By this petition file under Section 37(2)(b) of the Arbitration and Conciliation Act 1996 (hereinafter referred as Arbitration Act for short) petitioner seeks to impugn the order dated 12th November 2013 passed by the learned arbitrator rejecting the application filed by the petitioner under Section 17 of the Arbitration Act. Some of the relevant facts which merge from the pleadings and documents filed by both the parties are summarized as under :

2. (a) On 24 June 2005, respondent published a tender notice in the newspaper for development of a modern township of MIHAN and invited offers from the experienced developers for development of a modern township to meet housing requirement of MIHAN. Vide notification dated 29th May 2007, the Ministry of Commerce and Industries, Government of India notified MIHAN as Special Economic Zone (SEZ) pursuant to the provisions of the SEZ Act 2005.

(b) On 22 September 2005, M/s Reatox Builders and Developers who had submitted their bid @ Rs.72 lacs per acre was selected as successful bidder for development of the modern township. A letter of intent came to be issued in favour of the said builder. On 6 January 2006 the respondent specified the details of land to be allocated to the said builder. On 2 March 2006, the said builder paid the first installment towards land cost of Rs.4,46,40,000/- for 31 acres of land to the respondent. On 17 April 2006 the respondent issued No Objection Certificate (NOC) for development of the said township subject to final approval of all plans and necessary permissions from the Planning Authority and all other approvals to be obtained from the competent authorities. On 26 April 2006, M/s Reatox Builders and Developers came to be incorporated as a private limited company viz., Reatox Builders & Developers Pvt. Ltd. On 23 May 2006, respondent issued a Certificate of Confirmation for allocation of 31 acres of land and confirmed the schedule of the land. On 9 June 2006 Airport Authority of India (Airport Authority of India) approved height up to 61 meters for the buildings in the modern township. On 22 June 2006, respondent entered into development agreement for development of the modern township with the appellant. Name of M/s Reatox Builders and Developers Pvt. Ltd. was changed with the new name M/s Chaurangi Builders and Developers Pvt. Ltd., the appellant herein. The Terms and Conditions of the development agreement were recorded in the said agreement entered into by and between the parties. It is the case of the appellant that the appellant obtained financial assistance by way of working capital limit of Rs.20 crores from bank/financial institute on 28th December 2006 and created security interest in favour of the bank/financial institute inter-alia over the said land of 31 acres. respondent gave counter guarantee of Rs.20 crores in respect of the said land to be developed by the petitioner. On 30 March 2007, respondent issued a commencement certificate for construction of buildings up to 18 floors on the basis of approved height of 61 meters sanctioned by Airport Authority of India. Appellant paid second installment of Rs.4,46,40,000/- on 24 April 2007 to the respondent towards land cost/development fee.

(c) On 29 May 2007, Ministry of commerce & Industry, Government of India issued a notification notifying MIHAN as Special Economic Zone (SEZ) which undertook authorized operation to develop in non-processing area of SEZ for the residential modern township projects including the said land of 31 acres allotted to the petitioner in the SEZ entailing compliance of SEZ norms for the development of the said land. On 24 August 2007 respondent executed Power of Attorney in favour of the appellant to do various acts in connection with the said land including to sell, dispose of, assign, transfer nominate and/or alienate in any manner whatsoever, all and singular tenement/apartments, flats, parking spaces, shops in the modern township. On 16 August 2007, Ministry of Commerce & Industry, Department of Commerce granted approval to the petitioner in respect of the multi product SEZ including construction of 2082 flats subject to compliance of procedure in terms of SEZ Act 2005 and Rules of 2006. Appellant paid third installment to the respondent on 26 December 2007 in the sum of Rs.4,46,40,000/-.

(d) It is the case of the appellant that since the respondent did not consider the proposed second runway in MIHAN, petitioner was requested to obtain height clearance from Airport Authority of India on account of proposed second runway. It was necessitated in view of the anticipated reduction of height of the buildings. It is the case of the appellant that vide letter dated 4th March 2008, appellant informed the respondent that the appellant would not be able to adhere to the time schedule stipulated in the development agreement and requested for extension of time for completion of the project. On 3 April 2008 respondent agreed to allocate additional land of 11.644 acres to the petitioner @ Rs.80 lacs per acre. It is the case of the petitioner that the petitioner was not compensated by the respondent in respect of the loss suffered by the petitioner in view of the reduction of height but the said allotment was at the prevailing market value. The petitioner agreed to develop the additional land of 11.644 acres. On 29 April 2008, the petitioner paid 4th installment to the respondent in the sum of Rs. 4,46,40,000/- for 31 acres of land.

(e) On 12 May 2008, the appellant and the respondent entered into co-development agreement which entitled the petitioner to identify customers and unit holders for occupying the units in the project. On 12 May 2008, petitioner paid a sum of Rs.4,46,40,000/- towards land costs/development to the respondent in respect of the additional land of 11.644 acres. On 17th June 2008, the petitioner paid Rs.2.20 crores towards land costs/development in respect of the additional land of 11.644 acres.

(f) On 27 October 2008 Airport Authority of India issued height clearance only up to 43.3 meters thereby reducing the height by 17.7 meters. On 13 February 2009, the respondent issued second Commencement Certificate to the petitioner and granted development permission to construct the buildings with 13 floors with built up area of 213303.560 sq. meters. On 18 November 2009, the petitioner submitted construction schedule for 36 months to the respondent. On 16 February 2010, the petitioner made a request to the respondent for extension of time to complete the construction and for adjustment of the balance amount payable by the petitioner towards land costs/development fee in respect of the two lands against the consideration/purchase price payable by the respondent to the petitioner in respect of the Low Income Group (LIG) Units to be constructed by the petitioner in view of the alleged loss of about Rs.80 crores suffered by the petitioner owing to the height reduction by the Airport Authority of India. On 29 March 2010, the respondent entered into a development agreement and further executed Power of Attorney in favour of the petitioner for development of the additional land of 11.644 acres on the terms and conditions recorded therein. On 13 July 2010 in the 41st meeting of Board of Approval on account of objection from Department of Revenue about sale of residential units of the township to general public, Board of Approval granted approval for transfer of authorized portion in the non processing area in favour of co-developer subject to the condition that condition of sale was removed from the agreement between the developer and co-developer as well as from Power of Attorney granted by the respondent.

(g) On 14 July 2010, the petitioner borrowed term loan of Rs.105 crores from the Vijaya Bank for completion of the modern township. The sanction terms were further modified on 22nd September and 3rd June 2011. On 14 July 2010, the respondent executed a Letter of Guarantee (Counder Guarantee) of Rs.105 crores in favour of Vijaya Bank and permitted the petitioner to offer the said land of 31 acres and the additional land of 11.644 acres as security to the bank.

(h) On 22 July 2010, the Airport Authority of India revised the approved height of the buildings in the modern township by increasing the height from 43.3 meters to 54.3 meters. It is the case of the petitioner that in the local newspapers at Nagpur an article was published defaming the project and the petitioner. Objections were raised about the legality of the project by the local media and such articles published till December 2011. On 24 July 2010, the petitioner and the respondent executed fresh development agreement for development of 31 acres of land. On 26 July 2010, the development agreement dated 24 July 2010 was registered with the Sub registrar of Assurances, Nagpur. On 4 August 2010, the Board of Approvalrd of approval communicated its decision about removal of condition of sale, which necessitated correction in the development agreement dated 24 July 2010 by way of replacement of term sale with the term lease which correction came to be carried out by executing correction deed on 14 August 2010. The said correction deed and fresh Power of Attorney were duly registered on 17 August 2010. On 23 August 2010 the petitioner obtained confirmation from the respondent whether the petitioner can lease the flats in the modern township to general public/persons outside SEZ area anywhere around the world i.e. for leasing the flat, area/state/country was not restricted. It is the case of the petitioner that on 30 September 2010 respondent sought to cancel the allotment of additional land of 11.644 acres to the petitioner and offered the refund of payment made by the petitioner with interest.

