Atul Projects India Pvt. Ltd. v. Nima Developers Private Limited & Anr.

15. This facet of the matter has not been noticed or rather can be said to have escaped attention in the analysis contained in the Impugned Order. Therefore, in my opinion, it cannot be ruled out that the Atul Transaction Documents being a commercially-agreed transaction to develop residential accommodation could have potentially been accommodated and reconciled with the NDZ classification. Suffice it to say, the NDZ classification by itself would not be the end of the for the Atul Transaction Documents. Therefore, this element of the analysis can be said to be inaccurate.

16. Notably, the Oberoi MoU would itself deal with this very facet of the policy going by its description of the transaction. However, the Oberoi MoU was, for all practical purposes, not shared with the Learned Arbitral Tribunal. The manner of redacting of the Oberoi MoU is dealt with subsequently in this judgement. Suffice it to say, had the Oberoi MoU been available to the Learned Arbitral Tribunal, I have no doubt in my mind that the Learned Arbitral Tribunal would not have returned the findings that it did on the NDZ issue or at least in the manner that it has done. Was Atul Ready and Willing to Perform?

17. Whether Atul was truly ready and willing to perform the Atul Transaction Documents is a key element in resolving the issues raised in these proceedings. Atul’s key contention is that the obligation to pay Rs. 12 crores did not arise at all until there was clear and marketable title to the Subject Land, which could have only been achieved if there was a resolution of Appeal 766 in favour of India Farmers and Nima, or if they managed to convince the Government of Maharashtra to change its stance and perspective on the merits of pursuing those proceedings. Having examined the record, the key driver for the Learned Arbitral Tribunal to take a view on whether there is a failure on Atul’s part to demonstrate readiness and willingness to complete the Atul Transaction Documents is the reliance placed on a transcript of WhatsApp messages exchanged between Mr. Atul Patel and Mr. Manish Majithia on October 17, 2019. The Learned Arbitral Tribunal has examined the transcript produced in the proceedings (Page 502) to arrive at a view that Atul was not really ready and willing to perform the Atul Transaction Documents and had sought accommodation on its terms in view of the financial and market conditions prevalent in October 2019 after the DB Judgement came about.

18. Atul would contend that the WhatsApp transcript would only show negotiations and discussions and unless a firm position came about, the terms of the Atul Transaction Documents would have continued. The Respondents would contend that the issue at hand was not whether the Atul Transaction Documents were amended but whether Atul was ready and willing to perform the Atul Transaction Documents in the terms contracted.

19. Mr. Chidambaram would brand the WhatsApp chat transcript as “gibberish” that is unworthy of consideration as evidence, bearing in mind that at the stage of Section 17 proceedings, the Learned Arbitral Tribunal ought to have only examined how to preserve the subject matter of arbitration rather than render firm findings on whether a party is ready and willing to perform. Mr. Khambata would contend that the WhatsApp conversation speaks to Atul’s own desire to renegotiate the transaction and the difficulties he was then facing in the market, which would then point to the Learned Arbitral Tribunal’s view on the absence of readiness and willingness on Atul’s part to perform the contract was a reasonable and plausible view.

20. The transcript is evidently colloquial, with a strong vernacular rendition of the English language, but that is an element that afflicts even the Confirmation Deed (recall the reference to “almost work of title being clear”. This Court cannot undermine the ability of the Learned Arbitral Tribunal to exercise its discretion in discerning a prima facie position on whether Atul was ready and willing to perform the Atul Transaction Documents in the very same terms as contracted. Whether the Atul Transaction Documents was amended is not the point in issue – whether it was Atul’s desire to have the Atul Transaction Documents modified to enable him to still get some part of the bargain, is a question that the Learned Arbitral Tribunal is entitled to consider. However, what needs to be considered is whether the stage at which the WhatsApp conversation was had, was a stage when Atul was obliged to make payments on the premise that the title was absolutely clear.

21. While the WhatsApp transcript alone may not have a definitive bearing to render all other areas of consideration irrelevant, but discounting for the colloquial usage of English, it would be totally open to the Learned Arbitral Tribunal to draw a reasonable inference on the readiness and willingness to perform. The transcript would indicate, a prima facie position (a firm final conclusion can be drawn in arbitration proceedings eventually) that Mr. Patel was open to scaling down the area of development to reduce the financial burden at that time, which Mr. Majithia too was willing to consider. The WhatsApp transcript also shows that the parties had disagreement even on that very day about whether Nima and India Farmers could be said to have clean title. Atul presented a dual proposition – if the title were not clear, then nothing would be payable, and if title were clear, then the “problem is market & payment”. He would say “if due & not payable then will agree to reduce my area….but can’t commit nowadays”. To my mind, going by the style of conversation, the words “not payable” indicates that if Atul is unable to pay, he would agree to reduce his area, but it was difficult to commit. However, he did reject the proposition that the milestones for him to pay, had been reached.

22. In my opinion, no fault can be found with the Learned Arbitral Tribunal in interpreting this conversation on WhatsApp, which is in fact in writing. When dealing with the conduct of commercial parties, one must have regard to reading the language deployed by men of commerce in a manner that they would have meant. It would not be appropriate to bring to bear standards of legally-drafted correspondence when interpreting what is a ready indicator of the state of mind of the person authoring such a message. In my opinion, no fault can be found with the Learned Arbitral Tribunal’s reliance on the WhatsApp message or in its interpretation of the same. This element would go into the mix of what is to be considered in the course of an appropriate decision under Section 17 of the Act. The readiness and willingness to perform has indeed been shown as eroded, in about a fortnight after the DB Judgement. Whether the DB Judgement actually firmly and clearly lifted the cloud on title is a separate issue and that is dealt with separately. Was Precision of Subject Matter Absent?

