Monday, 9 January 2017

Worli land dispute: Tribunal rules in favour of builder Kalpataru

The panel has added that the seller's claim was an afterthought and had been raised with a view to wriggle out of the transaction.

MUMBAI: An 11-year-long legal dispute over one of the largest land transactions that was struck in 2004 has now reached a resolution as an arbitration tribunal has ruled in favour of realty developer Kalpataru Properties in a matter related to an agreement to buy around 5.2 acre prime land parcel, which is part of Shree Ram Mill in Worli, Mumbai.

The arbitration tribunal has directed the sellers Shree Ram Urban Infrastructure and Vijay Infrastructure Technologies to honour the agreement entered into over a decade ago and execute the conveyance in favour of Kalpataru Properties.

"We have also held that time was not the essence of the contract. We have further held that the claimants (Kalpataru) were and have always been ready and willing to perform their part of the contract and the contract was not repudiated by them. It must, therefore, be held that the arrangementagreement between the parties is valid, binding and subsisting and the parties were and continued to remain bound to perform their obligations under the said arrangementagreement," said the order delivered by presiding arbitrator and retired justice CK Thakker, and co-arbitrator Rafique Dada.

An email query to Shree Ram Urban Infrastructure remained unanswered until the time of going to press. Kalpataru's spokesperson also declined to comment on the story.

The dispute over the 20,955.40 sq meter land parcel began in 2005 following the sellers refusing to execute the agreement alleging that Kalpataru did not have financial resources to make the purchase. However, the arbitration panel has now ruled that Kalpataru had throughout had the financial capacity and ability to pay the price as per the agreement.

The panel has added that the seller's claim was an afterthought and had been raised with a view to wriggle out of the transaction.Of the total three members of the ar bitration tribunal, two have delivered the ruling in favor of claimant Kalpataru.

As per the agreement, Kalpataru were to buy the land parcel for total `105 crore, of which `30 crore has already been paid as initial payment in December 2004. Kalpataru had also paid the Municipal Corporation of Greater Mumbai (MCGM) on behalf of the seller for Intimation of Disapproval (IOD), a major permission. Building plans were sanctioned with commencement certificate issued by the civic authority in December 2004.

However, according to Kalpataru, the sale was stuck as the seller started to delay the deal in anticipation of getting a higher price from other developers for the said plot. In 2005, Kalpataru initiated the arbitration proceedings against the mill owners Shree Ram Urban Infrastructure and its group company Vijay Infrastructure Technologies.

The arbitration tribunal has directed the sellers to now take all necessary steps to sell, transfer and assign the property in dispute and convey the title of the said property to Kalpataru on terms agreed between the parties then and execute all deeds and documents.

It may be recalled that in 2005 the government had allowed 100% Foreign Direct Investment (FDI) in Indian real estate sector. This had led to a boom in investment and developmental activities in the backdrop of improved liquidity with many global financial institutions and developers forming joint ventures with local developers.