Bombay High Court: In a matter related to a multi-crore property development dispute over 12.5 acres of land in Malvani, Mumbai, a Single Judge Bench of Somasekhar Sundaresan, J., allowed the appeal filed by Atul Projects India Pvt. Ltd. (‘Atul Projects’), setting aside the arbitral tribunal’s order that had denied interim protection concerning its development rights.
The Court held that the Tribunal had failed to consider critical material, including the unredacted Oberoi MoU central to determining third-party rights and the sequence of events relating to title clearance. Emphasising that Atul Projects’ obligations were contingent upon securing an “absolute clear title,”, the Court found that no valid termination had occurred on the dates claimed by the respondents.
Additionally, the Court strongly disapproved of the excessive redaction of key documents, holding that such practice violates principles of natural justice. It quashed the arbitral tribunal’s order and remanded the matter for fresh consideration with full disclosure, firmly rejecting the filing of heavily redacted documents. The Court noted that this practice deprives the tribunal of material information essential for informed adjudication and undermines the principles of transparency and fairness that are foundational to judicial proceedings.
Background
The case centered on a complex property development dispute involving approximately 114 acres of marshy land in Village Marve, Malvani and Aksa, Mumbai. The land was originally leased by the Government of Maharashtra to India Farmers Private Limited through a 999-year reclamation lease deed in July, 1956, for agricultural purposes. This foundational lease became subject to protracted litigation spanning over three decades, creating legal uncertainties that affected all subsequent transactions.
The dispute began in 1993 when the Collector sought to terminate the original lease for alleged violations. This termination was set aside by the Additional Commissioner in 1994, reinstated by the Revenue Minister in 1998, and subsequently challenged through various legal proceedings, creating a state of legal limbo that persisted for years.
In November, 2014, Atul Projects entered a Memorandum of Understanding with Nima Developers Private Limited (Nima Developers’ ) for developing 500,000 square feet of residential area on a 12.5-acre parcel. This transaction was structured to account for ongoing litigation, with the Atul MoU made conditional upon resolution of appeal. One day prior, India Farmers had sub-leased 100 acres to Nima, creating the legal foundation for the development agreement.
In November, 2015, all three parties executed a tripartite Confirmation Deed with representations that clear title would be obtained within six months. The financial structure involved Atul paying Rs. 43 crores in stages: Rs. 3 crores upon signing, Rs. 12 crores upon obtaining absolute clear title, and subsequent milestone-based payments. Atul also secured a right of first refusal over the remaining larger land.
The Division Bench judgment (DB Judgment) partially resolved the litigation by setting aside the Revenue Minister’s adverse order of 1998. However, it simultaneously revived a 2002 Show Cause Notice that functioned as an interim order containing explicit prohibitions against creating any interest in the land without government permission. This revival meant that despite the partial legal victory, a cloud remained over the title, preventing achievement of “absolute clear title” as required under the Atul transaction documents.
In October, 2023, while the Atul transaction documents were still subsisting, India Farmers executed a competing Memorandum of Understanding with Oberoi Realty Limited (‘Oberoi MoU’) for the same land. Simultaneously, the parties executed a Sub-Lease Termination Deed to eliminate Atul’s interests by cutting the legal link between India Farmers and Nima. Atul Projects was not informed of these developments until 9,-04-2024.
In December, 2023, Nima Developers formally terminated the Atul Projects MoU, citing non-payment of Rs. 12 crores demanded in 2020 and enclosed a refund cheque for Rs. 5.51 crores. On December 28, 2023, the Government declared the land a No-Development Zone (NDZ). However, the Revenue Minister had already passed orders, finally resolving the title disputes in favour of India Farmers.