23. One of the key findings of the Learned Arbitral Tribunal is that the instruments constituting the Atul Transaction Documents are agreements to agree and not a firm and crystallised agreement. Towards this end, one key area of controversy is whether the 12.[5] acres of land on which residential development was to take place in terms of the Atul Transaction Documents had been identified and marked on a layout for the parties to know what precisely was the area on which they would effect residential development. Towards this end, the parties have had bitter disputes about the existence of a layout plan. Atul would contend that the layout was well known to the parties and had been identified. The contention is that Atul’s advocates inadvertently did not append it to the Section 17 Application (the Section 9 Petition originally filed) but were willing to tender it in the arbitration proceedings but the Learned Arbitral Tribunal simply refused to let them tender it.

24. In my opinion, the material on record would not lend itself to a sweeping conclusion that there was nothing earmarked in the instruments constituting the Atul Transaction Documents. Clause 6 of the Confirmation Deed records that the plot area of 50,500 square metres “as shown in plan” is for joint development. Should any portion of it fall in a reservation when town planning takes place, the Respondents would provide any residential zone area of the same size touching the proposed road. A plain reading of Clause 6 of the Confirmation Deed would indicate that there was a plan and that did indicate the area.

25. That apart, the role of an architect, one Mr. Ashwin Zhaveri and M/s H.M. Zaveri & Sons is writ large on the Confirmation Deed. It appears unlikely that a commercial party would agree to part with serious money for a residential development without so much as a plan to indicate the layout of the Larger Land and which part of the Larger Land would comprise the Subject Land, and where to locate the residential development. The value of development, particularly for residential units could vary widely when one is considering the sizeable value of monies contracted to be parted with between the parties.

26. Whether there was an identified plan and earmarked land would certainly present a question of fact, and to my mind it cannot be summarily concluded that the Atul MoU or the Confirmation Deed was simply without any idea whatsoever of where the 12.[5] acres of land would lie on the Larger Land. Evidence would need to be led – perhaps of Mr. Zaveri too and not just the contesting parties. Whether the plan sought to be exhibited by Atul is the plan that was referred to in Clause 6 of the Confirmation Deed would have been a matter of evidence. Answering that would call for a more detailed probe at the stage of the final hearing. Pending that, what interim arrangements are needed ought to have been considered. Therefore, to my mind, the Atul Transaction Documents cannot be entirely wished away as being so inchoate and vague that it would not lend itself to enforcement and execution, even if such a statement were to be made purely as a prima facie finding.

27. A letter from the solicitors to the Respondents dated April 9, 2024 would come in for some analysis across the issues involved in this judgement. In Paragraph 24 of that letter, it is asserted on behalf of the Respondents that Atul was to fence and build a compound wall but defaulted in doing so. If there had been a contracted obligation to fence an area and build a compound wall, it would stand to reason that the area of land to be fenced would have to be identified. That too would reasonably point to it being more probable than not, that the parties knew which precise piece of land would constitute the Subject Land. Therefore, it does not appear reasonable to wish away the Atul Transaction Documents away as a bunch of documents with no clue as to which parts of the Larger Land would constitute the Subject Land. If the fencing was to be of the Larger Land, and that too by Atul, it would beg the question as to whether Atul’s claim for protection on the Larger Land, premised that it had a ROFR on it, would have carried greater weight than what has been ascribed to the issue by the Learned Arbitral Tribunal.

28. Another relevant element is whether the subject matter of protection is just the Subject Land or the Larger Land. Atul would contend that it has a ROFR over development of the Larger Land. This is seen in Clause 4 of the Atul MoU. Therefore, when presented with a prayer for preservation of the subject matter of the dispute that is subject to arbitration, Atul would contend, the subject matter of protection includes its entitlement to the Larger Land and the ROFR it enjoys on it. This too is not an argument that can be summarily wished away. However, whether interim relief, when moulded, must cover only the Subject Land or the Larger Land is entirely a matter in the discretion of the Learned Arbitral Tribunal based on its perception of the strength of the view on the prima facie case, perception of grave injury and balance of convenience.

29. If it was found that there was hesitation in performing even the obligations in relation to the Subject Land, due to financial and market constraints, and that Atul was seen as being willing to truncate its entitlements even to the Subject Land, it would be totally open to make no interlocutory arrangements, subject of course, to whether the time to perform had arrived and the pre-conditions to performance obligations had been met. Was the Atul Transaction Documents Terminated on July 28, 2020?

30. One area of hot contest between the parties is whether the Atul Transaction Documents was terminated on July 28, 2020. The Learned Arbitral Tribunal has returned a summary view that they were terminated on that date. The Respondents hope to have a declaration of Atul being hopelessly barred by limitation by indicating that the termination took effect on July 28, 2020 and arbitration was invoked only on February 21, 2024. The April 9, 2024 letter from the solicitors of the Respondents asserts so in so many words. The effect of suspension of limitation periods between March 15, 2020 and February 28, 2022 at the instance of the Supreme Court in Suo Motu Writ Petition 3 of 2020 does not seem to have been factored in.

31. That apart, leaving limitation aside, the perceived delay could influence a reasonable assessment of whether interim protection ought to be granted. With that in mind, I have examined the assertion of termination having been effected way back on July 28, 2020. It is clear from the letter issued on that date (and this was nearly ten months after the DB Judgement) that Atul was called upon to pay a sum of Rs. 12 crores failing which there would be an automatic termination of the Atul Transaction Documents. This letter called upon Atul to perform within 14 days and did sound an ultimatum. However, this letter also invited Atul for a conversation on the subject. Atul did not accept the position that the conditions to be met for payment obligations to be triggered had been met. Atul replied on August 24, 2020 denying that the stage for payment of Rs. 12 crores had arrived.

32. Thereafter, Nima issued another letter dated September 7, 2020 which would indicate, prima facie, that the Respondent did not intend (then) for the July 28, 2020 letter to have been a termination letter. This letter again called upon Atul to perform the Atul Transaction Documents. It was stated explicitly that Nima hoped wiser counsel would prevail on Atul and it would perform the obligations demanded of it in accordance with terms agreed between the parties. If the July 28, 2020 letter was an inexorable termination, there would have been no room for the letter dated September 7, 2020 asking for compliance. Neither had Atul performed the actions demanded within 14 days of July 28, 2020 nor was Nima’s letter dated September 7, 2020 (in response to Atul’s letter of August 24, 2020) in the vein of asserting that the Atul Transaction Documents already stood terminated. On the contrary, the threat of legal action if wiser counsel did not prevail on Atul, could point to potential action for specific performance being initiated by the Respondents not being ruled out.

