[Cites 11, Cited by 0]

Bombay High Court

Mahavir Developers And 10 Ors. vs Mahavir Jaina Vidyalaya And 6 Ors. on 6 April, 2026

 2026:BHC-OS:8142

                                                                  CARBP.128.2023.Final.doc


                                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                        ORDINARY ORIGINAL CIVIL JURISDICTION

                                COMMERCIAL ARBITRATION PETITION NO.128 OF 2023

                     Shri Mahavir Developers & 10 Ors.                                  ....Petitioners

                               Versus

                     Shri Mahavir Jaina Vidyalaya & 6 Ors.                              ....Respondents


                          Mr. Darius Khambata, Senior Advocate a/w. Ish Jain, Rajan
                          Yadav, Karan Rukhana, Aditya Pimple, Duj Jain, Krishma Shah,
                          Naomi Ting, Deep Thakkar, i/b Kiran Jain & Co., for Petitioners.

                          Mr. Dinyar Madan, Senior Advocate a/w Ieshan Sinha, Dhruvi
                          Mehta & Yajas Achal, i/b Wadia Ghandy & Co. for Respondent
                          Nos. 1 to 5.


                               CORAM                        : SOMASEKHAR SUNDARESAN, J.

                               RESERVED ON                  : March 16, 2026

                               PRONOUNCED ON                : April 6, 2026



                     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

October 1, 2019, as modified further on October 17, 2019 passed by a

Learned Arbitral Tribunal comprising a sole arbitrator ( "Impugned

Digitally signed by Award").

AARTI AARTI GAJANAN

PALKAR Date:

2026.04.06 15:37:56 APRIL 6 , 2026 +0530

Aarti Palkar

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2. Petitioner No.1, Shri Mahavir Developers ("Developer") along with

its Partners, Petitioner Nos.2 to 11 are aggrieved by the Impugned Award,

which holds in favour of Respondent No. 1, Shri Mahavir Jaina Vidyalaya,

a Public Charitable Trust ("Trust") of which, Respondent Nos.2 to 5 are

Trustees ("Trustees"). Respondent No.6 and 7 are former Partners of the

Developer.

3. The Developer and the Trustees had executed a Memorandum of

Understanding dated April 9, 2005 ( "MOU") followed by a Development

Agreement dated April 30, 2007 ( "Development Agreement"), by which,

development rights were granted to the Developer over property owned

by the Trust situated in Gowalia Tank, Mumbai ( "Subject Property"). The

Developer was to pay a consideration of Rs.3.69 Crores for grant of the

development rights and contracted an obligation to construct a new

Hostel Building ("Hostel") and a Jain Derasar ( "Temple") with an area of

not less than 32,000 square feet ( "Agreed Area") in place of the existing

Hostel Building which includes six shops, and the Temple. The Developer

was to also reconstruct three tenanted buildings located on the Subject

Property. The parties had agreed that the development would be carried

out under Regulation 33(7) of the Development Control and Promotion

Regulations 2034 ("DCR").

4. Clause 19 of the MOU allowed the Trust to terminate the MOU if

the Developer were to breach the terms or were unable to construct and

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develop the Subject Property. Clause 6.2 of the MOU also provided the

Developer with a license and a right to enter upon the Subject Property in

furtherance of the agreement between the parties. The Development

Agreement, which elaborated the MOU in greater detail, recorded the

Developer's obligation to construct the Hostel, including six shops, and

the Temple having an area of not less than the Agreed Area, excluding

staircase and lift area. The construction of the Hostel was to be given the

highest priority and simultaneously the Developer could develop the three

tenant occupied buildings without diluting the priority for constructing

the Hostel. The Development Agreement made it clear that under no

circumstances would the area of the Hostel building be reduced from the

Agreed Area of 32,000 square feet.

5. Since the parties had agreed to further the development under

Regulation 33(7) of the DCR, the parties also negotiated the framework by

which they would handle the situation arising out of the rehabilitation

area certified by the Municipal Authorities in lieu of the Hostel building

falling below 32,000 square feet - this would affect the 50% incentive

Floor Space Index ("FSI") that the Developer would be entitled to.

