Bombay High Court

Vasanji Assaria Mamania vs Yadunarayan Mulky Shetty on 7 October, 2025

2025:BHC-OS:17920


                                                                                ARBP-200-2014-J - FINAL.doc



                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                     ORDINARY ORIGINAL CIVIL JURISDICTION
                                      ARBITRATION PETITION NO. 200 OF 2014
                           Vasanji Assaria Mamania                                          ...Petitioner
         Digitally
         signed by
                                  Versus
         SHRADDHA
SHRADDHA KAMLESH
KAMLESH TALEKAR
TALEKAR  Date:
                           Yadunarayan Mulky Shetty                                         ...Respondent
         2025.10.07
         14:49:18
         +0530
                           Mr. Dinyar D Madon, Senior Advocate a/w Mr Ramachandran
                           Narayanan and Mr Ashwin Bhadang i/b Narayanan and
                           Narayanan, for Petitioner.

                           Mr. Farhan Dubash a/w. Rahul Jain i/b VBA Legal, for
                           Respondent.

                                                CORAM         : SOMASEKHAR SUNDARESAN, J.
                                                RESERVED ON: JULY 14, 2025
                                                PRONOUNCED ON: OCTOBER 7, 2025


                      JUDGEMENT:

Context and Factual Background:

1. This is a Petition filed under Section 34 of the Arbitration and

Conciliation Act, 1996 ("the Act") challenging an arbitral award dated

May 31, 2013 ("Impugned Award") passed by a Learned Arbitral

Tribunal comprising a Sole Arbitrator in connection with disputes and

differences between the Petitioner, Vasanji Assaria Mamania

("Mamania") and the Respondent, Yadunarayan Mulky Shetty

("Shetty").

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2. The parties entered into a memorandum of understanding

("Agreement") by which Mamania agreed to purchase from Shetty a

certain land parcel located in Chembur, described in fuller detail in the

Impugned Award, admeasuring 2,493.9 square metres (" Subject

Property"), for a consideration of Rs. 11.25 crores, of which Rs. 50 lakhs

were payable at execution; Rs. 1 crore was payable as and when Shetty

removed the tenants from the premises and the balance Rs. 9.75 crores

against completion of the conveyance. On the face of the Agreement, a

date of execution is not discernible and there had been some differences

about the precise date although there was no dispute about execution of

the Agreement towards the end of April and start of May 2006. For all

purposes of this judgment the date of the Agreement is taken as May 2,

2006, as indicated in the Impugned Award and in the pleadings in the

Petition. As will be seen from this judgement, nothing would turn on

this facet.

3. The parties agreed that if a survey of the Subject Property

were to indicate a lower area, the consideration would be adjusted

downwards proportionately. Within three months, Shetty was required

to settle with all the tenants to get them to vacate the Subject Property;

make out a marketable title to the Subject Property free from any

encumbrance; have a survey conducted to demarcate the Subject

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Property at Mamania's cost; and build a boundary wall around the

Subject Property as per the survey coordinates, at Mamania's cost. The

conveyance too was expected to be completed within three months,

subject to Shetty complying with the aforesaid obligations.

4. The Agreement records in two places that time was of the

essence of the contract and on the face of it indicated a timeline of three

months for completion. The parties agreed that in the event of non-

completion due to Shetty's default, Mamania would have the option of

demanding specific performance; or demanding a refund of the "earnest

money" with interest at 12% per annum. Likewise, if Mamania's

payment obligation were to not be honoured, Shetty would have the

option to demand specific performance; or demand interest at 12% per

annum for the period of delay in payment; or cancel the Agreement and

forfeit the "earnest money" with anything excess paid being refunded

with interest at 12% per annum after 30 days of electing to cancel the

Agreement. The Agreement does not define the term "earnest money"

although it is used twice and in one place, indicates a blank that has

remained unfilled. The amount of Rs. 50 lakh agreed to be paid at

signing of the Agreement has been treated as the earnest money.

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5. Even before executing the Agreement, Mamania had paid a

sum of Rs. 1.5 crores to Shetty. After execution, he made two further

payments aggregating to Rs. 1.5 crores towards the end of July 2006,

taking the total amount paid to Rs. 3 crores.

