NIRMAL LIFESTYLE LTD Vs. TULIP HOSPITALITY SERVICES LTD

JUDGEMENT

(1.) THE parties entered into agreements for development of the property of the Tulip Hospitality Services Ltd. (Tulip) by Nirmal Lifestyle Ltd. (Nirmal). The payments under the agreements were to be made upon specified covenants contained in the agreements. Certain payments have been made. Certain covenants have been complied. Certain other covenants have not been complied. There were disputes between the parties. Arbitration was invoked. The parties appeared before the Arbitrator. An award has been passed which has been challenged by Nirmal with regard to two agreements executed by the parties which were referred to arbitration. The award is challenged by Tulip with regard to the grant of interest only. Nirmal has also applied for interim relief for protection and preservation of the disputed property pending the arbitral proceedings to be initiated in respect of the reference agreement and until the publishing of the award.

(2.) PARTIES have entered into agreements on 29.03.2003, 31.03.2003, 11.06.2003, 21.06.2003 and 17.10.2003. The parties have referred the last two agreements to arbitration as they have agreed to refer the dispute to arbitration in the last two of the aforesaid agreements. However since all the agreements relate to the same property being the hotel premises of Tulip known as Tulip Star Hotel, Juhu Beach, Juhu Tara Road, Vile Parle (West), Mumbai - 400 049 the parties have relied upon and shown the Court the initial agreement also. The main dispute between the parties is with regard to the covenant/obligation of Tulip to obtain the approval of the Consortium of Banks from whom Tulip had obtained a large loan of about 1.29 Crores for the proposed transaction of the parties. This was to be obtained within 60 days of the initial agreement dated 29.03.2003 and within 150 days of the agreements dated 21.06.2003 and 17.10.2003 which have been referred to arbitration. Tulip has not obtained the approval. Meanwhile Nirmal applied for specific performance of the agreement. Nirmal claimed that it was bound and liable to pay further sums in addition to the amount shown to be already paid under the agreement dated 21.06.2003 to Tulip only after the approval was obtained. Nevertheless it has admittedly made payments of further amounts to Tulip. Nirmal claims that despite such payments the approval was not obtained and Nirmal accordingly must obtain specific performance, it having performed its part of the contract and more and Tulip having breached its obligation under the contract. In the alternative Nirmal claimed damages.

(3.) NIRMAL 's claim for specific performance has been rejected. The counter -claim of Tulip has been rejected. Nirmal has been granted an award of return of the amount of monies paid by Nirmal to Tulip under the reference agreement but not those paid by Tulip under the earlier agreements dated 29.03.2003 and 31.03.2003 as those agreements were not referred to arbitration and the Arbitrator held that he would have exceeded his jurisdiction if he passed an award for refund of those monies also.