Therefore, the parties agreed that if the incentive area approved by the

authority fell below 16,000 square feet, the consideration of Rs.3.69

Crores paid by the Developer to the Trust would be adjusted downwards,

with a reduction being effected at the rate of Rs.2,500 per square foot of

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the shortfall. Such amount would then have to be refunded by the Trust to

the Developer.

6. The parties agreed that there would be no deviation from the

Intimation of Disapproval ("IOD") and the commencement certificate.

Before submitting plans to the Municipal Authorities, the Trust would

have a right to approve the same. Clause 28 provided that each party

would be entitled to seek specific performance against the other and claim

damages in the event of default on the part of the other party. Clause 29

provided that unless and until the premises are fully developed in all

respects, the arrangement recorded in the agreement could not be

brought to an end. In the event of any facet of the development not being

explicitly covered by the Development Agreement, the parties agreed to

fall back on the MOU to resolve such question.

7. While the MOU was executed in 2005 and the Development

Agreement in 2007, nearly a decade later, the Trust terminated the

relationship by a Termination Notice dated March 4, 2016 ( "Termination

Notice"). The termination was premised on the ground that the

Developer failed to secure approval for construction of the Agreed Area

i.e. 32,000 square feet for the new Hostel building since the IOD dated

December 2, 2014 had been obtained for only 25,838 square feet

("Reduced Area").

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8. The Developer contended that the Trust was unable to prove the

existence of the fifth floor, in view of which, the corresponding

development potential could not be tapped. The Trust took the position

that the fifth floor was in fact demolished by the Developer with requisite

permissions from the Municipal Authorities and that the element of

delivering at least the Agreed Area to the Trust was a non-negotiable

fundamental condition of the redevelopment.

9. The difference between the Agreed Area and the Reduced Area in

the entitlements flowing to the Trust under the Development Agreement

was at the heart of the controversy between the parties.

10. The aforesaid dispute led to arbitration, with the Trust and Trustees

being Claimants, and the Developer and its Partners being Respondents.

The Trust sought declaration that the Termination Notice was valid; a

direction that the Developer must hand over vacant and peaceful

possession of the Subject Property to the Trust; and made a claim for

damages. The Developer filed a counter-claim seeking declaration that the

MOU and the Development Agreement were valid and subsisting; that the

Termination Notice was illegal; a direction to the Trust to specifically

perform the terms and conditions of the MOU and the Development

Agreement "as varied from time to time".

11. The allusion to the "variation" is based on the Developer's

contention that the parties had consciously moved away from pursuing

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the redevelopment under Regulation 33(7) of the DCR to redevelopment

under Regulation 33(6) of the DCR. The difference between the two is

primarily that under Regulation 33(7), incentive FSI would be available

which would lead to the Developer's ability to exploit the enhanced FSI

and earn returns on the redevelopment. On the other hand, under

Regulation 33(6) of the DCR, what is permitted is simply reconstruction

of the existing area without any incentive FSI.

12. According to the Developer, the parties had agreed to deviate from

their agreement - to first apply for permission under Regulation 33(6) for

reconstruction of the existing certified area of the Hostel, and deferring

pursuit of a permission under Regulation 33(7) until such time the

existence of the fifth floor was capable of certification, based on

documentation. According to the Developer, it is the adoption of such a

changed course of action that led to the IOD for construction being for the

Reduced Area under Regulation 33(6), even while keeping pending, the

application for permission that would lead to the Agreed Area, under

Regulation 33(7).

13. The Learned Arbitral Tribunal analysed the evidence and the

material before it, and directed that possession of the Subject Property be

handed over to the Trust since it was found that the Developer had not

complied with obligations under the Development Agreement. The

Learned Arbitral Tribunal rejected the Trust's claim for damages and also

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ordered refund of the amount paid by the Developer to the Trust with

interest.

Contentions of the Parties:

14. It is against this backdrop, that the competing contentions of the

respective parties need to be considered. I have heard at length, Mr.

Darius Khambata, Learned Senior Advocate on behalf of the Developer

and its Partners; and Mr. Dinyar Madan, Learned Senior Advocate on

behalf of the Trust and the Trustees. For convenience, the two sides are

respectively referred to in the collective terms of "Developer" and "Trust".