(i) On 27 October 2010, Guidelines came to be issued for development of Special Economic Zone which restricted sale of units only to persons related to SEZ. On 24 November 2010 the petitioner submitted drawings for 16 floors as a result of height revision by Airport Authority of India as on 13 January 2011. Based on the progress report it is the case of the petitioner that the petitioner completed the overall physical work of about 34% in the First City Project.

(j) On 25 March 2011, Board of Approval directed the Development Commissioner, MIHANSEZ to take strict action against the petitioner for its proposal to sell flats to general public. On 7 April 2011, the Development Commissioner issued a show cause notice to the respondent for issuing letter dated 23 August 2010 to the petitioner allowing them to sell the units to general public/persons outside SEZ. It is the case of the petitioner that that on 6 June 2011, Vijaya Bank granted its approval for takeover of loan by India-bulls and assignment & transfer of the security interest in favour of the India-bulls. On 17 June 2011, India-bulls issued sanction note for sanction of loan of Rs.155 crores to the petitioner. On 18 June 2011, the petitioner requested the respondent to give consent to the said takeover of the loan by India-bulls and to transfer the existing counter guarantee in favour of India-bulls. On 18 July 2011, the respondent addressed a letter to the Deputy Commissioner, MIHANSEZ and confirmed that imposing the provisions of guidelines on a project that was started much earlier, appeared to be unfair. On 26 July 2011, Director, Ministry of Commerce & Industry issued a show cause notice to the respondent for issuing letter dated 23 August 2010 to the petitioner and calling upon to explain in writing to Board of Approval as to why the letter of approval granted to them for whole of the area established as MIHANSEZ should not be suspended for a period of one year and why administrator be not appointed to discharge the function of the Developer.

(k) On 18 August 2011 and 2nd September 2011, petitioner requested the respondent for consent to India-bulls and transfer of counter guarantee of Rs.105 crores to India-bulls. It is the case of the petitioner that on 13 September 2011 Vijaya Bank certified the construction value of the project completed so far to be at Rs.213.44 crores. On 14 October 2011, the repayment schedule of term loan of Vijaya Bank started. On 18 November 2011, petitioner once again requested the respondent to give consent to India-bulls for transfer of counter guarantee.

(l) On 2 January 2012, Vijaya Bank conveyed to the petitioner about the term loan account of Rs.105 crores turning non performing asset (NPA). On 21st February 2012, the Vijaya Bank issued a notice under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002 calling upon the petitioner to pay the amount due along with interest. On 21 February 2012, the said Vijaya Bank freezed the account of the petitioner at Mumbai branch. In the month of February 2012, the said Vijaya Bank invoked counter guarantee submitted by the respondent for encashment. It is the case of the respondent that the said Vijaya Bank has frozen the Fixed Deposits of the respondent lying with the said bank in the sum of Rs.157 crores. The said Vijaya Bank has also filed proceedings before the Debt Recovery Tribunal against the petitioner and the respondent in respect of said loan transaction. The petitioner requested the bank to withdraw the notice vide letter dated 10 April 2012 and by another letter of even date requested the respondent for giving consent to India-bulls and to transfer the counter guarantee. It is the case of the petitioner that on 12 April 2012, the Vijaya Bank granted its approval for takeover of loan by India-bulls and assignment and transfer of the security interest in favour of India-bulls. It is the case of the petitioner that vide letter dated 18 April 2012, the Vice Chairman and Managing Director of the respondent forwarded the proposal to its Chairman for sanction of consent to transfer the counter guarantee from Vijaya Bank to M/s India-bulls Financial Services Ltd. This letter was not on record before the arbitral tribunal and is sought to be relied upon by the petitioner in this proceedings.

(m) On 23 April 2012, Vijaya Bank issued possession notice to the petitioner and obtained symbolic possession of the three plots which was subject matter of the development agreement. On 28 April 2012, the petitioner requested the Vijaya Bank to restrain from taking any further steps and to withdraw the notices. On 14 May 2012, respondent issued termination notice to the petitioner calling upon the petitioner to deposit a sum of Rs.121 crores with the respondent for payment to the bank within seven days. On 17 May 2012, petitioner replied to the termination notice. According to respondent, the petitioner did not give any reply on merits of the termination notice and did not dispute the correctness of the reasons of termination notice issued by the respondent. On 18 May 2012, petitioner filed writ petition (L) No.1414 of 2012 in this Court impugning the termination notice dated 14 May 2012. The petitioner obtained ex-parte status quo order by making an application before the vacation Court on 21 May 2012. On 23 May 2012, Vijaya Bank freezed accounts of the petitioner at Nagpur branch. On 1 June 2012 name of the petitioner was changed from Reatox Builders & Developers Pvt. Ltd. to Chourangi Builders & Developers Pvt. Ltd.

(n) On 25 June 2012, Division Bench of this Court passed an order in the writ petition filed by the petitioner that the order of status-quo shall not prevent either of the parties from issuing notices. On 16 July 2012 respondent addressed two letters both dated 16 July 2012 and terminated letter of intent dated 22 September 2005, agreement dated 22 June 2006, Power of Attorney dated 24 August 2007, Agreement dated 24 July 2010, Correction deed dated 14 August 2010 and Power of Attorney dated 14 August 2010 in respect of 31 acres of land and called upon the petitioner to pay a sum of Rs.5.96 crores and terminated agreement dated 29 March 2010 and Power of Attorney dated 29 March 2010 in respect of additional land of 11.644 acres and called upon the petitioner to pay Rs.3.65 crores. On 21 July 2012, petitioner replied to two termination letters and denied the allegations. It is the case of the petitioner that joint meeting was held between the petitioner, officers of bank and the respondent in which the proposal to regularize term loan of the bank was discussed.

(o) On 10 September 2012 petitioner submitted a fresh proposal to Vijaya Bank to regularize the term loan of the bank and to issue fresh sanction of Rs.155 crores. On 10 December 2012, Vijaya Bank rejected the said proposal of the petitioner. On 6 May 2013, Division Bench of this Court dismissed writ petition No.2850 of 2012 as withdrawn and granted liberty to the petitioner to take recourse to Dispute Resolution Mechanism provided in Clause 19 of the agreement dated 24 July 2010 and continued ad interim relief for a period of six weeks from the said date to enable the petitioner to take the appropriate steps. On 17 May 2013, petitioner filed arbitration petition (L) No.640 of 2013 under Section 9 of the Arbitration Act for interim measures. On 13 May 2013, petitioner invoked arbitration clause under two development agreements and issued a letter to the learned arbitrator who was named under the development agreement who agreed to act as sole arbitrator and gave his consent vide letter dated 15 May 2013. On 31 May 2013 petitioner filed a statement of claim and application under Section 17 of the Arbitration Act before the learned arbitrator. On 7 June 2013, learned arbitrator passed an ad interim order in application filed under Section 17 for a period of six weeks from 7 June 2013. By an order dated 7 June 2013, then learned arbitrator recused himself from the arbitration proceedings. On 9 July 2013, this Court passed an order in arbitration petition (L) No.640 of 2013 and appointed Shri Justice S. P. Kurdukar, former Judge of Supreme Court as the substituted arbitrator by consent of parties. Both the parties filed their pleadings before the learned arbitrator. Learned arbitrator continued the order of status quo till 19 August 2013. By an order dated 12 November 2013, learned arbitrator passed a detailed order refusing to grant the interim measures in favour of the petitioner and rejected the application filed under Section 17 of the Arbitration Act. Learned arbitrator stayed the operation of said order dated 12 November 2013 till 25 November 2013 and directed the petitioner to issue 48 hours notice to the respondent before moving this Court for ad interim order or interim reliefs. Being aggrieved by the said order dated 12 November 2013, petitioner has filed this appeal under Section 37 of the Arbitration Act.