33. Therefore, in my opinion, it cannot be reasonably held with the certitude found in the Impugned Order that that there had been a termination of the Atul Transaction Documents on July 28, 2020, or for that matter, on September 7, 2020. Indeed, it was on December 18, 2023 that Nima actually terminated the Atul Transaction Documents and enclosed a cheque for the Rs. 5.51 crores received until then from Atul. By this time, the Respondents had achieved the commercial and financial security from the Oberoi MoU (executed in October 2023). It was on December 18, 2023 that the election to terminate was clearly made and the potential to litigate for specific performance was conclusively shelved. Arbitration was invoked by Atul in February 2024 and in the interregnum, mediation was attempted for what was evidently a commercial dispute. Both parties could equally be accused of remaining silent for three years since July / September 2020. The Respondents, of course, were battling a renewed effort by the Government of Maharashtra to take possession of the Larger Land – indeed, far from absolute title, even mutation entries indicating taking of possession on paper were passed, taking back the land in purported cancellation of the Lease Deed. The Oberoi MoU was executed in October 2023 and the Atul Transaction Documents were explicitly terminated in December 2023.

34. It appears to me that the reference to these dates by the Learned Arbitral Tribunal is in the context of articulating the fact that Atul sought to invoke arbitration much later (in February 2024 – perhaps after becoming aware of the risk that the ship was sailing), and this weighed with the Learned Arbitral Tribunal on the decision not to grant interim relief. That is understandable. However, it cannot be ruled at this stage for any purpose of the arbitration proceedings that the Atul Transaction Documents stood terminated on July 28, 2020. Relevance of the Oberoi MoU:

35. The Oberoi MoU is a very important element of these proceedings. The Oberoi MoU was executed on October 16, 2023 along with the Sub-Lease Termination Deed. The two instruments executed simultaneously on the same day appear to be a device structured to bring to an end, the interests of Atul. The Sub-Lease Termination Deed (signed by Mr. Majithia for himself; for Nima and for India Farmers) was a self-executed instrument that would enable the Respondents to contend that Nima had no title to the Larger Land, which was part of the land leased by the Government of Maharashtra to India Farmers and sub-leased by India Farmers to Nima. Third party interest in the hands of Oberoi was created in parallel.

36. In the letter written by solicitors of the Respondents on April 9, 2024, there is an assertion that the Sub-Lease Termination Deed had been executed. The effect of the Sub-Lease Termination Deed would be an internal document executed to be self-serving to one of the parties to the instruments constituting the Atul Transaction Documents.

37. One of the reliefs sought in the Section 17 Application is a full disclosure of all documents executed in relation to the land covered by the Atul Transaction Documents. There is no doubt that the execution of the Oberoi MoU was necessarily required to be part of the assessment and adjudication by the Learned Arbitral Tribunal. A redacted version of the Oberoi MoU was purportedly brought on record by the Respondents – “purportedly” because, in my opinion, the document tendered by the Respondents was as good as not producing anything at all.

38. I have already outlined the flow of events in these proceedings before my predecessor who had called for the Oberoi MoU to be produced without any masking for consideration by the Court, but in a sealed cover i.e. not for being shared with Atul. As stated earlier, I have gone through it. I am left with no doubt in my mind that if this document had been called for by the Learned Arbitral Tribunal just like my predecessor had called for it, the Learned Arbitral Tribunal would have taken a significantly different view of the matter. A number of conclusions drawn by the Learned Arbitral Tribunal, in my opinion, would have well stood undermined, had the Learned Arbitral Tribunal seen the Oberoi MoU in its entirety. That the Learned Arbitral Tribunal had been prevented from getting a full picture is evident from the manner in which a glimpse of the Oberoi MoU was purported to be provided to the Learned Arbitral Tribunal, if the manner of redacting could even be regarded as leading to even a “glimpse”.

39. A careful examination of the redacted Oberoi MoU would show that what was a 33-page document was presented as a six-page document. Of the four pages of recitals that are replete with the history of the transactions over the same land, just one page with a large black patch on it was filed. The provisions, including the definitions and the operative provisions contain references to the Atul Transaction Documents. These ought to have been part of the mix for consideration by the Learned Arbitral Tribunal so that it could consider an appropriate relief even if it were to be of the view that prima facie, Atul has not been able to show a strong demonstration of having been ready and willing to perform. Unfortunately, the end result is that the entire evidence that would have enabled an informed decision by the Learned Arbitral Tribunal had been kept away from the Learned Arbitral Tribunal.

40. Indeed, Section 19 of the Act makes it clear that arbitral tribunals are free to conduct proceedings in such manner as they deem appropriate. This would include the power to determine admissibility, relevance, materiality and weight of any evidence. Since Section 37 envisages a statutory right to appeal from decisions refusing to grant an interim measure, if it appears to the Section 37 Court that a certain decision on the manner of allowing evidence has been unreasonable or implausible, leading to a rejection of the interim relief under Section 17, an intervention may be made. It is apparent that the Learned Arbitral Tribunal took a view on the basis of the redacted Oberoi presented by the Respondent – six out of 33 pages, of which two are title pages and two are the signature pages and one page is the schedule to show that a third party interest has been created on the same land. By adopting such an approach, the Learned Arbitral Tribunal was led to believe that the rest of the Oberoi MoU would be totally irrelevant to a decision under Section 17 of the Act. In my opinion, the contrary is true.

