2014 Supreme(Bom) 117

High Court of Judicature at Bombay
R.D. DHANUKA, J.
Heritage Lifestyle & Developers Ltd.
Versus
Cool Breeze Co-operative Housing Society Limited & Others
Arbitration Petition No. 600 of 2013
Decided On: 21-01-2014

Headnote:Arbitration and Conciliation Act, 1996 - Section 9 - grant of interim relief. - Held, since respondent-society alongwith 7 other societies already entered into a joint development agreement with a new developer, hence interim relief as sought by petitioner to restrain society to appoint a new developer cannot be granted. It is not in dispute that the society has already terminated the MOU on 14th June 2013. Documents placed on record by the society indicates that the respondent No. 1 society alongwith other 7 societies had applied for permission from MHADA for joint development which permission is granted by MHADA. Pursuant to such permission/NOC, respondent No. 1 alongwith other societies has already entered into development agreement jointly with respondent No. 34. Resolution to terminate the MOU with the petitioner was passed by majority of members of respondent No. 1 society. Resolution is also passed by the members of respondent No. 1 to enter into development agreement with respondent No. 34. It is not in dispute that the petitioner has already filed statement of claim before the arbitral tribunal. Respondent No. 34 is not a party to arbitration proceedings. If any interim measures in the facts of this case is granted as prayed, it would affect not only the members of respondent No. 1. Society but would also affect large number of members of the other 7 societies who have agreed for joint development of their respective buildings with respondent No. 34.

       The respondent No. 1 has rightly terminated the said MOU which is subject matter of arbitration proceedings filed by the petitioner. No stay of such termination can be ordered by this Court. In the event the petitioner succeeds in arbitration proceedings, petitioner would be compensated in terms of money.

       Balance of convenience is in favour of the respondents and against the petitioner. No case is made out by the petitioner for grant of interim measures. Petition is devoid of merits.

       Specific Relief Act, 1963 - Section 16 - Specific performance of MOU. - Since petitioner, developer is not ready and willing to comply with his obligations under MOU, even if it is considered to be a concluded contract, specific performance of MOU cannot be granted.

       Specific Relief Act, 1963 - Sections 16 and 20 - Specific Performance of MOU. - Since MOU for redevelopment of a dilapidated building is not a concluded contract hence specific performance of said MOU cannot be granted. - One of the issue raised by the defendant in this proceedings is whether MOU entered into between the petitioner and the respondent Nos. 1 to 33 as such is enforceable in law is prima facie concluded agreement and in respect of such writing whether petitioner can get specific performance of such document at all. In support of this submission both parties have invited my attention to various clauses of the MOU. A perusal of the MOU prima facie indicates that the MOU was entered into for recording the broad parameters of the redevelopment pending the execution and registration of the detailed development agreement, POA and 22 individual permanent alternate accommodations. Limited rights were granted in favour of the petitioner subject to various permissions, sanctions, NOCs from authorities subject to due compliance with the development regulations and subject to development agreement being executed. The petitioner had paid only a sum of Rs. 5 lacs under the said MOU to respondent No. 1 Society. It is not in dispute that no further writing is executed between the petitioner and respondent Nos. 1 to 33 granting development rights in favour of the petitioner.

       On perusal of the provisions of the MOU and the fact that no further development agreement was entered nor was there any compliance of any conditions set out in the MOU which were not complied with according to the respondents, the said MOU at the most could be considered as an agreement to enter into an agreement in future subject to various contingencies set out therein. In my prima facie view such MOU thus cannot be specifically enforced. In my prima facie view specific performance of an agreement to enter into an agreement cannot be granted.