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IN HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
M/s. Amisha Buildcon Pvt. Ltd. - Appellant
Versus
Jidnyasa Co-operative Housing Society & Others - Respondent
Arbitration Appeal No. 17 of 2015 alongwith Civil Application No. 19 of 2015
Decided on : 09-08-2016
ARBITRATION - Interim Measures - Specific Performance - MOU - Development Agreement - Construction - Balance Consideration - TDR - FSI - Possession - Termination of Agreement - Status Quo - Balance of Convenience - Prima Facie Case - Specific Relief Act, 1963, Section 14.
Fact of the Case:
Appellant, a developer, entered into a development agreement with the respondent society for the construction of residential buildings on the society's land. The agreement included the assignment of development rights, FSI, and TDR rights to the appellant. The appellant also executed an undated MOU with the society, which contemplated the execution of several other agreements, including a work contract agreement for the construction of members' premises. The appellant paid a substantial amount to the society under the development agreement and MOU. However, disputes arose between the parties, and the society terminated the agreements. The appellant filed an application under Section 9 of the Arbitration Act, seeking interim measures, including a stay on the termination of the agreements and an injunction restraining the society from disturbing the appellant's possession of the suit property. The trial court dismissed the application, and the appellant filed an appeal.
Finding of the Court:
The High Court held that the appellant was not entitled to interim measures, including a stay on the termination of the agreements and an injunction restraining the society from disturbing the appellant's possession of the suit property. The court found that the appellant had not made out a prima facie case for specific performance of the development agreement and MOU. The court also found that the balance of convenience was in favor of the society, as the members of the society had been waiting for possession of their flats for a long time and had lost faith in the appellant's ability to complete the project.
Issues: 1. Whether the appellant had made out a prima facie case for specific performance of the development agreement and MOU? 2. Whether the balance of convenience was in favor of the appellant or the society?
Ratio Decidendi: 1. The court held that the appellant had not made out a prima facie case for specific performance of the development agreement and MOU. The court found that the MOU was an agreement to enter into further agreements, which were subject to various conditions and approvals. The court also found that the appellant had not completed the construction work as per the terms of the development agreement and had not paid the full consideration amount to the society. 2. The court held that the balance of convenience was in favor of the society. The court found that the members of the society had been waiting for possession of their flats for a long time and had lost faith in the appellant's ability to complete the project. The court also found that the appellant had not shown that it would suffer irreparable loss or injury if the interim measures were not granted.
Final Decision: The High Court dismissed the appellant's appeal and vacated the ad-interim status quo order granted by the trial court.
1. By this appeal filed under section 37 of the Arbitration and Conciliation Act, 1996, (for short the 'Arbitration Act') the appellant has impugned the judgment dated 7th April, 2015 passed by the learned Principal District Judge, Thane in Civil Misc. Application No.359 of 2014 dismissing the said application filed by the appellant herein under section 9 of the Arbitration Act inter alia praying for interim measures i.e. (a) for stay of the operation and/or implementation of the resolution dated 14th September, 2014 passed by the respondent no.1 society in the meeting held on 14th September, 2014, for prohibition/restraining the society from acting upon, executing or implementing the said resolution for grant of any construction right to any third party and/or respondent no.2 in respect of Desai property and/or Khidkali property, (b) for injunction restraining the society and its members from dispossessing the appellant without following due process of law from the said property, (c) from injunction from entering into any contract, further documents, registered instrument etc., from dealing with the rights in the larger property i.e. Desai village and Khidkali village.
2. Some of the relevant facts for the purpose of deciding this appeal are as under:-
3. It is the case of the appellant that the respondent no.1 society had represented to the appellant that the society was comprising of 779 members and is the owner of the land bearing Survey nos. 117/1, 6,7,8,9,10, 122/1, 123/1, 124/1, 2,3,4,5, 125/4, 5,6, 205/1A, 1/B, 1/C, 2,4, 5/A, 5/B, 5/C, 6,7, 8/A, 8/B, 206/3/A, 4,5,6, 207, 210/1, 2 in Sector 11 of Village Desai, Taluka and District Thane (Desai property).
4. It is the case of the appellant that the society had represented that the society owns and possess the land situated at Khidkali, Saja Desai, situate within the limits of Municipal Corporation for the city of Thane bearing survey nos.127/2/A, 4/A/1, 4/A/2, 4/A/3, 129/1/D/1, 129/1/D/2, 129/1/A, 1/B, 1/C, 130/1/1A, 1/B, 1/C, 1/D, 131/1 (Khidkali property), the total area of the said Desai property and Khidkali property was admeasuring abut 55,450 sq.mtrs. The society had commenced the construction of the residential buildings being building nos. A-1 to A-4 consisting of stilt plus seven upper floors and A-5 to A-7 consisting of stilt plus fourteen upper floors and 28 row houses for its members in accordance with the sanctioned plan dated 5th February, 2008.
5. It is the case of the appellant that the said society also intended to construct further 29 row houses as per the said sanctioned plan on some other ear marked portion out of the entire area and that for construction of such members premises, total FSI to be consumed was to the extent of 39,732.16 sq.mtrs. out of said total area. It is the case of the appellant that the society made a representation that the balance area admeasuring 14943.41 sq.mtrs. was available with the society together with the right to consume potential TDR admeasuring 30,869.54 sq.mtrs. in respect of the said entire property.
6. On 19th April, 2011 the respondent no.1 floated a tender notice expressing its intention to grant and assign the FSI of the said balance area and said TDR right for further development of the said larger property to the interested developer on the terms and conditions mentioned therein.
7. It is the case of the appellant that the appellant through its sister concern M/s. Karjat Land Developers submitted its bid vide its letter dated 27th April, 2011 with a caveat that the final offer and agreement would be done in the name of any of their real estate company or nominee. The respondent no.1 vide its letter dated 10th May, 2011 accepted the offer and vide their letter dated 13th October, 2011 agreed to execute requisite registered agreement in favour of the appellant as nominee of the said M/s. Karjat Lan Developers.
8. It is the case of the appellant that on 20th October, 2011 the respondent no.1 executed a develo
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