Bombay High Court

Sadguru Enterprises vs Asha Sonu Samjiskar And 6 Ors on 26 March, 2025

  2025:BHC-OS:5682

                                                                         909.CARBP.82.2021.doc


                                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                          ORDINARY ORIGINAL CIVIL JURISDICTION

                                      COMMERCIAL ARBITRATION PETITION NO.82 OF 2021
                                                         WITH
                                           INTERIM APPLICATION NO.836 OF 2021
                                                          IN
                                      COMMERCIAL ARBITRATION PETITION NO.82 OF 2021

                       Sadguru Enterprises                                          ...Petitioner
                         Versus
                       Asha Sonu Samjiskar & Ors.                                   ...Respondents

                             Mr. Karan Bhide a/w. Mona Bhide, Azmin Colah & Trisha Loha
                             i/b. Dave & Girish & Co., Advocates for Petitioner.
                             Mr. Shanay Shah a/w. Mr. Ameet Mehta, Nirav Marjadi, Srushti
                             Mehta, Rebha Dogra & Kushal i/b. Solicis Lex, Advocates for
                             Respondents.

                                                           CORAM: SOMASEKHAR SUNDARESAN, J.

DATE : MARCH 26, 2025

Oral Judgement:

1. This is a challenge under Section 37 of the Arbitration and

Conciliation Act, 1996 ("the Act") to an Order dated December 15, 2020

passed under Section 17 of the Act ("Impugned Order").

2. By the Impugned Order, which runs into nearly 40 pages, an

application under Section 17 of the Act made by the Petitioner in these

proceedings stood dismissed. Leaving the length of the order aside, the

Digitally following contents in the Impugned Award are noteworthy :-

signed by AARTI AARTI GAJANAN GAJANAN PALKAR PALKAR Date:

2025.04.03 10:55:00 +0530

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62. As noted earlier, the primary obligation in this behalf was that of Respondents. However, even the Claimant does not seriously dispute that of the total, fifteen premises in the Subject Building the Respondents did secure consents of at least seven concerned occupants, as long ago as in September -

October, 2018. Whether or not this was sufficient in the law for Claimant to proceed fully in the matter, it is not likely enough to justify Claimant's failure

- just until it wished to file an Additional Affidavit here - to proceed at least with steps that, in the ultimate analysis, were to redound chiefly to its benefit. To be clear, the Tribunal does not suggest this to be a failure on the Claimant's part to comply with some "essential term" of the Contract. But it does believe that it indicates, Claimant was neither ready nor willing to discharge a "burden" not otherwise supererogatory.

63. Having thus found, prima facie, that Respondents did not fail materially in their duty to secure the occupants' consent to development by the Claimant, and that they fairly did make out their title to the Subject Property, the Tribunal cannot but hold that Claimant's clock had begun to tick; and it will now consider, how far it had got to run?

72. The Contract, on its plain terms, gave the Claimant at least until the end of December, 2020, to comply with its obligation to "give possession of the permanent alternate accommodation to the occupants" . Granted the Claimant made it rather improbable that it could do so, but it was yet to render it entirely impossible (in the sense that, allowing the Claimant time at least until 31 December 2020, shall not have been "impracticable and useless from the point of view of the object and purpose which the parties had in view"). There was, in other words, not yet an accomplished violate (ion) (of) any essential term" of the Contract, "that on (Claimant's) part remain(ed) to be performed". Respondents yet have sought to terminate that Contract over a year and a half early (without any prior, written expression of dissatisfaction); and in a manner which plainly did not square with its (i.e. the Contract's) requirements. This may have been entirely lawful (which will be seen presently), but that does not make it any less inequitable, and to seek, as they now do, the full measure of equity, it behooved Respondents themselves to have acted within its spirit.

73. Coming thus to the "lawfulness" of Respondents' termination, the Tribunal must first dispose of the matter of the Contract's own "determinable" nature. On this issue, not only is the state of the record is not wholly satisfactory and must await trial, but even the authorities cited (on either side) are not exactly on point.

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79. Whilst not exactly on all fours with the case before this Tribunal, thus, Adhunik does nonetheless present some striking parallels, for,

(a) A contract of significant value was terminated, which termination was challenged by one party and defended by the other with arguments centred, inter alia, on the contract's determinability, the performance of a continuous duty and irreparable injury,

(b) The Court was unwilling to arrive at a definite, prima facie conclusion on the lawfulness of the termination on those grounds; and

(c) Whilst it recognised some merit in the movant's (i.e. Adhunik's) claim that the termination appeared unjust, it yet recognised the non-movant's (ie. OMM's) "right" at least to carry on (what was in effect) the operation under the agreement "on its own", given that "compensation" (to Adhunik), in the facts and circumstances of the case, could afford adequate relief.

