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Single Judge Bench of Justice Navin Chawla, The Delhi High Court gave its verdict that the specific performance of a Development Agreement cannot be granted as the fundamental terms are not specified adding to that the parties do not agree to them.
SITAC Pvt Ltd filed the petition under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, asking the Court to direct the case to Arbitration, to file the arbitral record and the arbitral award. The petitioners sought decree against the respondents.
The dispute arose between the parties regarding the Development Agreement. In this the petitioners were the builders and 3 other parties (respondent no 1 was the owner of the property, respondent no. 2 was the tenant in the property and respondent no. 3 was the occupier) relating to the property in 1985.
Another agreement was executed between petitioner and respondent no.2 and 3. According to the agreement the Respondent no.3 had to vacate the property under certain conditions and has to find an alternative accommodation at its own cost. The dispute arose when the respondent no. 1 cancelled the Development Agreement, the petitioner chose ADR to solve the dispute.
As the petitioner had carried out all the obligations according to the agreement, hence the respondent no.1 had no reason to cancel the agreement. The arbitrator held that the petitioner was entitled to specific performance on both the agreements. Arbitrator granted costs of Rs. 5 lakh in favour of the petitioner but did not grant damages a lieu of the specific performance.
Respondent no. 1 objected to the award before the High Court, the respondent no.1 said that the arbitrator should have exercised discretion and awarded damages and not ordering a specific performance.
Section 10 of the Specific Relief Act was when the immovable property was sufficiently identifiable. It was claimed that the property was not clearly identified by the agreement and also that the petitioners were bias to the petitioner
Referring to Sushil Kumar Agarwal v. Meenakshi Sadhu (2018), the Court added that a builder was entitled to ask specific performance of the Development Agreement in the proposed building were created etc.
The Collaboration Agreement was assessed and made a note that the building plans had not been agreed between the parties or received sanctions by the competent authorities, observed the court.
Therefore, although the shares of the parties in the constructed building were decided, what these building plans would be in the future was a matter of conjecture and supposition.
The Development Agreement was to specifically perform and it was to be monitored by the court.
As on the date of the agreement there was no restriction on the number of the height or the number of storeys that could be built on the plot. Subsequent orders for restrictions were issued by the Government of India, which was a major change in the agreement
It was finally concluded by the Court the reason of termination of the agreement might be superficial also adding that it would not justify the order of specific performance against the statutory presumption.
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