MANISH NARENDRA PAREKHversusRISHIRAM GALTIRAM BHATT AND ANR.

                                                                       1-ARBP-198-2023.doc



                            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
   varsha
                                ORDINARY ORIGINAL CIVIL JURISDICTION
                                 ARBITRATION PETITION NO. 198 OF 2023


                     Manish Narendra Parekh
                     Partner of Lala Builders and Developers
                     A partnership firm, having its office at
                     Flat No. 25/26, Ambajidham Building,
                     7th Floor, Factory Lane, Near Gokhale
                     School, Borivali(W), Mumbai-400 092               …. Petitioner
                           Versus
                     1.    Rishiram Galtiram Bhatt
                           of Mumbai, Indian inhabitant
                           residing at Flat No.9, 1st Floor,
                           Mathura Vihar, A-Wing, SVP Road,
                           Opposite Bhagwati Hospital, Borivali(W)
                           Mumbai – 400 092

                     2.    Dinesh D. Soni,
                           of Mumbai, Indian inhabitant,
                           residing at Pranav Vidya Building,
                           Flat No. 902, 9th Floor, Borsapada
                           Road, Opposite Pawar Public School
                           Kandivali(W), Mumbai- 400 067.              ... Respondents


                     Mr. Atul Damle, Senior Advcate a/w. Viraj Jadahv a/w. Ms. Disha
                     Jain i/b. Kevin Pereira for Petitioner.

        Digitally
                     Mr. Karl Tamboly i/b. Mr. Nitin G. Raut for Respondent No.1.
        signed by
        VARSHA
VARSHA VIJAY
VIJAY   RAJGURU
RAJGURU Date:
        2026.04.30                                  Page no. 1 of 16
        18:17:36
        +0530
                                                 1-ARBP-198-2023.doc



                   CORAM : GAURI GODSE, J.
                   RESERVED ON : 19th DECEMBER 2025
                   PRONOUNCED ON : 30th APRIL 2026


JUDGMENT :-


1. This petition is filed under Section 34 of the Arbitration and

Conciliation Act, 1996 (“Arbitration Act”) by the original claimant to

challenge the award dated 30th December 2020 dismissing the

claim, passed by the Arbitral Tribunal consisting of a sole arbitrator.

The arbitral claim was for specific performance of a Development

Agreement dated 8th December 2011 and, in the alternative, for

damages.


BASIC FACTS PLEADED BY THE PETITIONER:


2. Respondent no. 1 is the owner of an immovable property at

Borivali, being Final Plot No.24 (Part), Off. TPS I, Borivali, bearing

CTS No. 2413/21/1 to 19 situated at Village Eksar, Tal. Borivali,

consisting of two structures on the said property, one being an old

tenanted building named "Rishiram Nagar" and the other a building

named "Prem Kutir" owned by a society. ("the said property").



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According to the petitioner, respondent no. 1 was interested in

developing his property; hence, there were negotiations between

the petitioner and respondent no. 1 in the presence of respondent

no. 2 to develop the property by demolishing the old structures and

thereby constructing a new building thereon. It was agreed that the

entire redevelopment work shall be carried out by the petitioner at

his own cost, and thereafter, the petitioner shall provide 48% of the

area to respondent no. 1 towards consideration for the said

development rights. The terms and conditions were discussed,

finalised, and agreed upon by the parties. Accordingly, a

development agreement dated 8 th December 2011(“the said

agreement”) was executed in the presence of respondent no. 2. It

was mutually agreed that in the event there is any dispute, then in

that case, the matter will be referred to respondent no. 2 for

arbitration as per clause 40 of the said agreement.


3. At the time of execution of the said agreement, respondent no.1

insisted that the original agreement executed between the parties

be kept with respondent no.2, and respondent no. 2 agreed to hand

over the same to the petitioner. Two original agreements were



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executed, one for the petitioner and one for respondent no. 1. Both

were kept with respondent no. 2, with an assurance that they would

be handed over to the petitioner. However, when requested to hand

over the original agreement for adjudication, respondent no. 2

informed that the petitioner should first find out the amount of stamp

duty payable, and at the time of payment of stamp duty and

registration, he shall bring the original agreement and hand it over

to the petitioner for registration.