80. Here we have much the same claims. We also have, as observed earlier, a Claimant who, although perhaps not in breach, did also appear neither ready nor willing to perform its outstanding obligations under the Contract. We then have the Respondents who, albeit inequitably, may not also have been outside the bounds of law in terminating that Contract.

85. For these, self-same reasons, the Tribunal is also not inclined to accept that the balance of convenience favours the Claimant here, rather than the Respondents. The former's arguments in that behalf appear to claim not so much a balance of its convenience, as one of Respondents' inconvenience, i.e. not staying the putative termination will inconvenience them, their tenants, and any occupants. That, however, is for the latter to decide, and on this record, they do not appear hamstrung in any way.

86. If anything, given Respondents' unrebutted assertions re the Ashawanti Co-operative Housing Society Ltd., and the Claimant's own estimation of the effect that may have had on "the entire development potentiality of the (Subject) Property", it would appear that it is the Claimant which may find it far more challenging "to undertake a holistic development of the said Property."

87. Given the Tribunal's findings in Parts V-A and V-B, this aspect becomes more or less academic. The Tribunal will nonetheless address why,

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in its view, the Claimant may not demonstrate a likelihood of "irreparable" injury.

88. Three weeks after it filed its Application, Claimant filed its Statement of Claim ("SOC"). In it, it claimed not just specific performance of the Contract, but it also made an alternate claim, "in case the reliefs with respect to specific performance are not granted", in a sum of Rs.9,87,18,140/- (Rupees Nine Crore Eighty-seven Lakh Eighteen Thousand One Hundred and Forty only), "towards damages and refund of payments due and payable by the Respondents along with interest". At Exhibit "F" to the SOC, the Claimant has made a total of 29 (twenty-nine) particularised claims, in four, separate parts ("A" to "D").

97. That definiteness, however, may not be mistaken for finality. It ought, rather, to be understood as an effort to focus the parties' attention to their respective tasks at trial, when each such matter shall be considered without regard to anything stated herein.

3. The Learned Arbitral Tribunal had to contend with competing

versions of what would be equitable and has expressed a prima facie

view, which upon review, I do not find to be inequitable.

4. In a nutshell as stated in Para 80, the Learned Arbitral Tribunal

came to a view that the Petitioner, who although perhaps not in breach,

prima facie did not appear to be ready and willing to perform its

outstanding obligations under the contract. While this is seriously

contested by the Petitioner, the eventual finding in this regard would be

the matter of evidence which the Learned Arbitral Tribunal would need

to examine and deal with in the course of the arbitration proceedings.

The Learned Arbitral Tribunal has also returned a finding that the

termination by the Respondents could perhaps be inequitable, but

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could not be entirely outside the bounds of law governing termination

of contract. In arriving at its view, the Learned Arbitral Tribunal did

rely on the alternative prayer which extensively prays for damages on

various counts.

5. In my opinion, it can never be a matter of absolute law that a

mere alternative prayer for damages would necessarily remove all scope

for a stay on the termination of a contract. Indeed, the Learned Arbitral

Tribunal too has not said so. However, whether to exercise the Learned

Arbitral Tribunal's discretion to stay the termination of a contract is

entirely a matter of discretion, which falls in the domain of the Learned

Arbitral Tribunal.

6. Having perused the material on record and the provisions of the

underlying contract with the assistance of Learned Counsel for the

parties, I am not persuaded to hold that the view taken by the Learned

Arbitral Tribunal is implausible or perverse to a degree that in exercise

of jurisdiction under Section 37 of the Act one would need to interfere

at this stage. The challenge is entirely on the prima facie assessment of

evidence and the interpretation made by the Learned Arbitral Tribunal

rather than on relevant material being ignored or irrelevant material

being factored in.

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7. Learned Counsel for the parties acknowledge that the arbitration

has continued since the Impugned Order was passed, for almost for

four and half years. Currently, cross-examination of the Respondent's

witnesses is underway. The Impugned Order has not stood in the way

of the conduct of the proceedings for this entire period. At this stage of

the matter, it is also not reasonable to alter the position without any

further development taking place to alter the factual matrix on which

the Impugned Order is based. Put differently, if the Learned Arbitral

Tribunal has exercised its discretion reasonably, merely because

another view would be possible, the Section 37 Court must not

endeavour to substitute the wisdom of interim measures adopted by

the Learned Arbitral Tribunal with the interim measures that the Court

deems would be fit.

8. Needless to say, all the views expressed by the Learned Arbitral

Tribunal in the Impugned Order are indeed prima facie views and the

length dedicated to dealing with it, to my mind, evidences the anguish

of the Learned Arbitral Tribunal to be seen doing justice to all the

competing contentions presented before the Learned Arbitral Tribunal .

