[Cites 8, Cited by 0]
Bombay High Court
Kanti Builders Pvt Ltd vs Witty Enterprises Pvt Ltd on 27 January, 2026
2026:BHC-OS:2217
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION (L) NO.33334 OF 2024
WITH
INTERIM APPLICATION (L) NO.39240 OF 2024
IN
COMMERCIAL ARBITRATION PETITION (L) NO.33334 OF 2024
Kanti Builders Pvt. Ltd. ...Petitioner
V/s.
Witty Enterprises Pvt. Ltd. ...Respondent
______________
Mr. Vishal Kanade with Ms. Apurva Gupte, Mr. Amogh Singh & Mr.
Krishnakant P. Deshmukh i/b. Mr. Dhirendra Pratap Singh for the
Petitioner.
Mr. Vikhil Dhoka with Mr. Abhijit Mukherjee i/b. M/s. GM Legal for
the Respondent.
______________
CORAM: SANDEEP V. MARNE, J.
RESERVED ON: 14 JANUARY 2026.
PRONOUNCED ON: 27 JANUARY 2026.
JUDGMENT:
1) By this Petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (the Arbitration Act), the Petitioner challenges
impugned Award dated 5 August 2024 and modified Award dated 25
September 2024 passed by the learned sole Arbitrator. By the
impugned Awards, the Arbitral Tribunal has awarded a sum of
Rs.99,91,472/- to the Petitioner. Despite its claim being partially
allowed, the Petitioner has still challenged the impugned Awards on
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the ground that the Tribunal has not allowed the whole claim of Rs.
4,36,42,078/-.
2) Petitioner is an incorporated entity engaged inter alia in
the business of real estate development. The Respondent is also an
incorporated entity engaged in the business of running a school
imparting primary and secondary education across the country. The
Petitioner was the original owner of land bearing Survey No.41(part)
corresponding to CTS No.374/B/10 admeasuring 2419.10 sq.mtrs at
Borivali (West), Mumbai, (subject property), which was reserved for
public purpose of secondary school in the development plan for
Greater Mumbai. By registered Deed of Conveyance dated 22
December 2017, the Petitioner conveyed the said property to the
Respondent. It appears that the Respondent executed lease of the land
in favour of Pratiksha Foundation Charitable Trust for availing
additional benefit of FSI upto 4.00 for educational activities by a public
charitable trust. On 9 February 2018, the Petitioner and the
Respondent entered into construction contract by which the
Respondent was granted the work of construction of the school
building on the subject property. Under the construction contract, the
Respondent agreed to pay to the Petitioner an amount of
Rs.23,40,00,000/- plus applicable GST in a phased manner linked to
stage of construction. The plans for construction of the building were
approved by MCGM on 10 May 2014 and commencement certificate
upto 8th floor was issued on 28 May 2019. According to the Petitioner it
completed construction of the school building in 2019. The
Respondent thereafter started the work of installation of lift, fire
fighting equipment, toilets, etc.
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3) Petitioner alleges that the Respondent took forcible
physical possession of the school building in December 2020 and
started commercial use thereof by operating banquet hall in the
basement and stilt areas of ground floor without occupation certificate
being issued. On 12 December 2020, the Petitioner issued notice to the
Respondent calling it upon to discontinue the activities. The Petitioner
filed Petition under Section 9 of the Arbitration Act seeking interim
measures against the Respondent, in which order dated 11 March 2021
was passed restraining the Respondent from occupying any portion of
the building and from creating any third party right therein.
4) The Petitioner invoked arbitration clause by issuing notice
under Section 21 of the Arbitration Act on 31 May 2021 and
nominated an arbitrator. According to the Petitioner, the Respondent
admitted its liability for payment of amount of Rs.7.75 crores vide
letter dated 12 August 2021. An amount of Rs.1 crore was paid by
RTGS and two cheques for Rs.2 crores and Rs.4,36,42,078/- were
issued by the Respondent towards outstanding liability. The
Respondent also deducted an amount of Rs.38,57,922/- towards TDS
on the whole of the outstanding amount. The amount of Rs. 2 crores
was honoured by the Respondent by making the payment through
RTGS. However, the cheque in respect of second amount of
Rs.4,36,42,078/- got dishonoured. The Petitioner called upon the
Respondent to pay the balance amount. The occupation certificate for
the school building was received on 20 January 2022. For dishonour of
the cheque the Petitioner has filed Complaint under Section 138 of the
Negotiable Instruments Act, 1881 ( the NI Act) in the Magistrate's
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Court. The Petitioner has also filed a civil suit for recovery of amount
of Rs.88,00,000/- remaining unpaid under the Deed of Conveyance.
