Court held that specific performance cannot be enforced due to termination of MOU and lack of owner consent.

1. By this petition filed under S.37 of the Arbitration and Conciliation Act, 1996 , the Petitioners have impugned the order dated 10th February, 2014 passed by the learned Arbitrator under S.17 of the said Act directing the petitioner no.1 not to proceed with the SRA project with the heirs of the original owners or M/s. Gupta Housing Pvt. Ltd. or persons claiming through them as developers on the portion of land belonging to the original owner late Mrs. Rajrani Harbanslal Gupta admeasuring 2500 sq. mtrs. Some of the relevant facts for the purpose of deciding this petition which is in the nature of an appeal under S.37 of the Act are as under: -

2. By a notification dated 18th March, 1976, the Maharashtra Slum Improvement Board of Mumbai declared the area bearing Survey No. 58, Amar Nagar, Borla Village Chembur, Mumbai as a slum area. Members of the petitioner no.1 - Society are residing in the said slum area. Area admeasuring 5651 sq. yards equivalent to 4724.80 sq. mtrs. was held by Mrs. Rajrani Harbanslal Gupta.

3. On 16th December, 2004, Mrs. Rajrani H. Gupta entered into a Memorandum of Understanding (MOU) with the respondent no.1 and permitted the respondent no.1 to develop a portion admeasuring 2989 sq. yards equivalent to 2500 sq. mtrs. out of the portion of the property admeasuring 5651 sq. yards equivalent to 5730 sq. mtrs. which was covered by about 120 hutments out of the total 400 hutments covering on the larger plot. On 10th October, 2007, Mr. Rajrani H. Gupta expired. A portion of larger plot admeasuring 5161 sq. yards devolved upon Mr. Sudhir H. Gupta and Ashwin H. Gupta upon demise of Mrs. Rajrani H. Gupta.

4. The hutment dwellers, totally 400 in number, formed themselves into Amar Nagar Hutment Dwellers Society (proposed). Petitioner no.1 was formerly known as Amar Nagar Hutment Dwellers Society. The said society undertook a scheme for redevelopment of their plot under Regulation 33(10) of the Development Control Regulations. On 27th December, 2004, the petitioner no.1 entered into a Development Agreement with respondent no.1 appointing the respondent no.1 as developer in respect of portion admeasuring 2500 sq. mtrs.

5. It is the case of the petitioners that the respondent no.1 through its Architect under the covering letter dated 25th April, 2005 submitted a proposal for implementing Slum Rehabilitation Scheme on portion admeasuring 2500 sq. mtrs. which was subject matter of the said development agreement. It is the case of the petitioners that the respondent no.1 represented that the respondent no.1 proposed to execute similar MOU with Mrs. Rajrani H. Gupta for developing the remaining portion admeasuring 2662 sq. yards as also with Krishnakumar Gupta and others for the other portion admeasuring 5651 sq. yards and if the owners did not agree, the respondent no.1 shall put up a proposal under S.14(i) of the Slum Act for acquisition of the remaining portion of the larger property. The respondent no.1 submitted a proposal under S.14(i) of the Slum Act for acquisition of the remaining portion of the larger plot. It is the case of the petitioners that the respondent no.1 did not comply with the obligation under the MOU dated 16th December, 2004 entered into between the original owner and the respondent no. 1. The original owner through her advocate's letter dated 20th October, 2006 gave notice of termination to the respondent no.1 and called upon the respondent no.1 to collect the refund of the amount which was paid by the respondent no.1 to the original owner. The respondent no.1 subsequently accepted the refund and confirmed the acceptance of the amount of Rs. 4,51,000/- through his advocate's letter dated 4th October, 2007.

6. The legal heirs of the original owner thereafter through their advo