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CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
SACHIN DATTA, J.
1. The present petition under Section 37(2)(b) of the Arbitration and
Conciliation Act, 1996 (the “Act”) has been filed assailing the order dated
09.06.2022, passed by the learned arbitrator on an application under Section
17 of the Act, filed by the respondent no.1.
FACTUAL BACKGROUND
2. The disputes between the parties have arisen in the context of a Joint
Venture Agreement (“JVA”) dated 30.08.2019, between the respondent no.1
(B) Direct and Restrain the Respondents from making any construction on
the Disputed Property and not to in any manner engage in any kind of
commercial activity on the subject/Disputed Property or advertise
/communicate/display bill-boards with third parties as regards the
marketability of the same, as these may lead to creation of further third
party rights, interest and equities, which shall have a direct bearing on the
rights of the Applicant/Claimant; and
(C) Pass any other order which this Hon'ble Court may deem fit and
proper in the facts and circumstances of the case.”
OR IN THE ALTERNATIVE
6
MANU/DE/0033/2012
7
(2006) 1 SCC 751
8
(2009) 1 SCC 475
9
2012 SCC OnLine Del 4442
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2021 SCC OnLine Del 5571
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MANU/DE/1727/2020
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MANU/DE/2643/2021
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MANU/DE/3207/2021
34. With regard to the contention that the Joint Venture Agreement dated
30.08.2019 is determinable and that interim relief would fall foul of Section
14 (b) and (d) of the Specific Relief Act, 1963 it has been held in the
impugned order as under:
“77. As regards the contention of the Respondents that the agreement is
determinable and can be terminated, I do not find any merit in the same
for the reason that the agreement has not been terminated till date by the
Respondents No. 1 to 7. Had it been determinable, it stands to reason that
the Respondents No.1 to 7 would have terminated the same and refunded
the amount paid by the Claimant to them towards purchase of land. The
Agreement is a subsisting one and the judgments cited on behalf of the
Respondents that where there is no subsisting contract between the parties
and the agreement is determinable in nature, interim relief cannot be
granted to the Claimant, are, therefore, inapplicable. The entire tone and
tenor of the Agreement, prima facie appears to suggest that it was neither
78. The argument of the Respondents that interim relief cannot be granted
in view of the fact that JVA is hit by Section 14(b) and (d) of the Specific
Relief Act read with Section 41 (h) of the said Act also appears to me to be
based on a mis-construction of the Recitals and Clauses of the Agreement.
The terms of the Agreement appear to me to be clear and precise, which
do not require monitoring from this Tribunal. Much stress has been laid
by Mr. Sethi on his argument that the terms of JVA are not specific and
incapable of being enforced but upon close reading of the JVA, it is more
than apparent that there is no non-certainty or ambiguity in the terms of
the Agreement. The fulcrum of the Agreement is the transfer of land from
the first party to the second party for the purpose of development of the
land by raising construction of a warehouse thereon. Formation of LLP by
itself does not appear to be the bargain, but only a device for transfer of
the land from the Respondents No. 1 to 7 to the Claimant. For the
execution of the project on the transferred land, detailed steps have been
outlined and the responsibility of the entire construction is vested in the
Claimant, the Respondents No. 1 to 7 having no role to play. The bargain
of the parties is set out in clear terms and the said bargain constitutes
transfer of land from the first party to the second party, the development of
the land into are house facilities by the second party at its own costs and
expenses and upon completion of construction of the warehouse, the rents
to be shared on the constructed warehouse between the first party and the
second party in the ratio of 30:70. The formation of the LLP appears to be
merely with a view to facilitate the whole transaction, and could aptly be
said to be a module for carrying out the bargain of the parties.”
35. In para-82 of the impugned order, learned Sole Arbitrator has also
taken note of the amendment of Section 10 of the Specific Reliefs Act (by
Act 18 of 2018), as a result of which the grant of relief for specific
performance is no longer discretionary. Reference in this regard is rightly
made to the decision of the Supreme Court in the case titled as B.
Santoshamma v. D. Sarala,14 wherein it has been held as under:
“ 68. Section 10 of the SRA as it stood prior to its amendment with effect
from 1-10-2018 provided:
“10. Cases in which specific performance of contract
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(2020) 19 SCC 80
69. After amendment with effect from 1-10-2018, Section 10 of the SRA
provides:
“10. Specific performance in respect of contracts.—The specific
performance of a contract shall be enforced by the court subject to the
provisions contained in sub-section (2) of Section 11, Section 14 and
Section 16.”
70. After the amendment of Section 10 of the SRA, the words “specific
performance of any contract may, in the discretion of the court, be
enforced” have been substituted with the words “specific performance of
a contract shall be enforced subject to …”. The court is, now obliged to
enforce the specific performance of a contract, subject to the provisions of
sub-section (2) of Section 11, Section 14 and Section 16 of the SRA. Relief
of specific performance of a contract is no longer discretionary, after the
amendment.
36. It is also pertinent to note that in the statement of claim filed on behalf
of respondent no.1/claimant before the learned Arbitrator, the respondent
no.1 has primarily sought specific performance of the Joint Venture
45. Also in L&T Finance vs. DM South India Hospital Pvt. Ltd.(supra),
it has been held by this Court as under:
“25. As long as the Arbitral tribunal has weighed the two factors - i)
protection of arbitral corpus and preservation of arbitral process and ii)
balanced equities between the parties on consideration of prima facie
case, balance of convenience and irreparable damage; the Court should
not interfere with such orders. As Section 37 is not strictly like an appeal
process.”
46. In Sanjay Arora & Ors. Vs. Rajan Chadha & Ors.(supra), this court
held as under:
“This Court has already opined, in Dinesh Gupta v. Anand Gupta
MANU/DE/1727/2020 and Augmont Gold Pvt. Ltd. v. One97
Communication Ltd that the considerations guiding exercise of appellate
jurisdiction under Section 37(2) (b) are, fundamentally, not really
·different from those which govern exercise of jurisdiction under Section
34 of the 1996 Act.”