The Petitioner also filed Statement of Claim before the nominated
Arbitrator on 19 April 2022 claiming amount of Rs.7,96,00,000/- from
the Respondent alongwith interest. The Respondent, in addition to
defending the claim of the Petitioner, filed counterclaim claiming
amount of Rs.7,31,70,147/- alongwith interest and further amount of
Rs.2,85,64,231/- alongwith interest. The Respondent also claimed sum
of Rs.10 crores towards damages.
5) Based on the pleadings, the Tribunal framed issues. Parties
led evidence in support of their respective claims. The Arbitral
Tribunal has made Award dated 5 August 2024 partly allowing the
claim of the Petitioner in the sum of Rs.1,75,38,857/-. However, after
holding that the Respondent was entitled to receive from Claimant
Rs.79,91,472/- the Arbitrator has directed deduction of the said
amount and has allowed net claim of the Petitioner in the sum of
Rs.95,47,385/-. The Tribunal has awarded interest @ 15% per annum.
After delivery of the main Award dated 5 August 2024, the Respondent
filed Application under Section 33 of the Arbitration Act for
corrections in the Award. The Tribunal has accordingly allowed the
said Application of the Respondent and has effected various
corrections in the Award substituting figure of Rs. 79,91,472/- awarded
in favour of the Respondent by sum of Rs.99,91,472/-. After deduction
of amount of Rs.99,91,472/- awarded to the Respondent from the
claim of the Petitioner of Rs.1,75,38,857/-, the Tribunal has awarded
net amount to the Petitioner in the sum of Rs.75,47,385/-.
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6) The Petitioner is aggrieved by the Award dated 5 August
2024, as modified by order dated 25 September 2024. Since the claim
amount of the Petitioner is restricted to Rs.1,75,38,857/- and since the
Tribunal has not awarded entire claim of Rs.4,36,42,078/- Petitioner
has filed the present Petition under Section 34 of the Arbitration Act.
7) Mr. Kanade, the learned counsel appearing for the
Petitioner submits that the impugned Award suffers from patent errors
as the learned Arbitrator has ignored the settled position of law that
admissions are the best form of evidence constituting waiver of proof.
That in the present case there is explicit admission of liability in the
form of letter dated 12 August 2021 issued by the Respondent, in
addition to another undated letter. That the Arbitral Tribunal has failed
to take into consideration the effect of letter dated 12 August 2021 and
has concentrated only on the undated letter for the purpose of raising a
misplaced inference that the amount of Rs.7.75 crores agreed by the
Respondent was payable under both the Agreements. That letter dated
12 August 2021 records that the payments under the Conveyance Deed
was fully paid up and net balance of Rs.7.75 crores was only in respect
of the Construction Contract. That ignorance of vital piece of evidence
in the form of letter dated 12 August 2021 constitutes perversity and
patent illegality in the Award. That the expectation of the Tribunal of
Petitioner independently proving execution of work to the extent of
Rs.7.75 crores falls into insignificance in the light of explicit admission
of liability by the Respondent.
8) Mr. Kanade would further submit that the Arbitral
Tribunal has erred in rejecting the Petitioner's prayer for admitted
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amount on the ground of lack of alternate prayer. He would submit
that the Petitioner had specifically raised pleadings qua amount of
Rs.4,36,42,078/-. That the Tribunal could have considered and granted
the claim for lesser amount in absence of a specific prayer. That
rejection of an admitted claim on the ground of absence of alternative
prayer would constitute a patent error apparent on face of record. Mr.
Kanade would further submit that the Tribunal erred in allowing
counterclaim of the Respondent of Rs.1,09,47,700/- contrary to clause
7.3 of the Construction Contract. That under the contract, the liability
to pay the development cess and development charges for fungible FSI
was squarely the responsibility of the Respondent. That development
cess and development charges are both components of fungible FSI.
