Judgment:
Anoop V. Mohta, J.
1. The petitioner has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Act) as there is an arbitration clause in the agreement between the parties. There is no dispute so far as this part is concerned. The petitioner, by invoking arbitration clause, suggested the name of an Arbitrator for the Arbitral Tribunal. The respondents have agreed and consented for the same.
2. Pursuance to various discussion and negotiation between respondent No. 1 and the petitioner, they entered into an Agreement dated 12.08.2005 by which respondent No. 1 agreed to purchase and petitioner agreed to sell , convey, transfer all the petitioner's right, title and interest in the property to respondent No. 1 for total consideration of Rs. 54 crores (Rupees fifty four crores).
3. There is no dispute on record that the total consideration of Rs. 54 crores as per the agreement have been paid to the petitioner, as per clause 2 of the agreement.
4. The basic controversy involved here and as agitated is for security, as prayed, of the amount as per clauses, 5, 6 and 8 of the agreement. After adjusting Rs. 5,00,00,000/- (Rupees five crores) as already paid by the respondents to the petitioner pending the negotiation and culmination of arbitration proceedings, the prayer is to direct respondent No. 1 to forthwith deposit in Court a sum of Rs. 26,85,47,945/- covering the principal and the amount of interest as alleged to be due from 4.8.2008 to 8.4.2009 as per the particulars of claim. The petitioner, by this petition, has also prayed for the attachment before judgment of the property as contemplated under Order 38, Rule 5 of Civil Procedure Code (CPC).
5. Respondent No. 1 has filed affidavits in reply dated 24.04.2009, 2.5.2009 and dated 4.5.2009.
6. The relevant clause 5 of the agreement is reproduced as under:
5. It is agreed while calculating the consideration payable by the Assignee to Lok Holdings, an amount of Rs. 12,00,00,000/- (Rupees Twelve crores only) was added as lumpsum consideration for the assignment of all the rights, title and interest of the Lok Holdings in 1/6th undivided right, title and interest of late Mr. Vijay Kumar alias Vishnu Purshottam Kabali under the aforesaid Agreement dated 28.10.1994, with clear understanding and Agreement that the said Rs. 12,00,00,000/- is full and final consideration for all rights that accrue to the Lok Holdings for the said Versova Property out of the aforesaid Agreement dated 20.10.1994, and that Lok Holdings shall not be entitled to any further consideration for any rights that the Assignee may acquire from the legal heirs of the said late Mr. Vijay Kumar alias Vishnu Purshottam Kabali and/or the said Sandeep P. Gupta which included the rights to load TDR on the said 1/6th undivided share in the said Versova Property as Receiving Land. However, while calculating the consideration payable in respect of the rights under the other Two Agreements dated 17.4.1995 and 15.07.1995, with said Mulraj Kabali and the said Champabai Kabali and others respectively, and 15.07.1995 with said Mulraj Kabali credit was taken for sum of Rs. 31,00,00,000/- as the value of Transferable Development Rights (TDR) to be purchased from outside to be loaded on the said share and the said consideration has been arrived at on the basis of that, although Lok Holding was assigning its 50% share in the said Versova Property, since the consideration for late Mr. Vijay Kumar alias Vishnu Purshottam Kabali share was lumpsum consideration, then in reference to TDR FSI, the other two shares were with reference to the availability of FSI/TDR comprised of FSI of 4,66,320 sq.ft., and TDR of 4,93,680 sq.ft. It is agreed that in case ultimately the development in respect of the said 1/6th undivided right, title and interest each of the said Mulraj Kabali and said Champabai Kabali and others (hereinafter called the 'Said 2/3rd Development' turned out to be less, there shall be no deduction in consideration payable by; the Assignee to Lok Holdings. However, if any TDR is sanctioned in respect of the 2/3rd Development i.e. only in respect of the 1/6th undivided right, title and interest each of the said Mulraj Kabali and the said Champabai Kabali by the State Government, MMRDA or MCGM, free of costs in the form of FSI for loading of which the Assignee does not have to purchase the TDR from outside, the Assignee shall pay additional sum calculated at Rs. 625/- per sq.ft. of such free TDR to Lok Holdings. Accordingly, if the TDR in respect of the above 2/3rd Development calculated at 493,680 sq.ft. then the Assignee shall pay to Lok Holdings as stated above, further sum of Rs. 30,85,00,000/-. The Assignee has out of the aforesaid expected amount of Rs. 30,85,00,000/- that may become payable in the above circumstances to the lok Holdings paid as the Adhoc sum of Rs. 5,00,00,000/- (Rupees Five crores only) to the Assignor i.e. Lok Holdings on the execution hereof, (the payment and receipt whereof the said Lok Holdings do hereby admit and acknowledge).
7. By the aforesaid reply, the basic contention with regard to these clauses are as under:
(ii). Clause 2 of the said Agreement set out the consideration at Rs. 54 crores along with the manner in which the said consideration would be paid to the petitioners.
(iii). Clause 5 of the said Agreement, inter alia, provided for additional consideration to be paid by the respondent No. 1 to the petitioners with respect to T.D.R. being available free of cost on the share of Mulraj Kabali and Champabai Kabali heir of Chandrasingh Kabali) i.e. on a two-thirds share of portion sold to the respondent No. 1, as set out therein. The said clause provided that if such T.D.R. is sanctioned free of cost in the form of F.S.I. for loading on the said property, by virtue of which the respondent No. 1 would not have to purchase T.D.R. from the market, the respondent No. 1 would pay to the petitioners an additional sum calculated at Rs. 625/- per square feet of such free T.D.R. in the said clause, on a calculation of such potentially available T.D.R. at 4,93,680 square feet (free of cost), it was agreed that a sum of Rs. 30.85 crores could become payable by the respondent No. 1 to the petitioners. The said clause further provided that the respondent No. 1 would make payment of Rs. 5 crores to the petitioners as ad-hoc payment towards the said T.D.R. which may become available at a future date.
