- 1 - IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ARBITRATION ARBITRATION ARBITRATION PETITION NO.230 OF 2008 PETITION NO.230 OF 2008 PETITION NO.230 OF 2008 M/s.Shatabdi Infrastructure Development Pvt.Ltd. ...Petitioners vs. M/s.New Deal Trading Company P.Ltd. ...Respondents Mr.J.P.Sen a/w Mr.J.K.Mistry i/b M/s.Federal & Rashmikant for the Petitioners None for the Respondents CORAM CORAM CORAM: A.S.OKA,J. A.S.OKA,J. A.S.OKA,J. DATE DATE DATE : OCTOBER 16,2008 : OCTOBER 16,2008 : OCTOBER 16,2008 P.C.: P.C.: P.C.: 1. Heard the learned counsel appearing for the petitioners. None appears for the Respondents. My attention has been invited to the order dated 6th May 2008 passed by this court. Clause (6) of the said order states that the petition shall be listed for hearing after two weeks after the affidavit in reply is filed by the respondents. Affidavit in reply has been filed on 17th June 2008. Accordingly, I have taken up for hearing this petition under section 9 of the Arbitration and Conciliation Act, 1996. 2. The learned counsel for the petitioners on instructions states that the petitioners are pressing for interim relief in terms of clause (ii) of the prayer clause (a) of the petition. - 2 - He states that a liberty may be granted to apply for appropriate interim directions before the learned Arbitrator. According to the case of the petitioners, a sum of Rs.1,80,00,000/- was paid by the petitioners to one Mr.G.K.Solanki, the owner of the property known as "Baroda House" for purchase of the said property. The payment was made on the assurance and guarantee of the respondent Nos.2 to 4. The further case of the petitioners is that on the request, assurance and guarantee of the Respondent Nos.2 to 4, they paid a sum of Rs.1,05,00,000/- for the purchase of the property to M/s.Prime Properties Managers Private Limited which is a sister concern of the first respondent. According to the petitioners a pay order of Rs.1,48,00,000/- was issued by the petitioners in favour of the Superintendent of Stamps. According to the petitioners, they have spent an aggregate sum of Rs.4,33,00,000/-. 3. Reliance has been placed on the memorandum of understanding dated 8th December 2005 entered into by and between the petitioners and the respondents. It will be necessary to refer to the terms and conditions of the memorandum of understanding. The memorandum of understanding provides that the respondents agreed that the total amount payable to the petitioners as on 30th November 2005 was Rs.14,00,00,000/- and they agreed to pay the said amount by sale and transfer of the four flats bearing nos.501, 601, 701 - 3 - on 5th, 6th, 7th and 8th floor respectively of the building "Sai Mansion Condominium" along 12 car parking spaces bearing nos.1 to 9 on the 4th level and numbers 7,8 and 9 on the 3rd level without any additional consideration on ownership basis. Clauses 4 & 5 of the said memorandum of understanding read thus : "4. The Company SID Pvt.Ltd. hereby irrevocably assures, agrees, confirm and declares that the Guarantors abovenamed shall have preemptive rights to repurchase the said 4 flats (as stated in Clause No.3 hereinabove) viz. 501,601,701, 801 on 5th, 6th, 7th and 8th floor respectively in the building owned by them and known as "Sai Mansion Condominium" along with 12 car parking spaces Nos.1 to 9 on 4th level and No.7,8,9 on 3rd level for a total consideration of Rs.21 Crores only (Rupees Twenty One Crores Only) on or before 31st March 2007. 5. In the event the Guarantors hereinabove fails/unable to repurchase/repay to the Company SID Pvt.Ltd. the sum of Rs.21 Crores (Rupees Twenty One Crores Only) as stated in Clause 4 hereinabove latest by 31st March, 2007 then the Guarantors bind themselves to forge their rights. Clause 12 of the Memorandum of understanding is the arbitration clause. - 4 - 4. According to the case of the petitioners, 1st, 2nd and 4th respondents executed separate agreements for sale in favour of the petitioners in respect of the said four flats and appurtenant parking spaces. On the basis of the power of attorney executed by the 1st, 2nd and 3rd respondents in favour of one Mr.Asif Furniturewala, separate sale deeds were executed by the said Constituted Attorney in respect of the said flats and parking spaces in favour of the petitioners. The petitioners came across a public notice published on behalf of the 3rd and 4th respondents inviting the claims in respect of the building ‘Sai Mansion’. The petitioners lodged their objections on 5th January 2006. 5. The case of the petitioners is that the respondents failed to pay a sum or Rs. 21,00,00,000/- on or before 31st March 2007. By a letter dated 19th April 2007, the petitioners recorded the fact that the respondents had failed to pay an amount of Rs.21,00,00,000/- on or before stipulated date i.e. by 31st March 2007. The Petitioners called upon the respondents to inform the date on which occupation certificate will be obtained. The petitioners called upon the respondents to hand over possession of the premises. 6. Reliance has been placed on the correspondence made by the petitioners and especially the letter dated 4th February 2008 - 5 - as well as 15th April 2008 sent by the petitioners to the respondents. By letter dated 15th April 2008, the petitioners invoked the Arbitration clause and suggested the names of the two retired Judges of this Court for being appointed as the Sole Arbitrator. 7. The prayer in this petition under section 9 of the said Act of 1996 is for appointment of the Court Receiver in respect of the said premises and for injunction. Ad-interim injunction has already been granted. 8. The learned counsel for the petitioners has taken me through the reply filed by the respondents. One of the contentions raised by the respondents in the said reply is that readiness was shown to pay a sum of Rs.3,81,65,690/- which the petitioners refused to accept and the petitioners insisted upon the demand of Rs.14,00,00,000/-. The case made out by the respondents is that the time stipulated by the Memorandum of understanding has been extended. 9. Considering the nature of the dispute and clause (12) of the Memorandum of understanding, it is obvious that the dispute arisen between the petitioners and the respondents is referable to the arbitration and in fact the arbitral proceedings have commenced. - 6 - 10. The Memorandum of understanding shows that the respondents have agreed to repay a sum of Rs.21,00,00,000/- to the petitioner. There is material on record to show that the respondents did not offer to pay a sum of Rs.21,00,00,000/- on or before 31st March 2007. The claim of the respondent is of repurchase of the said four flats. 11. Hence a case is made out for grant of injunction as prayed. If the respondents are allowed to create any third party interests in respect of the said premises and part with possession thereof, irreparable loss will be caused to the petitioners. As stated earlier, the prayer for appointment of Receiver is not pressed. 12. Hence, I pass the following order : i) The petition is allowed in terms of prayer clause (a) (ii). It will be open for the petitioners to apply for appropriate interim directions before the learned Arbitrator under section 17 of the Arbitration and Conciliation Act,1996, if occasion arises. JUDGE JUDGE JUDGE