He would therefore submit that the Arbitral Tribunal has grossly erred
in allowing counterclaim of the Respondent of Rs. 1,09,47,700/-. On
above broad submissions, Mr. Kanade would pray for setting aside the
impugned Awards.
9) Mr. Dhoka, the learned counsel appearing for the
Respondent opposes the Petition submitting that the purported claim
of the Petitioner for Rs.4,36,42,078/- was an afterthought and was
never really raised before the Arbitral Tribunal. That the Petitioner had
claimed an altogether different sum of Rs.7,96,00,000/- of which the
breakup was provided in the Particulars with Statement of Claim. That
the said amount of Rs.7,96,00,000/- was indicated as outstanding
amount payable under the Construction Contract dated 9 February
2018. He would submit that the purported letter dated 12 August 2021
was never enforced by the Petitioner. That the Petitioner did not claim
amount of Rs.4,36,42,078/- as an alternate claim in the event of failure
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in the main claim of Rs.7,96,00,000/-. That the Arbitral Tribunal has
rightly considered the position that the undated letter specifically
referred to two agreements and that therefore the amount specified
therein was not relatable to only Construction Contract. He would
therefore submit that no interference is warranted in the impugned
Award not upholding the claim of Rs.4,36,42,978/- He would submit
that the Awarded sum has already been paid by the Respondent to the
Petitioner.
10) So far as second objection of reimbursement of
Rs.2,09,47,700/- towards development charges and development cess
paid to Municipal Corporation of Greater Mumbai (MCGM) is
concerned, Mr. Dhoka would submit that Clauses 7.3 and 8.7 of the
Construction Contract read with point Nos.11 and 13 of Annexure A
thereof specifically provide that the Respondent shall bear and pay the
premium payable to the MCGM strictly for fungible FSI and
Additional FSI only and all other payments payable to MCGM such as
IOD, deposit, scrutiny fees, validation charges, staircase premium,
open space deficiency premium, lift and lobby area premium, etc. were
to be borne by the contractor. That the said clauses unequivocally
provide that all charges including development charges and
development cess payable to MCGM while obtaining approval were to
be borne by the Petitioner alone. He would submit that the Respondent
had already obtained approval by MCGM to the construction plans as
per FSI 1.00. That therefore parties were fully aware about charges
payable to MCGM for constructing school building beyond FSI 1.00 at
the time of execution of contract itself. That therefore the charges
agreed for all payments other than additional FSI and fungible FSI
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were payable by the Petitioner alone. He would submit that the
amounts towards development charges and development cess was
charged by the MCGM distinctly. Mr. Dhoka submits that no case is
made out for interference in the Award in exercise of powers under
Section 34 of the Arbitration Act. That the Petitioner cannot seek re-
appreciation of the evidence on record. That the view taken by the
Arbitral Tribunal is a plausible view. He accordingly prays for dismissal
of the Petition.
11) Rival contentions of the parties now fall for my
consideration.
12) The disputes between the parties have arisen out of
performance of Construction Contract dated 9 February 2018. The
transaction between the parties is of unique nature where the owner of
the land (Petitioner) first sold the subject property to the Respondent,
who is in the business of setting up of schools. This was done possibly
on account of the fact that the land was reserved in the development
plan for setting up the secondary school. After acquiring ownership in
the land by virtue of registered Deed of Conveyance dated 22
December 2017, the Respondent apparently executed Lease Deed in
favour of a charitable trust on 6 February 2018. The Petitioner
contends that the lease was executed for the purpose of availing
additional FSI upto 4.00, which was admissible only to public
charitable trusts for educational purpose. Otherwise, the MCGM had
already sanctioned plans for construction of school building on the plot
by sanctioning of FSI 1.00. It is not necessary to go into the nitty-
gritties of complex transactions between the parties relating to
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ownership of the subject property. It is possible that ownership of the
land was changed for the purpose of availing extra FSI than the one
which would have been availed in normal circumstances. Be that as it
may. The Petitioner, who was original owner of the subject property,
was awarded the contract for construction of school building and
accordingly Construction Contract dated 9 February 2018 was
executed between Petitioner and Respondent. Under the Contract, the
Petitioner was to construct a school building on the land for contract
value of Rs.23,40,00,000/-, which was payable in a phased manner
depending on the progress of construction. The revised plans by
granting FSI 4.00 were approved by the MCGM on 28 May 2019. The
MCGM also sanctioned proportionate fungible FSI to the extent of
35%. This is how 8 storey building was proposed to be constructed on
the plot. Petitioner alleges that the Respondent took forcible possession
of the building even before issuance of occupation certificate, which
necessitated filing of Application under Section 9 of the Arbitration
Act by the Petitioner.
