Case Note & Summary
The petition filed under sections 30 and 33 of the Arbitration Act, 1940, sought to challenge an interim award and certain directions issued by the sole arbitrator in a family property partition dispute. The parties, belonging to the CMK and DMK groups, were co-owners of an immovable property known as Khatau Bungalow. They entered into a Memorandum of Understanding (MOU) dated 12 July 1984 to partition the property by metes and bounds, with the DMK group entitled to a two‑thirds share and the CMK group to one‑third, along with corresponding FSI entitlements. The MOU contained detailed terms, including payment of Rs. 55 lakhs by DMK to CMK under clause 3, mutual obligations to vacate portions under clauses 6 and 7, and specific provisions regarding possession of floors in an incomplete structure under clause 9, with a payment of Rs. 30 lakhs by DMK to CMK against handing over of the second and third floors. Disputes arose when the DMK group proposed to pay the balance consideration and take possession; the CMK group refused, contending that the MOU constituted an integral scheme and piecemeal implementation would cause irreparable damage. DMK filed an arbitration suit under section 20 of the Arbitration Act, 1940, leading to the appointment of Mr. Pratapsinh Mathuradas Vissanji as sole arbitrator by order dated 8 July 1985. During the arbitration, DMK sought interim relief for possession of the second and third floors. On 10 September 1985, the arbitrator directed CMK to hand over possession against deposit of a bank draft of Rs. 30 lakhs, which was complied with on 17 September 1985. Subsequently, on 4 December 1985, the arbitrator passed a non‑speaking interim award declaring that the CMK group had committed breach and/or willful default of their obligations under clauses 7 and 9 of the MOU. The petition challenged that award and the earlier directions.
Issue of Consideration
ARBITRATION PETITION NO. 4 OF 1986
Case Details
2013 LawText (BOM) (04) 45
Arbitration Petition No. 4 of 1986
Mr. Tushad Cooper, Ms. Kanchan Gupta, Ms. Jinal Mehta i/by M/s. Vigil Juris; Mr. Shiraz Rustomjee, Sr. Advocate, Mr. Kedar Desai, Mr. Aditya Raut i/by M/s. Desai Desai Carrimjee
1(a) Smt. Panna Sunit Khatau, 1(b) Neesha Sunit Khatau, 2(a) Smt. Panna Sunit Khatau
1. Dilip Dharamsey Khatau, 2(a) Mrs. Krishnabai Abhey Khatau, 2(b) Ms. Brinda Abhey Khatau, 2(c) Mrs. Nandita Jayesh Anjaria, 3. Smt. Leela Kishore Khatau, 4. Mahandra Kishore Khatau, 5. Anil Kishore Khatau, 6. Pratap Singh Mathuradas Vissanji, 7. Shobha M. Virani, 8. Smt. Bakul Kiran Khatau, 9. Hiten Abhay Khatau
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Nature of Litigation
Arbitration petition challenging interim award and directions under the Arbitration Act, 1940
Remedy Sought
Petitioners (CMK Group) sought to set aside the interim award dated 4th December 1985 and directions dated 10th September 1985, 25th September 1985 and 21st October 1985
Filing Reason
The petitioners contended that the arbitrator's directions and interim award were erroneous, breaching the integrated scheme of the MOU
Previous Decisions
Arbitrator passed interim award on 4-12-1985 declaring CMK group in breach; earlier directions on various dates for handing over possession.
Submissions/Arguments
Petitioners argued that the MOU constituted an integral scheme and piecemeal implementation would be damaging
Respondents contended they were ready to perform their part and sought possession
Judgment Excerpts
The main object of the said MOU was to implement the desire of the parties i.e. to divide and/or partition of the immovable property by metes and bounds.
the learned arbitrator made interim non speaking award declaring that the petitioners (CMK Group) committed breach and or willful default of their obligations under clauses 7 and 9 of the said MOU.
Procedural History
MOU dated 12-7-1984; DMK letter 17-12-1984 conveying desire to pay balance and take possession; Petitioners' refusal 11-1-1985; DMK filed arbitration suit under section 20 of Arbitration Act, 1940 (No. 1196 of 1985); Order dated 8-7-1985 appointing sole arbitrator; Agreement for reference with summary power; Application for interim relief by DMK on 4-9-1985; Directions by arbitrator on 10-9-1985, 25-9-1985 and 21-10-1985; CMK handed over possession of second and third floors on 17-9-1985; Interim non-speaking award on 4-12-1985 declaring breach by CMK; Petition filed in 1986.
Acts & Sections
- Arbitration Act, 1940: 30, 33, 20
- Urban Land (Ceiling and Regulation) Act, 1976:
- Bombay Municipal Corporation Act:
