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ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 200 OF 2014
Vasanji Assaria Mamania …Petitioner
Mr. Dinyar D Madon, Senior Advocate a/w Mr Ramachandran
Narayanan and Mr Ashwin Bhadang i/b Narayanan and
Narayanan, for Petitioner.
Mr. Farhan Dubash a/w. Rahul Jain i/b VBA Legal, for
Respondent.
JUDGMENT
1. This is a Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) challenging an arbitral award dated May 31, 2013 (“Impugned Award”) passed by a Learned Arbitral Tribunal comprising a Sole Arbitrator in connection with disputes and differences between the Petitioner, Vasanji Assaria Mamania (“Mamania”) and the Respondent, Yadunarayan Mulky Shetty (“Shetty”). October 7, 2025
2. The parties entered into a memorandum of understanding (“Agreement”) by which Mamania agreed to purchase from Shetty a certain land parcel located in Chembur, described in fuller detail in the Impugned Award, admeasuring 2,493.[9] square metres (“Subject Property”), for a consideration of Rs. 11.25 crores, of which Rs. 50 lakhs were payable at execution; Rs. 1 crore was payable as and when Shetty removed the tenants from the premises and the balance Rs. 9.75 crores against completion of the conveyance. On the face of the Agreement, a date of execution is not discernible and there had been some differences about the precise date although there was no dispute about execution of the Agreement towards the end of April and start of May 2006. For all purposes of this judgment the date of the Agreement is taken as May 2, 2006, as indicated in the Impugned Award and in the pleadings in the Petition. As will be seen from this judgement, nothing would turn on this facet.
3. The parties agreed that if a survey of the Subject Property were to indicate a lower area, the consideration would be adjusted downwards proportionately. Within three months, Shetty was required to settle with all the tenants to get them to vacate the Subject Property; make out a marketable title to the Subject Property free from any encumbrance; have a survey conducted to demarcate the Subject Property at Mamania’s cost; and build a boundary wall around the Subject Property as per the survey coordinates, at Mamania’s cost. The conveyance too was expected to be completed within three months, subject to Shetty complying with the aforesaid obligations.
4. The Agreement records in two places that time was of the essence of the contract and on the face of it indicated a timeline of three months for completion. The parties agreed that in the event of noncompletion due to Shetty’s default, Mamania would have the option of demanding specific performance; or demanding a refund of the “earnest money” with interest at 12% per annum. Likewise, if Mamania’s payment obligation were to not be honoured, Shetty would have the option to demand specific performance; or demand interest at 12% per annum for the period of delay in payment; or cancel the Agreement and forfeit the “earnest money” with anything excess paid being refunded with interest at 12% per annum after 30 days of electing to cancel the Agreement. The Agreement does not define the term “earnest money” although it is used twice and in one place, indicates a blank that has remained unfilled. The amount of Rs. 50 lakh agreed to be paid at signing of the Agreement has been treated as the earnest money.
5. Even before executing the Agreement, Mamania had paid a sum of Rs. 1.[5] crores to Shetty. After execution, he made two further payments aggregating to Rs. 1.[5] crores towards the end of July 2006, taking the total amount paid to Rs. 3 crores.
6. Mamania then filed Suit No.1255 of 2007 in this Court seeking specific performance of the Agreement. A deposit of Rs. 8.25 crores was made by Mamania with the Registry of this Court on June 27,
2007. By consent of the parties, the matter was referred to arbitration, which culminated in the Impugned Award.
7. Mamania would contend that the Agreement was valid and subsisting and that Shetty had not cleared the Subject Property of all tenants; had not made out a clear and marketable title to the Subject Property; not built a boundary wall, and therefore the Agreement could not have been performed. Mamania would contend that although there was a specific time indication in the Agreement, time was not the essence of the contract, and since the Agreement subsisted, he was entitled to specific performance of the Agreement in its terms i.e. at the very price contracted therein.
