LARSEN AND TOUBRO Vs. PURI CONSTRUCTION LIMITED

JUDGEMENT

(1.) BY this order, I shall dispose of the above petition under Section 34 of Arbitration and Conciliation Act, 1996 (for short, 'the Act'), by which the petitioner has assailed an award dated 28th December 2002 passed by the learned Arbitral Tribunal on various grounds which shall be dealt with at the relevant place herein below. Brief Facts

(2.) PURI Construction Limited (for short, 'PCL') and few other sister companies and persons were in possession of certain lands in District Gurgaon, Haryana for which they had obtained licenses from the Director, Town and City Planning, Haryana (for short 'DTCP') for developing the same into a residential group housing scheme. PCL initially entered into an agreement with ITCREF and formed a joint venture company as 'Florentine India Limited' in order to carry on the development of this land into a residential group housing project. Under this joint venture, ITCREF gave funding to PCL for purchase of other land and acquiring licenses etc. However, subsequently ITCREF took a decision to exit from the business of property development and entered into negotiations with PCL. As facts reveal, ITCREF introduced Larson and Turbo Limited (for short, 'LandT') into the project. The claims of ITCREF against PCL were still unsettled and in order to secure its claim against PCL, ITCREF made it mandatory that its interests in the project should find mention in the agreement between PCL and LandT. LandT AND PCL along with its associates companies entered into an agreement for development dated 10th March 1998 (signed on 19th January, 1998). Subsequent to this agreement for development, a supplementary agreement was also entered into between them on 30th December 1999. In consequence of supplementary developmental agreement, a tripartite agreement was entered into between PCL, LandT and Lord Krishna Bank (for short, 'LKB') on 10th January 2000.

(3.) THE agreement dated 10.03.1998 provided that though the total land to be developed was 40.661 acres as mentioned in Schedule 'A' of the agreement but LandT was to undertake and complete construction initially at Schedule 'B' of the property within a period of 60 months or such mutually extended period from the date of sanction of the building plan or clearance obtained under Section 37(i), whichever was later (Clause 26). Clause 26(a) of the said Agreement provided that the construction of first phase i.e. at Schedule 'B' would involve 3,00,000 sq ft of area and the total development of the area shall be done in 5 years. After completion of first phase, LandT, in consultation with PCL, shall have the option and liberty to review and revise the specifications, mandates and the built up area of the plan development and extend the period of completion by further period of 12 months depending upon the market conditions.