(p) On 25 November 2013, the respondent through the learned senior counsel made a statement that no further action would be taken pursuant to the order passed by the learned arbitrator till 28 November 2013. In view of the difficulties of the learned senior counsel appearing for the petitioner on 28th November 2013, learned senior counsel for the respondent extended the statement made by him till 29 November 2013. On 29 November 2013, this Court heard both the learned senior counsel appearing for parties at length.

3. Mr R. S. Apte, learned senior counsel appearing on behalf of the petitioner made following submissions:

(a) petitioner has submitted tender on the premise that the height of the buildings which would be permitted to be constructed on the plots in question was 61 meters. petitioner had submitted plans accordingly. Height of a building was however reduced by the Airport Authority of India on 27 October 2008 from 61 meters to 43.3 meters and subsequently increased on 27 February 2010 to 54.3 meters. It is submitted that by virtue of reduction of such height from 61 meters to 43.3 meters, the petitioner who had proposed to construct the buildings consisting of 18 floors was required to construct buildings consisting of 13 floors only. petitioner had entered into various agreements in respect of the flats proposed to be constructed beyond 13 floors and had received various amounts from the flat purchasers. In view of the reduction of height by the Airport Authority of India, several such flat purchasers were required to be accommodated in the portions from the first floor to 13th floor. Some of the flat purchasers had cancelled their bookings which were required to be refunded by the petitioner the amounts paid by them. It is submitted that the additional land allotted by the respondent to the petitioner was at market price and not in lieu of the compensation demanded by the petitioner due to reduction of height by the Airport Authority of India.

(b) It is submitted that there was no reference to SEZ in the first agreement entered into between the parties. In view of the notification issued by the SEZ subsequently imposing restriction on sale, their sale of flats constructed and proposed to be constructed was seriously affected. The petitioner was informed for the first time on 7th April 2011 that such decision was taken by SEZ as far back as on 8 August 2007. There was negative media campaign against the petitioner during the period between 23 July 2010 and 18 December 2011 which seriously affected the project of the petitioner and also financially. petitioner had already invested Rs.300 crores and had already constructed 550 flats which comprise of 34% of the total work awarded. It is submitted that petitioner was not responsible because of such notification issued by SEZ which was conveyed to the petitioner for the first time on 7 April 2011 that is much after making huge investments by the petitioner and completion of about 34% work.

(c) It is submitted that under the terms of the development agreement, the respondent agreed to issue counter guarantee in favour of the Vijaya Bank from whom the petitioner borrowed Rs.105 crores. In view of the breaches committed by the respondent, petitioner could not complete the construction and could not sell the flats and could not repay the loan amount of the Vijaya Bank and as a result thereof the said account with Vijaya Bank declared the account of the petitioner as NPA. Vijaya Bank also issued notice under Section 13(2) of the Securitization Act against the petitioner and took symbolic possession of the plots handed over to the petitioner/developer by the respondent.

(d) Learned senior counsel then placed reliance on Clause 3.7 of development agreement and submits that in view of such clause, respondent could not have created any obstruction against the petitioner from performing their obligation under development agreement and could not have terminated the agreements. It is submitted that under clause 19.3 read with Clause 20.1 of the development agreement, no action for termination of development agreements could be taken by the respondent at all. It is submitted that there is no provision for termination of development agreements under those agreements. Claim for damages was not an adequate remedy. The learned arbitrator has rejected the application under Section 17 contrary to the provisions of the contract by wrong interpretation of the provisions. It is submitted that respondent ought to have allowed the petitioner to perform their part of contract and ought to have issued the counter guarantee in favour of M/s India-bulls. Reliance is placed on clause 3.7 which provides for furnishing counter guarantee by the respondent. It is submitted that since no counter guarantee was issued by the respondent in favour of India-bulls though Vijaya Bank had agreed for transfer of loan, Vijaya Bank took coercive steps against the petitioner, freezed the accounts of the petitioner, declared the account of the petitioner as NPA and took symbolic possession of the plots.

(e) Learned senior counsel submits that in view of the violation of SEZ norms committed by the respondent, SEZ has issued show cause notices to the respondent. Learned senior counsel submits that the SEZ withdrew the embargo only on 28 November 2011. It is submitted that the respondent has committed fraud upon the petitioner by suppressing the notification issued by SEZ much earlier and thus termination was bad and illegal on this ground alone. Learned arbitrator has misunderstood the submissions of the petitioner regarding allegations of fraud in the impugned order and has not considered those submissions.

(f) Learned senior counsel placed reliance on a letter/note dated 18 April 2012 annexed at page 907 of the appeal paper book signed by the Vice Chairman and Managing Director of the respondent to the Chief Minister/Chairman of the respondent recommending the proposal for approval. Learned senior counsel submits that under the said proposal, the Vice Chairman of the respondent agreed that it was worthwhile to consider the proposal of the petitioner to issue counter guarantee to M/s India-bulls Financial Services Ltd., otherwise the respondent was unable to pay Rs.105 crores to Vijaya Bank which shall adversely affect the credibility of the respondent in the market and would have repurcussion on the image of the respondent as well as the Government. The learned senior counsel sought to place reliance upon some of the paragraphs of the said note dated 18 April 2012 in support of his submission that the respondent has suppressed the said writing though the learned arbitrator had directed the respondent to furnish inspection of the documents. The said writing was relied upon to submit that the respondent has committed fraud upon the petitioner. Based on this writing, learned senior counsel submits that even according to respondent, respondent would be unable to pay even Rs.105 crores to Vijaya Bank and thus if petitioner succeeds in arbitration proceedings, petitioner would not be able to recover any amount from the respondent and thus learned arbitrator ought to have stayed the termination. It is submitted that the petitioner thus have good chances of succeeding in their claim for specific performance before the learned arbitrator and for declaration that the termination effected by the respondent is totally bad and illegal. Learned senior counsel submits that the petitioner had applied for copy of the said writing under the provisions of Right to Information Act and has obtained a copy thereof. Mr Khambatta, learned senior counsel for the respondent strongly opposed the reliance placed by the petitioner on this writing on the ground that this writing was not part of the record before the learned arbitrator and thus cannot be relied upon by the petitioner in this proceedings for the first time. It is also opposed on the ground that the said writing is an opinion of the Vice Chairman and admittedly the said opinion/proposal of the Vice Chairman of the respondent has not been accepted or approved by the Chairman of the respondent.