41. The situation in hand is not even that the Learned Arbitral Tribunal was fully shown what the Oberoi MoU entailed, with an application being made for keeping it confidential – neither the Learned Arbitral Tribunal nor Atul were any wiser about the contents of the Oberoi MoU and its import for the matter at hand. This is not to suggest that the Learned Arbitral Tribunal must necessarily have seen the Oberoi MoU behind the back of Atul. Dealing with a similar situation in a writ petition involving development of property, the declaration of the law by a Learned Division Bench of this Court, in the case of Sonali Ashok Tandle[2] would be apt to cite: Sonali Ashok Tandle vs. Rannka Lifestyle Ventures – 2023 SCC OnLine Bom 1918

18. Pausing briefly for a moment, we note that the previous Division Bench accepted without comment the tendering of some documents in sealed cover by the 1st Respondent. This Court has previously thoroughly deprecated this practice.[1] So has the Supreme Court, most recently in Madhyamam Broadcasting Ltd. v. Union of India[2] We specifically disapprove of this and do not permit it. It undermines the legitimacy of the adjudication process in any system based on an adversarial proceeding. The simplest general principle is that anything that the Court can see, the opposing party must be allowed to see. Any exceptions must be narrowly tailored, whether under the Evidence Act or some other governing law. Nothing in this matter invites a single one of the exceptions in the Evidence Act regarding privilege, i.e., immunity from disclosure. In other jurisdictions, most particularly in the UK limited disclosures or non-disclosures are permitted. But such ‘Closed Material Proceedings’ are now governed by statute and always subject to judicial oversight. They are mostly in cases of national security, immigration, etc. It is never for a party to decide for itself what it will or will not disclose — most especially when there is an order of the Court ordering and compelling disclosure on affidavit. Where there are private disputes between two parties and a Court has ordered a party to make a disclosure on Affidavit of some material, there is simply no question of that party putting in anything ‘in sealed cover’. As a matter of law, that is noncompliance with a judicial order. In a given case, it will invite action in contempt. If immunity from disclosure is sought, that is an application that must be made to a court and must receive a judicial order. No litigant can disadvantage the opponent by squirrelling some information into the court record ‘in sealed cover’. No party is entitled can rely on such ‘sealed cover material’ to the prejudice of the other side, and no court should permit it. To do so flies in the face of every concept of fair justice and openness and transparency in the decision-making process. It is time to bury this thoroughly pernicious practice.

42. Madhyamam Broadcasting[3] referred to by the Learned Division Bench was a case of denial of reasons for refusal to provide approval for broadcasting of a television channel on the ground of national security. The facts involved in this Appeal involve no element of national security – it is a private dispute between two builders about the manner of dealing with development of the land. The land covered by their agreement forms subject matter of another agreement, which is alleged to have been executed when their agreement subsisted. There is nothing sensitive about the content that would impinge on public interest, necessitating hiding of the same.

43. Therefore, in my view, the Learned Arbitral Tribunal was deprived of a full picture by the manner of redacting of the Oberoi MoU. It is only appropriate that the Learned Arbitral Tribunal and Atul should know what is in the Oberoi MoU, since the contents speak for themselves. There are provisions in it that actually relate to the Atul Transaction Documents. Madhyamam Broadcasting Ltd. Vs. Union of India – (2023) 13 SCC 401 Perusal of these provisions would have enabled Atul to make submissions on the state of mind of the Respondents and the appropriate interlocutory measures necessary in the circumstances. The Learned Arbitral Tribunal would have benefitted from the contents of the Oberoi MoU to discern the precise factual position involved and the Respondents’ own position on whether Atul had any rights over the Subject Land or the Larger Land. All of this has escaped adjudicatory attention because of the approach adopted.

44. Another facet of the Oberoi MoU is whether it could have at all been executed without violating a requirement of law. This facet is integrally connected to whether the 2002 SCN posed a fetter on free and marketable title to the Larger Land. I have dealt with that facet where I deal with the import of the 2002 SCN, which in turn is directly linked to whether the DB Judgement resulted in free, marketable and clear title to the Larger Land. All of these have been dealt with in the next section. Did the 2002 SCN Constitute a Fetter on Title?

45. It is apparent that under the Atul Transaction Documents, until the cloud over Nima’s title to the Subject Land was lifted, no further payments in addition to the monies already paid, were due. Equally, the Atul Transaction Documents were incapable of termination only after the title became free and marketable and the parties registered a proper development agreement.

46. The key issue that arises for consideration is whether the DB Judgement comprehensively enabled free and marketable title to the Subject Land in Nima’s possession as a sub-lessee. Clause 4 of the Confirmation Deed (executed on November 2, 2015) has weighed with the Learned Arbitral Tribunal. Clause 4 is a follow-on provision to Clause 3, which provides that Nima has undertaken work to clear the title to the Subject Land such that possession of the entire land with title would be clear for submissions to be made to the MCGM for the redevelopment. For carrying out such work (to have title cleared), Atul was to pay Rs. 2 crores on execution of the Confirmation Deed and Rs. 3 crores “against almost work of title by revenue department and / or by court is clear”. Clause 4 goes on to say that Nima has promised that the procedure would be completed in six months with clear title and then the parties would execute registered documentation for the development.

47. The DB Judgement indeed struck down the earlier view of the Collector, which had been endorsed in the Revenue Minister Order, that in terms of the factual matrix set out in these instruments, the Lease Deed had been violated. The DB Judgement, however, restored the 2002 SCN. In doing so, the DB Judgement did not effect any carve-out to the terms on which the 2002 SCN stood entirely revived.

48. A careful reading of the 2002 SCN would show that apart from it being a show cause notice, it also doubled up as an interim order that contained prohibitions on alienating any portion of the Larger Land without the consent of the Government of Maharashtra. Therefore, it would not be possible to state that the DB Judgement emphatically cleared all cloud over title. It did clear the cloud arising of the Collector’s original view that had been expressed on April 26, 1993 and had culminated in the Revenue Minister Order of May 18, 1998. However, the DB Judgement revived the 2002 SCN. Indeed, the 2002 SCN dealt with alienation that arose by way of creation of encumbrances on the land in favour of Indian Bank, without permission of the Government of Maharashtra. On this ground too, the Lease Deed could have been cancelled, as indeed occurred later, in fact, contemporaneously with the September 7, 2020 Notice to Atul asserting that the title was clear. However, the 2002 SCN having doubled up as interim order containing prohibitions on dealings in the land, and specifically having been revived by the DB Judgement, contained a direction, which too was revived, not to deal freely with the Larger Land. Therefore, in my opinion, it would not be possible to hold with any certitude that the DB Judgement cleared all cloud over title to the Subject Land.