8. Shetty would contend that time was of the essence and Mamania had not performed his obligations under the Agreement before August 2, 2006 while Shetty had complied with his part of the bargain. On the other hand, Shetty contended that Mamania was not ready with the money; had second thoughts; and in fact, sought time to complete the transaction. Shetty would contend that it was only after a considerable wait that he terminated the Agreement on October 3,
2006. Shetty had sought to bring on record certain further documents purporting to demonstrate that the tenants had actually been cleared out. However, Mamania objected to bringing such evidence on record, on the ground that those documents had not been adequately stamped. Impugned Award:
9. The Learned Arbitral Tribunal found that time was indeed of essence of the contract in the Agreement, as was explicitly contracted by the parties. The Learned Arbitral Tribunal found that Mamania had not shown readiness and willingness to perform the Agreement proximate to its execution despite time being of the essence, and had demonstrated no urgency to complete the transaction, at least until October 3, 2006, when Shetty purported to cancel and terminate the Agreement.
10. The Learned Arbitral Tribunal held that the general presumption that time was not of the essence in transactions involving immovable property, stood displaced in the facts of the case. Not only did the Agreement itself explicitly record that time was of the essence, but also, by all indications, the parties had intended to perform their obligations within three months of the Agreement. Therefore, the Learned Arbitral Tribunal held that the Agreement was not subsisting and that when it had been subsisting, Mamania had not been ready and willing to perform.
11. The Learned Arbitral Tribunal held that it would not be appropriate to let Mamania cloud Shetty’s title to the Subject Property by making a partial payment and then dithering and refraining from performing to complete the transaction, with Mamania not even demanding performance until the Agreement was terminated. Citing the Supreme Court judgment in Arulappan[1], the Learned Arbitral Tribunal found that it was inappropriate to grant specific relief in the facts of this case.
12. The Learned Arbitral Tribunal found a rapid and remarkable rise in the value of the property – according to Mamania himself, Rs. 20 crores in 2007, and according to a witness statement, Rs. 16 crores. Citing copiously from the judgement of the Supreme Court in, the Learned Arbitral Tribunal held against A.C. Arulappan vs. Ahalya Naik – (2001) 6 SCC 600 Saradamani Kandappan vs. S. Rajalakshmi & Ors. – (2011) 12 SCC 18 declaring that the Agreement was amenable to specific performance at the behest of Mamania at an antiquated price. The Learned Arbitral Tribunal found, on facts, that the grant of specific performance would lead to a windfall gain for Mamania and a serious detriment to Shetty, on account of the steep escalation in market price of the Subject Property, holding that keeping money in the bank is not a sign of being ready and willing to perform a contract. The Learned Arbitral Tribunal held that there has to be something more concrete to demonstrate actual readiness and willingness to put that money to use and complete the transaction as obligated under contract. Analysis and Findings:
13. I have heard Mr. Dinyar Madon, Learned Senior Advocate on behalf of Mamania and Mr. Farhan Dubash, Learned Advocate on behalf of Shetty. With their assistance I have examined the material on record.
14. At the threshold, it may be seen that the Learned Arbitral Tribunal has essentially exercised its discretion not to grant specific relief. Whether this conclusion is implausible and perverse is the test to be applied. Merely because another view is possible, it would not be open to substitute the view of the Learned Arbitral Tribunal with the view of this Court to arrive at a different outcome. It is now trite law that if the Learned Arbitral Tribunal has otherwise returned reasonable and plausible findings, it is not open to the Section 34 Court to interfere and set aside the arbitral award.