15. The matter was substantially heard last year and submissions were

concluded. However, considering that there had been a significant efflux

of time since judgement was reserved, it was put to the parties to consider

their positions. Both sides unequivocally indicated that they have no

objection to the Court proceeding to pronounce judgement. The matter

was fixed for a refresher hearing. Mr. Karan Rukhana Learned Advocate

on behalf of the Developer and Mr. Dinyar Madan, Learned Senior

Advocate on behalf of the Trust made their submissions and judgement

was reserved afresh.

16. The grounds on which the Impugned Award is challenged can be

broadly classified under the following heads:

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A] The Impugned Award is purported to contain inherent

contradictions, inconsistencies, and is thereby assailed as perverse .

In a nutshell, the contention is that the Learned Arbitral Tribunal

had held that the Termination Notice was illegal because the Trust

had no right to terminate the Development Agreement, and yet

refused to grant either specific performance or damages to the

Developer for such illegal termination. The contention is that if the

termination were illegal, the corollary would be that the agreement

would subsist. Therefore, the grant of relief of specific performance

is contented to be an imperative, particularly since the Learned

Arbitral Tribunal has held that the contract subsists to the extent of

the Trust having transferred some interest in the Subject Property

to the Developer;

B] The Impugned Award is assailed as being perverse on

account of pleadings being selectively read and vital pleadings

being ignored, as indeed vital evidence being missed by the Learned

Arbitral Tribal. This contention is premised on the Developer's

assertion that it was ready and willing to perform its obligations to

deliver 32,000 square feet to the Trust but upon obtaining

certification of the existing area having been 32,000 square feet

and also upon obtaining incentive FSI under Regulation 33(7). The

contention is also that the Developer has specifically pleaded his

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readiness and willingness to develop the Subject Property on the

terms and conditions contained in the Development Agreement

between the parties as varied from time to time;

C] The Developer would also contend before this Court that the

order dated September 23, 2014 passed by the Municipal

Corporation of Greater Mumbai ("MCGM Order") specifically notes

approval for construction of 2880.58 square meters, which

corresponds to 31006.56 square feet. Coupled with the Temple's

area of 600 square feet, the alleged shortfall, if any, is contended by

the Developer to be of a mere 393.44 square feet. The MCGM

Order had also used the phrase "at this stage" in relation to the

Reduced Area which would indicate that eventual and potential

authentication of the legally valid pre-existence of the fifth floor

had not been shut out. It is contended that the Trustees had lauded

the Developer for having obtained the IOD for 2880.58 square

meters by a letter dated November 25, 2014 (two years prior to the

Termination Notice), thereby indicating that the Trustees had no

quarrel with the reduction in the area since they had consented to

changing tack from Regulation 33(7) to Regulation 33(6) even

while keeping the application under the former pending with the

Municipal Authorities. It is in this context that the Developer

would contend that the Learned Arbitral Tribunal has failed to

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import of the MCGM Order, which constitutes ignoring vital

evidence, rendering the Impugned Award perverse and patently

illegal;

D] The Impugned Award is also assailed as being contrary to

contract inasmuch as Clauses 28 and 29 of the Development

Agreement record that the only remedy to a non-defaulting party is

to enforce specific performance. Yet, the Learned Arbitral Tribunal

having denied the grant of specific relief and having directed

delivery of possession of the Subject Property to the Trust, has

committed a jurisdictional error.

E] The Impugned Award is also assailed as being contrary to

statutory jurisdiction in the matter vesting solely in the Small

Causes court under Section 41 of The Presidency Small Cause

Courts Act, 1882 ("PSCC Act"). The Developer would contend that

the Development Agreement placed the Developer in the position of

a licensee and that eviction of a licensee from possession by a

landlord is exclusively vested in the Small Causes Court and

therefore, the dispute is not arbitrable.

F] Finally, it is also contended that the Trust did not have prior

permission of the Charity Commissioner before invoking

arbitration. It is contended that this has totally eroded the

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jurisdiction of the Learned Arbitral Tribunal to arbitrate the

disputes between the parties.

17. In sharp contrast, the Trust would contend that none of the

aforesaid contentions of the Developer are worthy of acceptance

inasmuch as they do not conform to the contents of the record and indeed

the plausible interpretation of the record by the Learned Arbitral

Tribunal.