(g) Mr Apte, learned senior counsel then submits that the arbitral tribunal has not considered the entire matter in correct perspective and has rejected the arbitration application filed by the petitioner without considering all the relevant submissions made by the petitioner. Learned senior counsel sought to tender additional affidavit affirmed on 25 November 2013 for placing certain additional facts on record. Mr Khambatta learned senior counsel strongly opposes tendering of affidavit at this stage on the ground that though the said affidavit was affirmed as far back as on 25 November 2013 and the matter was moved by the petitioner before this Court on 25 November 2013, copy thereof was not served upon the respondent which shows the mala-fide intention of the petitioner to somehow delay the outcome of this proceedings. Learned senior counsel objected to this affidavit on the ground that no new facts can be brought on record in this appeal filed under Section 37 of Arbitration Act for the first time which was not part of the record before the learned arbitrator.

4. Mr Khambatta learned Senior Counsel appearing for the respondent made the following submissions :

(a) Letter of intent was issued in favour of the petitioner on 22.9.2005 for development of the modern Township. The petitioner was fully aware of the notification issued by SEZ. My attention is invited to the Co-Development Agreements entered into between the petitioner and the respondent on 12.5.2008 and more particularly recital (f) which records that the petitioner had been granted formal approval for setting up a multi product SEZ township by the Ministry of Commerce and Industries, Government of India vide letter dated 6.11.2006 and by the Government of India, Ministry of Commerce on 29.5.2007 pursuant to the provisions of Special Economic Zone Act, 2005. The parties had agreed to develop the plots as per SEZ Act, 2005 and SEZ Rules 2006. Under clause 1.1.1 it was agreed that the said agreement shall be Co-development agreement along with Annexures attached thereto and shall include modifications, alterations, additions or deletion thereto made in the agreement after the date of execution of the said agreement subject to the provisions of SEZ Act 2005 and SEZ Rules,2006. Clause 2 provided that the Co-Developer would be entitled to identity the customers for identifying the plots put up in units which was as per the agreement and subject to obtaining all necessary permissions required in the meeting of obligations of the SEZ Act, 2005 and SEZ Rules, 2006. It is submitted that the petitioner was thus fully aware about their obligations that the lands were covered by SEZ areas and/or subject to notification issued by the government under the provisions of SEZ Act and SEZ Rules.

(b) It is submitted that the Airport Authority of India had reduced the height and thereafter further increased the height of the buildings. The petitioner continued to work and did not terminate the agreements inspite of reduction of height by AAI. My attention is invited to the letter dated 3.4.2008 addressed by the respondent to the petitioner allotting additional land which worked down to 11.644 acres to make good the area loss which had taken place due to change of height on various conditions recorded therein. The petitioner accepted the allotment of the additional land admeasuring 11.644 acres and was satisfied with the said plot. It is submitted that the petitioner was thus fully compensated in respect of the area loss due to change of height by the Airport authority of India and thus could not make any grievance in respect of reduction of height by the Airport Authority of India. The petitioner also did not make any further claim nor referred the dispute in respect of the compensation and accepted the additional plot of land and entered into a separate agreement in respect thereof. It is submitted that the petitioner has finally entered into a Final Development agreement in respect of the said additional plot of land on 29.3.2010 and Final Development Agreement in respect of 31 acres on 24.7.2010. It is submitted that the petitioner was fully aware of the restrictions imposed by the SEZ on sale of the tenements when co-development Agreement was entered into between the parties.

(c) Learned Senior Counsel placed reliance on clause 2.5.1 of the Development Agreement and submits that the petitioner was obliged to complete the construction within 24 months from the date of signing of the power of attorney. It is submitted that even according to the petitioner, till the month of January, 2011 the petitioner could complete only 34 % of the work. Since January, 2011 the petitioner had stopped the work on the plot admeasuring 31 acres and has not commenced any work on the plot admeasuring 11.644 acres. The learned senior counsel placed reliance on clause 16 (i) (ii) (v) and (vi) which provides for some of the events of default. It is submitted that the petitioner had not paid the entire development fee and/or revenue share payable in accordance with the provisions of the Agreement. The petitioner committed material breach of the provisions of the agreement by repudiating the provisions by declaring themselves not to be bound for enforcement and initiated measures to enforce the counter guarantee furnished by the respondent and got freezed the fixed deposits of the respondent lying with Vijaya Bank. The petitioner did not adhere to the schedule of construction and did not furnish to the respondent the implementation of plans and programmes which the petitioner was under an obligation to furnish regularly from time to time. Since the petitioner did not make any payment to Vijaya Bank the said bank initiated measures under section 13 (4) of the Securitisation Act by taking possession of the two plots on 23.11.2012 and filed proceedings before the Debt Recovery Tribunal against the respondent also. The learned senior counsel submits that the respondent was thus, justified in terminating the Development agreement. The petitioner did not give any reply controverting the reasons recorded in the termination letter and gave a very vague and cryptic reply. My attention is invited to clause 7.5 of the Development Agreement which records that the developer shall be solely responsible for arranging of the funds and shall act in accordance with the provisions of the Agreement and standards of reasonable and prudent developer. It is submitted that the respondent was thus not liable to issue a fresh counter guarantee in favour of India-bulls.

(d) In so far as the submission of the petitioner that there is no right of termination provided under the Development Agreement and thus the termination was bad and illegal on that ground alone is concerned, Mr. Khambatta learned senior Counsel submits that in view of the events of default having taking place and since the petitioner did not rectify the breaches, the respondent was justified in terminating the Development Agreement. If according to the petitioner the respondent was responsible for noncompliance of the terms of the contract, even the petitioner could have terminated the Agreement. It is submitted that power to terminate the Agreement in case of breach vests under the provisions of the contract Act and even if there was no specific power in the Development Agreement, it did not preclude either of the party to terminate the contract in the event of other party committing breaches. It is submitted that the learned Arbitrator was thus, right in rejecting the application filed by the petitioner.

(e) It is submitted by the learned senior counsel that the petitioner had proposed that the respondent shall furnish the counter guarantee for 36 months. No work was restarted by the petitioner after January, 2011. The petitioner was never ready and willing to carry out the work within the stipulated period of time and even after November, 2011. My attention is invited to the sanction note dated 17.6.2011 from M/s India-bulls which records that the said company had proposed to sanction loan in favour of the petitioner up to 155 crores in two trenches, the first trench for not exceeding 36 months from the date of first disbursement of the said loan subject to submission of corporate guarantee by the respondent and subject to mortgage of the lands of the respondent on which the petitioner was required to carryout the entire construction. My attention is drawn to the contract provisions which provides that the petitioner to carry out the entire construction within 24 months from the date of issuance of power of attorney. It is submitted that thus the respondent was not liable or obliged to issue fresh counter guarantee on the terms proposed by the petitioner and M/s India-bulls.

