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2013 Supreme(Cal) 537
HIGH COURT OF JUDICATURE AT CALCUTTA
ASHIM KUMAR BANERJEE & MRINAL KANTI CHAUDHURI, JJ.
Jaichandlal Ashok Kumar & Co. Pvt. Ltd. & Others
Versus
Nawab Yossef & Others
A.P.O. Nos. 177 & 191 of 2013, A.P. Nos. 229 & 236 of 2009 (Original Side)
Decided On : 22-08-2013
For Petitioners:Ranjan Deb, Surojit Nath Mitra, Senior Advocates, Ashish Kumar Chakraborty, Advocate.
For the Respondents:Ranjan Bachawat, Prabhakar Chowdhury, A.P. Agarwalla, Advocates.
In a contract for the development of property, where the arbitrator finds that the developer is entitled to specific performance, the relief cannot be denied on the grounds of bitterness between the parties, complete non-cooperation, and the eventuality of the plan being lapsed in the meantime.
Headnote:
SPECIFIC PERFORMANCE - AGREEMENT FOR DEVELOPMENT OF PROPERTY - READINESS AND WILLINGNESS - NON-REGISTRATION OF AGREEMENT - LAPSE OF PLAN - ARBITRATION AWARD - SETTING ASIDE - SCOPE OF JUDICIAL REVIEW - SPECIFIC RELIEF ACT, 1963 - SECTION 14.
Fact of the Case:
The parties entered into an agreement for the development of a property. The developer was to construct a commercial complex and two bungalows, one for the owner and the other for the developer. The owner was to demolish the existing structure and hand over the vacant land to the developer. The developer got the tenants vacated and the plan sanctioned. The owner, however, was reluctant to vacate the premises and did not take any steps to demolish the existing structure. The developer filed a claim for specific performance of the agreement and the arbitrator held that the developer was entitled to specific performance but declined to grant the relief on the grounds of bitterness between the parties, complete non-cooperation, and the eventuality of the plan being lapsed in the meantime. The owner challenged the award on the ground that the developer was not ready and willing to perform the contract and that the agreement was not registered under the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993. The developer challenged the award on the ground that the arbitrator erred in denying specific performance.
Finding of the Court:
The court held that the developer was ready and willing to perform the contract and that the agreement was not required to be registered under the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993. The court also held that the arbitrator erred in denying specific performance to the developer.
Issues: 1. Whether the developer was ready and willing to perform the contract. 2. Whether the agreement was required to be registered under the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993. 3. Whether the arbitrator erred in denying specific performance to the developer.
Ratio Decidendi: 1. The court held that the developer was ready and willing to perform the contract on the basis of the following factors: (a) the developer got the tenants vacated; (b) the developer got the plan sanctioned; (c) the developer published an advertisement for demolition; and (d) the developer appointed a security guard. 2. The court held that the agreement was not required to be registered under the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993, as the construction had not commenced. 3. The court held that the arbitrator erred in denying specific performance to the developer on the following grounds: (a) the arbitrator found that the developer was not at fault; (b) the learned Single Judge agreed with the finding of the arbitrator on that score; and (c) the agreement was coupled with an interest created in favour of the developer.
Final Decision: The court allowed the developer's appeal and set aside the award to the extent that it declined interference with the Award on the aspect of Specific Performance. The court also modified the Award to the extent that the developer would be entitled to Specific Performance of the Agreement dated June, 28, 1989. The owner's appeal was dismissed.
Ashim Kumar Banerjee, J.
APOLOGY:
The hearing of this appeal, in our estimation, could be finished within three days. We are sorry; it did take long time to close the hearing. We are sorry, we could not give more than one and half hours time in a day because of other urgent matters in the Appellate Side and the administrative commitments of one of us (Banejee, J). There were other reasons too.
CONVENIENCE:
For the sake of convenience we mark the first volume and second volume of A.P.O No. 177 of 2013 as volume I and II and the first and second volume of A.P.O. No. 191 of 2013 as volume No. III and IV respectively.
FACTS:
One Abdul Gaffar was the absolute owner of premises No. 5B Outram Street Calcutta. The said property was measuring about 37 cottahs of land having structures built thereon. It was partly tenanted. Gaffar entered into agreement with Jaichandlal Ashok Kumar and Co. Pvt. Ltd. a developer, with intent to have the property developed by a joint venture. The parties entered into the agreement on June 28, 1989 appearing at page-148-196 (Volume-III). If we have a close look to the said agreement we would find, the property was comprised of 37 cottahs 11 chittaks 9 square feet. As per the agreement, the developer would build a commercial complex in the major part of the land and the rest part would have two bungalows, one for the owner and the other for the developer. The developer would pay Rs. 20 lacs as security deposit out of which 10 lacs to be paid simultaneously on execution of the said agreement and the balance 10 lacs after sanction of the plan from the Calcutta Municipal Corporation. The parties agreed, the developer would be responsible to have the tenanted portion vacated. The owner would have the sole responsibility to demolish the building so that the developer could construct the new one. The developer would pay Rs.5 lacs as lease premium upon execution of the said document and a general power of attorney followed by further sum of Rs.3500 per month to be paid by the allotees/transferees of the owner and the developer and/or its nominees towards lease rent. The agreement would provide, in case of dispute, the parties would go for arbitration of the sole arbitrator Sri Jahar Sengupta who was at the relevant time, Managing Director of Exide India, Sri Sengupta was acquainted with the owners in view of fact that the one of the parties was an employee under him at the relevant time.
OWNERS CASE:
Gaffar died during pendency of the proceeding on June 23, 2003 leaving him surviving his two sons namely Nawab Yossef and Nawab Jawed. We are told, one of them was a resident of Holand and the other is pursuing the litigation on their behalf.
According to the owners, the agreement was entered into in 1989. Initially a sum of Rs.15 lacs was paid. Subsequently, on one pretext or the other the developer got back Rs.14 lacs keeping only a sum of Rs.1 lac to their credit lying with the owners. The developer could not get the property vacated. Owner had to take the trouble of making such arrangement and the original owner was instrumental in getting all the tenants removed from the premises by mutual arrangement. A sum of Rs.5 lac was spent on that account paid by the developer. The developer caused an enormous delay in getting the plan sanctioned that too, by doing substantial modification encroaching upon the part of the land to be retained by the owner under the agreement. In any event, the developer never informed the owner about the sanctioning of the plan and allowed the said plan to be lapsed. The developer had no money to perform that would be apparent from the fact, an assertion as to subsequent payment of Rs.10 lacs by cheque was made at a time when the developer had no money in the bank. Under the agreement the developer was to make payment of taxes and all statutory outgoings that they failed to discharge. They were not ready and willing to perform their obligation under the agreement. Hence, the agree
