JUSTICE A.M. KHANWILKAR
Della Developers Private Limited
Versus
Noble Organics Private Limited & Another
ARBITRATION PETITION NO.528 OF 2008
Decided on : 04-01-2010
In the unreported decision, this Court has restated the position that decree for specific performance of the contract can be granted, provided three conditions specified under Section 14(3)(c) of the Specific Relief Act are satisfied. If any one of the condition is not satisfied, the question of granting decree of specific performance does not arise. Insofar as present case is concerned, out of the three conditions specified in Section 14(3)(c), prima facie, from the terms of the agreement as executed between the parties, there is nothing to indicate that the petitioners in pursuance of the contract, was put in possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. There is no express clause in the development agreement which puts the petitioners/developer in possession of the property. Sub-clause (e) of Clause 11 of the agreement would be useful for our purpose. Clause 11 pertains to the activities to be performed by the developer and to keep the respondents informed about the same. Clause (e) thereof provides that the developer may enter upon the land for the purpose of construction/development. This clause would come into play only when the construction development activity was to in fact commence. At that stage, the developer would enter upon the land for the purpose of construction/ development. Assuming that the petitioners were to assert that they have already taken over possession of the land and/or entered upon the same, that fact has not been informed to the respondents as is required by clause 11 of the agreement. Suffice it to observe that since the petitioners in pursuance of the contract have not obtained possession of the land either of the whole or any part thereof, one of the condition specified in Section 14(3)(c) is not fulfilled that would militate against the petitioners. Insofar as the argument advanced relying on the decision of the Apex Court in the case of Her Highness Maharani Shantidevi P.Gaikwad, that the Court shall not grant decree of specific performance if it were to involve continuous supervision is concerned that aspect can be answered at the end of the trial after the entire evidence becomes available and the Court would then examine as to the nature of relief that requires to be granted in the matter. Considering the above, the question of interfering with the prima facie finding and the ultimate conclusion reached by the sole arbitrator in rejecting the application does not arise at all. The sole arbitrator, in Court opinion, has also correctly found that the balance of convenience was titled in favour of the respondents in the fact situation of the present case. Even for that reason, the petitioners would not be entitled for any interim relief. Accordingly, this petition ought to fail. The same is dismissed with no order as to costs.
1. This Petition under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act’) takes exception to the order passed by the sole Arbitrator dated 1st August 2008 on Application dated 14th April 2008 filed under Section 17 of the Act in the Arbitration Dispute between the parties herein.
2. Briefly stated, an Agreement styled as Development Agreement was executed between the Petitioners and Respondents on 17th March 2006. According to the Petitioners, it was an arrangement to form a joint venture to jointly develop the property in question and the Petitioners would become entitled to a 50% share with all the rights and benefits arising thereunder. The Petitioners were to contribute aggregate amount of Rs.7.50 Crores. Whereas, the Respondents were to contribute by way of land which was to be developed as a joint venture. However, on account of certain differences and disputes between the parties in view of the arbitration clause in the said Agreement, the dispute was referred to the sole Arbitrator. In the said Arbitration proceedings, the Petitioners took out application under Section 17 of the Act for interim protection during the pendency of the proceedings. That Application came to be rejected by the sole Arbitrator by the impugned decision.
3. The prima facie opinion recorded by the sole Arbitrator in rejecting the Application preferred by the Petitioners is broadly on two considerations. Firstly, it is noted that the Agreement between the parties was a pure and simple Development Agreement to develop the property and share the profits. Relief of specific performance cannot be invoked in respect of such an Agreement. He has further opined that prima facie, the Petitioners/Claimants had failed to carry out all its obligations and that the balance of convenience also tilted in favour of the Respondents and against the Claimants.
4. In the present Petition, the findings reached by the sole Arbitrator have been assailed on the argument that the same is manifestly wrong and incorrect. According to the Petitioners, on construing the Agreement in question as a whole, it is a joint venture arrangement agreed upon between the parties to jointly develop the suit property and not a pure and simple Development Agreement with no rights in the property to be developed. Even with regard to the finding recorded by the sole Arbitrator on the issue as to whether the Petitioners were ready and willing to comply with their obligation specified in the suit Agreement have been criticized with reference to the terms of the Agreement as also the subsequent correspondence exchanged between the parties and the Minutes of the joint meeting held to discuss the relevant aspects arising from the Development Agreement. According to the Petitioners, in any case, the noncompliance of the obligations under the Development Agreement by the Petitioners have been waived by the Respondents and therefore, the same cannot be made the basis to deny interim protection. It is lastly submitted that in any case, since status-quo arrangement in respect of the suit property is continuing on account of the statement made in the present proceedings before this Court on 19th December 2007, the same arrangement can continue and the sole Arbitrator can be directed to finally dispose of the Arbitration proceedings expeditiously till which time, the same interim arrangement should prevail.
5. The Respondents on the other hand, have supported the view taken by the sole Arbitrator on both the counts and submit that the material on record clearly establishes that the Petitioners were not ready and willing to fulfill its obligations under the suit Agreement. Besides, it is a case of repudiation of contract, for which reason, relief of specific performance as prayed, cannot be granted to the Petitioners. It is further submitted that the claim of the Petitioners, if accepted, would require continuous supervision of the performance of
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
