JUDGMENT :

(Prayer: This Petition has been filed under Section 34(2) of the Arbitration and Conciliation Act 1996 praying to set aside the Arbitration Award dated 29.05.2019 made in Arbitration Case on the file of the Arbitrator Mr.Padmanaban Judge (Rtd.) and consequently allow the counter claims as claimed by the petitioners herein.)

1. The Petitioners were the respondents in the arbitral proceedings between them and the Respondent herein. The arbitral award dated 29.06.2019 (the Award) is assailed in this petition.

2. The Petitioners owned about 39.28 acres of land close to the Grand Southern Trunk(GST) Road. Some time in the year 2013, the Respondent approached the Petitioners in relation to the procurement of the above mentioned 40 acres as well as additional lands of an extent of 80 acres. Pursuant to negotiations in such regard, a Memorandum of Understanding dated 09.05.2013(the MoU) was executed between the parties. In terms of the MoU, the Petitioners were required to facilitate and procure the acquisition of 120 acres, in the aggregate, as described in the schedule to the MoU, by the Respondent herein. The MoU records that the Petitioners herein had already purchased an extent of 34.38 acres and also held an agreement for an extent of 4.90 acres, thereby aggregating to 39.28 acres. The sale consideration of Rs.25 lakhs per acre was fixed for the procurement of 120 acres under the MoU. The Respondent was required to pay an aggregate sum of Rs.30 crores for such purpose. The MoU imposed an obligation on the Petitioners herein to coordinate with the respective land owners, obtain the relevant documents and submit the same for perusal by the Respondent. If the total cost of purchase exceeded Rs.30 crores, such cost was to be borne by the Petitioners. The MoU provided for area sharing as follows: 26.1% or 6900 sq. ft. per acre of land was allotted to the share of the Petitioners; and 73.9% or 22200 sq. ft. per acre of land was alloted to the share of the Respondent. The MoU also stipulated that the Respondent is entitled to procure the lands if the Petitioners failed to do so, and that any excess cost in such regard shall be deducted by making an adjustment against the area allotted to the Petitioners under the MoU. Such MoU also contained an arbitration clause.

3. The agreed position is that the Petitioners were unable to procure the full extent of 120 acres in terms of the MoU. Pursuant to negotiations, the parties entered into a Supplemental Memorandum of Understanding dated 27.06.2014 (the Supplemental MoU). By the Supplemental MoU, the extent of land to be procured was reduced from 120 acres to 65 to 67 acres, and the sale consideration was increased from Rs.25 lakhs per acre to Rs.35 to Rs.37 lakhs per acre. However, the Supplemental MoU recorded that any amounts paid by the Respondent in excess of Rs.25 lakhs per acre shall be adjusted from the share of the Petitioners. The Supplemental MoU also provided for a further 20% of the above mentioned excess amount to be adjusted towards interest factor. The Supplemental MoU contained a schedule in which the survey numbers of lands, which were required to be procured, were set out. Significantly, the Supplemental MoU imposed an obligation on the Petitioners herein to procure the balance extent of 10 acres or thereabouts within a period of 15 days from the date of Supplemental MoU. In case of default, the Respondent could proceed to procure the lands and adjust the excess cost, if any, against the share of the Petitioners in the total project area.

4. Pursuant to both the MoU and the Supplemental MoU, payments were made to the Petitioners herein. Each time such payment was received by the Petitioners, it appears that endorsements were made on the MoU or the Supplemental MoU, as the case may be.

5. The Petitioners did not complete the procurement of the full extent of 67 acres, even as per the Supplemental MoU. While an extent of about 61.5 acres was procured, an extent of 5.5 acr