1 app-516-11 & 545-11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY. ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.516 OF 2011 IN ARBITRATION PETITION NO.389 PF 2011 WITH NOTICE OF MOTION NO.2364 OF 2011 M/s.Joy Builders through its sole Proprietor Mr.Jayant B. Soni ....Appellants. V/s. Mayadevi S. Makharia & Ors.... ....Respondents. WITH APPEAL NO.545 OF 2011 IN ARBITRATION PETITION NO.389 PF 2011 WITH NOTICE OF MOTION NO.2583 OF 2011 Mayadevi S. Makharia & Ors.... ....Appellants. V/s. M/s.Joy Builders through its sole Proprietor Mr.Jayant B. Soni ....Respondents. Mr. D.H. Mehta with Mr. Anuj Narula i/b. Jhangiani Narula Associates for the Appellant in Appeal No.516 of 2011 and for the respondent in Appeal No.545 of 2011 Mr. A.M. Saraogi for the appellants in Appeal No.545 of 2011 and for the respondents in Appeal No.516 of 2011. CORAM: MOHIT SHAH, C.J., AND MRS.ROSHAN DALVI, J. DATED : 5 September 2011. P.C. Appeal No.545 of 2011 not on board. Mentioned. By 2 app-516-11 & 545-11 consent of the parties taken up on board. 2. These appeals are directed against the order dated 1 July 2011 of the learned Single Judge of this Court by which the learned Single Judge disposed of Arbitration Petition No.389 of 2011 under Section 9 of the Arbitration & Conciliation Act, 1996, hereinafter referred to as “the Act”. 3. In view of the order that we propose to pass it is not necessary to set out all the facts in detail. 4. The parties had entered into an Agreement on 6 December 2005 under which the respondents/developers (in Arbitration Petition) were given the development rights and the petitioners/owners (in Arbitration Petition) had retained to themselves the FSI aggregating to 580.94 sq. mtrs. (6253 sq.ft.) out of the entire FSI including TDR FSI in the form of three flats on the first, second and third floors and three open and three stilt parking places. 5. The learned Single Judge has held that pending resolution of disputes regarding claims and counter claims by the Arbitrator, there will be no point in keeping the flats vacant and, therefore, the learned Single Judge passed an order for appointment of Court Receiver as Receiver of the flats on the first and second floors and the third floor is already in possession of the owners. The learned Single Judge also directed that the Court Receiver is appointed without security, but subject to payment of royalty. The royalty shall be computed on the basis of the market compensation for leave and licence agreements of similar flats in the area and that first preference shall be given to the 3 app-516-11 & 545-11 owners for such leave and licence. 6. In the appeal filed by the developers the learned Counsel submitted that the developers have to recover more than Rs.2.00 crores; that under the Agreement dated 6 December 2005 the owners had to pay to the developers the cost of construction and under the subsequent Agreement the owners had to pay further amount and that after taking into account all the outgoings including municipal taxes and interest, the owners are liable to pay to the developers a sum exceeding Rs.2.00 crores. 7. On the other hand learned Counsel for the owners has submitted that the owners are entitled to get possession of all the three flats on the first, second and third floors and that the owners are also entitled to get compensation of Rs.6.12 crores from the developers as per the particulars given in the statement which is part of the compilation before this Court. The learned Counsel for the owners, however, submitted that since the owners are presently without any permanent accommodation and they have to reside in other properties on leave and licence basis, the owners are ready and willing to pay to the developers total amount of Rs.1.50 crores including cost of construction and all other amounts due and payable towards the three flats. It is stated that this payment will be without prejudice to their contention that they are not liable to pay the said amount of Rs.1.50 crores or any other amount to the developers and without prejudice to their claim for Rs. 6.12 crores, which claim they propose to make before the Arbitrator. 8. Learned Counsel for the developers states that the Developers are ready to accept the aforesaid amount without prejudice 4 app-516-11 & 545-11 to their rights and contentions including their claim for an amount in excess of Rs.2.00 crores from the owners and also without prejudice to their contention that the owners are not entitled to claim any amount from the developers. 9. Learned Counsel for the parties further state that the parties are ready and willing to have all their disputes referred to the arbitration of Hon’ble Justice S.P. Kurdukar, Former Judge of the Supreme Court, and that their claims and counter claims will be submitted to the arbitration. 10. Having heard the learned Counsel for the parties, we dispose of these appeals in terms of the following directions:- (i) Upon the owners paying an amount of Rs.1.50 crores within forty-five days from today by Pay Order the developers shall hand over vacant and peaceful possession of the flats on the first and second floors and acknowledge the possession of the owners of the third floor in the property called “Joy Sapphire”, Juhu, Mumbai. (ii) By agreement of the parties the disputes between the parties in respect of the aforesaid property and the amounts/compensation payable by one party to the other are referred to the arbitration of Hon’ble Justice S.P. Kurdukar, Former Judge of the Supreme Court. (iii) The owners shall also pay all the municipal taxes and other outgoings in respect of the three flats with effect from 1 September 2011. 5 app-516-11 & 545-11 (iv) Till the disposal of the arbitration proceedings, the owners shall not dispose of any of the three flats or create any third party interest or rights in the said three flats. In case the owners propose to deposit the balance amount of the balance claim of the developers without prejudice to the rights and contentions of the owners before the Arbitrator, it will be open to the owners to approach the Arbitrator with an application for relieving them from the injunction and to deal with the three flats in such manner as they like after depositing the balance claim of the developers. (v) In case the owners fail to pay the aforesaid amount of Rs. 1.50 crores to the developers, either of the parties will be at liberty to move this Court for appropriate directions including for revival of these appeals. (vi) In view of the disposal of the appeals, Notices of Motion are also disposed of. (CHIEF JUSTICE) (ROSHAN DALVI, J.)