49. The language of the Confirmation Deed has to be seen in the light of the aforesaid facts. The usage of the words “almost work of title….is clear” would indicate that the commercial agreement between the parties was that if a substantial element of the title being clear was achieved, the payment under Clause 4 would be triggered. This is the nature of the language used through the Atul Transaction Documents (in one place “lapse” is spelt as “laps”) and the authors of these instruments have presented the Learned Arbitral Tribunal with a serious challenge in interpreting their true intent just as they did with their WhatsApp chats.

50. It would be a plausible and reasonable prima facie finding that while the DB Judgement did not result in a full, free and clear title to the Larger Land, it did potentially present a situation where the title was almost clear, triggering the payment instalment due under Clause 4 of the Confirmation Deed. However, the payment of Rs. 12 crores due under Clause 7 of the Atul MoU was linked to “obtaining absolute clear title”. Certainly, the DB Judgement, which revived the 2002 SCN could not be regarded as conferring absolute clear title. Prima facie, the Confirmation Deed supplemented the Atul MoU and did not override the Atul MoU. This facet of nuance does not appear to have been presented to the Learned Arbitral Tribunal and analysis of this nature is not found in the Impugned Order. Therefore, the view that the DB Judgement rendered absolute clear title appears to me as being summary in nature, particularly since the 2002 SCN containing a prohibition on dealing with the land was explicitly revived by the DB Judgement.

51. In the ordinary course, it would be trite to say that the mere issuance of a Show Cause Notice is not a fetter unless an adjudication is made on such notice. However, where the Show Cause Notice doubles up as an interim order, and what is revived by an explicit Court Order (that remained unchallenged) is the entire Show Cause Notice without pruning the fetter on free and marketable title, with the greatest respect to the Learned Arbitral Tribunal, it would not be possible to concur that the DB Judgement led to conferment of absolute and clear title on Nima for the Larger Land, and thereby the Subject Land.

52. Indeed, the 2002 SCN could be said to have been pruned in its content in relation to its basis – the creation of encumbrance in favour of banks without consent of the Government of Maharashtra. On the remaining facts that formed subject matter of the Revenue Minister Order, there was an adjudication already by the DB Judgement. However, it is reasonable to attribute the retention of the directions (not to transact in the land without government approval) to the remaining basis i.e. the creation of encumbrance without consent. That residual basis too could still have led to cancellation of the Lease Deed (as it indeed would later). In short, at this stage, the factual developments that transpired later would show that Atul had made a fair point – that the amount of Rs. 12 crore under the Atul MoU was not due since absolute title had not been obtained.

53. When the first purported termination letter dated July 28, 2020 was issued, the situation had not changed. Similar was the case on September 7, 2020, when Nima hoped better sense would prevail and again called upon Atul to perform on the Atul Transaction Documents. Worse, an adverse order was actually passed by the Collector on September 18, 2020, ten days after the letter dated September 7, 2020, calling upon Atul to perform the payment obligation. In fact, it is an admitted position that on September 23, 2020, the State officials attempted to take physical possession even while they took paper possession by making mutation entries actually changing the title to the Larger Land to the name of the Government of Maharashtra.

54. Looking at these contemporaneous developments, it would be impossible to hold that in July 2020 or in September 2020, Nima and India Farmers had clear title to the Larger Land. On September 24, 2020, this Court had directed in WP 3607 that status quo be maintained. While it is trite law that a mutation entry would not necessarily be determinative of title in a conclusive manner, and admittedly, physical possession was in the hands of the Respondents, the status quo that was to continue would at best have been the status quo obtaining after giving effect to the DB Judgement. Therefore, it cannot be said that absolute and clear title in favour of the Respondents was in existence.

55. The Oberoi MoU and the self-executed tripartite Sub-Lease Termination Deed of October 16, 2023 would follow three years later. The final clearance of the fetter on free and marketable title would cease only on September 19, 2024 when the then incumbent Revenue Minister would discharge the 2002 SCN and hold emphatically in favour of the Respondents. Curiously, this Order of the Revenue Minister putting a final end to the controversy (for the first time) was not even placed before the Learned Arbitral Tribunal, which only had the DB Judgement and the redacted Oberoi MoU to go by.

56. There has been a dispute during this Appeal about Atul’s access to the Order of the Collector passed on September 18, 2020. This document was indeed handed in by the Respondents as part of their Compilation of Documents in the course of the arbitration proceedings. Mr. Khambata would place strong reliance on the fact that Atul did not rely on the aforesaid Order dated September 18, 2020 despite it being available during the arbitration. In my opinion, at worst one could draw a conclusion of poor strategy or even folly for not relying on that Order in the proceedings. However, that instrument and the consequential action to take possession and the direction to maintain status quo are all part of the record. Whether Atul failed to make a better argument in the arbitral proceedings by relying on this Order would not change the legal position and status of whether there was absolute clear title when the Oberoi MoU was executed. The Order of September 18, 2020 was to the knowledge of the Respondents on September 24, 2020, when they informed this Court in WP 3607 that the Order had not even been served on the Respondents. Atul was not informed about these developments at that time. Had he been informed and yet kept quiet, the analysis would change. Yet, the Respondents had contended before the Learned Arbitral Tribunal that they had validly terminated the Atul Transaction Documents on July 28, 2020 for non-payment of the Rs. 12 crores, which was payable against absolute and clear title being available.

57. The Order of September 18, 2020 and the attempt at taking possession on September 23, 2020 and the Order in WP 3706 on September 24, 2020 are all part of one continuum of events and form an integral part of the material on record. Atul not having made submissions based on these developments, which only came in through a Compilation of Documents, cannot render this Court handicapped when dealing with whether there was absolute and clear title. If Atul did not rely on them in the proceedings and only relied on the revival of the 2002 SCN, these developments were a consequence of the revived 2002 SCN.

