Arbitration Order Set Aside in Dilip Kumar’s Bungalow Row

The Bombay high court set aside an Arbitration Tribunal’s order, which restrained veteran actor Dilip Kumar from creating third party rights in his Pali Hill property and required him to give the undertaking to secure the property worth Rs 25 crore, till there was a decision on the damages claimed by the developer.

Hon’ble Justice BP Colabawalla held there was no need for the tribunal to decide how Kumar would settle the number of damages. He said the tribunal had misconstrued directions of the Supreme Court, which had referred the developer’s claim for damages to the authority. Supreme Court had asked the tribunal to decide on the quantum of damages.

The order comes in the backdrop of an arbitration petition in which the developer had claimed damages of Rs176 crore, saying Mr Kumar had flouted a 2006 agreement to develop his Pali Hill bungalow. After Mr Kumar reneged on the agreement and appointed another developer, the first developer approached the HC in 2015, and later the SC.

The Supreme Court-appointed arbitrator had in May 2018 said Dilip Kumar must submit an undertaking, saying he will “not alienate or encumber or part with the possession of the property worth Rs 25 crore” till the arbitration proceedings concluded. The arbitrator had stated that this undertaking was in respect to Kumar’s share (25%) in the property. This order was challenged by Dilip Kumar in the arbitration petition in the High Court.

The developer’s advocate, Aspi Chinoy, argued that as the Pali Hill property was the only asset Kumar owned, and if the tribunal order was set aside, then the damages could not be settled. However, Kumar’s advocate told the High Court that he owned another property at Lonavala and the developer’s damages could be paid from that asset.

After hearing both sides, Justice Colabawalla said, “Looking at it from any angle, the tribunal was wholly unjustified in directing respondent no.1 (Kumar) to give an undertaking. It was irrelevant whether the undertaking was in respect of specific property or any other unencumbered personal property belonging to respondent no.1.”