4. As per the terms and conditions of the said agreement, the

petitioner had agreed to negotiate and reach agreements with the

tenants and respondent no. 1 had agreed to coordinate and

cooperate to get the agreements executed with the tenants and the

owners of the flats in Prem Kutir Building. Respondent no. 1 had

agreed to obtain consent from the owner of the flats in Prem Kutir

building at his own cost. The petitioner had agreed to pay monthly

rent/compensation and a corpus fund to the said tenants/owners of

the flats in Prem Kutir Building. It was respondent no. 1's

responsibility to arrive at agreements/arrangements with his

relatives who were tenants in respect of 22 rooms, more particularly



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set out in Part B of Annexure II annexed to the said agreement, and

also to obtain physical possession from the said tenants. As per

clause 10 of the said agreement, it was agreed that after deducting

the   aggregate    area    for     providing    permanent       alternate

accommodation to the tenants and the owners, the balance flats or

area in the proposed new building would be shared between the

petitioner and respondent no. 1 in the ratio of 52% to the petitioner

and 48% to respondent no 1.


5. Under clause 13 of the said agreement, upon receipt of the

sanctioned plan and IOD, the parties were to execute a

supplementary agreement to demarcate the plans and the

premises, for sharing between the petitioner and respondent no. 1.

Clause 21 of the said agreement provided that the petitioner would

obtain IOD in respect of the new building and would also obtain a

commencement certificate upto plinth level. However, the period

within which this was to be done was left blank. A photocopy of the

said agreement, produced before the learned arbitrator, contains

the signatures of the parties, including respondent no.2 as a

witness to the execution of the document.



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6. In December 2012, respondents suddenly began avoiding the

petitioner and the original agreement was not handed over to the

petitioner. The petitioner, therefore, by his advocate’s letter dated

9th December 2012 and 28 th January 2013, called upon respondent

no. 2 to hand over the original agreement and also arrange an

immediate meeting as an Arbitrator to resolve the issue.

Respondent no. 2, however, by his advocate’s letter dated 25 th

February 2013, denied the petitioner’s claim.


7. The petitioner, thereafter, by his advocate’s letter dated 7 th

February 2013, called upon respondent no. 1 to comply with his

obligations under the said agreement. Respondent no. 1, however,

by his advocate’s letter dated 27 th February 2013, denied the

petitioner’s claim. In the meantime, the petitioner also gave public

notice on 9th January 2013, inter alia, warning the public at large not

to deal with respondent no. 1 regarding the said property.


8. Hence, the arbitration clause was invoked, and an application

under Section 11 of the Arbitration Act was filed, and this Court

appointed the sole arbitrator.




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RESPONDENT NO. 1'S DEFENCE:


9. The main defence of respondent no. 1 is that there was no

concluded contract and that no consideration was paid for the said

agreement. The original draft agreement was destroyed in the

petitioner’s presence with mutual consent. The petitioner failed and

neglected to comply with the obligations under the agreement, and,

more specifically, clause 4, which required the petitioner to

negotiate and arrange agreements with the tenants and the owners

of the flats. The alleged agreement was agreed to be kept with

respondent no. 2 as the terms, such as consideration, time

completion, bank guarantee, and deposits, were to be discussed

and were to be finalised between the petitioner and respondent no.

1. It was on the petitioner’s suggestion that the agreement was kept

with respondent no. 2, pending the finalisation of all the terms.

Thus, there was no concluded contract between the parties.


RESPONDENT NO. 2' DEFENCE:


10. It is alleged by respondent no. 2 that the petitioner had failed to

perform his obligation of obtaining consent from the members of the

society, due to which respondent no. 1 was not willing to proceed


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further and wanted to terminate the said agreement. It was mutually

agreed between the petitioner and respondent no. 1 to destroy the

original agreement, and the same was done in their presence.

Respondent no. 2 tried to resolve the disputes between the

petitioner and respondent no. 1, but a settlement could not be

reached, and the parties therefore agreed to destroy the original

and the duplicate agreement and, in fact, destroyed the same.