58. Indeed, the sequence of events set out by Mr. Khambata in his written submissions are instructive. After the status quo order in WP 3706, the Additional Commissioner, Konkan Division passed an Order dated October 15, 2020 staying the Collector’s Order dated September 18, 2020. This Order staying the Collector’s Order was set aside by the Divisional Commissioner on June 25, 2021. In fact, the Collector was directed to hear the matter afresh and take into account a Government Resolution dated June 26, 2018 to examine if unauthorised mortgages could be regularised by paying twice the prescribed charges.

59. On January 19, 2022, the Collector ruled that such Government Resolution would not apply. This Order was upheld by the Additional Commissioner on July 4, 2022. The matter meandered on without there being absolute and clear title until October 31, 2023, when the then incumbent Revenue Minister passed the New Revenue Minister Order to aside the Additional Commissioner’s Order dated July 4, 2022, thereby bringing to an end the Collector’s Orders dated January 19, 2022 and September 18, 2020. This was a comprehensive closure for the first time to the cloud on the title. The events of this period explain the silence on the Respondents’ part, with Atul, from following through on the letters dated July 28, 2020 and September 7, 2020.

60. What is piquant is that the New Revenue Minister Order was passed a fortnight after the Oberoi MoU was executed on October 16, 2023. Therefore, when the Oberoi MoU was executed, the cloud had continued, but within a fortnight of the execution of the Oberoi MoU, immediately after its execution, this new position was secured by way of the New Revenue Minister Order dated October 31, 2023. Therefore, prima facie, it can be said that the cloud posed by the 2002 SCN came to an end on October 31, 2023 while the truly effective termination by the Respondents, with the refund cheque of Rs. 5.51 crores took place only thereafter, on December 18, 2023.

61. By this time, indeed it could be said that there was absolute and clear title for the first time, although a review petition was also filed before the Revenue Minister, which was disposed of finally on September 19, 2024. It is this Order of September 19, 2024 that was not at all available to the Learned Arbitral Tribunal and was given to Atul for the first time on December 3,

2024. Conclusions and Directions:

62. Based on the aforesaid analysis, a conspectus of the inter-play of the various findings, and their relevance for the final outcome, would be necessary. Needless to say, every single observation set out above is prima facie in character. In my opinion, on a number of facets the Impugned Order contains summary findings, primarily because the Learned Arbitral Tribunal appears to have been handicapped by not having had access to the Oberoi MoU. Therefore, I have been persuaded that the Impugned Order deserves to be set aside by way of a remand, with the provision of the Oberoi MoU, appropriately redacted. This is the only course that would be appropriate and meet the ends of justice and fairness. In my opinion, the summary nature of many critical findings that have come about, would warrant a remand. I have given my anxious consideration as to whether this Court could itself take a view, but I am constrained to note that a number of inter-connected facets have emerged in this case, not all of which can appropriately be dealt with for the first time by the appeal court without the benefit of analysis and findings from the forum of the first instance.

63. In my opinion, the Oberoi MoU must necessarily be handed over in an appropriately redacted form (as directed below) to the Learned Arbitral Tribunal. As regards commercial interests of Oberoi, I have taken care to stipulate below what must be redacted in the Oberoi MoU, and what must not be redacted:- A) Nothing in the Recitals A to O shall be redacted; B) Nothing in the Definitions Section shall be redacted; C) Nothing in Clause 2 (Transaction) shall be redacted; D) In Clause 3.[1] (Clause 3.1.[1] to Clause 3.1.9) the amounts denominated in rupees in figures and words shall be redacted, and nothing else shall be redacted; E) In Clause 3.[2] (Clause 3.2.[1] to Clause 3.2.7) the references to the percentages of revenue sharing shall be redacted, and nothing else shall be redacted; F) In Clause 4 (Clause 4.[1] to Clause 4.6.4) and in Clause 5 (Clause 5.[1] to Clause 5.6) all amounts denominated in rupees in figures and words, and to percentages of revenue sharing shall be redacted, and nothing else shall be redacted; G) In Clause 6 (Clause 6.[1] to Clause 6.8), nothing shall be redacted except for the percentages of expense sharing, which corresponds with the percentage of revenue sharing. It is made clear that the percentages relating to anything other than the aforesaid shall not be redacted; and H) Nothing in Clause 7 and Clause 8 shall be redacted.

64. An authenticated copy of such redacted Oberoi MoU conforming to the foregoing shall be filed before the Learned Arbitral Tribunal by the Respondents and a copy shall be served on Atul within a period of four weeks from the upload of this judgement on the website of this Court. Atul shall be entitled to file an application seeking interim reliefs of such nature as advised on the basis of its review of such redacted Oberoi MoU having become available to it, and the Learned Arbitral Tribunal shall consider the same and deal with such application, uninfluenced by whatever has been held in the Impugned Order. Summary of Conclusions:

65. A summarisation of my findings, to provide a comprehensive prima facie thesis underlying my opinion that setting aside coupled with a remand is necessary, is set out below:- A) The land leased by the Government of Maharashtra to India Farmers was over ~114 acres, of which India Farmers leased 100 acres to Nima, which in turn executed the Atul Transaction Documents for 12.[5] acres towards residential development; B) It is difficult to conclude in the manner done in the Impugned Order that there was no earmarking whatsoever of the 12.[5] acres of land that constituted the Subject Land. The Confirmation Deed in particular, refers to a plan. The Atul Transaction Documents entail involvement of an architect. Atul has annexed a map at Exhibit J and claims that inadvertently the plan was not annexed to the Section 9 Petition, which was converted into the Section 17 Application. The Respondents contest the very existence of such a plan. This dichotomy in positions would have led to a triable issue and that would have to be dealt with in the arbitration proceedings after examining evidence. However, the Respondents have persuaded the Learned Arbitral Tribunal to conclusively hold that there was no plan whatsoever. In my opinion, such a firm conclusion even on a prima facie basis would not tenable. It would not be possible to conclude that the Atul Transaction Documents were an inchoate set of instruments with no clarity whatsoever on where the Subject Land was meant to be located within the Larger Land, with serious monies changing hands. For dealing with the Section 17 Application, in my opinion, a greater scrutiny of this issue is warranted – the conclusion appears to be summary; C) The Notice of termination dated July 28, 2020 called upon Atul to pay Rs. 12 crores within 14 days, failing which termination would take place. That very letter called for a conversation. Atul denied the contents of that letter on August 24, 2020. On September 7, 2020, yet another letter was issued by Nima calling upon Atul to perform and hoping better sense would prevail to avoid unnecessary litigation. This letter, inherently calling for performance, would indicate at least prima facie, that the July 28, 2020 letter was not a conclusive termination. The copious deliberations on the purported absence of a pleading on waiver of the termination are, in my opinion, unnecessary. These two letters speak for themselves. The Respondents did not have an evident intent to terminate the Atul Transaction Documents at that time, and could have even sued for specific performance, particularly when the September 7, 2020 letter actually called upon Atul to perform. In their eventual termination letter dated December 18, 2023, the Respondents claim to have terminated the Atul Transaction Documents “once again” and with “immediate effect”. This is untenable. For the reasons set out above, the clear and comprehensive termination took place only on December 18, 2023, when a cheque for refund of Rs. 5.51 crores was enclosed. It is evident that this firm step of termination was taken only after securing the New Revenue Minister Order, which too had followed a fortnight after the Oberoi MoU was executed; D) The DB Judgement of October 1, 2019 revived the 2002 SCN, which was not merely a Show Cause Notice but also a direction prohibiting dealing with the Larger Land without government approval. This is clearly not consistent with a position of absolute and clear title. The Atul MoU required payment of Rs. 12 crore only on obtaining absolute and clear title. The Confirmation Deed used the ambiguous “almost….clear” language, which has led to an inference by the Learned Arbitral Tribunal that the DB Judgement conferred clear title. Be that as it may, on neither of the two dates competing for the termination date, namely, July 28, 2020 and September 7, 2020, did absolute and clear title exist. Therefore, the obligation to pay Rs. 12 crores on either of these dates cannot be said to have arisen; E) The actual termination was effected on December 18, 2023, with a refund of Rs. 5.51 crores being enclosed. However, by this time, the Oberoi MoU was already executed on October 16, 2023. Therefore, prima facie, the Oberoi MoU was executed before the Atul Transaction Documents were effectively terminated. This would have necessitated a closer examination of what kind of interim relief would be appropriate. However, with the Oberoi MoU not having been given to the Learned Arbitral Tribunal except in such a redacted form that rendered it meaningless in substance, the range of facts that ought to have been analysed has missed adjudication; F) The cloud over title appears to have been truly lifted on September 1, 2023 and eventually on October 31, 2023. Indeed, the Oberoi MoU was executed on October 16, 2023, and the clearing of the cloud took place in a fortnight thereafter. The Learned Arbitral Tribunal not having had the benefit of seeing any provision worth its name in the Oberoi MoU, the Impugned Order has no analysis on the validity of executing the Oberoi MoU. Such execution was effected during the subsistence of the Atul Transaction Documents as also during the subsistence of the status quo order of this Court passed in WP 3607. The Impugned Order has simply recorded that the Learned Arbitral Tribunal has accepted the statement made by Respondents’ counsel, on instructions, that third party rights had already been created. After the Oberoi MoU, redacted as above, is made available, the Learned Arbitral Tribunal would be able to revisit this facet and take a clear view; G) The Oberoi MoU, with the specific redacting directed earlier in this judgement must be released to Atul and to the Learned Arbitral Tribunal within a period of four weeks from the upload of this judgement on the website of this Court. Atul shall be entitled to file an application seeking appropriate reliefs after having examined the Oberoi MoU as directed above; H) Whether the NDZ classification of the Larger Land has an inexorable necessary implication of no residential development at all being possible is a question that the Learned Arbitral Tribunal has to consider. The finding that the NDZ could never entail residential development at all appears to be inaccurate. Indeed, the DCPR 2034 enables residential development although incidental to development for IT and ITES units. Indeed, the Oberoi MoU entails elements of non-IT and non-ITES development and indeed residential development. These facets would need a nonsummary examination and towards this end, the provision of the Oberoi MoU would enable the Learned Arbitral Tribunal to examine how residential development is still possible and has actually been envisaged; I) The WhatsApp chat transcript does indicate that on October 17, 2019, Atul appears to have expressed apprehension about having to pay Rs. 12 crore and was willing to prune the size of his entitlements under the Atul Transaction Documents. However, at this stage, absolute and clear title had not been obtained – the DB Judgement revived the 2002 SCN and with it, the fetter on dealing with the Larger Land. There is nothing wrong with the Learned Arbitral Tribunal seeking to interpret the WhatsApp chat and it cannot be totally dismissed as “gibberish”. However, the very same WhatsApp chat transcript also contains Atul’s assertion that the milestone to pay the Rs. 12 crores had not been reached. Therefore, the parties were engaged in a fluid conversation, and greater scrutiny of the factual position obtaining then would be necessary, without which the adverse inference drawn from the WhatsApp chat transcript would be summary in character. In view of the other findings such as the implication of the DB Judgement, this facet would need to be revisited more comprehensively.

66. I have given my anxious consideration to the standard of review to be adopted in exercise of the jurisdiction under Section 37 when considering a challenge to an Order passed under Section 17 of the Act. I am conscious of the light-touch approach necessary in this jurisdiction. The state of the law has been summarised succinctly by a Learned Single Judge of this Court (Manish Pitale J.) in Paragraph 27 to Paragraph 29 of Max Healthcare Institute Ltd. Vs. Touch Healthcare Private Ltd. & Ors.[4] Even while the scope for interference would be tempered and measured, also bearing in mind the legislative objective of limited interference by the Court under the Act, if the Impugned Order misses considering material facets of the matter, or Commercial Arbitration Petition (L) No. 2053[3] of 2023. considers what must not be considered, the scope of review would lend itself to examining the perversity that may emerge from the Order impugned.