6. Mamania then filed Suit No.1255 of 2007 in this Court

seeking specific performance of the Agreement. A deposit of Rs. 8.25

crores was made by Mamania with the Registry of this Court on June 27,

2007. By consent of the parties, the matter was referred to arbitration,

which culminated in the Impugned Award.

7. Mamania would contend that the Agreement was valid and

subsisting and that Shetty had not cleared the Subject Property of all

tenants; had not made out a clear and marketable title to the Subject

Property; not built a boundary wall, and therefore the Agreement could

not have been performed. Mamania would contend that although there

was a specific time indication in the Agreement, time was not the

essence of the contract, and since the Agreement subsisted, he was

entitled to specific performance of the Agreement in its terms i.e. at the

very price contracted therein.

8. Shetty would contend that time was of the essence and

Mamania had not performed his obligations under the Agreement

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before August 2, 2006 while Shetty had complied with his part of the

bargain. On the other hand, Shetty contended that Mamania was not

ready with the money; had second thoughts; and in fact, sought time to

complete the transaction. Shetty would contend that it was only after a

considerable wait that he terminated the Agreement on October 3,

2006. Shetty had sought to bring on record certain further documents

purporting to demonstrate that the tenants had actually been cleared

out. However, Mamania objected to bringing such evidence on record,

on the ground that those documents had not been adequately stamped.

Impugned Award:

9. The Learned Arbitral Tribunal found that time was indeed of

essence of the contract in the Agreement, as was explicitly contracted by

the parties. The Learned Arbitral Tribunal found that Mamania had not

shown readiness and willingness to perform the Agreement proximate

to its execution despite time being of the essence, and had demonstrated

no urgency to complete the transaction, at least until October 3, 2006,

when Shetty purported to cancel and terminate the Agreement.

10. The Learned Arbitral Tribunal held that the general

presumption that time was not of the essence in transactions involving

immovable property, stood displaced in the facts of the case. Not only

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did the Agreement itself explicitly record that time was of the essence,

but also, by all indications, the parties had intended to perform their

obligations within three months of the Agreement. Therefore, the

Learned Arbitral Tribunal held that the Agreement was not subsisting

and that when it had been subsisting, Mamania had not been ready and

willing to perform.

11. The Learned Arbitral Tribunal held that it would not be

appropriate to let Mamania cloud Shetty's title to the Subject Property

by making a partial payment and then dithering and refraining from

performing to complete the transaction, with Mamania not even

demanding performance until the Agreement was terminated. Citing

the Supreme Court judgment in Arulappan1, the Learned Arbitral

Tribunal found that it was inappropriate to grant specific relief in the

facts of this case.

12. The Learned Arbitral Tribunal found a rapid and remarkable

rise in the value of the property - according to Mamania himself, Rs. 20

crores in 2007, and according to a witness statement, Rs. 16 crores.

Citing copiously from the judgement of the Supreme Court in

Saradamani Kandappan2, the Learned Arbitral Tribunal held against

A.C. Arulappan vs. Ahalya Naik - (2001) 6 SCC 600

Saradamani Kandappan vs. S. Rajalakshmi & Ors. - (2011) 12 SCC 18

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declaring that the Agreement was amenable to specific performance at

the behest of Mamania at an antiquated price. The Learned Arbitral

Tribunal found, on facts, that the grant of specific performance would

lead to a windfall gain for Mamania and a serious detriment to Shetty,

on account of the steep escalation in market price of the Subject

Property, holding that keeping money in the bank is not a sign of being

ready and willing to perform a contract. The Learned Arbitral Tribunal

held that there has to be something more concrete to demonstrate

actual readiness and willingness to put that money to use and complete

the transaction as obligated under contract.

Analysis and Findings:

13. I have heard Mr. Dinyar Madon, Learned Senior Advocate on

behalf of Mamania and Mr. Farhan Dubash, Learned Advocate on behalf

of Shetty. With their assistance I have examined the material on record.

14. At the threshold, it may be seen that the Learned Arbitral

Tribunal has essentially exercised its discretion not to grant specific

relief. Whether this conclusion is implausible and perverse is the test to

be applied. Merely because another view is possible, it would not be

open to substitute the view of the Learned Arbitral Tribunal with the

view of this Court to arrive at a different outcome. It is now trite law

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that if the Learned Arbitral Tribunal has otherwise returned reasonable

and plausible findings, it is not open to the Section 34 Court to interfere

and set aside the arbitral award.

