Amit Rawal, J. - (1.) Before adverting to the submissions and counter submissions of the learned Senior Counsel for the parties, it would be apt to give a brief preface of the admitted facts.
(2.) A development agreement dated 2.3.2007 was entered into between the appellant -Chandigarh Administration (hereinafter called "CA") and respondent -M/s. Parsvnath Film City Limited (hereinafter called "the Developer"). The aforementioned agreement was entered/executed for a period of 99 years and the lessee was granted liberty to set up Film City, Multimedia Park, Multimedia College and Research Centre and Multimedia Entertainment Centre. The completion date of the scheduled project was 36 months or such extended date as agreed by the CA starting from the date of agreement, excluding any such period of delay attributable after payment of the entire bid price by the Developer and in actually handing over the leasehold land to the Developer. As per Article 2 of the agreement, if any of the conditions precedent have not been fulfilled or waived in writing by the CA, without prejudice to its rights hereunder and under applicable laws, CA can terminate the agreement and the amount paid towards the bid price or bid security by the Developer to the CA shall be forfeited. As per Article 4.2 of the agreement, the Annual Ground Rent (AGR) shall be the amount payable by the Developer to the CA at the rate specified in Schedule IV annually in advance from the date of signing the agreement till the end of the agreement period, in essence, the Developer was required to pay the AGR yearly in advance. As per Article 4.3.1, the bid price was Rs. 191.00 crores only and a sum of Rs. 47.75 crores was deposited by the Developer being part of the bid price, required to be paid upfront by the Developer. The Developer was required to pay the balance and outstanding bid price to the CA in accordance with the timelines specified in Schedule IV. Article 5 of the Agreement deals with obligations of the parties and as per Article 5.1.1, the Developer was required to obtain all necessary approvals from the Ministry of Commerce, Ministry of Finance and Department of Industrial Development, Ministry of Environment & Forests and other statutory authorities, whereas Article 5.2 deals with the obligations of the CA to grant to the Developer, the requisite permission(s) to develop the land required for the development of the Project, in essence, the CA shall provide the Developer the land free from all encumbrances and occupations and assist the Developer in obtaining the necessary approvals in accordance with the agreement. Article 12 of the Agreement deals with the events of default and termination. The relevant clauses read thus: - - "12.1 The Developer Event of Default 12.1.1 A "Developer Event of Default" shall be deemed to have occurred if any of the following events has occurred, unless the same has so occurred as a consequence of a Force Majeure Event: i) The Developer fails to obtain all necessary Approvals (except environmental clearance from MOEF; provided however that, in the reasonable opinion of the CA, the Developer has exerted all necessary efforts to obtain the said environmental clearance) required for commencement of work on the Leasehold Land within six Months from the date of execution of this Agreement; or ii) The Developer fails, neglects, reuses, or is unable to pay the consideration in accordance with the Payment Schedule indicated in Schedule IV. iii) The Developer fails to complete the development of the Project within the period as agreed therein. iv) The Developer repeatedly and persistently remains in breach of any of its obligations under his Agreement; or v) If any representation made or warranties given by the Developer under this Agreement is found to be false or misleading. vi) The Developer fails to comply with any of the terms and conditions of the Lease Agreement. vii) The Developer does not issue, renew, replace or provide the Bank Guarantee in accordance with the terms of this Agreement or if the Bank Guarantee ceased to be in effect prior to the discharge of payment obligations of the Developer to CA as under Article 4. viii) The Developer passes a resolution for voluntary winding up. ix) Upon appointment of a provisional liquidator, administrator, trustee or receiver of the whole or substantially whole of the undertaking of the Developer by a court of competent jurisdiction in proceedings for winding up or any other legal proceedings. x) Upon levy of an execution or restraint on the Developer's assets which has or is likely to have Material Adverse Change and such execution or restrain remaining in force for a period exceeding 90 Days. xi) Upon amalgamation of the Developer with any other company or reconstruction or transfer of the whole or part of the Developer's undertaking [other than transfer of assets in the ordinary course of business) without the CA's prior written approval, provided, if the amalgamated entity, reconstructed entity or the transferee as the case may be, has the ability demonstrated to the satisfaction of the CA, to undertake, perform/discharge the obligations of the Developer under this Agreement, necessary approval shall be granted by the CA."
(3.) Article 12.2.3 deals with the termination notice which shall be effective from such date not exceeding 30 days, which reads thus: - - "12.2.3 The Termination Notice shall be effective from such date not exceeding thirty (30) days from the date of issue of notice as may be specified in the Termination Notice. During the period specified in the Termination Notice, the parties shall, subject where applicable to the provisions of Article 12, continue to perform such of their respective obligations under this Agreement which are capable of being performed with the object, as far as possible, of ensuring continued availability of the Project to the users, failing which the Developer shall compensate CA for any loss or damage occasioned or suffered on account of the underlying failure/breach.";