67. For the reasons set out above, it is apparent that on multiple counts, the views taken in the Impugned Order are implausible. The contents of the multiple termination letters from the candidates speak for themselves, and yet a firm view has been arrived at that the Atul Transaction Documents were terminated on July 28, 2020. The Oberoi MoU, presented in the manner it was, clearly indicates that there was significantly more than what met the eye. The full document now having been seen by me, I would be remiss if I did not take note of its contents and refrained from taking the consequential action from what is disclosed in it. The status quo directed by this very Court having been in operation when the Oberoi MoU was signed, also cannot be ignored. The sweeping conclusion about residential development being impossible on NDZ land adds to the mix above. Therefore, for the various reasons articulated in this judgement, I am of the view that there is no option but to interfere with the Impugned Order. Oberoi’s Intervention Application:

68. I am also conscious that the Learned Arbitral Tribunal has held that it has no jurisdiction to hear contentions of Oberoi, which would be necessary for considering the Oberoi MoU. Oberoi has sought to be impleaded in these appellate proceedings, which have led to a remand. Therefore, Oberoi is willing to subject itself to the proceedings so that it can be heard and the manner of impact on its interests can also be considered. Curiously, Atul has opposed allowing impleadment of Oberoi stating that it is not a party to the arbitration agreement – curious because Atul seeks reliefs that would have an impact on Oberoi, and it would only be appropriate that Oberoi is heard.

69. Meanwhile, the law on the power of the Learned Arbitral Tribunal to join veritable parties has made a significant forward movement in a recent judgement of the Supreme Court in ASF Buildtech[5]. It has been made clear even that the Learned Arbitral Tribunal can implead a non-signatory party, without the role of a reference court, on its own motion, if the requisite factors are found.

70. In the instant case, the Oberoi MoU has interceded into the subject matter of the Atul Transaction Documents before they were terminated. The execution of the Oberoi MoU has been followed by the resolution of the dispute with the Government of Maharashtra as envisaged therein, within a fortnight. This is precisely the approach that had been envisaged in the Atul Transaction Documents as well, but with a six-month expectation from Nima, ASF Buildtech Pvt. Ltd. Vs. Shapoorji Pallonji and Co. Pvt. Ltd. – 2025 INSC 616 – See Section C(ii) the deadline being extendable by Atul.

71. Oberoi has volunteered to be impleaded in this Appeal, and disposal of this Appeal has led to a remand. Therefore, this is not a case where an arbitral tribunal is seeking to bind a third party to its proceedings – instead, the third party is volunteering to join the proceedings.

72. The Oberoi MoU is being directed to be introduced into the evidence before the Learned Arbitral Tribunal, with appropriate redacting as directed above. The Learned Arbitral Tribunal would have the benefit of getting a complete and holistic picture with Oberoi’s participation. In any case, Oberoi’s entry into the fray has led to Oberoi’s interests being aligned with the interests of the Respondents in the very same subject matter of the arbitration agreement. The Oberoi MoU makes many references to the Atul Transaction Documents and to Atul – not just recitals of history. Therefore, making Oberoi a party, and directing the Oberoi MoU to be considered without the inhibition of Oberoi being a non-signatory, would meet the ends of justice and would also not hurt Atul. Atul, of course, is dominus litis. If the impleadment had been permitted by this Court, Oberoi would have been heard in these appellate proceedings. Oberoi not having participated in the Section 17 proceedings, and coming in the appellate stage would have skewed the position. However, going by the same framework in which the Learned Arbitral Tribunal considered the matter, this judgement has been rendered. Since a remand is being directed, it is only appropriate that the Learned Arbitral Tribunal considers Oberoi’s Impleadment Application too and takes an appropriate view.

73. Section C(ii) in ASF Buildtech is a comprehensive summary of the law on the subject, but in this regard, just the following extracts are noteworthy:-

123. What can be discerned from the above is that the recourse to doctrine of implied powers would be permissible, if without it, it is impossible to effectuate a final power, and such exercise of implied power would effectuate and advance the object of the legislation.

124. Cox and Kings (I) (supra) has elaborately acknowledged the unique complexities posed by contemporary business transactions to the traditional framework of arbitration. Historically, arbitration gained prominence in the context of straightforward and linear bilateral transactions under the mercantile system of law. While over the past century, the nature of modern commercial transactions has undergone a profound transformation with the involvement of multifaceted obligations between multiple parties and complex contractual structures more sophisticated than the linear parent- subsidiary type of organization, that has rendered the traditional dyadic paradigms of business obsolete, particularly in areas such as construction contracts, financing transactions, reinsurance contracts, the framework of arbitration has, to a significant extent remained unchanged, leading to a mismatch between procedural form and commercial substance.

125. For arbitration to remain a viable and effectively alternative mechanism for dispute resolution, it is imperative to ensure that commercial reality does not outgrow this mechanism. The mechanisms of arbitration must be sufficiently elastic to accommodate the complexities of multi-party and multi-contract arrangements without compromising foundational principles such as consent and party autonomy. The approach of courts and arbitral tribunal in particular must be responsive to the emerging commercial practices and expectations of the parties who submit themselves to it. [Emphasis Supplied]

74. In view of the foregoing, in my opinion, this is a fit case for the Impugned Order to be set aside with a remand for a reconsideration on merits on the basis of the findings rendered above. On remand, with the benefit of the Oberoi MoU, to be redacted in the manner directed above, the Learned Arbitral Tribunal would be in a better position to consider whether and what appropriate interim reliefs are warranted.

75. With the aforesaid conclusions and directions, this Appeal is finally disposed of. I am conscious that the parties will need some time to assess the findings in this judgement and consider their respective positions. Therefore, I have provided a period of four weeks from the upload of this judgement on this Court’s website for the Oberoi MoU, redacted as directed above, to be provided by the Respondents to Atul and to the Learned Arbitral Tribunal.

76. The protective arrangement obtaining as of today in favour of Atul shall continue for a further period of two weeks from the expiry of the aforesaid four-week period, within which the appropriately redacted Oberoi MoU is required to be sent to Atul. This would enable Atul to review the same and make an appropriate application to the Learned Arbitral Tribunal within such period.

77. The issue of costs for this round of litigation is deferred for consideration by the Learned Arbitral Tribunal when it hears the arbitration proceedings finally.

78. 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.]