13) According to the Petitioner, substantial amount was due
and payable to it from the Respondent under the Construction Contract
and that an additional amount of Rs.88,00,000/- still remained unpaid
under the Conveyance Deed. The Petitioner claims that though much
higher amounts were due and payable by the Respondent to it, the
Respondent admitted liability only in respect of Rs.7.75 crores by letter
dated 12 August 2021 and agreed to pay the same within one month of
receipt of occupation certificate. The Petitioner also relies on undated
letter issued after letter dated 12 August 2021 under which the
Respondent once again admitted liability for the sum of Rs.7.75 crores.
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It was stated in the said undated letter that an amount of Rs.1 crore
was paid through RTGS and balance amount payable was Rs.6.75
crores. According to the Petitioner, two cheques in the sum of Rs.2
crores and Rs.4,36,42,078/- were issued after deducting amount of
Rs.38,57,922/- towards TDS. According to the Petitioner, while the
amount of Rs.2 crores was paid by RTGS, the cheque in the sum of
Rs.4,36,42,078/- got dishonoured.
14) It is on the strength of letter dated 12 August 2021
coupled with the undated letter that the Petitioner claims that at least
sum of Rs.4,36,42,078/- ought to have been awarded by the Arbitral
Tribunal. However, what is done by the Tribunal is that it took into
consideration the value of the work performed under the contract and
deducted various amounts received by the Petitioner from the
Respondent for the purpose of determining Petitioner's entitlement to
balance amount. This is how Petitioner's entitlement is restricted to Rs.
1,75,38,857/-. However, after deducting the amount sanctioned to the
Respondent in the counterclaim of Rs. 99,91,472/-, the Tribunal has
awarded net amount of Rs.75,47,385/- in Petitioner's favour.
15) The Petitioner filed claim before the Arbitral Tribunal
claiming an amount of Rs.7,96,00,000/-. It would be apposite to
consider the breakup of the said amount of Rs.7,96,00,000/- as
reflected in the particulars of claim, which reads thus:-
PARTICULARS OF CLAIM AND BREAK-UP OF OUTSTANDING
AMOUNT:
SR PARTICULARS AMOUNT (in Rs.)
NO.
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CONVEYANCE DEED
1. Total Amount payable by the Respondent to
the Claimant under the Conveyance Deed 15 Crores 50 Lakhs
dated 22.12.2017
2. Total Amount paid by the Respondent to the
Claimant under the Conveyance Deed dated 14 Crores 62 lakhs
22.12.2017
3. TOTAL AMOUNT OUTSTANDING 88 Lakhs
CONSTRUCTION CONTRACT
4. Total Amount payable by the Respondent to 23 Crores 40 Lakhs
the Claimant under the Construction
Contract dated 9th February 2018
5. Total Amount payable by the Respondent to 23 Crores 40 Lakhs + 4
the Claimant under the Construction Crores 21 Lakhs=
Contract dated 9th February 2018 alongwtih
GST amount of 18% (i.e. Rs.4 cores 21
Lakhs) 27 Crores 61 Lakhs
6. Total Amount paid by the Respondent under 18 Crores 86 Lakhs
the Construction Contract dated 9th February
7. Under clause 7 of the Construction Contract 78 Lakhs 78 Thousand
dated 9th February 2018, the same deductions
will be given to the Respondent, as the said
amount was to be paid by the Claimant:
Particulars Amount
Scrutiny fees Rs.1.50 Lakhs
IOD Deposit 0.50 Lakhs
Debris Deposit 1 Lakh
Staircase Premium 30.21 lakhs
Open space premium 20 Lakhs
Labour welfare 25.57 lakhs
Total 78.78 lakhs
8. Total Outstanding amount payable by the 7 Crore 96 Lakhs
Respondent To the Claimant under the
Construction Contract Dated 9th February
2018 will be:
Total Amount payable Rs. 27 Crores 61 lakhs
(sr.No.5):
Minus Rs.18 Crores 86 Lakhs
Total amount paid by
Respondent (sr.no.6):
Minus 78 Lakhs 78 Thousand
Deductions available