18. The contentions on behalf of the Trust may be summarised thus:

A] There are no inherent contradictions in the Impugned Award

inasmuch as the Learned Arbitral Tribunal has interpreted the

agreement to indicate that the parties had committed to specific

performance and there is no right to terminate but that would not

mean that the principles of law governing specific performance

have no application. The Learned Arbitral Tribunal has returned

logical and reasonable findings about the absence of readiness and

willingness on the part of the Developer to perform under the MoU

and the Development Agreement. The Developer has hedge about

the essential and fundamental element of delivering at least 32,000

square feet of redeveloped area to the Trust, by linking such

commitment to potential certification of the area that had been

demolished. Therefore, the Impugned Award, insofar as it holds

that the Developer is not entitled to specific relief cannot be faulted;

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B] Whether the agreement was incapable of termination was a

subject of the Learned Arbitral Tribunal's interpretation of contract

and in particular Clauses 28 and 29 of the Development Agreement.

However, whether the agreement was capable of specific

performance was clearly also a subject matter of the Learned

Arbitral Tribunal's adjudication. If that view is plausible, the

Impugned Award cannot be displaced with a quest for finding

inherent contradictions. The two findings are not incapable of

reconciliation and therefore there is nothing perverse in a manner

that cuts to the root of the matter for this Court to intervene under

Section 34 of the Act;

C] The MGCM Order has been well appreciated by the Learned

Arbitral Tribunal - perhaps not to the Developer's liking. The

MCGM order itself indicates that the Developer failed to submit the

authenticity of the pre-existing fifth floor, which is what led to the

MCGM not considering the fifth floor for purposes of the FSI

computation at that stage. Therefore, the Trust should point to the

MCGM not validating the area corresponding to the fifth floor

because of the Developer's shortcoming, demonstrating that the

Developer was in default as asserted in the Termination Notice;

D] As regards the recovery of possession not being arbitrable in

view of the provisions of the PSCC Act, the Trust would contend

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that the license in the Development Agreement is incidental to and

connected with the development rights conferred upon the

Developer and not a standalone leave and license agreement of the

manner that would fall within the protective jurisdiction of the

PSCC Act. According to the Trust, at the highest, the license enjoyed

by the Developer would be an accessory license under Section 55 of

The Indian Easements Act, 1882, which is a license necessary for

exercise of any right, which would be implied in the conferment of

such right. Such right is the right to develop the Subject Property,

and that too in compliance with the Development Agreement.

E] The Trust would reject outright, the contention that prior

permission of the Charity Commissioner had not been obtained

thereby undermining the jurisdiction to arbitrate. This issue was

never raised before the Learned Arbitral Tribunal and is being

raised for the first time in the Section 34 proceedings. This not

being a facet of inherent lack of jurisdiction, it is not open to the

Developer to raise it at this stage, never having tabled this issue

earlier.

Analysis and Findings:

19. Having heard the parties in the context of the challenge mounted to

the Impugned Award, it would be necessary to examine the specific

grounds on which the arbitral award is impugned. At the heart of the

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controversy lies the fact that the Learned Arbitral Tribunal did not grant

specific relief to the Developer. The Learned Arbitral Tribunal has found

that the Developer is not worthy of being granted specific relief, among

others, on the premise that the foundational and essential feature of the

agreement between the parties is that the Developer must deliver not less

than 32,000 square feet of redeveloped area to the Trust. In this context,

the key question to be asked is whether the Learned Arbitral Tribunal had

riddled the Impugned Award with inherent contradictions of such a

nature that its finding that the Trust could not have terminated is

repugnant to the finding that specific relief cannot be granted.

20. Upon a careful reading of the Impugned Award and the material on

record, I find that the Learned Arbitral Tribunal has not rendered

findings that are inherently repugnant leading to the Impugned Award

being rendered perverse. The Learned Arbitral Tribunal has indeed

interpreted Clauses 28 and 29 in a manner that appealed the most to the

Learned Arbitral Tribunal. The Learned Arbitral Tribunal is entitled to

interpret these provisions - it has squarely held that the Trust was

incapable of terminating the Development Agreement. Even while

rendering such finding, the Learned Arbitral Tribunal has squarely stated

that the issue of whether a case for grant of specific relief is made out has

been dealt with separately that should also be read harmoniously.