A reading of the Impugned Order does not indicate that the Learned

Arbitral Tribunal has made up its mind firmly in the manner of a final

decision, or that the Learned Arbitral Tribunal has taken a firm

position one way or the other. On the contrary, the Learned Arbitral

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Tribunal has taken care to state that it would need to deal with

evidence and the record in the course of the final hearing before being

firmer in its conclusions.

9. In these circumstances, I would find that the findings of the

Learned Single Judge of this Court in the case of Raymond Limited1

would articulate the standard to be applied quite appropriately - the

relevant extract is set out below:-

26. In any event, I find substance in the argument of Dr. Saraf that the view of the Tribunal is certainly a plausible view and does not suffer from any perversity requiring interference under Section 37 of the Arbitration and Conciliation Act, 1996. It is now quite well settled that the Arbitration and Conciliation Act, 1996 contemplates minimal interference by the Court and which is clear from Section 5 of the Act. It is not as if this Court, either to a challenge to an Award under Section 34, or to a challenge to an interim order under Section 37, can go into the facts and law on every aspect and substitute its own opinion in place of that of the Arbitral Tribunal. To put it differently, what this Court has to look into, is whether the order passed by the Tribunal was one that was a plausible view and once this test is satisfied, no interference is called for in the impugned order. This has been held by a Division Bench of the Delhi High in the case of NHAI v. BSC-RBM-

Patil Joint Venture [2018 SCC OnLine Del 6780]. This decision of the Delhi High Court has in fact been followed by this Court in the case of Artha Vruddhi Securities Ltd. v. Mahavir Prasad Gujjar [Arbitration

Raymond Limited Vs. Akshaypat Singhania & Anr. - 2019 SCC OnLine Bom 227

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Petition No.547 of 2018 decided on 25th January, 2019]. Paragraph 26 of the decision in Artha Vruddhi Securities Ltd. reads thus:--

"26. On going through the impugned order, I do find that the view taken by the Arbitral Tribunal is certainly a plausible view. I do not find that the order suffers from any perversity that would require my interference in appeal as held by the Delhi High Court in the case of NHI v. BSCRBM-Patil Joint Venture (supra). The position that emerges from the law, as it stands crystallized today, is clearly, that findings, of fact as well as of law, of the Arbitrator/Arbitral Tribunal are ordinarily not amenable to interference either under Section 34 or Section 37 of the Act. It is only where the finding is either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by the Court, is necessary. The Arbitrator/Arbitral Tribunal is the final arbiter on facts as well as in law, and even errors, factual or legal, which stop short of perversity do not merit interference under Sections 34 or 37 of the Act. Paragraph 66 of this decision culls out the aforesaid proposition and reads thus:--

"66. We have already highlighted, herein above, the limited arena of the jurisdiction of this Court, in the matter of interference with arbitral awards, under Sections 34 and 37 of the Act. The position that emerges from the law, as it stands crystallized today, is, clearly, that findings, of fact as well as of law, of the arbitrator/Arbitral Tribunal are ordinarily not amenable to interference either under Sections 34 or Section 37 of the Act. It is only where the finding is either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by this Court, is necessary. The arbitrator/Arbitral Tribunal is the final arbiter on facts as well as in law, and even errors, factual or legal, which stop short of perversity, do not merit interference under Sections 34 or 37 of the Act. Insofar as the ultimate view of the learned arbitrator/Arbitral Tribunal, on any issue is concerned, so long as the view is plausible, and not merely possible, this Court would be loath to interfere therewith. We may usefully make reference, in this regard, to the following postscript, entered by this Court in its judgment in P.C.L. Suncon (JV) v. N.H.A.I.:--

"As a postscript, this Court believes that it is imperative to sound a word of caution. Notwithstanding the considerable jurisprudence advising the Courts to remain circumspect in denying the enforcement of arbitral awards, interference with the awards challenged in the petition before them has become a matter of routine, imperceptibly but surely erasing the distinction between

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arbitral tribunals and courts. Section 34 jurisdiction calls for judicial restraint and an awareness that the process is removed from appellate review. Arbitration as a form of alternate dispute resolution, running parallel to the judicial system, attempts to avoid the prolix and lengthy process of the courts and presupposes parties consciously agreeing to submit a potential dispute to arbitration with the object of actively avoiding a confrontation in the precincts of the judicial system. If a court is allowed to review the decision of the arbitral tribunal on the law or on the merits, the speed and, above all, the efficacy of the arbitral process is lost."

10. Having considered the record and the current status of the

arbitration proceedings, and considering that this is a challenge to an

interlocutory order, which in my opinion does not contain an

implausible or an arbitrary position, the Petition deserves to be

dismissed.

11. The parties are requested to cooperate with the Learned Arbitral

Tribunal to complete the proceedings at the earliest within the

mandate stipulated in law.

12. All actions required to be taken pursuant to this order, shall be

taken upon receipt of a downloaded copy as available on this Court's

website.

[ SOMASEKHAR SUNDARESAN, J.]