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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Sandeep V. Marne, J.
SSD Escatics Private Limited - Petitioner
Versus
Goregaon Pearl Cooperative Housing Society Limited - Respondent
Commercial Arbitration Petition No. 354 of 2024
Decided On : 30-03-2026
| Table of Content |
|---|
| 1. factual background of da breaches and termination (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. petitioner challenges award perversity and benefit restoration (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. respondent defends termination and no-compensation clauses (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 4. court outlines da clauses and alleged breaches (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
| 5. developer's breaches validate da termination (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
| 6. clause 22 enforceable barring developer compensation (Para 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58) |
| 7. s.64 restoration distinct from s.73 compensation (Para 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72) |
| 8. no contractual bar to s.64 benefit restoration (Para 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87) |
| 9. transit rent not benefit under s.64 (Para 88 , 89 , 90 , 91 , 92) |
| 10. fsi purchase price restorable benefit under s.64 (Para 93 , 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105) |
| 11. incomplete construction costs not s.64 benefit (Para 106 , 107 , 108 , 109 , 110) |
| 12. award upheld except fsi restoration ordered (Para 111 , 112 , 113 , 114) |
JUDGMENT :
SANDEEP V. MARNE, J.
1) The Petitioner has filed this Petition under section 34 of Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging the award of the learned sole arbitrator dated 24 June 2023. By the impugned award, the Arbitral Tribunal has declared the Termination Notice dated 9 June 2018 terminating the Development Agreement (DA) and Power of Attorney (POA), both dated 26 September 2007, and of the Consent Terms dated 16 May 2017 as valid, legal and binding. The Tribunal has further declared that the contract of redevelopment is terminated with effect from 9 June 2018. The Arbitral Tribunal has restrained the Petitioner from interfering with possession of Respondent-Society over the land and building in question. Petitioner is directed to the handover all original documents relating to redevelopment of the Society. The Arbitral Tribunal has also awarded claim in the sum of Rs.7,08,53,695.03/- in favour of the Respondent-Society. The Arbitral Tribunal has awarded costs of Rs.9,65,250/- in favour of the Respondent-Society. The counterclaims of the Petitioner are rejected.
FACTS
2) Respondent is a Cooperative Housing Society registered under the provisions of the Maharashtra Cooperative Societies Act, 1960. The Society was formed by owners and occupiers of 60 flats in Buildings B-3, B-4 and B-5 at Survey No.7, CTS No.27 at Siddharth Nagar, Goregaon (West), Mumbai, which was a part of MHADA layout. The Respondent-Society had 60 original members, who owned and occupied flats in the building of the Society. The Respondent-Society decided to go for redevelopment of its building. By resolution adopted on 18 June 2005, the Special General Body Meeting of the Society appointed Petitioner as the developer to carry out redevelopment of its building. A Redevelopment Agreement was executed between the Petitioner- Developer and Respondent-Society on 26 September 2007. A separate Power of Attorney was also executed in favour of the Petitioner on the same day. The Municipal Corporation issued the Intimation of Disapproval (IOD) on 16 August 2007. In October/November 2007, the members of the society vacated their respective flats and handed over the possession thereof to the Petitioner. On 5 January 2008, the Petitioner issued Bank Guarantee of Rs. 5 crores in favour of the Respondent-Society. Commencement Certificate for construction of a building having two wings - Wing-A and Wing-B was issued by the Municipal Corporation on 17 June 2008, which was revalidated from time to time. On 4 August 2011, a stop work notice was issued to the Petitioner alleging that it carried out construction beyond the permissions. According to the Respondent-Society, the construction activit
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