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21. On the denial of specific relief, in much the same way in which the

Learned Arbitral Tribunal was entitled to interpret Clauses 28 and 29 of

the Development Agreement, the Learned Arbitral Tribunal was entitled

to interpret what was the essential feature of the agreement between the

parties. The Learned Arbitral Tribunal has been satisfied that delivery of

32,000 square feet of redeveloped area is a fundamental and essential

feature of the agreement between the parties, and that the Developer was

not ready and willing to perform on this count. This is a clear, fair and

reasonable finding that puts the Impugned Award beyond the realm of the

implausible, for this Court to interfere with the Impugned Award. This is

because of the sheer number of times the parties have reiterated the core

element of their arrangement, namely, the delivery of 32,000 square feet

of developed area. Not just that, the parties have also agreed on the

consequences of there arising any shortfall in the exploitation of incentive

FSI that had been envisaged for the Developer. There would have been an

adjustment to the amount of Rs. 3.69 crores already paid by the

Developer to the Trust, at a pre-agreed rate per square foot of shortfall,

necessitating a refund of the amount received by the Trust to the

Developer. The scheme of the agreement between the parties set out no

means of a situation that the Trust would get lower area in the bargain.

22. Seen in this light, I am simply not satisfied that the Learned

Arbitral Tribunal has indulged in any egregious error of the nature

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canvassed by the Developer. The Learned Arbitral Tribunal has carefully

examined the pleadings of the Developer and has quoted chapter and

verse, how the Developer has, in its own affirmed pleadings, clearly

indicated that the Trust should be happy with a lower area, and how

delivery of less than the Agreed Area is justifiable. The justification flows

from the legitimacy of the fifth floor of the hostel building, that was

demolished, being in doubt. According to the Developer, the legitimacy of

the fifth floor is not borne out in the property records, and therefore, it is

not open for the Trust to claim performance of the delivery of the Agreed

Area. Even taken at its highest, this would mean that the agreement was

incapable of specific performance, which could at best, lead to a potential

claim in damages.

23. The Developer would contend that the very finding that the

Developer was not ready and willing to perform on the obligation to

deliver 32,000 square feet was perverse. This is untenable since the very

pleadings of the Developer in the arbitration proceedings indeed point to

how the obligation to deliver the Agreed Area was no longer valid. The

Developer indeed has contended that if certified by the municipal

authorities, and it gets additional incentive FSI under Regulation 33(7) of

the DCR, it would be open to delivering the Agreed Area. This would

indicate that there is no precision of a clear executable nature in the

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bargain sought to be enforced at the behest of the Developer as a matter

of specific relief.

24. The Developer had indeed pleaded that the Trust cannot seek any

area beyond what is approved and accepted by the planning authority.

Therefore, it is rightly contented by the Trust that when the pleadings are

read as a whole and the contemporaneous correspondence is examined,

the finding by the Learned Arbitral Tribunal that the Developer was never

ready and willing to provide a rehabilitated Hostel building of 32,000

square feet is not just a plausible and reasonable finding but an accurate

finding. Indeed, as contended by the Trust, the phrase "ready and

willing" is not a mantra to be peppered into pleadings in a mechanical and

formulaic recitation without an actual and real depiction of how the actual

readiness and willingness to perform an agreement is discernible from the

record, and what precise obligation such party is ready and willing to

perform.

25. Indeed, this calls for comment on the parties moving away from

Regulation 33(7) to Regulation 33(6) as an interim measure to give the

Hostel its priority as agreed by the parties. Whether the project was

amenable to Regulation 33(7) at all and whether it was amenable to part

processing under Regulation 33(6) and subsequently by migration to

Regulation 33(7) is an issue that has remained at large. What the

Learned Arbitral Tribunal has done, and fairly so, is interpret the

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provisions of the agreement and the pleadings of the parties to examine

whether specific relief can be granted. There is not a whisper of a

provision or subsequent correspondence with the Trust having agreed to a

lower bargain - of taking less than the Agreed Area for such movement

across regulatory provisions under which the development would be

pursued. That being so, it would not have been possible for the Learned

Arbitral Tribunal to substitute the Agreed Area with the Reduced Area or

any other area and to uphold that as the basis of specific performance.