SUBMISSIONS ON BEHALF OF PETITIONER:


11.     The learned senior counsel for the petitioner submitted that

the execution of the development agreement is admitted. The

defence by respondent no. 1 is that the document was destroyed.

However, destroying a document will not end the agreement

between the parties. Respondent no. 1 came up with the theory of

escrow for the first time in the evidence. Therefore, the findings on

the plea of escrow, unsupported by any pleadings, are perverse.

When execution of the agreement is not disputed, mere destruction

of the document will not end the contract between the parties. The

learned arbitrator has wrongly applied the principles in Jeweltouch

(India) Pvt Ltd Vs. Naheed Hafeez Quraishi(Patrawala) and Ors 1.
1 (2008) 3 Mah LJ 54


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12. All the terms and conditions between the parties were agreed

upon and recorded in the document. Hence, a few blanks in the

agreement regarding the timelines would make no difference. A few

blanks in the agreement would not mean that the contract between

the parties was not concluded. In view of clauses 4 and 5 of the

agreement, the findings on readiness and willingness are

erroneous. The learned arbitrator has not considered the evidence

of the three witnesses.


13.   The impugned Award is therefore in conflict with the public

policy of India and the most basic notions of morality and justice.

Hence, the impugned Award is liable to be set aside as per Section

34(2)(b)(ii) of the Arbitration Act, read with Explanation.


SUBMISSIONS ON BEHALF OF RESPONDENT NO. 1:


14.    Mere signing an agreement will not make it a concluded

contract. Admittedly, the agreement was with respondent no. 2.

Therefore, even if the word ‘escrow’ is not used, keeping the

agreement with respondent no. 2 by mutual consent would amount

to keeping it in escrow. Based on the pleadings and the evidence

on record, the learned Arbitrator has recorded findings of fact. No


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perversity in the findings is pointed out by the petitioner; hence, no

interference is warranted under Section 34 of the Arbitration Act.


15.       Even otherwise, if the prayer for specific performance is to

be considered by assuming the existence of a concluded contract,

the petitioner has failed to satisfactorily plead and prove readiness

and willingness. The petitioner took no steps for more than a year

to comply with his obligations to pay the stamp duty and get the

agreement registered. After the said agreement was destroyed,

respondent no. 1 entered into a Development Agreement dated 31 st

December 2012 with one M/s. Abhinandan Realty and has received

an interest free security deposit of Rs. 1.62 crores from the said

party. The grounds raised on behalf of the petitioner would amount

to reappreciation of the evidence, which is not permissible in a

Section 34 petition.


16.      To support his submissions, learned counsel for respondent

no. 1 relied upon the decisions in C & C Constructions Limited Vs.

Ircon International Limited2, and P. Ravindranath and Another Vs.

Sasikala and Others3

2 (2025) 4 SCC 234
3 2024 SCC Online SC 1749


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      ANALYSIS AND CONCLUSIONS:


17.     The learned Arbitrator, on relying upon the oral evidence,

held that the two original agreements signed by the petitioner and

respondent no. 1 were kept in escrow with respondent no. 2 and

were not released; hence, the development agreement never came

into existence. It is further held that the said agreement is either

destroyed or still in escrow. Hence, no contract has been

concluded. It is thus held that the petitioner failed to prove the

existence of any concluded contract.


18.     The learned Arbitrator perused the terms and conditions of

the agreement and held that the parties had not agreed upon the

timelines for completion of the project. Thus, it is further held that, in

the absence of all the vital terms of the contract agreed upon

between the parties, it is not possible to hold that there was a

concluded contract between the parties. The petitioner did not

make any attempts to get the original agreement produced before

the tribunal; hence, it is held that there was a strong possibility that

the agreement was destroyed with the consent of the parties.




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Therefore, it is held that the question of any valid, subsisting and

binding contract would not arise.


