BASF INDIA LTD Vs. LANDCOM PROPERTIES PVT LTD

JUDGEMENT

(1.) The parties entered into an Agreement dated 5.3.2002 under which the Respondent had to develop and let out to the Petitioner on leave and licence basis a premises of upto 40,000 sq. ft. The leave and licence agreement was to be from 1.8.2002. Under Clause 8 of the said agreement, the Respondent was to hand over possession of the premises to the Petitioner on 1.6.2002. Under Clause 9 of the said agreement, the possession was to be handed over upon the construction duly completed in all respects on 25.7.2002. Several facilities and services were to be provided as mentioned in the said agreement. Under Clause 30 of the said agreement, the Respondent was to pay the Petitioner penalty charges as compensation, if there was any delay in handing over possession beyond 25.7.2002. Under Clause 31 of the said agreement, time was made of the essence. If, however, the Respondent did not perform the covenants as stipulated in the agreement, it was to pay penalty of Rs.2 Crores to the Petitioner for the non-performance of the covenants. This included not obtaining the requisite municipal approvals on or before 10.6.2002. The Respondent was also to give a Bank Guarantee and a corporate guarantee of Rs.l Crore each. It was to be valid until 1.12.2002. The Petitioner agreed to refer its disputes to arbitration under Clause 36 of the said agreement.

(2.) The Petitioner was to be provided this accommodation since its own tenanted premises were handed over to its landlord and the Petitioner required an alternate premises for its business.

(3.) A reading of the aforesaid agreement shows that it is a composite agreement to develop the premises which were to be acquired by the Respondent for such development and then to hand it over to the Petitioner under a licence for 8 years. The agreement further shows that the dates for handing over possession mentioned in Clauses 8 and 9 are different, being 1.6.2002 and 25.7.2002. The agreement further provides payment of penalty charges for an alternative premises to be obtained on rent till the Petitioner can move in the agreed premises including the cost of shifting and the amenity charges payable to the Petitioner specified in Clause 30 as well as a penalty of Rs.2 Crores specified in Clause 31 in the event of delay in handing over possession and non-performance of the covenants in the agreement, respectively. The dates forgiving the Bank Guarantee as well as corporate guarantee are not specified in the agreement. Hence, though time was stated to be of the essence, there are specific stipulations with regard to the Petitioner being compensated in case of delay in handing over possession and for one of the acts no time limit was specified. to the Petitioner specified in Clause 30 as well as a penalty of Rs.2 Crores specified in Clause 31 in the event of delay in handing over possession and non-performance of the covenants in the agreement, respectively. The dates forgiving the Bank Guarantee as well as corporate guarantee are not specified in the agreement. Hence, though time was stated to be of the essence, there are specific stipulations with regard to the Petitioner being compensated in case of delay in handing over possession and for one of the acts no time limit was specified.