26. Even in the proceedings before this Court, a more novel argument

was made by the Developer, which only underlines the inchoate nature of

the bargain of which specific performance was sought. The Developer

would contend that the area allocated to the Temple may be added to the

Reduced Area, which would in turn show that the shortfall was just about

393 square feet. While the Trust would stridently oppose this submission

on the premise that this submission is being made for the very first time

in the Section 34 proceedings, it must be said that the Developer's

contention, while attractive at first blush (particularly when seen in the

context of the consensual deviation from Regulation 33(7) of the DCR), it

would still not constitute that the parties had consensus ad idem on what

revised area the Trust had settled for. The fact remains that the IOD is for

nearly 7,000 square feet lesser than the Agreed Area.

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27. The Learned Arbitral Tribunal has rightly held that oral evidence

and oral arguments have to be consistent with the pleadings. A holistic

reading of the pleadings has been rightly interpreted to indicate that the

Developer is not ready and willing to assuredly deliver the Agreed Area as

contracted. The right to get 32,000 square feet was never made

conditional on certification by any Planning Authority. Each party has

sought to explain how the evidence must be interpreted. It is not for this

Court to re-appreciate evidence. I must say that the reading of evidence as

canvassed by the Developer falls in the realm of re-appreciation of

evidence which this Court must not resort to. The overall reading of the

evidence and the contemporaneous correspondence by the Learned

Arbitral Tribunal would indicate that the finding of absence of readiness

and willingness to perform is an eminently plausible view that does not

call for interference.

28. Indeed, the Trust had delivered an approval from the Government

of Maharashtra for development under Regulation 33(7) of the DCR,

which informed the basis of the bargain between the parties. The

Municipal Commissioner rejected this on the premise that the

department that gave the permission was the wrong one (Housing

Department instead of Urban Development Department), but then the

parties had entered into the arrangement with eyes open and the

Developer has also confirmed satisfaction with examination of all facets of

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the matter when entering into the bargain with the Trust. The hurdle

posed by the Municipal Commissioner rejecting the very basis of

Regulation 33(7) being applicable, even when taken as a facet outside the

scope of the parties' expectations and control, it would undermine the

specific performance of the Development and not further the same.

Indeed, the departure into Regulation 33(6) could be said to fall within

the zone of consideration of acquiescence to the situation but it would still

not point to a sharp and precise revised bargain that is amenable to

specific performance.

29. The Learned Arbitral Tribunal has also examined the fact that there

is a pointer to the fifth floor being legitimate from the records obtained

under the law governing right to information. The Learned Arbitral

Tribunal has fairly held that the Developer was aware of the project it was

getting into and ought to have done its due diligence before executing a

contract of which it is seeking specific performance.

30. The Termination Notice was issued two years after the Trust is

contended to have lauded the Developer for managing to secure approvals

for the Hostel, and indeed the Learned Arbitral Tribunal has held that the

Termination Notice was illegal as being contrary to contract. However, to

grant specific relief, the Developer would still need to have demonstrated

readiness and willingness to perform on a precise, binding and committed

revised contract and that is not discernible from the record - in itself, a

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matter of adjudication and appreciation of evidence. Therefore, to my

mind, the finding that the Termination Notice is "illegal" would at worst

be a problematic finding but it is not a finding that presents a perversity

of such a magnitude that it would go to the root of the matter of specific

relief, for the Impugned Order to be interfered with.

31. I find that the Learned Arbitral Tribunal has instead adopted a

practical, commonsensical and commercially logical interpretation even

while holding that the Development Agreement was incapable of

termination - that even the termination was not contractually envisaged

(indeed the Learned Arbitral Tribunal terms the termination "illegal" a

few times), the Development Agreement was not capable of specific

performance. Therefore, specific relief could not have been granted for

the asking in the teeth of the principles governing specific relief, which at

the least, requires a specific committed obligatory element that can be

enforced under supervision of the Court. That being the case, no fault can

be found with the finding that specific relief was not worthy of being

granted.