(f) Mr. Khambatta learned senior counsel invited my attention to the application filed by the petitioner under section 17 of the Arbitration and Conciliation Act,1996 before the learned Arbitrator and more particularly para 67 thereof. It is the case of the petitioner themselves that in order to successfully complete the modern township the respondent was obliged to do various acts such as further extension of time for approval of the project, renewal of technical approval of the petitioner and the validity for further 10 years, submission of counter guarantee, to afford loan to the project give consent to transfer and to secure the investors. It is submitted that petitioners own pleadings filed before the learned Arbitrator demonstrates that the petitioner was not ready and willing to comply with their part of the obligations. The learned senior counsel also invited my attention to the Writ petition filed in this Court (Writ Petition No.2850 of 2012) by the petitioner and in particular para 4 in which it is averred by the petitioner that the petitioner had prepared for all the arrangements for projects and required various compliance from the respondent that is withdrawal of termination orders forthwith, renewal of the Development Agreement in respect of 31 acres and 11.644 acres for next 10 years to complete the project, renewal of fresh technical approvals having validity up to 10 years, submission of counter guarantee to the bank for its loan to the project, Execution of tripartite Agreement etc. Even in the rejoinder filed before the learned Arbitrator the petitioner contended that the petitioner would require 10 years extention for completion of the project. Learned senior Counsel submitted that the petitioner did not terminate the Development Agreement and was thus, bound to complete the construction as per the Development Agreement and was not discharged with compliance of their obligations under those two agreements.

(g) The petitioner admittedly has no money and was not in a position to arrange for any funds, when petitioner stopped construction. Learned senior counsel submit that in the arbitration proceedings the petitioner has already quantified the claim of damages in the sum of Rs.68,69,67,9,188/-. It is submitted that the petitioner cannot seek specific performance of these agreements. In any event if the petitioner succeeds in the arbitration proceedings the petitioner would be compensated in terms of money.

(h) Mr. Khambatta learned Senior Counsel appearing for the respondent invited my attention to the ad interim order passed by this Court in Writ Petition No.2850 of 2012 and submits that the said order was obtained by the petitioner without issuing any notice to the respondent from the vacation court. Status quo order passed by the vacation court continued from time to time. He placed reliance on the order passed by this court in Arbitration Petition (L) No.629 of 2013 between he same parties by which order this Court has prima facie held that termination of the contract cannot be stayed by this Court under section 9 of the Arbitration and Conciliation Act, 1996.

(i) The learned Senior counsel placed reliance on the Judgment of the Supreme Court in COX AND KINGS INDIA LIMITED VS INDIAN RAILWAYS CATERING AND TOURISM CORPORATION LIMITED reported in (2012) 7 Supreme Court Cases 587 [LQ/SC/2012/541] and in particular para 26 in support of his submissions that remedy of the petitioner would lie in an action for damages. Para 26 of the said Judgment of the supreme court in case of COX AND KINGS LIMITED reads thus :

It is no doubt true that the petitioner has invested large sums of money in the project, but that cannot entitle it to pray for and obtain a mandatory order of injunction to operate the train once the lease agreement arrangement had been terminated. We are also unable to accept Mr. Rohatgis submission that the joint venture agreement was akin to a partnership. Such submission had been rightly rejected by the Division Bench. As rightly pointed out by the Division Bench of the High Court, the petitioners remedy if any, would lie in an action for damages against IRCTS for breach of any of the terms and conditions of the Joint venture agreement and the memorandum of understanding.

"(j) Mr Khambatta learned Senior Counsel appearing for the respondent placed reliance on the Judgment of this Court in case of MAYTAS INFRA LIMITED vs UTILITY ENERGYTECH AND ENGINEERS PVT.LTD & ORS 2009 (4) Bom C.R.143 and in particular para 11 thereof in support of his submissions that the Court cannot compel a party to continue with the contract. It is difficult for the Court to supervise the performance of the contract based upon such type of public project. Para 11 of the said Judgment reads thus :

The Court cannot compel the respondent to continue with the contract. It is difficult for the court even to supervise such performance of contract, based upon such type of public project, I see there is no material and reason to grant interim injunction as sought by invoking section 9 of the Act.

(k) Learned Senior counsel then placed reliance on the Judgment of this Court in the case of MILAN COMMERCIAL VS ASIAN HEALTHCARE reported in (2010) 2 Bom. C.R. 295 and in particular paras 56 and 57 in support of his submissions that in case of a commercial contract if parties had taken a decision based on commercial wisdom and material available with them and terminated the contract and enter into a fresh contract the Court cannot compel such party to continue with the work/project only through the debarred party. The facet and importance of completion of the project within the stipulated time just cannot be overlooked. Paras 56 and 57 of the said Judgment reads thus :

56. Once in a commercial contract like this, if parties have taken decision based upon the commercial wisdom and material available with them, and terminated the contract and entered into fresh contract, the Court cannot compel such party to continue with the work/project only through the debarred party. The facet and importance of completion of the project within the stipulated time just cannot be overlooked. The contract, as alleged, if terminated illegally and/or any breach of various clauses the aspect of compensation/damages subject to proof and the evidence need to be kept in mind while considering the case of the plaintiff or the supporting defendants. (Maytas Infra Limited vs Utility Energytech and Engineers Pvt. Ltd & ors) 2009 (4) Bom C.R. 143 (O.S.)

57. Timely completion of the project was the object of the company and the JVA. The plaintiff just cannot defend/support companys defaults and financial unstability and breaches of the obligations, to claim injunction, interim relief in such fashion. All these factors, in my view goes against the plaintiff and other supporting defendants.

(l) On the issue whether the contract could be terminated though there was no specific clause under those agreements for termination is concerned, Mr. Khambatta learned senior Counsel placed reliance on the Judgment of the Delhi High Court in case of RAJASTHAN BREWERIES LIMITED VS STROH BREWERY COMPANY reported in AIR 2000 DELHI 450 in para 20 in support of his submissions that even in the absence of specific clauses the parties could terminate the agreement in the event of happening of the events specified therein in the contract Para 20 of the said Judgment reads thus :

20. Even in the absence of specific clause authorising and enabling either party to terminate the agreement in the event of happening of the events specified therein from the very nature of the agreement, which is private commercial transaction, the same could be terminated even without assigning any reason by serving a reasonable notice. At the most, in case ultimately it is found that termination was bad in law or contrary to the terms of the agreement or of any understanding between the parties or for any other reason, the remedy of the appellants would be to seek compensation for wrongful termination but not a claim for specific performance of the agreements and for that view of the matter learned single Judge was justified in coming to the conclusion that the appellant had sought for an injunction seeking specifically enforce the agreement. Such an injunction is statutorily prohibited with respect of a contract which is determinable in nature. The application being under the provisions of Section 9 (ii) (e) of the Arbitration and Conciliation Act, relief was not granted in view of Section 14 (I) (c) read with Section 41 of the Specific Relief Act. It was rightly held that other clauses of Section 9 of the Act shall not apply to the contract, which is otherwise determinable in respect of which the prayer is made specifically to enforce the same.

(m) Mr Khambatta learned senior Counsel for the respondent then submitted that the petitioner ought to have shown readiness and willingness all through out from the beginning till the end for seeking specific performance of the agreement which the petitioner failed to demonstrate before the learned

Arbitrator in these proceedings.

(n) In so far as the internal note dated 18.4.2012 annexed at Exhibit-N to the Petition, is concerned, it is submitted that the said document was not relied upon before the learned Arbitrator and cannot be considered by this Court for the first time. It is submitted that in any event the respondent did not take any action on the said opinion of the Vice-Chairman which was for approval of the Chairman of the respondent. No action on the said note was taken by the respondent. It is submitted that in any event since no decision was taken and was not conveyed to the petitioner, no reliance on such internal note can be placed by the petitioner. If the said document would have been produced by the petitioner before the learned Arbitrator by filing an Affidavit, respondent could have been given an opportunity to explain the said note. The petitioner cannot be thus permitted to rely upon the said note which is in the nature of opinion expressed by the Vice-Chairman of the respondent on which no action is taken by the respondent. The said proposal given by the Vice-Chairman does not give any right in favour of the petitioner.