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to the Respondent
(sr.no.7)
Total Rs.7 crore 96 Lakhs
OUTSTANDING:
Sr. No.5-(sr.no.6
and7)=
9. Total Amount payable under both Rs.43 crores 11 lakhs
Agreements cumulatively:
Sr.No.1+Sr.No.5
10.Total amount received from Respondent 33 Crores 48 Lakhs
under both Agreement
16) Thus, as per the particulars of claim, Petitioner claimed
that an amount of Rs.88,00,000/- was outstanding under Conveyance
Deed dated 22 December 2017. In respect of Construction Contract,
the total amount due and payable by the Respondent was indicated as
Rs.23.40 crores and adding after 18% GST, the said amount was
worked out to Rs.27,61,00,000/-. According to the Petitioner the
amount paid by the Respondent was Rs.18.86 crores. The Petitioner
also gave credit in the sum of Rs.78,78,000/- to the Respondent and
this is how it claimed total amount of Rs.7,96,00,000/-. The prayers in
the Statement of Claim raised by the Petitioner read thus:-
a) that the Arbitral Tribunal be pleased to pass an order of
permanent injunction against the Respondents, its members,
servants and agents restraining them in any manner from occupying
the said school building and/or conducting any activity of
whatsoever nature in the said school building till the time balance
consideration under the Agreement dated 9 th February, 2018 is paid
to the Claimant by the Respondent.
b) That the Arbitral Tribunal be pleased to order and decree against
the Respondent that a sum of Rs.7,96,00,000/- (Rupees SevenCrores
Ninety Six Lakhs) be payable to Claimants along with 18% interest
till realization of the same.
17) However, it appears that the Petitioner mainly pressed its
claim before the Arbitral Tribunal in the sum of Rs.4,36,42,078/- based
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on letter dated 12 August 2021. Before considering the effect of the
letter dated 12 August 2021, it would be necessary to note the fact that
the Respondent had attempted to raise the defence of forgery in the
said letter. However, the defence of forgery in the letter dated 12
August 2021 has been rejected by the Arbitral Tribunal. The Tribunal
also rejected the defence of the Respondent that it was pressurised by
the Claimant/Petitioner to issue letter dated 12 August 2021.
18) Coming back to the effect of the letter dated 12 August
2021, the same is extracted below for the facility of reference:-
PRATIKSHA FOUNDATION
CHARITABLE TRUST
(A Jain Minority Trust)
12th August 2021
To,
Kanti Builders (P) Limited,
Utopia Vity, P.B. Marg,
Worli, Mumbai- 400013.
Sub: Confirmation of Full & Final Outstandings.
Sir,
We refer to the Conveyance Deed and Construction
Agreement signed with you for construction of our school project
located at property bearing CTS No.374 B/10 of village Eksar,
Borivali West. Post our personal meeting for account settlement, we
herewith confirm the following:
1. The entire payment towards the Conveyance Deed has
been fully paid up.
2. A net balance of Rs.7.75 crores (Seven Crores Seventy
Five Lacs only) is payable by us towards full and final
payment towards construction agreement full and final
outstanding dues. (this includes GST, extra work
payment, extra steel payment and interest on delayed
payments, if any)
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As agreed, we shall clear the above outstanding payment within one
month of receipt of Occupation Certificate.
We also look forward to your assistance, as assured by you, in claiming
the excess premium amount paid to MCGM under your instructions
worth Rs.12350800/- (Rupees One crore twenty three lacs fifty
thousand eight hundred only).
We acknowledge your support and cooperation in completing our
school project and look forward to associate with you in the near
future for our other forthcoming projects.
