DISCOVERY PROPERTIES AND HOTELS PVT LTD Vs. CITY AND INDUSTRIAL DEVLOPMENT CORPORATION OF MAHARASHTRA LTD

JUDGEMENT

(1.) The petition has been filed under section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of an Arbitrator.

(2.) By a letter dated 10 December, 2007, the respondent accepted the offer of the petitioner for the allotment of a plot at Kharghar, Navi Mumbai, for the construction of a Five Star Hotel. The balance amount payable, apart from the earnest money of Rs. 2.5 crores, was Rs. 78.28 crores.

(3.) The respondent by its letter dated 3 February, 2009 sought the payment of the balance lease premium failing which it was stated that the agreement would be liable to be terminated by forfeiting the earnest money deposit and twenty five percent of the agreed lease premium. The petitioner by a letter dated 12 March, 2009 recorded that it had paid a sum of Rs. 39.14 crores towards the first instalment of the bid consideration. However, according to the petitioner, it had agreed to take up the project on a representation by the respondent that certain "milestones" would be achieved by the respondent including the construction of an International Airport at Navi Mumbai; a Flyover adjacent to the plot; the setting up of a Special Economic Zone at Navi Mumbai; the completion of certain road projects and the setting up of a Central Park and golf course. The petitioner stated that it was ready and willing to make payment of the second instalment amounting to Rs. 39.14 crores only if the respondent completed some or all the milestones, referred to earlier and subject to the grant of additional F.S.I. The petitioner also sought permission to carry out a mixed development project. In terms of Clause 44 of the Letter of Allotment, which according to the petitioner, contemplates appointment of the Managing Director of the respondent as Arbitrator, the petitioner nominated Mr. G. S. Gill, Managing Director of the respondent as Arbitrator. This was followed by a letter dated 12 March, 2009.