SUMER BUILDERS PVT. LTD. Vs. NARENDRA GORANI

JUDGEMENT

(1.) The instant appeal is directed against the judgment and order dated 10.03.2015 passed by the Division Bench of the High Court of Judicature at Bombay in Appeal No. 572 of 2013 whereby it has concurred with the view expressed by the learned Single Judge in Chamber Summons No. 720/2013 in Arbitration Petition No. 799/2013 dated 10.10.2013 whereunder the learned Single Judge had revoked the leave granted by the court under Clause 12 of the Letters Patent to file a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, "the 1996 Act").

(2.) The facts which are essential to be stated are that the parties to the lis entered into an agreement on 28.2.2008 for development of the land of the respondent. As per the said agreement, the appellant was required to develop a residential project and/or commercial complex and/or multiplex and/or hotels and/or malls etc. as permissible in law. The respondent had handed over the vacant possession of the land to enable the appellant to start the development work. Clause 13 of the development agreement contains an arbitration clause whereby the parties had agreed to refer the matter in respect of any difference or dispute between them with regard to the construction or the terms of the development agreement or with regard to the project undertaken for arbitration. A Memorandum of Understanding (MoU) was entered into between the parties, which stipulates that the developer was required construct a township project consisting of one commercial building, 11 residential wings in four buildings and one club house under licence from the Indore Municipal Corporation. It was further agreed that if the MoU was terminated, the developer would not have any right, title or interest in the township project and would be required to remove his employees and machineries from the land. Clause 13 of the developer agreement was also incorporated in the MoU.

(3.) As disputes arose with regard to payment, the respondent terminated the MoU, forfeited the security deposit and invoked the arbitration clause by issuing a notice through his Advocate on 6.6.2013. The appellant herein replied to the termination notice by stating that it had carries out substantial construction on the property by constructing three buildings and by taking many other steps. It was also stated by the appellant that the environmental clearance certificate for the project was not obtained by the respondent and, therefore, further work was stopped. The appellant required the respondent to perform his part of the contract in obtaining the requisite environmental clearance, execute irrevocable power of attorney, refund the part of the amount payable and pay interest on the security deposit.