LOTUS LOGISTICS AND DEVELOPERS PRIVATE LIMITED Vs. EVERTOP APARTMENTS CO-OPERATIVE HOUSING SOCIETY LIMITED

JUDGEMENT

(1.) By this Petition filed under Sec. 34 of the Arbitration and Conciliation Act, 1996, Petitioner has sought invalidation of the Arbitral Award dtd. 16/8/2024 passed by the learned sole Arbitrator. By the impugned Award, the Arbitral Tribunal has directed Petitioner to have the building plans amended and approved in consonance with the sanctioned plan dtd. 17/9/2008 for the purpose of issuance of occupation certificate for the building. The Tribunal has directed the Petitioner to take all necessary steps for procurement of occupation certificate for wing 'A' building in accordance with building plans sanctioned on 17/9/2008. In the event of non-grant of occupation certificate in respect of wing 'A' building, the Tribunal has directed the Petitioner to take steps to get the area shown as 'open to sky ducts' in the living rooms and bedrooms, regularaised at its cost within three months of rejection of application for occupation certificate. In the event of non-grant of occupation certificate and rejection of regularisation of 'A' wing building, Petitioner is directed to pay to the Respondent-Society sum of Rs.128,98,00,000.00 within three months of such rejection alongwith interest @ 8% per annum. The Petitioner is also directed to pay to the Respondent-Society monthly compensation @ Rs.80.00 per sq.ft. per month per society member in respect of the period from February-2014 to October-2015 alongwith interest @ 8% per annum. The Petitioner is also directed to pay to the Respondent-Society sum of Rs.45,82,500.00 being the loss on account of shortfall in area alongwith interest @8% per annum. The Petitioner is also directed to pay to the Respondent-Society property taxes for the period from November 2008 till 15/10/2015. Arbitral Tribunal has also declared plans dtd. 9/5/2009 and 25/3/2011 as well as Rectification Deed dtd. 3/11/2010 as illegal and void and not binding on the Respondent- Society.

(2.) The Respondent is a cooperative housing society registered under the Maharashtra Co-operative Societies Act, 1960. The Respondent is the owner, seized and possessed of land bearing Plot No.9/10/11 admeasuring 31,603 sq.ft.(2930 sq.mtrs.) bearing CTS No.834/1, 834/2 and 822/1, J.P. Road, Andheri (W), Mumbai-400 053. On the said plot of the society, there were three buildings consisting of ground plus 3 floors having total 58 tenements. The Respondent-Society resolved to go for redevelopment of its buildings and invited offers from developers. The Petitioner is a developer and submitted its offer to the Respondent-Society and offered 52% additional usable carpet area (including flower beds, duct area, dry balcony, niches, etc.) to every member over and above the area occupied by them in the old buildings. The Respondent-Society resolved to appoint the Petitioner as the developer for redevelopment of its buildings. In 2008, the Petitioner-Developer furnished plans including floor plans in respect of the proposed building, under which it was proposed to construct a tower/building for members of the Respondent-Society comprising of basement, stilts, podium and 15 floors with four flats per floor with amenities such as society office, community hall, gymnasium, garden, amenity area, children's playground, jogging track, etc. On 3/5/2008, Development Agreement was executed between the Petitioner and the Respondent -society. Power of Attorney was also executed by the Respondent -Society in favour of the Petitioner. Under the Development Agreement, Petitioner agreed to provide to 58 members of the Society 52% additional usable carpet area over and above their flats. The redevelopment was to be completed by securing occupation certificate within 24 months with further grace period of six months. The Petitioner-developer agreed to pay monthly compensation to each member @ Rs.40.00 per sq.ft. per month for first 12 months, Rs.44.00 per sq.ft. per month for next 12 months and Rs.52.00 per sq.ft per month for extended period of six months. Beyond the period of 30 months also, monthly compensation @ Rs.52.00 per sq.ft. per month was agreed to be paid. The Petitioner was to construct wing 'A' building for members of the Society whereas wing 'B' building was to be constructed as free sale component. Petitioner submitted plans for approval to the Municipal Corporation of Greater Mumbai (MCGM) and Intimation of Disapproval (IOD) on 17/9/2008 was issued by the MCGM.

(3.) According to the Respondent-Society, the Petitioner- Developer failed to complete redevelopment within agreed period of thirty months. Some of the members voiced concerns about delay in completion of the redevelopment process. Letters dtd. 21/6/2012 and 7/7/2012 were addressed by some of the members to the Petitioner-Developer. The Petitioner-Developer relies upon Deed of Rectification dtd. 3/11/2010, which according to the Respondent-Society was unauthorisedly executed by the erstwhile secretary. By the said unregistered Deed of Rectification, some of the clauses of the Development Agreement were sought to be altered. The Petitioner-Developer stopped paying monthly compensation to the members from January-2014. 'A' wing building for members of the Society was apparently constructed and it is claimed that on account of failure by the Petitioner-Developer to pay monthly compensation after January-2014, some of the members were left with no other alternative but to occupy flats in the newly constructed wing 'A' building in absence of issuance of occupation certificate.