Research › Search › Judgment

Rajasthan High Court · body

2011 DIGILAW 2050 (RAJ)

Elenees Housing and Construction Ltd. v. Govind Pujara

2011-09-22

PREM SHANKER ASOPA

body2011
JUDGMENT 1. - Heard learned counsel for the parties. 2. The applicant company has filed this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996) seeking appointment of an independent Arbitrator to adjudicate all the disputes between the parties in terms of Clause of the Agreement to Sell dated 23rd December, 1995. 3. Briefly, stated the facts of the case are that the applicant company 'Elenees Housing and Construction Ltd.' is formally known as Peeyush Construction Company and the same name was duly changed in the incorporation certificate. The agreement out which the dispute arose was executed between the erstwhile Peeyush Construction company and Shri Govind Pujara, Suresh Pujara, Ishwar Pujara, Chandi Ram @ Chandu Pujara and Sunil Pujara sons of Late Shri Meghraj on 23rd December, 1995 (Annexure-3) which contains arbitration clause 14. According to clause 14 for any of the disputes arising out between the parties during or after completion of construction, with the consent of both the parties, was to be referred Shri J.K. Chawala, nominated Arbitrator by both the parties and the decision of the Arbitrator was binding on both the parties. No party to the agreement would have right to approach any court for any dispute arising out of the agreement unless the Arbitrator for the reasonable cause is incompetent to give award. However, subsequently this agreement was terminated on 16th November, 1999, with regard to which applicant submits that the same is forged and collusive. Vide letter dated 12th March, 2004 the applicant requested Shri J.K. Chawla to enter into arbitration. Shri J.K. Chawala vide letter dated 31st March, 2004 informed Mr. Raj Kumar Sharma, Director of the applicant company that the agreement to sell dated 23.12.1995 between the five Pujara brothers and M/s. Peeyush Construction Co. Pvt. Ltd. Jaipur had been terminated by both the parties leaving no claim between both the parties and in lieu of termination, his signature by way of consent was also obtained, therefore, in absence of any agreement between the parties no proceedings for arbitration can be initiated. In the aforesaid circumstances, the applicant company has filed the present application under Section 11(6) of the Act of 1996 seeking the relief mentioned herein above in para no.2. 4. Submission of Mr. R.K. Agarwal, Sr. In the aforesaid circumstances, the applicant company has filed the present application under Section 11(6) of the Act of 1996 seeking the relief mentioned herein above in para no.2. 4. Submission of Mr. R.K. Agarwal, Sr. Advocate learned counsel appearing for the applicant is that merely on account of termination of the agreement to sell dated 23rd December, 1996 on 16th November, 1999 which is collusive and forged, the named arbitrator has no right to refuse to enter into the dispute. Mr. Agarwal further submits that as per clause 14 of the agreement to sell is not restricted to the disputes arising between the parties during and after completion of construction but it is related to 'any of the dispute' arising out of the agreement and the same has to be referred to the arbitrator. In support of his submission, Mr. Agarwal places reliance on the judgment of the Apex Court in the matter of Nandan Biomatrix Ltd. v. DI Oils Ltd., (2009) 4 SCC 495 . 5. Mr. Agarwal then submits that simply because of termination of the agreement to sell, the dispute arising out of the agreement does not debar the applicant to get the matter referred to the arbitrator as per clause 14 of the agreement. 6. Counsel for the non-applicants submits that the said arbitration clause 14 would come into play in case the dispute has arisen between the parties 'during and after completion of construction' for which Mr. J.K. Chawala has been appointed arbitrator by mutual consent. Since the possession of the property was not delivered to the applicant company as per the agreement dated 23rd December, 1995, there was no question of any construction and for referring the dispute to the named arbitrator Shri J.K. Chawala. Otherwise also, the aforesaid agreement has been terminated on 16.11.1999, therefore, no dispute survives. 7. Before proceeding further, it will be useful to refer the relevant portion of para nos. 37 and 38 of the judgment of the Apex Court in the matter of Nandan Biomatrix Ltd. (supra), which are as under:- "37. Having regard to the claim made by the applicant and the response of the non-applicant, a number of issues arise for determination. Some of them are as follows, namely, whether the deed of termination stood forged as claimed by the applicant ? Having regard to the claim made by the applicant and the response of the non-applicant, a number of issues arise for determination. Some of them are as follows, namely, whether the deed of termination stood forged as claimed by the applicant ? If not, whether it was signed by the two Directors who were not authorised to sign on behalf of the applicant ? Effect of the R&D agreement and its implementation on the supply agreement ? Whether the joint venture agreement replaced the supply agreement ? Whether the supply agreement should be read along with the joint venture agreement and the R&D agreement or whether the supply agreement should be read as a stand-alone item ? Whether the claim for alleged expenditure incurred by the applicant for supply of seedlings under the supply agreement stood extinguished by the deed of termination dated 16.10.2004 ? Whether claims, if any, under the supply agreement had ceased in view of the termination agreement dated 16-10-2004 ? 38. If the said questions are to be looked into, the conclusion is that the case involves a live claim between the parties. The applicant has claimed compensation/damages for supply of seeds to the non-applicant under the supply agreement. That is the basic claim made on behalf of the applicant. Accordingly, Issue (b) is also answered in favour of the applicant and against the non-applicant." (Emphasis supplied) 8. I have gone through the record of the arbitration application and further considered the aforesaid submissions of the counsel for the parties and the aforesaid citation. 9. On consideration of the same, I am of the view that since the named arbitrator Shri J.K. Chawala has not acted on the ground of the alleged termination of agreement to sell dated 23rd December, 1995 but the said termination of agreement on 16.11.1999 which is said to be collusive and forged. Whether the same will extinguish the rights of the parties arising out of the agreement to sell dated 23rd December, 1995 and further whether termination of the agreement on 16.11.1999 is collusive or forged are the live issues, therefore, the applicant will not be dis-entitled from filing the application under Section 11 of the Act of 1996 for resolving the dispute arising out of the agreement dated 23rd December, 1995 and as such, the applicant is entitle for appointment of independent Arbitrator. 10. 10. Accordingly, I deem it proper to appoint Mr. Justice Anoop Chand Goyal, Former Judge, resident of D-19-C, Seema Sadan, Meera Marg, Bani Park, Jaipur as an arbitrator to decide the matter. The non-applicants are at liberty to raise any other objection before the Arbitrator. Fees and other terms and conditions of arbitration shall be settled by the Arbitrator as per the Arbitration Manual. A copy of this order be sent to the Arbitrator.Application allowed. *******