Thereafter, Atul Projects invoked arbitration clause, seeking interim relief including a deposit of Rs. 10 crores, stay on termination, and disclosure of third-party rights. On October 24, 2024, the Arbitral Tribunal dismissed Atul’s Section 17 application, finding that NDZ classification made development impossible, Atul was not ready to perform, the specific area was unidentified, the contracts were terminated in July 2020, and third-party rights had been created. Crucially, this decision was based on a heavily redacted Oberoi MoU. Atul Projects, therefore appealed to the High Court under Section 37 of the Arbitration Act.
Analysis, Law and Decision
The Court identified fundamental flaws in the arbitral tribunal’s approach. The Court’s most significant observation concerned procedural unfairness created by improper redaction of the Oberoi MoU. Having examined the complete document, the Court noted that the heavily redacted version was as good as not producing anything at all, depriving the tribunal of crucial information for an informed decision.
The Court found the tribunal’s conclusion that NDZ classification made residential development impossible was factually incorrect. Rule 8.1.3 of DCPR 2034 specifically provided for IT/ITES development on NDZ land, which necessarily included residential accommodation as allied services. The Oberoi MoU itself contemplated such mixed developments, demonstrating that NDZ did not create an absolute bar.
Also, the Tribunal had concluded the Atul documents were mere “agreements to agree” because the 12.5-acre area was unidentified. The Court found this summary unsupported, noting that the Confirmation Deed referred to a plot as shown in plan, indicating a specific plan existed. The involvement of architects and contractual obligations to fence specific areas supported this conclusion.
The Court thoroughly analyzed whether valid termination occurred in July 2020. The letter demanding payment also invited conversation. When Atul denied conditions were met, Nima’s letter called for performance. The Court reasoned that if July 2020 was an inexorable termination, there would be no room for subsequent performance demands. Actual termination occurred only on December 18, 2023, with the refund cheque.
The Court meticulously examined whether “absolute clear title” existed when Rs. 12 crores were demanded in 2020. While the DB Judgement struck down earlier adverse findings, it revived the 2002 Show Cause Notice containing prohibitions on land dealings without government consent. The Court emphasized this notice doubled as an interim order, preventing absolute clear title. Subsequent events in September 2020, including adverse Collector orders and attempted government possession, confirmed title remained clouded.
The Court strongly criticized excessive redaction practices, citing Sonali Ashok Tandle v. Rannka Lifestyle Ventures, 2023 SCC OnLine Bom 1918 emphasising that “anything that the Court can see, the opposing party must be allowed to see.” The extensive redaction prevented understanding of the competing transactions’ true relationship.
The Court pointed out that the Oberoi MoU was executed before effective termination of Atul Projects documents and while a High Court status quo order was in effect. The New Revenue Minister Order, clearing title disputes was passed just a fortnight later.
The Court applied appropriate Section 37 appeal standards, acknowledging the need for “light-touch approach” while recognising intervention was warranted when decisions were based on incomplete evidence. Accordingly, the Court set aside the order passed by the Arbitral Tribunal and remanded the matter, concluding the tribunal’s views were implausible as the decision was based on summary findings primarily because the tribunal lacked access to the complete Oberoi MoU.
The Court also provided detailed disclosure directions for the Oberoi MoU, specifying exactly what could be redacted while requiring disclosure of all recitals, definitions, transaction clauses, and other substantive provisions. This redacted document must be provided to both Atul Projects and the tribunal within four weeks.
[Atul Projects India Pvt. Ltd. v. Nima Developers Pvt. Ltd., 2025 SCC OnLine Bom 2725, decided on: 23-7-2025]
Advocates who appeared in this case:
Advocate for the Petitioners: P. Chidambaram, Aspi Chinoy, Dinyar Madon, Cyrus Ardeshir, Senior Advocates; Kausar Banatwala, Ziyad Madon, Manini Roy, Neuty N. Thakkar, Vaishali Dedhia, Nisha Waghmare, Dipsy Sequiera, Advocates
Advocate for the Respondents:Darius Khambata, Senior Advocate; Rohaan Cama, Pheroze Mehta, Krishna Balaji Moorthy, Bhakti Mehta, Letishiya Chaturved, Advocates
