Case Note & Summary
The petitioner, Manvel Tuscano, sole proprietor of M/s. Manvel Land Empire, and the respondent, DLF Limited, a real estate developer, entered into a memorandum of understanding (MOU) dated 31 January 2006, supplemented by a supplementary agreement dated 21 February 2006. Under these agreements, the petitioner agreed to procure agricultural land in Raigad District, Maharashtra, and transfer it to the respondent. The respondent paid an aggregate of Rs.91 lakhs to the petitioner as earnest money and advances. The respondent claimed that no land was procured and sought refund. The petitioner contended that he had procured land and transferred it to a nominee/assignee of the respondent, but the respondent failed to pay the agreed consideration. Disputes were referred to arbitration under Section 11 of the Arbitration and Conciliation Act, 1996. The sole arbitrator, after considering oral and documentary evidence, ordered the petitioner to refund Rs.91 lakhs to the respondent. The petitioner challenged the award under Section 34 of the Act before the Bombay High Court. The court examined the evidence and found that the MOU was an umbrella agreement for procurement of land in specified villages. The arbitrator noted that the petitioner did not produce any registered sale deed or other evidence to show that he had procured and transferred land to the respondent's nominee. The court held that the arbitrator's findings of fact, based on appreciation of evidence, are not open to reappreciation in a Section 34 petition unless perverse or contrary to public policy. The court found no perversity or patent illegality in the award and dismissed the petition.
Headnote
A) Arbitration - Challenge to Arbitral Award - Section 34 Arbitration and Conciliation Act, 1996 - Public Policy - The court considered whether the arbitral award directing refund of advance payment for procurement of land was contrary to the terms of the contract and evidence. The court held that the arbitrator's findings of fact, based on appreciation of evidence, are not open to reappreciation in a Section 34 petition unless perverse or contrary to public policy. (Paras 3-7) B) Contract - Umbrella Agreement - Procurement of Land - The parties entered into an umbrella MOU for procurement of agricultural land. The petitioner failed to prove that he procured and transferred land to the respondent's nominee. The arbitrator found that the petitioner did not produce any registered sale deed or other evidence of transfer. The court upheld the finding that the petitioner was liable to refund the advance. (Paras 3-6) C) Evidence - Burden of Proof - The petitioner claimed to have procured land but did not produce any registered sale deed or other documentary evidence. The arbitrator's conclusion that the petitioner failed to discharge the burden of proof was not perverse. The court held that the award does not suffer from any patent illegality. (Paras 5-7)
Issue of Consideration
Whether the arbitral award directing refund of Rs.91 lakhs to the respondent is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on the ground of being contrary to the terms of the contract and evidence on record.
Final Decision
The Bombay High Court dismissed the arbitration petition, upholding the arbitral award directing the petitioner to refund Rs.91 lakhs to the respondent.
Law Points
- Arbitration
- Arbitral Award
- Section 34 Arbitration and Conciliation Act
- 1996
- Public Policy
- Reappreciation of Evidence
- Findings of Fact
- Perversity
- Umbrella Agreement
- Procurement of Land
- Refund of Advance
