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Madhya Pradesh High Court · body

2016 DIGILAW 381 (MP)

Atul Agrawal v. Ashima Sayal

2016-05-09

ROHIT ARYA

body2016
ORDER 1. Before advertintg to the facts as contended in the AC in hand, it is relevant to mention that earlier, the applicant had filed Arbitration Case No.12/2014 with a grievance that despite efforts made, dispute between the parties is not resolved and also as non-applicant did not respond to the notice for appointment of arbitrator, applicant had approached this Court invoking jurisdiction under sections 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act, 1996) as per clause 24 of the agreement. 2. On notice, respondents had entered appearance and objected to the maintainability of the arbitration case on the premise that agreement having not been sufficiently stamped, since was not admissible, therefore, the arbitration clause as contained therein cannot be pressed into service for appointment of arbitrator. The objection being sustained by order dated 1.12.2015, the arbitration case was held not maintainable with liberty to the applicant to approach the competent authority for payment of stamp duty. Learned counsel for the applicant contends that thereafter the agreement dated 28.10.2008 (Annexure A-2) was impounded by the Collector and applicant affixed the deficit Court fee on the instrument. As such, the document became admissible in evidence. 3. Accordingly, the instant AC has been filed seeking relief for appointment of arbitrator in terms of clause 24 of the agreement after expiry of 30 days' of notice issued by the applicant on 7.1.2016 (Annexure A-12 colly.) explaining the area/issues of disputes and differences between the parties offering names of Hon'ble Judges (since demitted the office) as his arbitrators and requesting non-applicants to appoint an arbitrator of their choice. However, the notice has not been replied. 4. Learned counsel for the applicant contends that dispute between the parties has been detailed in paragraphs 3(i) to 3(vii) of the application. It is contended that neither the non-applicants are complying with the clauses of the original agreement nor the supplementary agreement. The terms contained therein are related to division of property and handing over the same for the purpose of construction as per sanctioned map. 5. Therefore, as a dispute exist, this Court if deems it proper may appoint an arbitrator for the purpose of resolution of dispute. 6. The terms contained therein are related to division of property and handing over the same for the purpose of construction as per sanctioned map. 5. Therefore, as a dispute exist, this Court if deems it proper may appoint an arbitrator for the purpose of resolution of dispute. 6. Shri Harish Dixit, learned counsel for the non-applicant has taken exception to the tenability of clause 24 of the agreement by referring to the provision contained under section 10 of the Act, 1996. It is contended that as the aforesaid clause contemplates appointment of even number of arbitrators and the same having not permissible under section 10 of the Act, 1996, therefore, no relief under the arbitration clause can be claimed. Learned counsel further contends that even otherwise, there is no arbitral dispute between the parties. Therefore, for want of arbitral dispute, right to claim arbitration does not arise. Alternatively, even if this Court reaches the conclusion that there is arbitral dispute between the parties, still the non-applicants are not interested to appoint an arbitrator. Learned counsel relied upon the judgment of Hon'ble Supreme Court in the case of Sime Darby Engineering Sdn. Bhd. v. Engineers India Limited [ (2009)7 SCC 545 ], in the context of the objection as regards provision of even number of arbitrators contained under clause 24 of the agreement. Further, relied on the judgment of Hon'ble Supreme Court in the case of Kss Kssiipl Consortium Through its Constituted Attorney Devendra Kumar v. GAIL (India) Limited [ (2015)4 SCC 210 ], in the context of non-existence of arbitral dispute between the parties. With the aforesaid submissions, learned counsel submits that the application deserves to be dismissed. 7. Heard learned counsel for the parties. 8. There is no dispute between the parties that there exist an agreement dated 28.10.2008 (Annexure A-2) between the applicant (developer) and the non-applicant (owner) for the purpose of developing the property situated at Nai Sarak, Gwalior by constructing and putting a commercial multistoried complex. The applicant/developer having requisite expertise in construction of such complexes has agreed for the said purpose. Therefore, the agreement is executed containing reciprocal obligations of parties and is in respect of freehold and vacant land admeasuring about 1133.73 sq.mtrs., approximately of the ownership of non-applicant 1. The developer is required to get maps prepared and approved from competent authorities of Gwalior. Therefore, the agreement is executed containing reciprocal obligations of parties and is in respect of freehold and vacant land admeasuring about 1133.73 sq.mtrs., approximately of the ownership of non-applicant 1. The developer is required to get maps prepared and approved from competent authorities of Gwalior. The non-applicant/owner is obliged to permit the developer to enter upon such property and to do such acts and things as may be considered necessary or conducive for construction of the commercial multistoried complex at developer's cost or expenses. The multistoried complex shall have basement floor, ground floor, first floor, second floor and third floor with terrace on top as per permission granted. The apportionment of the property is described in clause 6 of the agreement which reads as under : “6. That, it has been agreed by and between both the parties that the owner will get the entire ground floor of the total saleable built up area and developer get the entire first floor of the total saleable built up area. That remaining area on all the constructed floors except the ground floor and the first floor will be divided in equal proportion to both the parties, i.e., owner and developer i.e., 50% of the total built up area on second floor, third floor,etc., owner will get the above area in lieu of its land and developer will get the above area in lieu of investment and expertise involved in construction and development of the said commercial multistoried complex.” 