15. The Learned Arbitral Tribunal adopted the following extract from the Supreme Court judgement in Arulappan[3]:
7. The jurisdiction to decree speci c relief is discretionary fi and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant speci c fi relief, the court need not grant the order for speci c relief fi; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Speci c Relief Act, 1963 as to under what circumstances the fi court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, speci c fi relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant speci c relief, then also the court would desist fi from granting a decree to the plaintiff. [Emphasis Supplied]
16. From the Supreme Court in Saradamani Kandappan[4], the Learned Arbitral Tribunal quoted the following extracts: A.C. Arulappan vs. Ahalya Naik – (2001) 6 SCC 600 Saradamani Kandappan vs. S. Rajalakshmi & Ors. – (2011) 12 SCC 18
37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to speci c performance. The fi steep increase in prices is a circumstance which makes it inequitable to grant the relief of speci c performance fi where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non-readiness". The precedents from an era, when high in ation was unknown, holding fl that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to speci c performance, as suits fi and appeals therefrom routinely take two to three decades to attain nality. As a result, an owner agreeing to sell a property for rupees fi one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.
43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam:
(i) The courts, while exercising discretion in suits for speci c fi performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some signi cance and therefore fi time/period prescribed cannot be ignored
(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.
(iii) Every suit for speci c performance need not be decreed merely fi because it is led within the period of limitation by ignoring the time- fi limits stipulated in the agreement. The courts will also "frown" upon suits which are not led immediately after the breach/refusal. fi The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to le a suit and obtain speci c performance. fi fi The three-year period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in partperformance, where equity shifts in favour of the purchaser.
17. The application of these precedents by the Learned Arbitral Tribunal to the facts of the matter at hand is reasonable and a plausible means of disposition of the matter at hand. The Learned Arbitral Tribunal found that Mamania moved court in 2007 when performance was expected three months after May 2006. There was no firm movement until October 2006 when Shetty terminated the Agreement. On the contrary, for a person who was keen to complete the transaction and paid over Rs. 1.[5] crores even before signing the Agreement, the slowing down of the pace of interest in closing cannot be ignored. A careful scrutiny of the record would show that it was Mamania’s case that Shetty had demanded more money upfront to be able to settle the tenants, since they were said to be demanding exorbitant amounts, and this is why further payments of Rs. 1.[5] crores were made in July 2006. That having been paid and Shetty claiming to have settled with the tenants, the Learned Arbitral Tribunal has drawn an inference about Mamania objecting to bringing on the record, evidence of settlement with tenants.
18. In fact, Mamania had claimed that there had been a partial encroachment on the Subject Property, with a part of the encroachment being on the road and partly on the Subject Property. Mamania had claimed that such encroachment would be an eye sore and had undermined the purpose for which the Agreement had been priced at Rs. 11.25 crores. In September 2006, Mamania claims to have received a notice from two persons, Jagatpal Shetty and Sadanand Shetty, with a copy of an agreement of February 19, 1993 for purchase of the property. Shetty not having disclosed this past is said to have shocked Mamania but Shetty is said to have simply requested Mamania to ignore such past claims and indicated that those would be solved. This too would indicate that Mamania seemed to not having been keen to complete the transaction and in fact raised doubts about the efficacy of the Agreement.
19. The aforesaid pleadings in the Suit are reflective of a litigant who would resist having to perform a contract and not typical of a litigant who is seeking specific performance. This is why Mamania wanted a declaration from the Learned Arbitral Tribunal that the Agreement was still valid and subsisting and was capable of specific performance. The plaint in the Suit was affirmed in April 2007, a good six months after the termination of the Agreement by Shetty in October
2006. It is apparent that what has weighed with the Learned Arbitral Tribunal is that Mamania did not rush to court seeking specific performance proximate to his grievance that a subsisting agreement was being breached. From Mamania’s own pleadings it appears that he was picking faults that would aid postponing Mamania’s performance.
20. Meanwhile, the value of the Subject Property, by Mamania’s own showing had risen to Rs. 20 crores (from Rs. 11.25 crores) and Mamania wanted performance at the contracted lower price or even lower on his purported discovery of shabby structures at the front, which he would claim eroded the value of the land where he planned to build commercial premises with an attractive frontage.
21. A party that had made some payments even before the Agreement and another set of payments immediately after the execution of the Agreement could not be expected to have delayed paying the final component with the same dispatch and promptitude unless it had harboured second thoughts about the wisdom of the transaction. The pleadings and the material on record reasonably point to such second thoughts, or perhaps a second bite at the cherry by proposing renegotiation of the bargain.
