1. Court’s decision
The Bombay High Court has dismissed a Section 34 petition challenging an arbitral award involving a decades-long dispute over multiple parcels of tribal land in Malad (East), Mumbai, earmarked for slum rehabilitation development. The Court upheld the arbitral award that validated a chain of agreements dating back to 1981, reaffirmed the respondent-developer’s development rights, nullified competing agreements executed in 2014, and granted injunctions restraining the petitioners from interfering with the slum redevelopment process.
Significantly, the Court held that Section 34 jurisdiction is strictly confined to pleaded grounds, that unpleaded objections raised orally cannot be considered, and that the arbitrator’s findings on permissions under the BTAL Act and MLRC were plausible. The Court refused to re-appreciate evidence on readiness and willingness, stamp duty issues, or tribal-land permissions, holding that none of these were properly pleaded and that the award did not suffer from patent illegality or conflict with public policy.
2. Facts
The dispute concerns three contiguous parcels of land in Malad (East), collectively referred to as the “suit properties”. These lands were treated as tribal lands, originally held by Janglya Shanwar Khanjode, whose heirs (Petitioners 1–23) inherited the property following mutation under Section 32M of the BTAL Act.
In July 1981, several legal heirs executed a development agreement and an irrevocable power of attorney in favour of M/s Makewell Corporation. In 1997, Makewell assigned its rights to the respondent through an MOU involving the original owners.
Over the next two decades, multiple deeds, assignments, confirmations and development agreements were executed, including a significant 2010 set of documents reaffirming the respondent’s development rights. During the same period, part of the land was taken up for slum rehabilitation under the Slum Act, with Jai Ganesh SRA CHSL obtaining approvals, Annexure-II, Letter of Intent and IODs for redevelopment.
Meanwhile, in 2014, Petitioners 1–23 executed conflicting agreements, powers of attorney and MOUs in favour of Petitioner No. 24, creating overlapping claims to development rights. This led the respondent to initiate Section 9 proceedings, ultimately resulting in a reference to arbitration.
The arbitral tribunal declared the respondent’s agreements valid, the 2014 agreements void, and awarded injunctions restraining petitioners from submitting competing proposals to the SRA. The tribunal rejected monetary claims on both sides.
Aggrieved, the petitioners filed a Section 34 challenge alleging incapacity, invalidity of arbitration agreement, non-arbitrability involving tribal land, improper reliance on the Jai Ganesh SRA judgment, and errors concerning permissions under Section 36A MLRC and Section 43 BTAL.
3. Issues
The Court was required to address:
- Whether the petitioners could raise new, unpleaded grounds during oral arguments under the umbrella of public policy or patent illegality.
- Whether tribal-land restrictions under Section 36A MLRC and Section 43 BTAL rendered the development agreements void and outside the scope of arbitration.
- Whether the arbitrator erred in relying on the Jai Ganesh SRA judgment, which petitioners alleged was procured through a proxy society.
- Whether failure to examine stamp duty, readiness and willingness, and other factors constituted patent illegality.
- Whether the award dealt with disputes alleged to be non-arbitrable under statutory land law regimes.
4. Petitioners’ arguments
The petitioners argued that the arbitral award was vitiated by failure to record reasons, mere reproduction of submissions, and non-application of mind. They contended that the arbitrator ignored statutory prohibitions under Section 36A MLRC and Section 43 BTAL, which render transfers or development of tribal lands void unless prior permission is obtained. They alleged the award improperly relied on Jai Ganesh SRA CHS, which they claimed was a proxy litigation engineered by the respondent.
Petitioners also asserted that many agreements were unregistered, insufficiently stamped or executed without mandatory permissions, rendering them inadmissible. They argued that the arbitrator did not examine readiness and willingness—an essential condition for specific performance—and wrongly upheld transactions executed by illiterate tribal heirs who allegedly suffered incapacity. They invoked public policy, patent illegality, violation of natural justice, and jurisdictional errors.
5. Respondent’s arguments
The respondent maintained that the award took a plausible view based on evidence and that Section 34 does not permit re-appreciation of facts or reconsideration of contractual interpretations. It argued that most objections raised during arguments were absent from the pleadings and were therefore impermissible.
The respondent emphasized that permissions under Section 43 BTAL could be obtained at conveyance stage, not at agreement stage, relying on Balu Baburao Zarole. It highlighted that stamp duty deficiencies had been cured, as reflected in the arbitrator’s minutes, and that the petitioners’ own defences—including reliance on alleged oral termination—confirmed the agreements’ validity.
They contended that the Jai Ganesh SRA ruling was binding and that the slum redevelopment process had progressed substantially, with construction completed for the earlier SRA society and approvals granted for the remaining land.