15. The Learned Arbitral Tribunal adopted the following extract

from the Supreme Court judgement in Arulappan3:

7. The jurisdiction to decree speciﬁc relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant speciﬁc relief, the court need not grant the order for speciﬁc relief ; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Speciﬁc Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, speciﬁc relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant speciﬁc relief, then also the court would desist from granting a decree to the plaintiff.

[Emphasis Supplied]

16. From the Supreme Court in Saradamani Kandappan4, the

Learned Arbitral Tribunal quoted the following extracts:

A.C. Arulappan vs. Ahalya Naik - (2001) 6 SCC 600

Saradamani Kandappan vs. S. Rajalakshmi & Ors. - (2011) 12 SCC 18

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37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to speciﬁc performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of speciﬁc performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non-readiness".

The precedents from an era, when high inﬂation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to speciﬁc performance, as suits and appeals therefrom routinely take two to three decades to attain ﬁnality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.

43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam:

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(i) The courts, while exercising discretion in suits for speciﬁc performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some signiﬁcance and therefore time/period prescribed cannot be ignored

(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.

(iii) Every suit for speciﬁc performance need not be decreed merely because it is ﬁled within the period of limitation by ignoring the time-

limits stipulated in the agreement. The courts will also "frown" upon suits which are not ﬁled immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to ﬁle a suit and obtain speciﬁc performance. The three-year period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part- performance, where equity shifts in favour of the purchaser.

[Emphasis Supplied]

17. The application of these precedents by the Learned Arbitral

Tribunal to the facts of the matter at hand is reasonable and a plausible

means of disposition of the matter at hand. The Learned Arbitral

Tribunal found that Mamania moved court in 2007 when performance

was expected three months after May 2006. There was no firm

movement until October 2006 when Shetty terminated the Agreement.

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On the contrary, for a person who was keen to complete the transaction

and paid over Rs. 1.5 crores even before signing the Agreement, the

slowing down of the pace of interest in closing cannot be ignored. A

careful scrutiny of the record would show that it was Mamania's case

that Shetty had demanded more money upfront to be able to settle the

tenants, since they were said to be demanding exorbitant amounts, and

this is why further payments of Rs. 1.5 crores were made in July 2006.

That having been paid and Shetty claiming to have settled with the

tenants, the Learned Arbitral Tribunal has drawn an inference about

Mamania objecting to bringing on the record, evidence of settlement

with tenants.

18. In fact, Mamania had claimed that there had been a partial

encroachment on the Subject Property, with a part of the encroachment

being on the road and partly on the Subject Property. Mamania had

claimed that such encroachment would be an eye sore and had

undermined the purpose for which the Agreement had been priced at

Rs. 11.25 crores. In September 2006, Mamania claims to have received

a notice from two persons, Jagatpal Shetty and Sadanand Shetty, with a

copy of an agreement of February 19, 1993 for purchase of the property.

Shetty not having disclosed this past is said to have shocked Mamania

but Shetty is said to have simply requested Mamania to ignore such past

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claims and indicated that those would be solved. This too would

indicate that Mamania seemed to not having been keen to complete the

transaction and in fact raised doubts about the efficacy of the

Agreement.

19. The aforesaid pleadings in the Suit are reflective of a litigant

who would resist having to perform a contract and not typical of a

litigant who is seeking specific performance. This is why Mamania

wanted a declaration from the Learned Arbitral Tribunal that the

Agreement was still valid and subsisting and was capable of specific

performance. The plaint in the Suit was affirmed in April 2007, a good

six months after the termination of the Agreement by Shetty in October

2006. It is apparent that what has weighed with the Learned Arbitral

Tribunal is that Mamania did not rush to court seeking specific

performance proximate to his grievance that a subsisting agreement was

being breached. From Mamania's own pleadings it appears that he was

picking faults that would aid postponing Mamania's performance.