Thanking you,
For Witty Enterprises(P) Limited For Pratiksha Foundation
Charitable Trust
sd/- sd/-
Dr. Vinay Jain Dr. Vinay Jain
Director Director
19) Thus, letter dated 12 August 2021 refers to both,
Conveyance Deed as well as Construction Agreement and recorded
that the entire payment towards Conveyance Deed was fully paid and
net balance of Rs.7.75 crores was due and payable towards
Construction Agreement. The letter recorded that the net balance
payment of Rs.7.75 crores represented not only full and final payment
under the Construction Agreement, but also included payment towards
GST, extra work payment, extra steel payment and interest on delayed
payments.
20) The Petitioner also relied upon another undated letter
issued by the Respondent, which reads thus:
To
M/s. Kanti Builders Pvt. Ltd.
Trade View, Utopia City,
Pandurang Budhkar Marg,
Worli, Mumbai- 400 013.
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Sub: Registered Conveyance Deed dated 22nd December, 2017 ('the
said Agreement') in respect of properties bearing CTS Nos.
374B/10 and CTS Nos. 374B/9 of Village Eksar, Borivali
(West) reserved for Secondary School and Play-Ground
respectively and Construction Contract dated 9 th February, 2018
for construction of School Building thereon.
Ref: Order dated 11 March, 2021 in Arbitration Petition (L) No.186
of 2021 passed by the Hon'ble High Court at Mumbai.
Dear Sir,
1. You are aware that the considerations as agreed under the aforesaid
Agreements entered between ourselves and yourselves were to be paid in
installments as recorded therein. Accordingly we have been making
payments in installments as per the aforesaid Agreements.
2. Thus, by way of this letter we acknowledge that the balance amount
payable was Rs.7.75 Crores under the aforesaid Agreements out of
which we have paid an amount of Rs.1 Crore through ICICI Bank RTGS
No.ICICR22021110800008968 dated 08.11.2021 leaving balance of
Rs.6.75 Crores.
3. We have through our Architect have applied for Occupation
Certificate for the completed school building which shall be obtained by
us at our risks and costs.
4. Thus, we are enclosing herewith the postdated cheques towards full
and final payment of entire balance as under:
Sr. Cheque No. Drawn on Dated Amount (Rs)
No.
1000843 ICICI BANK 15.12.2021 2,00,00,000
2000844 ICICI BANK 30.12.2021 4,36,42,078
TDS Amount 38,57,922
Total Amount 67,500,000
5. You are kindly requested to co-operate.
Thanking you, yours faithfully
Witty Enterprises P. Ltd.
Authorised Signatory
21) The liability of Rs.7.75 crores is shown to have been
discharged in the undated letter by paying Rs.1 Crore through RTGS
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and by issuing two cheques for Rs.2 Crores and Rs.4,36,42,078/- after
deducting TDS amount of Rs.38,57,922/-. According to the Petitioner
the amount of Rs.2 crores is satisfied by RTGS payment by the
Respondent and cheque for amount of Rs.4,36,42,078/- got
dishonoured. According to the Petitioner therefore, an amount of
Rs.4,36,42,078/- remained due and payable by the Respondent to the
Petitioner. If the Petitioner was confident that what was due and
payable under the Construction Contract was only Rs.4,36,42,078/- it
ought to have based its claim on the two letters and ought to have
claimed only the amount of Rs.4,36,42,078/-. However, far from
providing particulars of break-up of amount of Rs.7.75 crores as
reflected in the undated letter, the Petitioner decided to press its claim
for having executed total work worth Rs.27,61,00,000/- and after
deducting the amount of Rs.18,86,00,000/- paid by the Respondent
claimed balance Rs.7,96,00,000/- (which figure did not match with the
total figure of 7.75 crores reflected in the letter dated 12 August 2021
or the alleged balance figure of Rs.4,36,42,078 reflected in the undated
letter). Thus, there is absolutely no match between the particulars filed
alongwith the Statement of Claim and the particulars indicated in the
undated letter.
