Under Section 34, courts defer to arbitral tribunal's plausible contract interpretation unless patently perverse; contingent clause on injunction validly triggers termination, frustrating performance without express continuance provision.

JUDGEMENT :

SOMASEKHAR SUNDARESAN, J.

Context and Factual Background:

1. This is a Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”), impugning an Arbitral Award dated October 10, 2015 (“the Impugned Award”), by which the Learned Arbitral Tribunal has dismissed the Petitioner's contention that a Memorandum of Understanding dated December 7, 2006 (“MOU”) for transfer of land is subsisting and is amenable to specific performance.

2. The MOU was executed between the Petitioner, Jolly Brothers Pvt. Ltd. (“Company”) and the Respondents, certain members of the wider Jolly Family (“Jollys”), by which, a particular parcel of land admeasuring about 4.1 acres (“Subject Land”) was meant to be surrendered by the Jollys in favour of the Company on the terms and conditions set out therein.

3. The wider family of which the Jollys were a part, had been involved in various internal disputes and differences. The wider Jolly Family was classified under three different branches, loosely called the “Pune Group”, the “Bangalore Group” and the “Hyderabad Group”. The Respondents, the Jollys, fall within the “Hyderabad Group”.

4. When the Company was under the control of the wider Jolly Family, certain transactions had been effected with an entity called Jaycee Homes and Hotels Ltd. (“Jaycee”), which resulted in Jaycee claiming the existence of an oral agreement with the Pune Group for purchase of 16 acres of land, with a sum of Rs. 29.5 lakhs having been received by the Pune Group from Jaycee.

5. When disputes among the constituents of the wider Jolly Family got settled, land was distributed among the three groups. Approximately 14 acres of land came to vest with the Jollys. Separately, another 6 acres of land owned by the wider Jolly Family was meant to come to the Jollys, but on physical verification it was found that only 4.1 acres of land (which is the Subject Land) was actually available. The Jollys were given possession of the Subject Land and they also took over the liability of Rs. 29.5 lakhs paid by Jaycee to the Pune Group, when it was part of the larger Jolly Family.

6. It is against this backdrop that the MOU was executed between the parties for the surrender of the Subject Land by the Jollys in favour of the Company. It is common ground that when the MOU was signed, the Company was already in the hands of new owners. The other plot of land admeasuring 14 acres in the same vicinity was also transacted between the parties and was smoothly transferred also by way of surrender for Rs. 7 crores and the parties have no quarrel over it. 7. The MOU provided for a sum of Rs. 3.90 crores being the consideration payable for surrender of the Subject Land by the Jollys to the Company. A sum of Rs. 80 lakhs was marked as earnest money but deposited in escrow with solicitors of the Jollys. If Jaycee were to obtain an injunction against the surrender, the Company had a right to terminate the MOU. If Jaycee did not institute any suit by June 30, 2007, the money kept in esc