(o) In so far as the proposal regarding counter guarantee in favour of M/s India-bulls is concerned, it is submitted by the learned Senior Counsel that the said proposal had already been rejected by the respondent as far back as in the month of May 2012.

(p) it is submitted that the respondent is proposing to file a counter claim against the petitioner before the learned Arbitrator. In view of the defaults committed by the petitioner in not clearing the dues of Vijaya Bank the said Vijaya Bank has filed proceedings against the petitioner as well as the respondent before the Debt Recovery tribunal by taking possession of the lands which was handed over to the petitioner by the respondent for development. The fixed deposits of Rs.117 crores which was deposited by the respondent with Vijaya Bank as and by way of security has been freezed by the said Vijaya Bank. The petitioner thus cannot plead that the respondent did not have funds to pay to the petitioner their alleged dues.

(q) In so far as the allegation of fraud made by the petitioner against the respondent are concerned, it is submitted by Mr Khambatta learned senior Counsel that the petitioner first filed a Writ petition in this Court and thereafter withdrew the said Petition with liberty to file arbitration proceedings and got the Arbitrator appointed. In the written arguments filed before the learned arbitrator the petitioner pleaded fraud and submitted that in view of such allegations of fraud involved, the matter was required to be referred to the civil court. It is submitted that the petitioner thus deliberately delayed the proceedings by raising all sorts of frivolous objections and got the status quo order continued which is causing serious prejudice to the rights of the respondent. It is submitted that the learned Arbitrator has thus rejected the plea of fraud raised by the petitioner.

(r) In so far as the affidavit filed on 25.11.2013 sought to be tendered by Mr Apte learned senior counsel for the petitioner is concerned the learned senior Counsel for the respondent strongly protested against tendering of such an affidavit at this stage. Learned senior counsel pointed out that though the said Affidavit was affirmed on 25.11.2013 when this matter was on board, the petitioner deliberately did not serve copy thereof and seeks to tender the affidavit today, after completion of substantial arguments, with a view to further delay the outcome of these proceedings and with a view to get the status quo order continued. It is submitted that in any event this Court cannot permit the petitioner to rely upon the additional affidavit at this stage.

(s) It is lastly submitted by the learned senior counsel that the learned Arbitrator has dealt with each and every issue at length and has taken a prima facie view that the termination cannot be stayed and the order of the learned Arbitrator being not perverse, this court shall not interfere with such reasoned order passed by the learned Arbitrator. Mr Khambatta invited my attention to the findings recorded by the learned Arbitrator in the impugned order.

5. In the rejoinder, Mr Apte learned Senior Counsel appearing for the petitioner submits that if the petitioner would not have been ready and willing to comply with their part of the obligations the petitioner would not have invested more than Rs.300 crores. Since the petitioner has already invested more than Rs.300 crores and 34 % of the work was already completed it was not possible for the petitioner to terminate the contract and to come out of the project. It is submitted that M/s India-bulls is a registered financial institution which had already sanctioned substantial amounts of loans but in view of the respondent refusing to furnish bank guarantee in favour of M/s India-bulls the said transaction did not materialise. The counter guarantee furnished by the respondent in favour of Vijaya Bank is without any time limit. It is submitted that the respondent has not rejected the proposal of the petitioner to submit the guarantee in favour of M/s India-bulls on the ground that the said company was seeking counter guarantee for a period of 36 months. It is submitted that the petitioner has not abandoned the work. The meetings were held from time to time between the parties till September, 2012. It is submitted that even today, various investors are ready to purchase the property and to lend various amounts and the petitioner is ready and willing to recommence the project. It is submitted that the order thus passed by the learned arbitrator deserves to be set aside and the status quo order shall continue till the disposal of the arbitration proceedings.

6. Mr R. S. Apte learned senior Counsel for the petitioner placed reliance on the Judgment of the Supreme Court in the case of S.P.CHENGALVARAYANAIDU VS. JAGANNATH reported in AIR 1994 SUPREME COURT 853 in support of his submissions that withholding vital documents which are relevant to a litigation amounts to fraud on the Court. It is submitted that since the respondent did not furnish the note submitted by the Vice Chairman of the respondent which clearly demonstrates breach of the respondent and their proposal to issue counter guarantee in favour of the M/s India-bulls, the said document being vital documents having been suppressed by the respondent thus in view of such fraud committed by the respondent, the impugned order be set aside and the learned arbitrator be directed to consider the said documents of the respondent. In so far as the judgment relied upon by Mr. Khambatta are concerned, Mr. Apte submitted that those judgments are not applicable to the facts of this case and are not impermissible.

7. I have given my anxious consideration to the rival submissions made by both the learned Senior Counsel.

REASONS AND CONCLUSIONS :

8. A perusal of the Development Agreements, entered into between the parties it is clear that the the respondent had proposed to construct a modern township in order to meet housing requirements of MIHAN and was a public project. The petitioner was issued a letter of intent. The petitioner was required to develop the plots of land in accordance with the terms and conditions recorded in the letter of intent and in the development agreement. The petitioner was also under obligation to comply with all the provisions of law and the conditions as may be imposed by the authorities. Airport authority of India Ltd had approved the height up to 61 meters of the buildings in the modern townships. Subsequently, the height was reduced by the Airport Authority of India Ltd from 61 meters to 43.2 meters on 27.10.2008 and subsequently increased on 27.2.2010 to 54.30ft. The petitioner had made a claim for compensation in view of the area reduced due to reduction of height originally permitted. The respondent had considered such representations and claim of the petitioner. Vide letter dated 3.4.2008 the respondent informed the petitioner that the respondent had agreed to make the good loss which had taken place due to change of height on various conditions set out therein. The petitioner was allotted exact area of land which worked out to 11.644 acres on payment of Rs.80,00,000/- per acre. The petitioner accepted the said allotment made by the respondent and entered into the Development Agreement in respect of that plot on the terms and conditions recorded therein. The learned Arbitrator has considered this issue at length in para 13 to 15 of the impugned order. The petitioner was fully aware of the topography of the project and were aware that as the said plot was adjacent to the Airport at Nagpur, clearance from the Airport Authority of India Ltd was necessary.

9. It is not in dispute that inspite of reduction of height, the petitioner accepted the additional plot of land and chose to enter into final development agreement on 24.7.2010 and second Development agreement on 29.3.2010. The learned Arbitrator has in my view, rightly rendered a prima facie view that the petitioner could not attribute any delay to the respondent. The petitioner had with open eyes and with full knowledge that certain approvals and permissions would be necessary from the Airport Authority of India Ltd had entered into a Development Agreement on 22.6.2006 as well as Final Development Agreement dated 24.7.2010 and has thus rightly rejected the submissions of the petitioner that the delay was attributable on the part of the respondent due to change of height by the Airport Authority of India Ltd.

