Allowed

Dhanashree Developers Pvt. Ltd. v. Majaswadi Inqulab Nagar Punrujjivan Chs Ltd.

Bombay HC6 Aug 2012ARBP/526/2012

Case brief

AI extract

What is this about?

In this arbitration petition, the court granted an order of injunction and status quo pending arbitration. The petitioner sought protection against the respondent regarding redevelopment rights after the respondent terminated their development agreement. Finding the termination prima facie illegal, the court disposed of the petition allowing the prayed relief.

What did the court decide?

Ordre of injunction and status quo granted against the Respondent from dealing with, entering into, transferring, alienating, and creating third party rights.

Dhanashree Developers Pvt. Ltd. Vs Majaswadi Inqulab Nagar… — Arbitration | Bombay HC (2012)

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ARBAP 110 of 2012

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 526 OF 2012

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Dhanshree Developers Pvt. Ltd. … Petitioner Versus Majaswadi-Inqulab Nagar Punarujivan CHS Ltd. ...Respondent

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Mr. Rohan Cama a/w Mr.Amal Mishra and Ms.Urmi Shah i/by SRM Law and Associates, for Petitioner. None for Respondent.

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CORAM: S.J.KATHAWALLA, J.

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DATE: 6 th AUGUST 2012

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P.C.

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The above Petition is filed under Section 9 of the

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Arbitration and Conciliation Act, 1996 ( the Act) seeking an order of injunction and status quo in respect of the subject property as prayed in prayer clause (a) of the Petition.

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The relevant facts of the matter are set out hereunder :

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The Petitioner is a Private Limited Company interalia

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carrying out work of land and building development and construction activities in the city of Mumbai and also in the State of Maharashtra. The Respondent is a tenant co-operative housing society consisting of 43 individual members registered under the provisions of the Maharashtra

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Co-Operative Societies Act, 1960 and Rules of 1961 framed thereunder. The Respondent is a lessee of Maharashtra Housing and Development Authority (MHADA), a statutory corporation constituted under the Maharashtra Area and Development Act, 1976 (Mah XXVIII of 1977), in respect of piece and parcel of land admeasuring about 1240.12 sq.mtrs bearing Survey No.46 (part) of plot no.8 situated at Village Majas, Taluka Andheri, in the Registration Sub-District of Mumbai Suburban District, Mumbai (the said property).

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By virtue of a Registered Lease Deed dated 26-10-1989 under Registration No.P/10684/89 dated 03-11-1989, the Respondent Society became the lessee in respect of the said property and subsequently in and around 1991, constructed 43 tenements for its members. According to the Petitioner, owing to the old and dilapidated condition of the said structure, the Respondent convened a General Body Meeting on 12-04-2007 and decided to opt for redevelopment of the existing building under relevant provisions of Development Control Regulations, 1991 (DCR) by appointing private developer.

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According to the Petitioner, upon invitation from the Respondent, the Petitioner submitted its offer dated 04-08-2007 to the Respondent Society. The Respondent Society after evaluating various

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offers and several negotiations with the Petitioner, unanimously resolved to accept the same in its General Body Meeting held on 12-09-2007. The Respondent on the same day, issued a letter of appointment and authorized the Petitioner to commence with the redevelopment process. According to the Petitioner, in pursuance of the said appointment and after further discussion between the parties, the Respondent executed the Development Agreement and the Irrevocable General Power of Attorney, both dated 07-11-2007 in favour of the Petitioner. Clauses 48 and 50 of the said Development Agreement stipulate that any dispute and difference between the parties shall be referred to the Arbitrator as per the Arbitration and Conciliation Act, 1996. The said arbitration clauses are reproduced hereunder for ready reference :

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“Clause 48 – The parties hereto agree that in the event of any difference of opinion arises with regard to the interpretation, implementation and enforcement of terms and conditions of the agreement and/or compliance of the terms and conditions herein, then in that event the parties hereto shall refer such dispute to the mutually agreed Sole Arbitrator under the provisions of Arbitration and Conciliation Act, 1996, whose decision shall be final and binding on the parties hereto.

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Clause 50 – All disputes and differences between the parties hereto pertaining to this Agreement for Development and/or subsequent Agreement for Development including interpretation of any terms and conditions hereof either during the subsistence of this

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Memorandum of Understanding, Agreement for Development or subsequent thereto shall be referred to Arbitration and the same shall be governed by the provisions of the Arbitration and Conciliation Act, 1996, or its statutory modification for the time being in force. The Arbitrators shall have summary powers. The Arbitration shall always be held in Mumbai and the Courts of Mumabi shall have jurisdiction in the matter. The award declared and published thereunder shall be final and binding upon the parties hereto.”

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The Petitioner in good faith and in order to honour its obligations under the said Development Agreement and with intent to commence and complete the redevelopment work in the stipulated time, also undertook certain activities on behalf of the Respondent which are not at all concerned or connected with the redevelopment of the Respondent's society. To give an illustration, the Respondent Society vide Indenture dated 20-03-1991 had mortgaged the said property to the Maharashtra Corporation Co-operative Housing Finance Limited. The Petitioner paid the mortgage dues thereby getting the property discharged from mortgage and further proceeded with the redevelopment process. According to the Petitioner, the Petitioner in coordination with the appointed Architect Mr.Ketan Belsar of M/s. Ellora Project Consultants submitted a revised proposal dated 06-10-2010, along with relevant documents for obtaining offer letter from MHADA in view of the amended policy of the State

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Government for MHADA colonies. Moreover, the Petitioner through the appointed Architect, vide letter dated 11-10-2010 also applied to MHADA for a demarcation plan showing “the conveyance boundary tit-bit land or any land in possession of the society”. In response thereto, MHADA vide letter dated 13-01-2011 has issued a demarcation plan to the Petitioner.