32. To reconcile the two positions, namely, that termination was illegal

and yet specific relief could not be granted, it is apparent to me that the

Learned Arbitral Tribunal has simply adopted the principle of restitution

to place the parties in the respective positions that they were in before

executing an apparently interminable contract that is incapable of specific

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performance. The Learned Arbitral Tribunal rejected the competing

claim for damages; directed that the Trust be put in possession; and

directed that the Trust must return the amount of Rs. 3.69 crores paid by

the Developer to the Trust, along with interest. The Learned Arbitral

Tribunal has indeed reconciled the two positions presented as being

inherently contradictory and to my mind there is no fatal contradiction or

inconsistency in the analysis that flows through this issue in the

Impugned Award.

33. The contention that the MCGM Order constitutes vital evidence

that has been ignored also does not appeal to me. Each party has made

submissions on how the MCGM Order helps its respective case, but

suffice it to say, the Section 34 Court must resist the temptation of being

drawn into interpreting the true import of this document and should

instead examine whether that document contains any vital evidence that

has been ignored. I find that the core elements and contents of the

MCGM Order have indeed been analysed in the Impugned Order to

factually arrive at a finding of a shortfall in the commitment of the

Developer to deliver the Agreed Area and therefore, it cannot be said that

any vital evidence has been ignored. At worst, the Developer could be

said to be unhappy with the interpretation of the evidence by the Learned

Arbitral Tribunal, but one cannot say that the Learned Arbitral Tribunal

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failed to appreciate vital evidence to render the Impugned Award patently

illegal.

34. For the foregoing reasons, in my view, the interpretation of Clauses

28 and 29 of the Development Agreement is not in foundational conflict

with the finding that the core and essential term of the contract was

delivery of Agreed Area to the Trust. Therefore, whether or not the

Termination Notice is illegal, the finding that no case for specific relief

has been made out cannot be faulted. Presented with this seemingly

dilemmatic situation, the Learned Arbitral Tribunal has fairly and

reasonably held that the parties need to put back in their respective

positions, without any award of damages since both sides entered into the

bargain with eyes open and ran the risk of the costs and damages they

have respectively suffered. The Learned Arbitral Tribunal has fairly held

that neither party deserves to be saddled with damages for a contract

incapable of specific performance. Therefore, in my opinion, the

Impugned Award does present a wholesome outcome that is plausible,

logical and reasonable, and does not lend itself to interference under

Section 34 of the Act.

35. This brings me to the contentions of the PSCC Act, namely, that the

Developer is a licensee and is a protectee of the statutory tenant-

protection provisions of that legislation and the ouster of forums other

than the Small Causes Court from adjudication of a licensee eviction. The

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Learned Arbitral Tribunal has examined this squarely, to return a finding

that the license or the right to enter upon the property is incidental and

inextricably linked to the right to develop the Subject Property. If the right

to specific performance of the obligation to permit the Developer to

develop the Subject Property is not found worthy of acceptance, it would

follow that the incidental right to enter upon the Subject Property and

develop it would come to an end.

36. In my view, the contention of the Developer that it is a statutory

protectee of the PSCC Act is extreme and unreasonable. Provisions of

beneficial and ameliorative legislation must be interpreted in the context

of the objectives of the legislation. It is well settled that if more than one

view is possible, the view that furthers the remedy and suppresses the

mischief in the objective of the legislation would need to be adopted. The

Developer is hardly a tenant or a licensee who has been given the right to

use the Subject Property for a license fee. On the contrary, the Developer

in the same breath claims an interest in the Subject Property with a right

to exploit it and sell units from the free sale component, which itself

stands undermined. The license to enter the Subject Property is an

incidental and ancillary right and can simply not be elevated to a tenancy-

protection right under the PSCC Act. No fault can be found with the

Learned Arbitral Tribunal's analysis of this issue to reject the

jurisdictional challenge.

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37. Finally, the purported absence of permission from the Charity

Commissioner to litigate should be stated to be rejected. This is another

novel argument in the process of throwing the kitchen sink at the

problems the Impugned Award poses to the Developer. While this may

not have been raised before, it is evident from the record that the Charity

Commissioner is not unaware of the litigation that the parties have been

engaged in, and has postponed consideration of an extension of approval

for the redevelopment, to await the outcome of the arbitration. This

ground is based on the regulatory scheme relating to governance of

charities. This is of no avail for a contractual counterparty to place

reliance on, and that too after the arbitral proceedings have been

concluded, of course, the outcome being unsatisfactory to such

counterparty.

