Actor's dispute:SC says firm can raise issue before arbitrator

The Supreme Court has said that a Mumbai-based real estate firm, entangled in a property dispute with thespian Dilip Kumar, could raise the issue of alleged breach of contract by the actor before the apex court- appointed arbitrator.
The top court, which had on August 30 asked the actor to deposit Rs 20 crore with its registry as part payment to the builder with whom the agreement to develop his prime Pali Hill property ran into rough weather a decade ago, was informed that Kumar had deposited the money as directed by the court.
The actor had entered into an agreement with Prajita Developers Pvt Ltd for developing his property, measuring 2412 square yards, and the dispute arose later as no construction was raised and Kumar wanted back the plot whose possession was with the firm.

The top court, in its August 30 order, had appointed former apex court judge Justice P Venkatarama Reddy as the arbitrator to decide whether Prajita was entitled for more as damages apart from Rs 20 crore.
A bench comprising Justices J Chelameswar and S Abdul Nazeer was informed that as per the Mumbai Police's report, possession of the property had been handed over to the actor.
"Therefore, the first respondent (Prajita) is permitted to withdraw the said amount of Rs 20 crore deposited in the registry of this court," the bench noted in its order.

The bench was dealing with an application seeking certain clarifications including that the developer was entitled to demonstrate before the court-appointed arbitrator that there was breach of the agreement between the parties allegedly on part of Kumar.

"We accordingly clarify that it would be open to Prajita Developers to plead and establish before the arbitrator that there is a breach of contract on the part of the appellant (Kumar) entitling Prajita Developers for a decree of specific performance only for the limited purpose of examining the further questions whether Prajita Developers is entitled to damages and, if entitled, what would be the quantum of damages," the court said.
"We also make it clear that all the parties to the agreement are entitled to raise such claims and defences, as the case may be, with regard to the respective claims of damages (if any)," the bench said.

In March 2016, the apex court had granted relief to Kumar by rejecting a plea to restrain him from creating third party rights over the Pali Hill property till the arbitration of the dispute with a private developer.
According to the original agreement, the owner as well as the developers had to share 50 per cent each of the residential flats to be built on the land.
Prajita developers had thus obtained the leasehold rights in the property together with the bungalow standing thereon by virtue of lease of September 25, 1953. But the developers had failed to raise any construction.

The Bombay High Court had last year rejected the plea of the realty firm.