Dilip Kumar bungalow row: HC sets aside tribunal’s order against actor

The order comes in the backdrop of an arbitration petition in which the developer had claimed damages of Rs176 crore, saying Kumar had flouted a 2006 agreement to develop his Pali Hill bungalow

The Bombay high court (HC) on Monday 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 an undertaking to secure the property worth ₹25 crore, till there was a decision on the damages claimed by the developer.

Actor Dilip Kumar’s Pali Hill bungalow has been at the centre of legal battle. (HT File Photo)

Justice BP Colabawalla held there was no need for the tribunal to decide how Kumar would settle the amount of damages. He said the tribunal had misconstrued directions of the Supreme Court (SC), which had referred the developer’s claim for damages to the authority. The SC 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 Kumar had flouted a 2006 agreement to develop his Pali Hill bungalow. After Kumar reneged on the agreement and appointed another developer, the first developer approached the HC in 2015, and later the SC.

The SC-appointed arbitrator had in May 2018 said Kumar must submit an undertaking, saying he will “not alienate or encumber or part with the possession of the property worth ₹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 Kumar in the arbitration petition in the HC.

Advocate Rajeev Kumar, representing the actor, argued that such an order of the tribunal was not fair as the developer’s claim for damages could be settled through another property Kumar owned. He argued that as the claim was not a liability till it was decided whether the developer was entitled to the damages, making Kumar submit such an undertaking was not right.

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 HC that he owned another property at Lonavala and the developer’s damages could be paid from that asset.

After hearing both sides, 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.”