ARBP1218-10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.1218 OF 2010 Vikas Narayan Raikar .. Petitioner Versus Deonar Anudeep Co-operative Hsg.Society Ltd .. Respondent Mr.D.D.Madan a/w Jayesh Mistry & Chirag Mody i/by RMG Law Associates for the petitioner. Mr.B.G.Vaidya i/by K.B.Borhade for the respondent. CORAM: S.C.DHARMADHIKARI, J. DATED: 31st January 2011 P.C. 1] This is a petition under section 9 of the Arbitration & Conciliation Act, 1996. The petitioner is a carrying on business of building contractor and developer in the name of proprietary concern M/s.Vikas Construction Company. Respondent is a cooperative housing society. 2] It is the case of the petitioner that the respondent represented to him that it is owner of the plot of land more particularly described at Exh.A to this petition. Therefore, it is stated that as a developer, the ARBP1218-10 2 petitioner entered into an agreement with respondent society as owner on 24th September 2001 and the petitioner styles this as development agreement. There was a power of attorney executed in favour of the petitioner. There are certain disputes under the said agreement and the petitioner, is therefore, invoking the arbitration agreement arrived between the parties vide clause 44. He is ready and willing to go for arbitration and to do everything that is necessary for the same but until the Arbitral reference concludes and award is rendered the subject matter of the Reference viz., immovable property may be preserved and protected is his case. 3] At the same time the petitioner in para 6 of the petition has stated that he was approached by the respondent in 1999 for carrying out development of the property. It is stated that a memorandum of understanding dated 22nd June 1999 was entered into by and between the petitioner and respondent. Thereafter, in para 7 it is stated that it was mutually agreed that a regular development agreement shall be executed and that is how the agreement dated 24th September 2001 came into existence. It is contended that the petitioner was to construct multi- storeyed building by developing the property and allot 29 flats of 1121 sft. carpet area and 13 flats of 1380 carpet area to the members of the ARBP1218-10 3 respondent free of cost and in lieu thereof, respondent gave irrevocable authority and permission to utilise and sell the flat/s in respect of balance FSI/ TDR to outsiders. 4] The nature of the disputes have been set out but I am not in agreement with Mr.Madon, learned Senior Counsel appearing for petitioner that the stand taken in the affidavit in reply viz., that the agreement dated 24th September 2001 is not the agreement and there is a prior agreement is totally false. Further, it is his contention that the property had slums which fact was never disclosed to the petitioner developer. 5] In paras 10 to 12 of the present petition, this is what is stated. “10. The said property admeasuring 14,129.56 consists of two parts namely vacant plot admeasuring 7721.27 sq.mtrs and the remaining area fully encumbered by athorized and unauthorised structures/hutments. The petitioner had agreed to allot 29 flats admeasuring 1121 sq.ft of carpet area and 13 flats admeasuring 1380 sq.ft of carpet area to the respondent solely on the premise that the petitioner could develop the vacant plot ARBP1218-10 4 admeasuring 7721.27 sq.mtrs under Regulation 3.11 of Appendix IV of the Development Control Regulations for Greater Bombay, 1991 for project affected persons. The remaining area was also proposed to be developed after obtaining permissions from the concerned Authorities under Regulation 33.10 of Appendix IV of the Development Control Regulations for Greater Bombay, 1991, however this remaining area was not taken into consideration by the petitioner for making its proposal to the respondent under the said Agreement as construction on the said remaining area was always considered to be a very tedious task if at all possible as this area is heavily encroached by slums. The development of the encroached area under the said Regulation 33(10) is possible only when the consent of 70% of the eligible slum dwellers is obtained. 11. Further, for the vacant portion of the said property the petitioner submitted its proposal to SRA Authorities under the said section 3.11. The proposal was scrutinized by Executive Engineer and technically approved and letter of intent for the same was issued on April 10, 2003. Further, in ARBP1218-10 5 order to avail the benefits under section 3.11, the land was required to be conveyed to SRA and only thereafter would the petitioiner be entitled to FSI/TDR for the land and on actual construction of buildings for PAP the petitioner would be entitled to further FSI/TDR for construction. In view thereof, the SRA Authorities sent the petitioner’s file to their legal department. 12. One of the main conditions of the LOI was to get the title of the said property certified by the advocates for SRA and to convey the land in favour of SRA by executing conveyance and an agreement. Therefore, the file was sent to SRA advocate Mr.Shashikant G. Surana, who after scrutinising all the documents informed that the said property is a declared slum. He further informed that since the land is declared slum, the scheme under section 3.11 cannot be implemented without obtaining necessary permission from the Deputy Collector (Encroachment) to develop the property which is already declared as slum.” 6] To my mind, if a portion of the land was not a slum then, there ARBP1218-10 6 was no question of the petitioner making a reference to the approval from the Slum Rehabilitation Authority. 7] Further, prima facie, there is no substance in the contention of the petitioner that the delay in the development work did not occur because of any fault of petitioner. If the petitioner had an agreement with him which dates back to 24th September 2001 and finding that there is no progress at site, if the cooperative housing society ultimately terminates the agreement then, prima facie, it cannot be said that the termination effected by letter dated 27th July 2010 is bad in law. The society has also set out in the letter of termination as to how there was a dead lock and no progress at all. The reasons for the termination are something which may not be gone into in details, but prima facie, if the society finds that no progress has taken place at site, then, as a owner of the property it can call upon the developer to carry on the work or else the agreement stands terminated. Ultimately, if the termination is found to be wrongful, the petitioner will be compensated for his efforts by an appropriate award. The petitioner himself points out the legal difficulties and complications. If the necessary approvals and permissions are not forthcoming even though the Letter of Intent was issued on 10th April 2003, then, the termination effected in the year 2010, prima facie, cannot be termed as ARBP1218-10 7 abrupt and unwarranted. The reasons set out in the letter of society coupled with the fact of this enormous delay, prima facie, support Mr.Vaidya’s arguments. Hence assuming any rights are created in petitioner’s favour in respect of the immovable property, they are now put an end by the respondent for reasons, which prima facie, appear to be germane and relevant. 8] However, until and unless it is determined that the termination is illegal, the society as a owner cannot be prevented from dealing with its own property. For the reasons aforestated, I am of the opinion that the conduct of the petitioner, being as above and, prima facie, the reasons for termination being justified, the petitioner is not entitled to any interim measures. Petition, therefore, is devoid of any merits and it is dismissed. No costs. 9] At this stage Mr.Madon appearing for petitioner submits that the ad-interim order be continued for four weeks from today. Mr.Vaidya for society opposes the continuation. Since, I have found that the termination is prima facie justified, for the reasons set out in the letter of the society and the petitioner was fully aware of the fact that a part of the property is declared as slum and, therefore, encumbered, it is not a fit case ARBP1218-10 8 to continue the ad-interim relief. Request in that behalf is, therefore, rejected. (S.C.DHARMADHIKARI, J)