Agreements not capable of specific enforcement can still entitle the aggrieved party to damages for breach, and the scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996, is limited.

VIBHU BAKHRU, J.

1. These petitions have been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’) inter-alia for setting aside the arbitral award dated 28.10.2015 (hereafter ‘the impugned award’) delivered by the Arbitral Tribunal, constituted by the sole arbitrator, Justice V.K. Jain (Retd.), a former judge of this Court.

2. By the impugned award, M/s B.S. Promoter and Developers was awarded an amount of Rs. 2 crores with interest at the rate of 12 % p.a. from the date of the impugned award till the realization of the amount. The impugned award was rendered with respect to disputes arising under the Agreement dated 09.09.2003 (Property Development Agreement) entered into amongst M/s B.S. Promoter and Developers, Mr. Sanjeev Malhotra, Smt. Sudesh Kapoor and Mr. Suresh Malhotra (since deceased).

Factual Background

3. Mr. Sanjeev Malhotra, Smt. Sudesh Kapoor (hereafter ‘petitioners’) and late Suresh Malhotra were the co-owners of the plot measuring about 4840 sq yds. bearing Khasra no. 266 in the Revenue Estate of village Tughlaqabad, now known as Chittaranjan Park, New Delhi (hereafter ‘the plot’). On 25.11.1980, the petitioners and late Suresh Malhotra entered into an agreement to sell with M/s Competent Builders (P) Ltd. (hereafter ‘Competent Builders’) for sale of the aforesaid plot. Pursuant to the said agreement, the possession of the plot was handed over to Competent Builders. However, the transaction could not materialize and petitioners filed a suit (Suit No. 938/90) in this Court. The said suit was settled and a compromise decree dated 21.03.1991 was passed. The petitioners state that in terms of the compromise decree, they were required to pay Rs. 11 lacs to Competent Builders to recover possession of the plot.

4. Thereafter, the petitioners and late Suresh Malhotra entered into a Property Development Agreement dated 09.09.2003 (hereafter ‘the PDA’) with M/s B.S. Promoter and Developers (hereafter ‘respondent’) for development of the plot in question after getting the plan sanctioned under a Group Housing Scheme from Delhi Development Authority (DDA). According to the terms of the PDA, it was agreed that all expenses till the recovery of possession of plot from Competent Builders and upto sanction of plans from DDA had to be borne by the respondent. Further, it was agreed that the respondent would be entitled to 70% of the built-up area constructed on the plot by it along with remaining undivided right in the plot underneath the superstructure for an amount of Rs. 3 crores to be paid to the petitioners. Accordingly, the respondent paid a sum of Rs. 11 lacs to the petitioners and a further sum of Rs. 2.89 lacs was agreed to be paid on transfer of the aforesaid interest in the plot. In addition to the above, the respondent was required to commence construction within 6 months from the date of sanction of plans by DDA and complete the same within 3 years from the said sanction.

5. In the meantime, a petition (Ex. Pet. No. 95/2003) was also filed against Competent Builders for recovery of the plot.

6. The petitioners claim that by communication dated 20.09.2004, the petitioners requested the respondent for a sum of Rs. 50 lacs to be paid to Competent Builders for restoration of possession of plot in favour of the petitioners. The said request was not acceded to. Thereafter, by a notice dated 25.10.2004, the petitioners terminated the PDA. These notices are disputed by the respondent and were subject matter of controversy in the arbitration.

7. Competent Builders filed a Special Leave Petition (being SLP (C) No. 23250/2012) in the Supreme Court. The petitioners state that in those proceedings, the petitioners and Competent Builders settled their disputes by entering into a settlement deed dated 05.04.2013 (hereafter ‘settlement agreement’), by virtue of which possession of the plot was to be handed back to the petitioners in lieu of Rs. 2 crores.

8. In the meanwhile, the respondent s