22) In the light of the above peculiar position, no fault can be
found in the following findings of the Arbitral Tribunal in paragraph
272 of the Award:
272. While considering this alternate claim made by the Claimant, it
is noticed that there is no specific alternate prayer to the extent of
the claim of Rs.4,36,42,078/-, in the Statement of Claim. It is also
to be noted that Claimant has filed Commercial Suit No. 37961 of
2022 against the Respondent to recover dues of Rs. 88 lakh plus
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interest which arises under the said conveyance. Lack of such prayer,
is not an embargo for considering a claim for lesser amount than
made at prayer clause (b) to the SOC.
23) In my view, the Petitioner was required to make a
conscious choice in respect of its claim. It could have either claimed (i)
the alleged admitted sum in the letter dated 12 August 2021 together
with undated letter or (ii) could have given particulars of due amount
as per work executed and after deducting the paid amount, could have
claimed the balance sum. The Petitioner made a conscious choice of
not claiming former sum but claimed only the latter sum. Having done
so, the Tribunal cannot be found fault with for having adjudicated the
claim in the manner in which the same was presented before it. Perusal
of the Awards would indicate that the Tribunal has taken into
consideration the amount of contract value and has deducted the
amount already paid to the Respondent and this is how the sum
payable to the Respondent is arrived at Rs.1,75,38,857/-. I do not find
any patent error in this exercise undertaken by the Arbitral Tribunal.
24) Mr. Kanade has strenuously contended that the Arbitral
Tribunal has erroneously considered only the undated letter for holding
that the amount of Rs. 7.75 crores reflected therein was in respect of
both the contracts. In my view, it is not necessary to go into this aspect
particularly because the Petitioner never based its claim merely on the
basis of alleged admission in the two letters. Though some reference is
to be found to the letters in paragraph 5(xvii) of the Statement of
Claim, it is more than apparent that the Claimant ultimately pressed
claim for Rs. 7,96,00,000/-, which was not based on alleged admitted
figure, but based on quantum of work allegedly performed. In this
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regard, it would be apposite to reproduce paragraph 5(xvii) of the
Statement of Claim:
xvii) The Claimant submits that the amount payable under the
construction Contract was much more but the Respondent
admitted its liability towards payment of Rs.7,75,00,000/- (Rupees
Seven Crores Seventy Five Lakhs Only). On 12th August, 2021 the
Respondent vide a letter admitted its liability of Rs.7,75,00,000/-
as full and final payment towards Construction Agreement. The
letter further recorded that the same will be cleared within 1 month
from the date of receiving the Occupation Certificate. Thereafter,
the Respondent addressed another letter to Claimant and again
acknowledged its liability for payment of Rs.7.75 Crores. Along
with the said letter the Respondent made a stamen that 1 crore is
paid by RTGS and balance 6.75 crores will be paid in two
installments. Two cheques were also attached to the said letter. The
first cheque was of Rs.2 Cores bearing Cheque 000843 drawn on
ICICI bank which was dated 15th December 2021. The second
cheque was of Rs.4,36,42,078/- (Rupees Four Crores Thirty Six
Lakhs Forty Two Thousand Seventy Eight Only) bearing cheque
No.000844 dated 30th December, 2021 drawn on ICICI Bank. As
per the said letter an amount of Rs.38,57,922/- (Rupees Thirty
Eight Lakhs Fifty Seven Nine Hundred Twenty Two Only) was
deducted by Claimant towards TDS. The Respondent cleared the
first amount of Rs.2 Crores by way of RTGS on or around the
same date as mentioned in the cheque so the first cheque was not
deposited. The cheque dated 30th December, 2021 of
Rs.4,36,42,078/- (Rupees Four Crores Thirty Six Lakhs Forty Two
Thousand Seventy Eight Only) was dishonored. In complete
disregard to the Order passed by Hon'ble Bombay Court. The
Claimant states that the balance consideration payable as of today
is Rs. 7,96,00,000/- (Rupees Seven Crores Ninety Six Lakhs). The
claimant has attached the list of the entire schedule of amount
receivable under the construction contract with the compilation of
documents.
