Bombay High Court Halts Godrej from Handing Over Chembur Space to Titan in Decathlon Lease Dispute

In a significant ruling, the Bombay High Court has temporarily restrained Godrej Projects Development Ltd from handing over a part of the commercial property in Chembur, Mumbai, to Titan Company Ltd. This order provides a temporary relief to Decathlon Sports India, which had entered into an agreement to lease a portion of the property.

The court's order, issued on April 28, states that both Godrej Projects and Titan are restrained from making any alterations to the suit property and are directed to maintain the status quo. The court also appointed a receiver to take possession of the property and report back to the court about its precise status.

Justice Milind Jadhav, in his 64-page order, clarified that while Godrej Projects is free to hand over the remaining 50% of the commercial area to Titan on the terms and conditions agreed upon, the company must not alter the status of the property in any way. The judge observed that Godrej Projects had unilaterally repudiated the Agreement to Lease (ALT) with Decathlon for reasons that were not supported by the material on record. Specifically, Godrej Projects terminated the ALT because Decathlon refused to lease the entire commercial area, even though Titan was ready and willing to take over the entire space.

The dispute revolves around a prime commercial space of 8,192 square feet in the 'Godrej RKS' project in Chembur, which is part of a larger commercial area spanning 15,674 square feet. Decathlon Sports India, a local subsidiary of the French sporting goods retailer, had signed a term sheet with Godrej Projects to lease the 8,192 square feet property for 10 years. The agreement included 24 car parking spaces and rights to use the common area. Decathlon made a strategic decision to develop a single commercial store in the Godrej RKS project, shutting down its two other flagship stores in Bandra and Worli to focus on the Chembur area due to its potential and prime location.

However, Godrej Projects later sought to alter the terms of the ALT, insisting that Decathlon lease the entire commercial area. Decathlon, through its lawyer, argued that the lease deed should be executed strictly in accordance with the original ALT, limited to the agreed premises. Within seven days of the termination of the ALT, Godrej Projects issued a Letter of Intent (LoI) to Titan, agreeing to lease the entire commercially developed area for 21 years at a rent of Rs 42.5 lakh per month, along with 39 reserved car parking slots.

After the court's order, Senior Counsel Janak Dwarkadas, representing Godrej Projects, requested a stay on the operation of the order appointing the court receiver, as the company intends to challenge the ruling in a higher court. However, the court declined this request.

This ruling is a significant development in the ongoing lease dispute and provides temporary relief to Decathlon Sports India, allowing it to maintain its strategic business plans in the Chembur area.