38. The Learned Arbitral Tribunal has also analysed the absence of

consent from 70% of the tenants. However, I do not think it necessary to

delve into the issue of tenants' consents not having been obtained since

the Developer is not pressing anything related to this issue except in

defence of the contentions of the Trust that invokes this issue. The

analysis in this judgement, bearing in mind the scope of jurisdiction

under Section 34 of the Act, is restricted to the grounds on which the

Developer has assailed the Impugned Award.

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Some Relevant Case Law Extracts:

39. Before parting, a word about the scope of review under Section 34

would be in order. Without intending to undertake a prolix reproduction

from the numerous judgements that now well settle the standard, in the

context of incoherence and inherent inconsistency being alleged by the

Developer, the following extracts from Associate Builders1 would be

appropriate (for ease of reference, the footnote in the judgement inserted

in the extracted paragraph is also set out in the extract below):

It must clearly be understood that when a court is applying the "public policy"

test to an arbitration award, it does not act as a court of appeal and con- sequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbit- ral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score [Inserted Footnote - extracted below:] Very often an arbitrator is a lay person not necessarily trained in law. Lord Mansfield, a famous English Judge, once advised a high military officer in Ja- maica who needed to act as a Judge as follows:

" General, you have a sound head, and a good heart; take courage and you will do very well, in your occupation, in a court of equity. My advice is, to make your decrees as your head and your heart dictate, to hear both sides patiently, to decide with firmness in the best manner you can; but be careful not to assign your reasons, since your determination may

1 Associate Builders v. Delhi Development Authority - (2015) 3 SCC 49

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be substantially right, although your reasons may be very bad, or essen- tially wrong".

It is very important to bear this in mind when awards of lay arbitrators are chal- lenged.

[Emphasis Supplied]

40. Indeed, the Sole Arbitrator manning the Learned Arbitral Tribunal

is not a lay man and is a former Chief Justice of a High Court. However, I

felt the need to extract the foregoing not because the Impugned Award

reads like one by a layman but for emphasising the principle involved -

where the reasons for two separate findings are logical and reasonable,

and the two can be reconciled in a manner that does not make the

findings mutually repugnant, if the outcome is just, logical and

commonsensical, the arbitral award need not be interfered with. The

reasons for which the Learned Arbitral Tribunal has held the Termination

Notice to be "illegal" and the allusions to the Development Agreement

subsisting to some extent may make the denial of specific relief illogical,

but one cannot lose sight of the fact that the reconciliation of the two

seemingly conflicting positions is quite commonsensical and logical. I

have already given my reasons as to how the two positions are not

inherently conflicting. Even if this reconciliation is contended as not

being explicitly and expressly set out in the Impugned Award, it is also

well settled that even implied reasons that are discernible and are capable

of being inferred to support a just and fair outcome in arbitral awards

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would make it appropriate not to interfere with arbitral awards. In this

regard, the following extract from the decision of the Supreme Court in

Dyna Technologies2 would be appropriate:

24. There is no dispute that Section 34 of the Arbitration Act limits a chal-

lenge 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 ad- judicated 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 al- ternative 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 per- versity unpardonable under Section 34 of the Arbitration Act.

[Emphasis Supplied]

Summary of Conclusions:

41. In the result, the points determined by me may be summarised

thus:

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

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A] The finding that the Termination Notice is illegal for not

being supported by Clauses 28 and 29 of the Development

Agreement is plausible and falls within the realm of interpretation

that the Learned Arbitral Tribunal is entitled to make;

B] Such interpretation on legality of termination is not

inherently and necessarily inconsistent with the refusal to grant

specific relief to the Developer in view of the other logical,

reasonable and plausible finding that the obligation to deliver the

Agreed Area of 32,000 square feet of redeveloped area is an

essential term of the agreement between the parties;

C] The Learned Arbitral Tribunal has rightly found that there

has been no revised area that had been agreed between the parties,

for a Court-supervised enforcement of specific relief to be possible;

D] The refusal to grant specific relief is not irreconcilable with

the finding that the Termination Notice was "illegal";

E] The objection on arbitrability on the ground of exclusive