9. Learned counsel for the applicant refers to paragraphs 3(i), (ii), (iii) and (vii) of the notice dated 7.1.2016 in the context that a dispute exist between the parties as detailed therein which reads as under: “(i) That, as per the agreement, you noticees were to get the entire ground floor of the total saleable built up area and my client being the developer was to get entire first floor of the total saleable built up area and second floor, third floor, etc. was to be divided in equal shares, but you noticees are not making division of the property as per clause 6 of the agreement. (ii) That, as per the agreement, after final approval of the map from the competent authority for division of constructed area, i.e., second floor, third floor, etc., supplementary agreement was to be executed between you noticees and my client. (ii) That, as per the agreement, after final approval of the map from the competent authority for division of constructed area, i.e., second floor, third floor, etc., supplementary agreement was to be executed between you noticees and my client. Permission for construction has been granted by the Town and Country Planning Department, Gwalior on 29.11.2008 in case No.1787/03654/Nigrani/2008 and by the Municipal Corporation, Gwalior on 27.4.2009 in case No.78/2009×3/3 through letter No.67A, but even after final approval of map from the competent authority you noticees are not making division of the constructed area i.e., second floor, third floor, etc., More so, a coloured map of demarcation between you noticees and my client was also to be prepared after getting final permission, which is also not done due to the attitude of you noticees in spite of best efforts made by my client. (iii) That, as per the agreement, after division of the property as provided in the agreement, the respective parties cal sale, gift, mortgage their respective portion, but because you noticees are not executing the supplementary agreement making division of the property, my client is not in a position to fetch the value of the property on the second floor, third floor, etc., though the structure is completed and brick and plaster work is also completed upto 70% in which my client has invested huge amount, but because of inaction on your part in not making division of the property i.e., second floor, third floor, etc., my client has come under financial distress. (vii) That, apart from above, it is also clear that the delay caused in construction and development due to any defect in title of owner would not be attributable to the developer as per clause 17 of the agreement dated 28.10.2008 as the Surrender deed dated 11.12.1999 executed by Shri Ravi Jham and Shri Raman Jham in favour of you noticee No.1 is not yet registered and therefore title has not yet passed to you noticee No.1. Needless to mention that this was obligatory on your part, which you failed to perform inspite of repeated reminders. Moreover, the registered surrender deed dated 24.3.2006 does not related to the property in question but is I respect of some property situated at Shivram Kole Ka Bada, Lashkar, Gwalior (M.P.,).” 10. Needless to mention that this was obligatory on your part, which you failed to perform inspite of repeated reminders. Moreover, the registered surrender deed dated 24.3.2006 does not related to the property in question but is I respect of some property situated at Shivram Kole Ka Bada, Lashkar, Gwalior (M.P.,).” 10. Referring to aforesaid facts of dispute in the application/notice, learned counsel for the applicant submits that jurisdiction of this Court while deciding application under section 11(6) of the Act, 1996 to ascertain existence of the dispute is limited in nature. This Court is required only to ascertain as regards existence of dispute. This Court is not expected to address upon the merits of dispute for the purpose of arbitration as according to learned counsel, the same shall be in the realm of arbitrator. It is submitted that looking to the facts and circumstances of the case, it is a fit case for appointment of arbitrator under section 11(6) of the Act, 1996. 11. Upon careful consideration of the submissions advanced by learned counsel for the parties and material placed on record, this Court is of the view that there exist dispute between parties. Hence, the objection raised by the non-applicant/owner that arbitral dispute does not exist is misconceived and devoid of substance. 12. Learned counsel for the applicant submits that the applicant/developer has no objection if this Court ignores the even number of arbitrators as provided for in clause 24 of the agreement and appoint an independent arbitrator. 13. There is a fair option given by learned counsel for the applicant for appointment of independent arbitrator by this Court and, therefore, the argument advanced by learned counsel for the nonapplicant/owner cannot be countenanced in the light of the judgment of Hon'ble Supreme Court in the case of Sime Darby Engineering Sdn. Bhd., (supra). Hence, the objection in that behalf is overruled. 14. Following the principle of law as propounded by Hon'ble Supreme Court in the case of Kss Kssiipl Consortium Through its Constituted Attorney Devendra Kumar (supra), this Court is satisfied that arbitral dispute exist between the parties which is to be resolved by the arbitrator. 15. Consequently, this Arbitration Case No.2/2016 is allowed. This Court hereby appoints Hon'ble Justice Mr. K. K. Lahoti (since demitted the office, High Court of Madhya Pradesh as arbitrator. Both the parties are directed to appear before Hon'ble Justice Mr. 15. Consequently, this Arbitration Case No.2/2016 is allowed. This Court hereby appoints Hon'ble Justice Mr. K. K. Lahoti (since demitted the office, High Court of Madhya Pradesh as arbitrator. Both the parties are directed to appear before Hon'ble Justice Mr. K.K. Lahoti on his given address viz. B-56. Sector-14, Noida – 201301 on 6.6.2016 or any other date convenient to Hon'ble Justice Mr. K.K.Lahoti. 16. The arbitrator's fee, secretarial expenses and other expenses shall be discussed by both parties with Hon'ble Justice Mr. K.K. Lahoti and both parties shall bear the expenses 50:50. 17. Registry is directed to communicate the order passed by this Court to Hon'ble Justice Mr. K.K. Lahoti with a request to take up the matter on arbitration.