10. As far as the submission of Mr. Apte learned senior Counsel for the petitioner that in view of the restrictions of sale introduced by SEZ during the execution of the project by the petitioner and in view of the negative media campaign against the petitioner during the period from 23.7.2010 to 18.12.2011, the respondent not having informed about the notification to the petitioner the project of the petitioner got effected resulting in financial problem is concerned, it is not in dispute that the Notification was issued by SEZ on 29.5.2007. A perusal of the co-development agreement dated 12.5.2008 entered into between the parties clearly indicates that the schedule lands proposed to be developed operated and maintained by the Co-developer was under process of SEZ for the township, the developer had been granted formal approval for setting up of multi-project by the Ministry of Commerce and Industry, Government of India vide letter dated 6.11.2006 and further vide letter dated 29.5.2007 pursuant to the provisions of Special Economic Zones, 2005 authorising the operations and known processing for residential modern township project. The Co-developer had proposed that he should be permitted to apply to the board of approval under section 3 (12) of the Special Economic Zone, 2005. The Board had recognised the petitioner a Co-Developer. The petitioner was described as the Co-Developer under the said Co-development Agreement. The respondent was described as the developer. Thus, it is clear that at least on the date of execution of the co-development agreement on 12.5.2008 the petitioner was fully aware of the notification issued by the government.

11. I am inclined to accept the submissions made by Mr. Khambatta learned senior Counsel for the respondent that the petitioner had knowledge about the applicability of the provisions of SEZ Act and SEZ Rules and the notification issued by the Government from time to time which was made applicable to the agreements entered into between the parties. The petitioner did not raise any such issue even when the petitioner entered into two final development agreements on 29.3.2008 and 24.7.2010 in respect of the plots admeasuring 11.644 acres and 31 acres respectively. The learned Arbitrator has dealt with this issue in paras 16 to 18 of the impugned order. The learned Arbitrator has prima facie held that it was made clear to the petitioner about the status of the land and consequently of the project they had agreed to complete the project within 24 months. The learned Arbitrator rightly rejected the contentions of the petitioner that they were not knowing about the SEZ Rules and such allegations were far from truth and an after thought attempt and was accordingly rejected. In my prima facie view, the findings of the learned Arbitrator is correct and no interference is warranted.

12. In so far as the submission of Mr. Apte learned senior Counsel for the petitioner that it was obligation on the part of the respondent to issue a counter guarantee in favour of the M/s India-bulls in terms of clause 3.7 is concerned, it is not in dispute that the respondent had furnished counter guarantee in favour of Vijaya Bank to secure the loan of Rs.105 crores availed of by the petitioner. The petitioner committed default in making repayment of the loan to Vijaya Bank as a result whereof the said Vijaya bank declared the accounts of the petitioner as nonperforming assets and issued a notice under section 13 (2) of the Securitisation Act. The said Vijaya Bank also invoked the counter guarantee issued by the respondent in the sum of Rs.105 crores and freezed fixed deposit of Rs.117 crores which was given as a security to the Vijaya Bank by the respondent. It is not in dispute that the said Vijaya Bank has already filed proceedings against the petitioner and the respondent before the Debt Recovery Tribunal. On perusal of clause 3.7 of the Agreement dated 24.7.2010 it is clear that the counter guarantee required to be furnished by the respondent was for loan as per approved DPR and approved by the respondent and such a guarantee was to be valid till end of April 2012 unless further extended. On a perusal of sanction letter of M/s India-bulls, it is clear that M/s India-bulls had proposed to sanction loans to the petitioner on the condition that the said loan was to be in two trenches first trench to be for a period of 36 months. According to the said sanctioned note one of the conditions as that the respondent shall furnish counter guarantee for the sum of the amounts sanctioned.

13. In my view, Mr. Khambatta learned Senior Counsel appearing for the respondent is right in his submission that the respondent was not bound to furnish any counter guarantee on fresh terms and conditions not agreed under the Development Agreement and also on the ground that the petitioner had already committed default to Vijaya Bank as a result thereof counter guarantee already submitted by the respondent was invoked and fixed deposits of Rs.117 crores lying with Vijaya Bank was freezed. On perusal of the pleading filed before the learned Arbitrator by the petitioner and in the Writ Petition filed in this Court which was forming part of the record before the learned Arbitrator and in this court, it is clear that the petitioner wanted to seek various directions against the respondent. It was averred by the petitioner that the petitioner would be able to complete the project after various terms and conditions proposed by the petitioner including the submission of counter guarantee for a period of 10 years was complied by the respondent. In my prima facie view, the respondent was right in rejecting the proposal of the petitioner that the respondent shall submit the counter guarantee in favour of M/s India-bulls on the terms and conditions of loan approved by M/s India-bulls.

14. A perusal of clause 7.1 of the Agreement indicates that the petitioner was solely responsible for arranging the funds required for development in accordance with the provisions of the agreement and in accordance with the standard of a reasonable prudent developer. The learned arbitrator has dealt with this issue at length in para 19 to 26 of the impugned order. The learned arbitrator has taken a prima facie view that the respondent was justified in exercising their discretion that no counter guarantee be given afresh in favour of the financial company like M/s India-bulls and the learned arbitrator would thus not interfere with the discretion exercised by the respondent. The learned arbitrator has interpreted clause 3.7 of the agreement and also clause 7.1 and has rendered a prima facie finding that the petitioner was responsible for arranging for the funds. The proposal of M/s India-bulls was for Rs.155 crores and extension of time for 36 months from the date of sanction was inconsistent and not compatible with the terms and conditions entered into between the parties. It is held that no fault could be found with the respondent. It is held that respondent had committed no default in carrying out their obligation under the contract. The respondent cannot be faulted on the ground that they have failed in their obligation under clause 3.7 by not giving counter guarantee in favour of M/s India-bulls. In my view the learned arbitrator has rightly rejected the submissions of the petitioner and has rightly not interfered with the exercise of discretion by the respondent in view of the provisions of the Agreement entered into between the parties. The respondent had already landed into trouble in view of the petitioner not repaying the loans availed from Vijaya Bank. The respondent in these circumstances were not expected to issue a fresh counter guarantee and more particularly on the terms and conditions proposed by M/s India-bulls and were justified in rejecting the said proposals. In my prima facie view, the prima facie findings of the learned Arbitrator is correct and no interference is warranted with this finding.

15. Next submission of Mr. Apte learned senior counsel for the petitioner is that the petitioner was discriminated by the respondent by giving unfair treatment in comparison with other developers who were similarly situated and who had not completed the work. The Agreement with the petitioner came to be terminated whereas no action was taken against other developers. It is not in dispute that the petitioner had already filed a Writ Petition in this Court impugning the action on the part of the respondent which Petition was withdrawn by the petitioner with liberty to file arbitration proceedings.

16. The learned Arbitrator has dealt with this issue in paras 27 to 29 of the impugned order and has rightly rejected this submission upon considering the Judgment of the Supreme Court in case of INDIA OIL CORPORATION vs. AMRITSAR GAS SERVICES reported in 1991 (1) SUPREME COURT CASES 533. In my view, the agreement between the parties was commercial and Article 14 of the Constitution of India would not apply for consideration in a contractual matter and the same has to be decided strictly in accordance with the terms and conditions of the agreement entered into between the parties and also in accordance with the provisions of Specific Relief Act, 1963 and Indian Contract Act. There is no merit in the submission of Mr Apte learned Senior Counsel for the petitioner that action of the respondent was discriminatory.