6. Analysis of the law
The Court emphasized that Section 34 is a constrained remedy: an arbitral award can only be challenged on specific statutory grounds, and all such grounds must be pleaded. The Court traced the jurisprudence from Patel Engineering, Ashesh Busa, Hindustan Construction Co., and Sal Udyog, explaining that although courts may, in rare cases, exercise the “court finds that” power to consider patent illegality or public policy defects, such review still requires a foundational plea and cannot be used to introduce new grounds wholesale.
On the tribal-land issue, the Court found the arbitrator relied on binding precedent and properly considered Section 43 BTAL and Section 36A MLRC. It noted that permissions can be obtained at conveyance and that the Jai Ganesh SRA judgment had already settled several aspects, making the petitioners’ objections untenable.
On reasons, the Court held that the arbitrator’s reasoning need not be elaborate and that reproducing submissions does not invalidate an award if the tribunal adopts and applies them. The Court stressed that findings on stamp duty, readiness and willingness, and termination were factual and not open to review under Section 34.
7. Precedent analysis
• Patel Engineering Co. Ltd. v. Konkan Railway Corp. — Strict pleading requirements apply under Section 34; unpleaded grounds cannot be introduced later. The Court applied this to reject the petitioners’ new oral objections.
• Ashesh Busa v. Atul Gandhi — Reinforces that Section 34 is not a suo motu jurisdiction. Applied to bar new arguments.
• Hindustan Construction Co. Ltd. — Amendments may be allowed in rare cases, but only when the application is timely and interests of justice demand. Distinguished because no amendment was sought.
• Sal Udyog Pvt Ltd — Patent illegality may be examined if apparent on the face of the award, but cannot create entirely new grounds. Applied to limit review.
• Balu Baburao Zarole — Permission under Section 43 BTAL is required at conveyance, not agreement stage. Relied on in affirming arbitrator’s reasoning.
• Jai Ganesh SRA CHS — Binding precedent supporting the validity of development steps; applied to uphold respondent’s development rights.
8. Court’s reasoning
The Court held that almost all grounds argued orally were absent from the pleadings. Section 34 petitions must specifically plead material facts, failing which objections cannot be entertained. The Court found that the arbitrator’s findings on MLRC and BTAL permissions were plausible, that readiness and willingness was neither pleaded nor raised as an issue, and that stamp duty and registration objections had been waived or addressed during arbitration.
The Court rejected allegations of incapacity, noting that illiteracy does not constitute incapacity when the party is represented and their participation is recorded. It also rejected arguments about proxy litigation in Jai Ganesh SRA, holding that the arbitrator was correct in relying on binding High Court precedent.
Finding no violation of public policy, no patent illegality, and no arbitrable defect, the Court refused to disturb the award.
9. Conclusion
The Section 34 petition was dismissed in its entirety. The Court affirmed that arbitral awards cannot be challenged through unpleaded, post-hoc objections and that the award in this case reflected a plausible and legally sound interpretation of long-standing development agreements. The arbitrator’s validation of the respondent’s rights and nullification of the 2014 agreements stands undisturbed. Costs and injunction orders remain intact.
10. Implications
This judgment reinforces strict procedural discipline in Section 34 challenges. Developers and landowners in slum-rehabilitation projects must raise all objections explicitly and cannot rely on broad “public policy” claims to reopen findings. The ruling strengthens the finality of arbitral awards in complex redevelopment disputes and clarifies the application of Section 36A MLRC and Section 43 BTAL in contexts where slum schemes and historic agreements coexist. It also sends a clear signal that courts will not derail redevelopment projects based on belated technical objections.
Case Law References
• Patel Engineering Co. Ltd. v. Konkan Railway Corp. — Establishes strict pleading requirements under Section 34; applied to reject new arguments.
• Ashesh Busa v. Atul Gandhi — Reiterates absence of suo motu powers under Section 34; applied.
• State of Maharashtra v. Hindustan Construction Co. Ltd. — Amendment principles explained; distinguished.
• State of Chhattisgarh v. Sal Udyog Pvt Ltd. — Patent illegality test; applied narrowly.
• Balu Baburao Zarole — Section 43 BTAL permission at conveyance stage; relied upon.
• Jai Ganesh SRA CHS v. State of Maharashtra — Binding precedent on slum redevelopment; applied.
FAQs
1. Can new objections be raised during oral arguments in a Section 34 petition?
No. The Court held that all grounds must be pleaded. Unpleaded objections cannot be introduced later unless they fall within extremely narrow exceptions under public policy or patent illegality.
2. Do agreements involving tribal land require prior permission under Section 43 BTAL?
The Court affirmed that permission is required at conveyance stage, not for agreements to develop or assign rights, aligning with established precedent.
3. Can an arbitral award be set aside for lack of detailed reasoning?
No. Awards need only contain intelligible reasons. Adoption of a party’s submissions is permissible if the arbitrator’s reasoning is discernible.