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According to the Petitioner, the Petitioner pursued the said matter to the best of his capacity and ability and carried out considerable work, as envisaged by the Development Agreement. Sufficient time elapsed in completing various basic essential formalities on behalf of the Respondent Society which are indispensable in order to commence with the actual construction of the said property, which is further affected by uncertain and changing housing policies of the State Government pertaining to MHADA colonies. According to the Petitioner, pending the process being followed by the Petitioner, the redevelopment of the Respondent Society was also effected by M/s.Aishwarya Light Construction Company, the developer developing the adjoining plot.

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According to the Petitioner, during the pendency of the process of obtaining various sanctions from MHADA and follow ups in connection therewith, to the utter shock and surprise of the Petitioner, the

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Petitioner discovered that one Mr.Sandeep R. Kangutkar, the Architect on behalf of M/s.Nisar Properties Pvt. Ltd., vide letter dated 08-10-2011 had submitted a fresh proposal to MHADA pertaining to the Respondent's property, without the knowledge of the Petitioner, and despite there being a subsisting, valid and pending Development Agreement between the Petitioner and the Respondent Society. The Petitioner promptly upon coming to know of the same, vide letter dated dated 04-11-2011 took strong objection against the said unauthorized and unscrupulous act. According to the Petitioner, the said Nisar Properties Pvt. Ltd., vide its Advocate's letter dated 23-12-2011 replied to the Petitioner's letter dated 04-11-2011, thereby for the first time disclosing that in or around October, 2010, the Respondent Society had appointed one M/s.Vardhaman Infrastructures as its developers. However, due to failure on part of M/s.Vardhaman Infrastructures, the Respondent Society terminated its appointment and appointed M/s.Nisar Properties Pvt. Ltd. as its new developer. The Petitioner vide letter dated 02-01-2012 refuted the authority of M/s.Nisar Properties Pvt. Ltd. in respect to the proposed redevelopment of the Respondent's society. M/s. Nisar Properties Pvt. Ltd. vide its Advocate's letter dated 09-01-2012 responded to the said letter of the Petitioner dated 02-01-2012.

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According to the Petitioner, to their further shock and surprise, the Respondent Society vide termination notice dated 20-12-2011, received by the Petitioner only on 13-01-2012, terminated the development rights of the Petitioner on the alleged ground that the decision for such termination was taken by the Society in its General Body Meeting held on 13-07-2011. According to the Petitioner, aggrieved by the unauthorized and unscrupulous conduct of the Respondent Society and the termination notice, the Petitioner vide notice dated 01-02-2012 finally invoked the arbitration as per clauses 48 and 50 of the said Development Agreement. The Respondent Society failed and neglected to respond to the said notice dated 01-02-2012 despite receipt of the same. The Petitioner has therefore, on 07-03-2012 filed the Application No. 110 of 2012 under Section 11 of the Act, seeking the aforestated reliefs.

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On 4^th April, 2012 the petitioner filed the above Petition seeking the following relief:

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“(a) That this Hon'ble Court be pleased to grant order of injunction and status quo against Respondent from dealing with, entering into, transferring, alienating and/or creating third party rights either through M/s. Nisar Properties Pvt. Ltd. and/or any other third party in respect of re-development of the subject property, pending the hearing and final disposal

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of the Arbitral reference”.

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The Petitioner on 17^th July, 2012 , after giving notice to the Respondent, moved this Court for urgent ad-interim relief in terms of prayer clause (a) above. On 17^th July, 2012 this Court therefore passed the following order.

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“ Heard learned Advocate for the petitioner. None for the Respondent, though served. Ad-interim relief in terms of prayer clause (a).

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2. A copy of this order shall be forthwith served on the Respondents by the Advocate for the Petitioner by handdelivery.

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Stand over to 6^th August, 2012 for final hearing” .

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Today the above Arbitration Petition is taken up for final hearing. Despite service of the order dated 17^th July, 2012 on the Respondent, the Respondent has neither filed its reply to the above Arbitration Petition nor remained present before this Court. In view thereof, the contents of the above Petition have remained uncontroverted. I am prima facie satisfied that the Respondent Society has wrongly and illegally terminated the said development agreement dated 7^th November, 2007 entered into by and between the Respondent Society and the Petitioner. In view thereof,

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pending arbitration proceedings and passing of an Award, protective orders are required to be passed in favour of the Petitioner. Hence the following order:

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(a) The Petition is allowed in terms of prayer clause (a).

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(b) The arbitration proceedings shall be decided by the learned Arbitrator without being influenced by any observations made herein which are only prima facie and not upon a detailed adjudication of disputes between the parties.

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The above Arbitration Petition is accordingly disposed of.

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A copy of this order shall be forthwith served on the Respondents by the Advocate for the Petitioner by hand delivery.

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( S.J.KATHAWALLA, J.)

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Dhanashree Developers Pvt. Ltd. v. Majaswadi Inqulab Nagar Punrujjivan Chs Ltd.

Case brief

What is this about?

What did the court decide?

Dhanashree Developers Pvt. Ltd. v. Majaswadi Inqulab Nagar Punrujjivan Chs Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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