17. In so far as the submission of Mr Apte learned Senior counsel that there was no provision under the agreement entered into for termination of the agreement and thus the termination of the agreement by the respondent was illegal and contrary to the provisions of terms of the agreement is concerned it is not in dispute that clause 16.1.1. of the agreement provides for events of default. The petitioner did not pay the development fees, revenue share payable to the respondent in accordance with the provisions of the agreement. The petitioner had abandoned the work by themselves repudiating the contract. No work has been carried out admittedly by the petitioner since January 2011. The petitioner did not adhere to the schedule of construction and did not furnish to the respondent implementation plan and progress report. In view of the default of the petitioner in making repayment to Vijaya Bank the counter guarantee furnished by the respondent came to be invoked and fixed deposits of the respondent in the sum of Rs.117 crores lying with Vijaya Bank came to be freezed. The project came to a standstill since January 2011. The petitioner has no funds in hand and could not get any other arrangement. The petitioner was demanding fresh terms and conditions for completing the project from the respondent.

18. In these circumstances, in my prima facie view, the respondent was justified in terminating the contract. In my view, even though there is no provision in the contract entered into between the parties permitting either party to terminate the contract, since events of default on the part of one party had already occurred, other party is entitled to terminate the contract under the provisions of the Indian Contract Act. If the submission of Mr. Apte learned Senior Counsel is accepted, in the absence of specific clause permitting either of the party to terminate the contract even if breaches are committed is accepted, no contract can be terminated even if one party has committed breach and the other party would have to continue his contractual rights. In my view, in such a situation, the provisions of the Indian Contract Act would be attracted. In my prima facie view, the respondent was thus justified in terminating the contract. I am in agreement with the view expressed by the Delhi High Court in case of Rajasthan Breveries Ltd. (supra).

19. The learned arbitrator has dealt with this issue in paras 30 and 31 of the impugned order and has rendered a prima facie finding that the petitioner is neither ready nor willing to perform their part of the contract due to financial difficulties and it was difficult to expect that the petitioner would complete the project as per the Development Agreement and the respondent has thus taken into account various circumstances relating to default on the part of the petitioner and has rightly terminated the said agreements. In my view, the learned Arbitrator has rightly come to such a prima facie conclusion based on the documents placed on record and interpretations of the terms and conditions. No infirmity can be found in the findings rendered by the learned arbitrator.

20. In paras 32 to 37 of the impugned order, the learned arbitrator has considered the issue of readiness and willingness on the part of the petitioner to perform the development agreement at length. The learned Arbitrator has adverted to the judgment of the Supreme Court in case of His Holiness Ganesh Acharya reported in 1996 (4) SCCs 5266 and judgment of COX AND KINGS INDIA LIMITED VS. INDIAN RAILWAYS CATERING AND TOURISM CORPORATION LIMITED reported in 2012 (7) Supreme Court Cases 587 [LQ/SC/2012/541] and has rightly held that termination cannot be stayed. The learned Arbitrator has followed the supreme court judgment in case of His Holiness Ganesh Acharya (supra) in which it is held that readiness means capacity of a party to perform a contract which includes his financial position to pay the purchase price.

21. In my prima facie view, the petitioner was not ready and willing to comply with their part of the obligation. The petitioner has not carried out any work since January 2011. Even according to the petitioner they have completed only 34 % work. The petitioner has no funds and their accounts with Vijaya Bank are already freezed and Vijaya Bank has already taken symbolic possession of the lands on which the development was to be carried out by the petitioner. In my prima facie view, the learned Arbitrator was right in rejecting the Arbitration Application to stay the termination notice. No infirmity can be found with the conclusions drawn by the learned Arbitrator. I am in agreement with the view of the learned single Judge of this court in case of Maytas Infra Ltd (supra) that court cannot compel a party to continue with the contract.

22. In so far as the issue of fraud canvassed by Mr.Apte learned senior Counsel for the petitioner is concerned, a perusal of the record indicates that allegations are made in the rejoinder before the Arbitral Tribunal. In the written arguments filed before the learned arbitrator, it was urged by the petitioner that in view of the serious allegations of fraud, the matter is required to be referred to a civil Court for adjudication. The petitioner sought liberty to withdraw Writ Petition and to file arbitration proceedings. No such plea was raised by the petitioner while obtaining leave to withdraw the Writ Petition. After filing of the arbitration proceedings, the petitioner raised the issue of fraud to be referred to the civil court. The learned arbitrator has dealt with this issue at length in paras no. 41 to 44 of the impugned order. The learned arbitrator in my view has rightly rejected the submission of the petitioner regarding allegation of fraud. No such plea could be raised for the first time in rejoinder. The learned arbitrator also considered the fact that there was no specific pleading relating to fraud and misrepresentation and cheating in the statement of claim and thus could not be permitted. In my view the learned Arbitrator is right in rejecting the plea of fraud and no infirmity can be found with the impugned order on this issue. Conduct of the petitioner would indicate that such a plea was raised out of frustration.

23. As far as internal note relied upon by the petitioner for the first time is concerned it is not in dispute that the petitioner had not relied upon any such document before the learned arbitrator. By such note submitted by the Vice Chairman of the respondent to the Chairman expressing his opinion and sought approval. Such a proposal has not been neither accepted by the respondent nor any decision thereon was conveyed to the petitioner. In my view, since no action was taken by the respondent on such note, no cognizance could be taken of such opinion/note/proposal for seeking approval. In my view, Mr Khambatta learned Senior counsel appearing for the respondent is right in his submission that if the petitioner would have produced such note before the learned arbitrator on an affidavit, the petitioner would have opposed production of such a writing being taken on record or in any event would have explained the so called admission in such writing on the part of the respondent before the learned arbitrator. In my view, this court cannot take cognizance of such document in these proceedings for the first time. In any event since no action was taken on such note by the respondent or no action was conveyed to the petitioner no reliance thereon can be placed by the petitioner.

24. The Supreme Court in the case of COX AND KINGS LTDsupra held that though a party had invested a large sum of money in the project, but that cannot entitle it to pray for a mandatory order to operate the contract once it is noted that the remedy of the petitioner would be if any in action for damages against the respondent for beach of any of the terms and conditions of the Joint Venture agreement and MOU. Similar view has been taken by the learned Single Judge of this Court in the case of MILAN COMMERCIAL PVT. LTD VS ASIAN HEALTHCARE (supra). In my view, the arbitrator has rightly not stayed the termination of the agreement effected by the respondent. A perusal of the pleadings before the learned arbitrator and in the writ petition which was on record before the learned arbitrator, it is clear that the petitioner was pressing demand of the additional terms and conditions for completion of the project. In my view, the readiness and willingness of a party has to be all throughout. The petitioner has not carried out any work since January 2011. Neither the Court nor the learned arbitrator can rewrite the contract and direct a party to withdraw the termination notice and enter into a fresh contract on the terms and conditions proposed by another party.

25. In my prima facie view, in view of the status quo order passed by this Court which has been continued form time to time the public project of this magnitude has been stalled for no fault of the respondent and the learned arbitrator was thus justified in refusing to continue such status quo order in favour of the petitioner. In the event of the petitioner succeeding in the arbitration proceedings and if termination of the agreement is found to be illegal the petitioner can be compensated in terms of money.26. In my view, termination of the Agreement thus cannot be stayed. There is no infirmity found by this Court in the order passed by the Arbitral Tribunal. The impugned order is a reasoned order and is passed after considering the submissions of the parties at length, documentary evidence and provisions of law and thus no interference is warranted by this court.

27. In my view, the Petition is devoid of merits and is accordingly rejected.

28. Mr. Apte learned senior Counsel appearing for the petitioner seeks continuation of the statement made by Mr. Khambatta learned senior counsel appearing for the respondent. Mr. Khambatta on instructions has opposed such a request. Application made by Mr. Apte for continuation of the statement is accordingly rejected.

29. No order as to costs.