pub or bar

Andheri

Evertop Apartments CHS

Lotus Logistics and Developers Private Limited

JBRL Hospitality and Wallstreet Hospitality

Court-appointed arbitrator rules in favour of society, which specified in agreement that nocould be run on premises.The first round of a legal battle between ansociety and a pub has gone the society’s way. A court appointed arbitrator has asked the pub to stop selling alcohol — as doing so goes against the agreement signed between the society and the pub’s management — and stop playing loud music.In an order passed on Monday, senior advocate Shailesh Shah, the arbitrator appointed by the Bombay High Court for the case, upheld arguments made on behalf of, Andheri (West). Shah rejected arguments made on behalf of the developer,— owner of, which run the Drinking Kulture pub.The case hinges on a “negative covenant running with the land” on which the residential society, Evertop Apartment CHS, and the commercial building, Lotus Trade Centre, stand. “Negative covenant” refers to a condition in an agreement that restricts a party from doing something.In this case, while signing the redevelopment agreement in May 2008, the society put in a condition that the developer would not sell “the free sale area to any purchaser for running a restaurant with bar, ladies bar, pub, disco or for any immoral/antisocial activity, etc banned as per society’s rules and bylaws”. It allowed the developer to sell the premises only for a restaurant (not serving liquor), bank, office, etc.Represented by advocates Birendra Saraf and Pooja Kshirsagar from IC Legal, the society filed a suit in the Bombay HC, where Justice SJ Kathawalla directed an arbitrator to hear the issue.The main defence taken by Lotus, JBRL and Wallstreet was that when the society had terminated the development agreement, it could not seek to enforce a specific clause from the agreement. The developers’ lawyer, senior advocate Pravin Samdani, also argued that seeking to enforce a specific clause involves different proceedings — not the kind the society had undertaken.The defendants also submitted that the society couldn’t restrict a business; it was not able to show any harm/inconvenience to them; that once the society had quantified the damages against the builder as Rs 50 lakh and against JBRL as Rs 1.10 crore, it could not seek injunction; that Wallstreet had spent Rs 3.66 crore on the pub.But the arbitrator ruled that the agreement was for the society’s redevelopment, so there was no need for different proceedings; the restriction on the developer was permanent, therefore the agreement’s termination have no effect. And the society had put in a very specific, limited restriction. Finally, spending money on an impermissible facility didn’t disentitle the society from claiming relief.The arbitrator observed: “(That) it is a case where actual damages could be ascertained can’t be accepted... prima facie the actual damage caused to senior citizens by playing loud music till 4 am... or the impression on young minds by a drinking pub, is impossible of computation in terms of money.... The damage which it would cause would be irreparable.”