The case primarily centers around a flat numbered 16/199 located at Khar, West Mumbai and belonging to the Maharashtra Housing and Area Developent Authority. The originally belonging to N H Krishanan had been transferred to Manameet Singh Chadha by an agreement dated 7/04/1986 and thereby, purchased by Haresh Dayaram Thakur, the appellant in the present case fora consideration of Rs.345000 and by an agreement dated 21/11/1989. In the same year, duringa routine inspection of te premises, the Estate Manager of MHADA in his reports said that the flat in question still belonged to N H Ramakrishnan and the appellant and his brothers, Pitamber Dayaram Thakur and his sister-in-law, Raj Kumari were unauthorised occupiers of the same under 66(1)of the Maharashtra Housing and Developent Act, 1996. However, the flat was regularised in the name of the appellant after he presented his documents before the authority on 21/11/1989. Respondent no 3 filed a writ petition with the Bombay High Court challenging the eviction order of the MHADA against him even though he had shared the cost of buying the flat with his brother. However, the High Court disposed of the writ petition and directed the MHADA to look into the claims of respondent no 3.The MHADA after inspection allotted the flat in the name of the appellant.on 18/12/1998. A susequent writ petition was filed by the respondent no 3 & 4 under artcle 226 & 227 challenging the MHADA's order dating 18/12/1998 with the Bombay High Court. In this petition, they prayed for the restoration of falt no 16/199 at Khar, Mumbai in their possession that had been alloted to the appelant. The Bombay High Court on 6/3/1999 orderd the matter to be taken up by conciliation and with the consent of the parties appointed Mr. H Suresh as an conciliator between the parties. The parties agreed on the binding nature of the conciliation award and thereby, the the proceedings were initiated. On 8/8/1999, the last sitting of the proceedings, the conciliator settled the matter in the favour of the petitioner, alloting the flat in the possession of the petiotioner on the condition that the petitioner would give up all claims on an ancestral flat at R K Nagar. The counsels of the parties agreed on the same. However, the conciliator in his report dated 31/8/1999, that was being sent to the High Court noted thefollowing stipulations :
- the respondent shall vacate the flat at West Mumbai on the paying of Rs. 4 lakhs by the petitioner
- the petitioner will have no right over the ancestral flat at R K Nagar.
- the MHADA will not allot the flat no 16/199 in the petitioner
- the respondent will have no claim over the flat no. 16/199
The appellant challenged this settlement order of the conciliator in the HIgh Court but with no avail since the court rejected the plea on the grou ds that the parties had agreed on the binding nature of the award and, thereby no remedy shall be available to them in respect of it. This decision of the High Court was challenged by the appellant in the Supreme Court.
The Hon'ble Supreme Court in this case of Haresh Dayaram Thakur vs. State of Mharashtra and Ors., held that the sections 61 to 81 in part III of the Arbitration and Conciliation Act, 1996 deals with conciliation while part I, chapter I to X delas with arbitration. The Act has laid down a clear cut distinction between arbitration and conciliation and the Bombay High Court has clearly failed to take note of the same. Sectins 61, 64, 65, 67, 69, 70, 72,73,74,75,76,77 in deciding the case. In light of section 73 of the Act, it was further held that a settlement agreement can be finalised only when the terms of the settlement have been agreed to andsigned by the parties after their observations and recommendations have been incorporated in the agreement. Only such an agreement shall have the status similar to that of an arbitration award under section 74. However such provisions were violated by the High Court as well as the conciliator. Thus the order of the High Court holding the cocnciliator's agreement to be binding on the parties is not maintenable. The Bombay High Court had assigned higher status to the award by not entertaining the petition against the settlement agreemnt. Accordingly, the judgement favoured the appellant and the Supreme Court directed the High Court to dispose of the writ petition on groundsof insufficient merit. The settlement agreement drawn up by the conciliator was also set aside by the the Supreme Court.