25) Having himself not pressed the claim before the learned
Arbitrator only on the basis of alleged admissions in the two letters,
Petitioner cannot now criticise the Tribunal for not granting any relief
in terms of alleged admissions. Also of relevance is the fact that the
Petitioner led no evidence to prove execution of any extra work under
the Construction Contract. After appreciation of evidence, the Tribunal
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has arrived at a conclusion that total work performed under the
contract by the Petitioner was only Rs.21,15,00,000/-. Nothing is
brought to my notice, nor any submission is raised to demonstrate any
perversity in the said finding. Therefore, Petitioner's claim of having
executed any extra work cannot be accepted in absence of evidence on
record. The Petitioner has also not pointed out any error in the figure
of Rs.19,26,25,872/- treated as having paid by the Respondent to the
Petitioner under Construction Contract. As per the particulars of claim
presented by the Petitioner, credit was required to be given to the
Respondent in respect of certain amounts. After undertaking the above
exercise, the Tribunal has rightly held that total sum payable by the
Respondent to the Petitioner was only Rs.1,75,38,857/-. Thus, the
Tribunal has conducted a factual enquiry about the actual work
performed by the Petitioner and exact amount it received from the
Respondent. In the light of above exercise undertaken by the Tribunal,
it cannot be contended that there is any element of perversity on the
part of the Tribunal only on account of figures reflected in letter dated
12 August 2021 and the undated letter.
26) I am therefore of the view that no interference is
warranted in the impugned Award in not awarding the claim of the
Petitioner in the sum of Rs.4,36,42,078/-.
27) So far as sanction of counterclaim of the Respondent in
the sum of Rs.2,09,47,700/- is concerned, the same is sought to be
challenged on the ground that payment of development cess and
development charges was the responsibility of the Respondent. The
Tribunal has considered the position that originally the FSI in respect
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of the land was 1.00. The Tribunal also considered the position that for
availing FSI 4.00 certain amounts were required to be paid as
premiums to the MCGM. Under the Construction Contract, it was
agreed that all other payments except for fungible FSI and additional
FSI were to be paid by the Petitioner. After considering the effect of
clauses 7.3 and 8.7 and clause 13 of Annexure-A of the Construction
Contract, the Arbitral Tribunal has arrived at a conclusion that it was
the responsibility of the Petitioner to pay development charges and
development cess. The above interpretation of the Arbitral Tribunal of
contractual clauses does not suffer from any patent illegality. It is well
settled position that interpretation of contractual stipulations is in the
exclusive domain of the Arbitral Tribunal and even if any error is
committed in the interpretation, such error is within the jurisdiction of
the Tribunal. The interpretation of the contractual clauses by the
Arbitral Tribunal is not something which no fair-minded would
undertake. It is a plausible interpretation. In my view, therefore, no
case is made out for interference in the award of counterclaim in favour
of the Respondent.
28) Considering the overall conspectus of the case, I am of the
view that the Petitioner has failed to make out any of the enumerated
grounds under Section 34 of the Arbitration Act for laying a valid
ground of challenge to the impugned Award. The Arbitral Tribunal has
considered the evidence on record and has thereafter arrived at a
conclusion that the Petitioner must receive only the amount due and
payable under the contract. The Tribunal is rightly not got swayed by
alleged admissions contained in the letter dated 12 August 2021 and
undated letter. Instead, it has committed an indepth exercise to
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examine the exact liability of the Respondent to pay amounts under the
Construction Contract. The Tribunal has objectively decided the issue
before it by adjudicating the claims of the Petitioner in the manner in
which they were pleaded and pressed before it. Merely because another
method of adjudication may also be possible by considering the only
effect of alleged admissions in the two letters, it cannot be contended
that the view taken by the Arbitral Tribunal is such that no fair-minded
person would ever adopt the same.
29) In my view therefore, the impugned Award is
unexceptional warranting dismissal of the Petition. The Commercial
Arbitration Petition is accordingly dismissed.
30) Considering the peculiar facts and circumstances of the
case, I deem it appropriate not to award any further costs in favour of
the Respondent.
31) In view of dismissal of the Commercial Arbitration
Petition, nothing survives to be adjudicated in the Interim Application
and the same is accordingly disposed of.
[SANDEEP V. MARNE, J.].
Signed by: Megha S. Parab
Designation: PA To Honourable Judge 27 January 2026
Date: 27/01/2026 16:57:22
