2018 Supreme(SC) 831

SUPREME COURT OF INDIA
Dipak Misra, CJI., A.M. Khanwilkar, D.Y. Chandrachud, JJ.
Samir Narain Bhojwani – Appellant(s)
Versus
M/s. Aurora Properties and Investments and Anr. – Respondent(s)
CIVIL APPEAL NO. 7079 OF 2018 (Arising out of SLP (Civil) No.18465 of 2018)
Decided On : 21-08-2018

IMPORTANT POINT
Exercise of power to grant mandatory order at an interlocutory stage, is manifestly wrong.

Headnote:(a) Administration of justice – a person cannot be held liable under an agreement to which he is not a party. (Para 23)

       (b) Constitution of India – Article 226 – Moulding of relief – Can be resorted to at the time of consideration of final relief in the main suit – Not at an interlocutory stage – Moulding of relief and granting mandatory relief at an interlocutory stage – Distinction – Latter can be granted only to restore status quo and not to establish a new set of things. (Para 24, 29)

       (2014) 8 SCC 294; (1990) 2 SCC 117; (2004) 7 SCC 478; (2006) 3 SCC 312; (2011) 6 SCC 73 – Relied upon

       Facts of the case:

       Respondent No.1/plaintiff was appointed by one Andheri Kamgar Nagar Cooperative Housing Society Ltd. under a Development Agreement as a developer under the Slum Development/ Rehabilitation Scheme to develop the suit property in question.. One part of the suit property was for constructing tenements free of charge for project-affected persons and the balance property could be used to develop and sell the balance FSI. Respondent No.1 then executed an Agreement for Sub-Development with respondent No.2/defendant No.1, transferring the benefits of development rights in the suit property, with the consent of the aforementioned Society, to respondent No.2 after keeping aside 15,000 sq. ft. for itself i.e. respondent No.1.

       Subsequently, respondent No.2 executed an Agreement for Development dated 10th March, 2003 with the appellant/defendant No.2, whereunder the appellant would be entitled to 55% of the total area available for free sale buildings and car parking in the suit property and respondent No.2 retained 45% of the total area available for construction of free sale buildings and car parking by utilizing FSI which may be available on the suit property as per the Slum Rehabilitation Scheme. All three parties executed a Tripartite Agreement referencing the previous agreements wherein respondent No.1 was entitled to an area of 22,500 sq. ft., an increase from its earlier agreed upon 15,000 sq. ft., which would be allocated out of the 45% share due to respondent No. 2

       Disputes arose during the construction of the building, which resulted in respondent No.1 filing a Commercial Suit against respondent No.2 and the appellant inter alia seeking specific performance of the Development Agreement dated 22nd September, 1999, read with the Tripartite Agreement dated 11th September, 2009, including handing over constructed area of 22,500 sq. ft. in the free sale buildings along with proportionate car parking space, in the form of 12 (twelve) flats in Wings “A” and “B” of the building “Bay – View” constructed on the suit property and 24 (twenty four) car parking spaces.

       The appellant then took out Notice of Motion seeking to refer the suit to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 and Arbitration Application, seeking to appoint an arbitrator. Both these proceedings were rejected by the High Court

       The appellant initiated arbitration solely against respondent No. 2 under the Agreement dated 10th March, 2003. In the said arbitration proceedings, respondent No.2 filed an application for interim relief’s under Section 17 of the Arbitration Act inter alia seeking specific performance of the agreement of 10th March, 2003 including possession of its entire 45% share of flats in the buildings constructed on the suit property.

       The sole arbitrator was of the opinion that respondent No.2 could not receive its entire 45% share in the constructed area of 88 flats, which worked out to 31.6 flats, but instead, would receive 72% of its 45% share which worked out to 28.5 flats. From these 28.5 flats, 12 flats were to be kept aside for respondent No.1 as directed in the High Court”s ad-interim order dated 3rd December, 2012 and thus, respondent No.2 was entitled to 16.5 flats. Out of 16.5 flats, the appellant was directed to hand over possession of 16 flats to respondent No. 2, after which respondent No.2 would refund the deposit given by the appellant in respect of such flats. The remaining amount of respondent No.2”s entitlement in one flat would be discharged by both respondent No.2 and the appellant jointly disposing of the said flat at a mutually agreed price.

       The Single Judge directed the appellant to hand over keys and possession of the said 8 flats to respondent No.1 along with 16 parking spaces, recording that he had moulded the reliefs originally sought by respondent No.1 in the changed circumstances of the case and in order to shorten the litigation and do complete justice.

       The Division Bench upheld the mandatory direction issued by the Single Judge at an interlocutory stage and rejected the appeal, holding that the Single Judge had addressed the various issues in detail and that it was right to mould the reliefs, even at the interim stage, in light of changed circumstances in the case.

       Finding of the Court:

       Mandatory order has been passed against the appellant in excess of jurisdiction.

       Result: Appeal allowed.