Case Title: Royal Orchids V. Kuldip Singh Kohli & Anr. (2022)
On August 23, the Delhi High Court made the following observation: The petitioner could not be deemed entitled to relief under Section 9 of the Arbitration and Conciliation Act 1996 if the petitioner was prohibited from requesting specific performance of the Memorandum of Understanding (MOU) between the two parties.
In order to protect the property that is the subject of the dispute, the present petition was preferred under Section 9 of the Arbitration Act. According to the petitioner, the parties signed an MOU in which the petitioner was required to develop the land at its own expense in lieu of receiving 30% of the sale earnings. The remaining portion of the original deposit was ready and accessible to the petitioner, and the petitioner paid the respondents an advance of Rs. 1 crore. The defendants, on the other hand, did not accept this and started to shun the petitioner.
According to the petitioner, the respondents began to ignore him and engage in negotiations with other parties. According to the petitioner, this was a violation of their contract.
After reviewing the disputed MOU, the Court observed that the respondents continued to have all of the property's rights, including possession and the right to sell. Only for the purposes of construction was the petitioner's possession real. Additionally, the Power of Attorney was granted for specific building goals. The MOU included information on the building costs. The Court ruled that it was also evident from the MOU that the respondents were responsible for paying all taxes, including the capital gain tax.
The Court cited Section 16(c) of the Specific Relief Act, which said that a person may not get specific performance of a contract in his favour if he could not demonstrate that he had fulfilled or was consistently prepared and willing to fulfil the contract's basic requirements.
Justice Mini Pushkarna's one-judge panel made the following observations:
"This Court is of the prima facie view that the petitioner has failed to prove that it was ready and willing to perform its obligations under the MOU at the relevant time. There is nothing on record to demonstrate that the petitioner had the appropriate balance in its account at the appropriate time to make payment to the respondents."
The Court denied the motion for relief and left the Arbitral Tribunal to address additional issues regarding the MOU breach.
For further reference - Royal Orchids v. Kuldip Singh Kohli and anr.