22. The Learned Arbitral Tribunal appears to have picked up on that and discerned that Mamania had not been truly ready and willing to perform within the envisaged time. That apart, he filed the Suit nearly one year after the execution of the Agreement and a good seven months after the termination of the Agreement. This is what justifies the invocation of Saradamani Kandappan and Arulappan by the Learned Arbitral Tribunal for application to the facts of this case.
23. When seen from this prism, the outcome rendered by the Learned Arbitral Tribunal cannot be faulted. It is now trite law that the Section 34 Court cannot re-consider evidence and re-assess the material on record and sit in judgement over the Learned Arbitral Tribunal. The Section 34 Court may only determine if the arbitral award under challenge is plausible, reasonable and not in conflict with the grounds for being set aside in the Section 34 jurisdiction. In my opinion, having analysed the Impugned Award and examined the material that was presented to the Learned Arbitral Tribunal, there is nothing to show that the findings of the Learned Arbitral Tribunal are implausible, perverse, contrary to the contract, violative of natural justice or in conflict with the fundamental policy of India to merit any interference under Section 34 of the Act.
24. The Impugned Award is consistent with the bargain between the parties, namely, that the parties had explicitly agreed in so many words, that time was of the essence. While it may be possible to displace the ordinary presumption that in matters of immovable property, time was not of the essence, no fault can be found in the instant case, with the Learned Arbitral Tribunal having found that the express agreement as to time being of the essence not being displaced.
25. The Learned Arbitral Tribunal has also returned plausible findings on the grant of specific relief being a matter of discretion, and that exercise of discretion in favour of specific performance would be inequitable. Mamania had insinuated value erosion by discovery of ugly encroachments outside the frontage of the Subject Property and at the same time, also indicated the market value of Rs. 20 crores to canvas the scale of damages suffered. The Learned Arbitral Tribunal, citing the case law reproduced above, found that this approach was not acceptable and that it was not meritorious to exercise discretion in favour of granting specific performance. A natural corollary was that the intention to perform on the part of Mamania having been found, going by the material on record, the Learned Arbitral Tribunal also held that no case was made out for award of damages.
26. The scope of review by the Section 34 Court is well covered in multiple judgements of the Supreme Court including Dyna Technologies[5], Associate Builders, Ssyangyong, Konkan Railway[6] and OPG Power[7]. Even implied reasons are discernible and may be inferred to support the just and fair outcome arrived at in arbitral awards. To avoid prolixity, I do not think it necessary to burden this judgment with quotations from these judgments. It is well settled that the arbitral tribunal is the master of the evidence and the best judge of the quality and quantity of evidence. Suffice it to say (to extract from just one of the Dyna Technologies Private Limited v. Crompton Greaves Limited – (2019) 20 SCC 1 Konkan Railways v. Chenab Bridge Project Undertaking – 2023 INSC 742 OPG Power vs. Enoxio – (2025) 2 SCC 417 foregoing judgements) in Dyna Technologies[8], the Supreme Court held thus:
27. Applying the aforesaid standard, I find it difficult to hold that the Impugned Award is liable to set aside. It can never be held to be perverse in a manner that goes to the root of the matter, where no other view would be possible.
28. Mamania’s contentions about how the Agreement and the material on record ought to be interpreted, would would necessitate substituting the incumbent plausible view with a competing view (even assuming that the competing view canvassed is plausible). This, in my opinion, is not permissible. When the reasoning in the Impugned Award is reasonable, not arbitrary and not implausible, it would not be appropriate for me to interfere as if this were an appellate court.
29. In the result, this Section 34 Petition must fail and is hereby dismissed, along with interim applications, if any. Monies deposited by Mamania in Court shall stand released to him and paid over by the Registry along with all accruals thereon, within a period of three weeks from the upload of this judgement on the website of this Court.
30. All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this Court’s website. [SOMASEKHAR SUNDARESAN, J.]