SWASTIK CONSTRUCTION Vs. MUKESH ALIAS MOHANLAL MULJI

JUDGEMENT

(1.) This Petition is filed under Sec. 34 of Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging the Award of the learned sole Arbitrator dtd. 28/2/2024. By the impugned Award, the Arbitral Tribunal has allowed the claims of the Respondent in terms of prayer clauses (a), (b), (e), (f), (h) and (s) of the Statement Of Claim. The learned Arbitrator has rejected the claims raised in prayer clause (c) and (d) of the Statement Of Claim. The learned Arbitrator has awarded interest at the rate of 15% p.a. on the sums awarded. The learned Arbitrator has also directed payment of legal costs of Rs.49,43,826.00 in favour of the Respondent.

(2.) Respondents are the owners of property bearing Survey No.89 corresponding CTS No.306 and 306/1 to 6. admeasuring 1557 sq. yards equivalent to 1129.20. sq.mtrs. together with structures standing thereon situated at Poisar, Village, Kandivali (West), Mumbai (subject property). On 16/9/2005, Respondents entered into an Development Agreement with the Petitioners for development of the subject property with Petitioner No. 2. The consideration agreed was Rs.1,15,51,111.00 and two flats admeasuring 1050 sq.ft each on the top floor of the building to be constructed in the subject property. On 4/5/2007, MCGM granted Intimation of Disapproval. Petitioner No.1 was the owner of adjoining property bearing CTS No.304(A) admeasuring 436.10 sq.mtrs (Sita Sadan Plot). Petitioner No.2 approached Petitioner No.1 with an offer of amalgamation of Sita Sadan Plot with the subject property. Accordingly, Development Agreement dtd. 8/4/2008 was executed between Petitioner Nos.1 and 2 to jointly develop the suit property and Sita Sadan Plot. Petitioners planned construction of 2 wings 'A' and 'B' on the amalgamated plots. Wing B was constructed and 22 tenants of the subject property were accommodated in 'B' wing, for which occupancy certificate was issued.

(3.) Petitioners obtained various permissions for construction of 'A' wing. Since 'A' wing building was not constructed and Respondents did not secure possession of flats, they issued termination notice dtd. 15/4/2011 to the Petitioners. On 27/8/2013, Addendum Agreement was executed between the Petitioners and Respondents thereby modifying the terms of the original Agreement dtd. 16/9/2005. An amount of Rs.96,00,000.00 was paid to the Respondents and it was agreed to provide 2 flats on 14th and 15th floors totally aggregating 2900 sq.ft in the 'A' wing building. Clause-8 of the Addendum Agreement provided for handing over possession after obtaining Occupancy Certificate within 21 months. For delay in handing over possession, Petitioners agreed for payment of 1% interest per month on the market value of the four flats after expiry of period of 21 months. By December 2018, Petitioner No.1 completed construction of 'A' wing upto 15th floor. Possession of the four flats was not handed over to the Respondents. Respondents terminated Agreement of 2005 and Addendum Agreement of 2013 on 28/1/2016. On 24/3/2021, the disputes were referred to Arbitrator by constitution of Arbitral Tribunal at the instance of the Respondents, who had filed Sec. 11 Petition in this Court. On 11/11/2021, the learned Arbitrator passed interim Award which was challenged by the Petitioners by filing Arbitration Petition(L)- 29416 of 2021. With the consent of parties, the interim Award was modified by order dtd. 16/11/2022. The learned Arbitrator has passed final Award dtd. 28/2/2024 directing Petitioners to pay to the Respondents an amount of Rs.5,74,54,800.00 being the amount of interest for the period from 1/6/2015 to 31/12/2022 with further direction to pay further 1% interest on market value determined after 1/1/2023 until the date of possession of flat. The learned Arbitrator has also awarded costs of Rs.49,43,826.00 in favour of the Respondents. Aggrieved by the Award dtd. 28/2/2024, the Petitioners have filed the present Petition.