(iv). Clause 6 of the said Agreement provided that in the event the respondent No. 1 become entitled to additional F.S.I. (not T.D.R.) on the said property more than 4,66,320 square feet, the respondent No. 1 would pay additional consideration at the rate of Rs. 1,400/- per square foot in respect of such excess F.S.I. over and above 4,66,320 square feet.
(v). The receipt clause of the said Agreement demonstrates that the entire amount of Rs. 54 crores being the total consideration payable under the said Agreement to the petitioners. Further the said clause also records the Rs. 5 crores ad-hoc payment made by the respondent No. 1 in contemplation of T.D.R. being made available free of cost for loading on the said property.
8. Therefore, the submission is that the entitlement of the petitioner to receive and the obligation of respondent No. 1 to pay Rs. 625/- per square feet under the agreements arise only in the event of T.D.R. being sanctioned free of cost in the form of F.S.I. by the State Government, MMRDA and MCGM. The petitioners are aware that the consent terms dated 4.8.2008 filed in Writ petition No. 1944/2007, respondent No. 1 would be entitled to T.D.R. by procuring the same from outside and using and consuming the said T.D.R., the State Government, MMRDA and MCGM has not yet sanctioned free of cost T.D.R. on the property. Therefore, there is no question of the payment as raised in the present petition.
9. After going through the said clauses referred above, as well as the documents and correspondences exchanged between the parties, there is no much dispute about the fact that pre-condition of the said amount is free T.D.R. and as there is nothing on record to show that the said T.D.Rs. have been sanctioned free of cost in the form of F.S.I. by the concerned authorities. Therefore, there is no question of amount being payable by the respondents to the petitioner at this stage.
10. The learned Counsel for the petitioner, however, relying on these clauses and by putting his interpretation submitted that in addition to the amount of Rs. 54 crores already paid, the respondents are liable to make this payment as prayed. The reference is also made to other provisions/clauses of the agreement, which in my view and as objected by the learned senior counsel for respondent No. 1 is a matter of trial & interpretation. The terms are not so clear that he is entitled for this amount as of right, merely by asking. The issue that they are entitled to recover this money at this stage itself inspite of the fact that the said amount, as referred above, is payable on certain conditions and basically for availability of free T.D.R., this submission of the petitioner, in my view, just cannot be accepted at this interlocutory stage of the petition under Section 9 of the Act. In the present case, as noted above, the respondents are not accepting these liabilities as according to them those prior conditions are not yet fulfilled. Therefore, the demand so made is totally incorrect.
11. The respondents, when demanded Rs. 5 crores as already paid as per clause 5, the petitioner moved and demanded this amount, adjusting the same. No steps were taken earlier by the petitioner to demand such amount. It appears from the record that after the demand made by the respondents, the petitioner has moved this petition.
12. The adjustments, if any, whether is right or wrong and whether the respondent is entitled to refund or demand of this sum of Rs. 5 crores are subject to those clauses. I am of the view that this Court, at this stage, cannot decide these issues which require detail inquiry and trial. The parties have already invoked arbitration clause. The Arbitral Tribunal is practically constituted. Therefore, the apprehension so raised on the basis of the possible interpretation, as per the petitioner, which is opposed by the respondents and as admittedly, there is substantial amount of Rs. 54 crores has already been paid and the respondents have already announced its huge project, no case is made to grant any interim protection as prayed.
13. To grant interim measure/protection under Section 9 of the Act, as set out by the Apex Court in Adhunik Steel Ltd. v. Orissa Manganese & Minerals (P) Ltd. : AIR2007SC2563 , the Court need to consider all the facets of Specific Performance Act and the Civil Procedure Code, including Order 38, Rule 5, Order 39, Rules 1 and 2, Order 40, Rule 1 i.e. principle of balance of convenience, apprehension with material to justify the interim measure/protection/injunction, equity and/or a substantial injury or injustice In my view, all these ingredients are missing in the present case.
14. Respondent No. 1 in his affidavit dated 2nd May, 2009 has averred as under:
5. At the further outset, I submit that the respondent No. 1 is a public limited company listed on Bombay Stock Exchange and has excellent track record in performance and profitability and despite the economic slow down and recession in the real estate market it has registered a impressive profitability of Rs. 718.45 crores in the three quarters ending 31st December 2008, I submit that in view therefore the present petition is an abuse of process of court and no circumstance for grant of any interim relief, order or any interim protection pending reference and adjudication of dispute before the Sole Arbitrator is made out....
15. Therefore, even if some case is made out by the petitioner, but considering the financial status as recorded above, I see there is no case made to grant any interim security or relief to the petitioner.
16. It is made clear that this Court has already granted interim order on 17.04.2009. Pursuance to that respondents have already supplied I.O.D. and sanctioned plans. The respondents, therefore, not pressed the Notice of Motion to vacate the said order dated 17.04.2009 and this Court has accordingly disposed of that notice of motion already. Therefore no further order on that count is necessary.
17. Resultantly, the petition is dismissed. No costs.
18. It is made clear that all these are prima facie observations and the parties are at liberty to take application for appropriate order or injunction as contemplated in accordance with law before the Arbitral Tribunal.