20. Meanwhile, the value of the Subject Property, by Mamania's

own showing had risen to Rs. 20 crores (from Rs. 11.25 crores) and

Mamania wanted performance at the contracted lower price or even

lower on his purported discovery of shabby structures at the front,

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which he would claim eroded the value of the land where he planned to

build commercial premises with an attractive frontage.

21. A party that had made some payments even before the

Agreement and another set of payments immediately after the execution

of the Agreement could not be expected to have delayed paying the final

component with the same dispatch and promptitude unless it had

harboured second thoughts about the wisdom of the transaction. The

pleadings and the material on record reasonably point to such second

thoughts, or perhaps a second bite at the cherry by proposing

renegotiation of the bargain.

22. The Learned Arbitral Tribunal appears to have picked up on

that and discerned that Mamania had not been truly ready and willing

to perform within the envisaged time. That apart, he filed the Suit

nearly one year after the execution of the Agreement and a good seven

months after the termination of the Agreement. This is what justifies the

invocation of Saradamani Kandappan and Arulappan by the Learned

Arbitral Tribunal for application to the facts of this case.

23. When seen from this prism, the outcome rendered by the

Learned Arbitral Tribunal cannot be faulted. It is now trite law that the

Section 34 Court cannot re-consider evidence and re-assess the material

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on record and sit in judgement over the Learned Arbitral Tribunal. The

Section 34 Court may only determine if the arbitral award under

challenge is plausible, reasonable and not in conflict with the grounds

for being set aside in the Section 34 jurisdiction. In my opinion, having

analysed the Impugned Award and examined the material that was

presented to the Learned Arbitral Tribunal, there is nothing to show

that the findings of the Learned Arbitral Tribunal are implausible,

perverse, contrary to the contract, violative of natural justice or in

conflict with the fundamental policy of India to merit any interference

under Section 34 of the Act.

24. The Impugned Award is consistent with the bargain between

the parties, namely, that the parties had explicitly agreed in so many

words, that time was of the essence. While it may be possible to

displace the ordinary presumption that in matters of immovable

property, time was not of the essence, no fault can be found in the

instant case, with the Learned Arbitral Tribunal having found that the

express agreement as to time being of the essence not being displaced.

25. The Learned Arbitral Tribunal has also returned plausible

findings on the grant of specific relief being a matter of discretion, and

that exercise of discretion in favour of specific performance would be

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inequitable. Mamania had insinuated value erosion by discovery of ugly

encroachments outside the frontage of the Subject Property and at the

same time, also indicated the market value of Rs. 20 crores to canvas the

scale of damages suffered. The Learned Arbitral Tribunal, citing the

case law reproduced above, found that this approach was not acceptable

and that it was not meritorious to exercise discretion in favour of

granting specific performance. A natural corollary was that the

intention to perform on the part of Mamania having been found, going

by the material on record, the Learned Arbitral Tribunal also held that

no case was made out for award of damages.

26. The scope of review by the Section 34 Court is well covered in

multiple judgements of the Supreme Court including Dyna

Technologies5, Associate Builders, Ssyangyong, Konkan Railway6 and

OPG Power7. Even implied reasons are discernible and may be inferred

to support the just and fair outcome arrived at in arbitral awards. To

avoid prolixity, I do not think it necessary to burden this judgment with

quotations from these judgments. It is well settled that the arbitral

tribunal is the master of the evidence and the best judge of the quality

and quantity of evidence. Suffice it to say (to extract from just one of the

Dyna Technologies Private Limited v. Crompton Greaves Limited - (2019) 20 SCC 1

Konkan Railways v. Chenab Bridge Project Undertaking - 2023 INSC 742

OPG Power vs. Enoxio - (2025) 2 SCC 417

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foregoing judgements) in Dyna Technologies8, the Supreme Court held

thus:

"24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.

25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."

[Emphasis Supplied]

Dyna Technologies Private Limited v. Crompton Greaves Limited - (2019) 20 SCC

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27. Applying the aforesaid standard, I find it difficult to hold that

the Impugned Award is liable to set aside. It can never be held to be

perverse in a manner that goes to the root of the matter, where no other

view would be possible.

28. Mamania's contentions about how the Agreement and the

material on record ought to be interpreted, would would necessitate

substituting the incumbent plausible view with a competing view (even

assuming that the competing view canvassed is plausible). This, in my