19.    The learned Arbitrator further held that even otherwise, the

petitioner failed to plead and prove that he was ready and willing to

perform his part of the contract. The terms and conditions of the

agreement between the parties, including the steps to be taken to

execute the agreement with the tenants and the owners of the flats,

are discussed by the learned Arbitrator. After appreciating the oral

evidence on record, it is held that the petitioner failed to prove that

any steps were taken in furtherance of the contract and readiness

and willingness was not proved. The petitioner also failed to prove

that he could seek specific performance of the contract against

respondent no. 2.


20.   The arguments made on behalf of the petitioner concern the

performance of the contract's terms and conditions. Nothing is

pointed out to show that any findings in the impugned Award are

perverse or patently illegal. Although it was argued that the

impugned Award is in conflict with the public policy of India and the

most basic notions of morality and justice, such an argument is not



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supported by any valid ground to say so. The conclusions drawn by

the learned Arbitrator are based on the appreciation of evidence.

Unless any perversity or patent illegality is noted in recording the

conclusions, the findings cannot be interfered with. The arguments

made on behalf of the petitioner amount to reappreciation of the

evidence, which is impermissible in a Section 34 petition.


21.   In P. Ravindranath, the Apex Court confirmed the refusal to

grant specific performance by relying upon the well-settled legal

principle that, for relief of specific performance, a plaintiff has to

prove that, from the outset and until the final decision of the suit, he

was ready and willing to perform his part of the contract. It is held

that it is the bounden duty of a plaintiff to prove his readiness and

willingness by adducing evidence. The decision in C & C

Constructions Limited is on the scope of Section 37 of the

Arbitration Act.


22.    In Jeweltouch (India) Pvt. Ltd., this court held that when

parties to an agreement place the document in escrow, the act of

placing the instrument in escrow evinces an intent that the

document would continue to lie in escrow until a condition that is



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precedent to the enforceability of the document comes to exist and

the instrument becomes valid and enforceable in law only upon the

due fulfilment of a prerequisite.


23.    In the present case, there is no dispute that the agreement

was kept with respondent no. 2. The learned Arbitrator, after

appreciating the evidence, has recorded findings that keeping the

agreement with the respondent no. 2 would amount to keeping the

document in escrow. The learned Arbitrator has also held that

nothing was produced on record to show that the document was

ever released from escrow. These findings, recorded by the learned

Arbitrator, are based on an appreciation of the evidence on record.

No illegality or perversity is evident in the findings recorded by the

learned Arbitrator. Thus, the prayer for specific performance is

rightly refused on the ground that the agreement never came into

existence, and thus, there was no concluded contract. Therefore, in

the absence of any concluded contract in existence, the petitioner

would not be entitled to specific performance of the contract.


24.    The conclusion reached by the learned Arbitrator is a

reasonable and plausible view. In view of the well-settled legal



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principles, the findings recorded by the learned Arbitrator cannot be

interfered with by taking a different view on reappreciating the

evidence. It is not open to do so in a petition under Section 34, by

virtually acting as a court of appeal. It is also a well-settled legal

principle that perversity would include patent illegality if the finding

is based on no evidence at all, if an award ignores vital evidence, or

if a finding is based on documents taken behind the back of the

parties. In the present case, the learned Arbitrator has considered

the entire evidence. Thus, none of the grounds raised by the

petitioner is within the limited scope of interference under

Section 34.


25.   The law on the scope of interference in the Section 34 petition

is no longer res integra. In multiple decisions of the Apex Court, it

is held that the Section 34 Court must not lightly interfere with

arbitral awards in a casual and cavalier manner, unless a

conclusion can be drawn that the award suffers from perversity and

patent illegality that goes to the root of the matter. The Apex Court

has held in various decisions that the mandate under Section 34 is

to respect the finality of the arbitral award and the party autonomy



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to get their dispute adjudicated by an alternative forum as provided

under the law.


26.    In the present case, the conclusions of the learned Arbitrator

are based on a possible view and do not warrant any interference.

There is no ground to set aside the award under the limited scope

of Section 34 of the Arbitration Act. Hence, no interference is called

for in the impugned Award.


27.   For the reasons recorded above, the petition is dismissed.




                                                  (GAURI GODSE, J.)




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