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2019 DIGILAW 2355 (PNJ)

Anita Devi Dayma v. Graviss Hotels

2019-08-27

HARINDER SINGH SIDHU, RAJIV SHARMA

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JUDGMENT : Harinder Singh Sidhu, J. In this appeal the appellant has challenged an order dated 13.10.2018 passed by Additional District Judge-cum-Presiding Judge, Special Commercial Court at Gurugram dismissing the application filed by her under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for setting aside the arbitral award dated 04.03.2016 passed by the Sole Arbitrator. 2. A dispute between the appellant and respondent arising out of agreement to sell dated 18.3.2008 was referred to the Sole Arbitrator who made an award dated 04.03.2016. 3. Respondent-Graviss Hotels and Resorts Limited (hereinafter referred to as 'the claimant') filed the claim before the Arbitrator stating that it was a Company engaged in the business of setting up hotels. It intended to set up a hotel in Gurgaon. It approached various persons/entities for outright purchase of parcels of land as per its requirement. Its representatives Raman Mehra (CEO), Vikram Seth, late Kishore Bakshi had met Satyawarat Sangwan Real Estate agent. He introduced them to Devi Singh Rawat Real Estate agent. The latter claimed that he was aware of three separate parcels of land available for sale which would meet the requirement of the claimant. 4. Mahesh Dhamia husband of the appellant (Anita Devi), D.B.Jain and Antram Jharia along with Rajesh, Devi Singh Rawat and Satyawarat Sangwan met the representatives of the claimant on 27.02.2008 with a proposal to sell the land belonging to them. It was represented by them that the appellant, D.B.Jain and Antram Jharia owned three different pieces of land which were adjacent and contiguous to each other. While negotiating the purchase of the land with the three owners, the claimant wanted to conduct a joint survey of the land to ascertain its boundaries. However, Devi Singh Rawat acting on behalf of the land owners insisted that the survey should be conducted after the agreement to sell was entered into. It was projected that a survey would send a message that the land had already attracted a potential buyer. This would deter other interested purchasers from approaching the sellers and if the claimant did not eventually purchase the land it would result in loss of opportunity to sell the land to other parties. 5. The appellant was owner in possession of 05 Kanal 04 Marlas of land situated within the revenue estate of village Tigra, Tehsil and District Gurgaon. This would deter other interested purchasers from approaching the sellers and if the claimant did not eventually purchase the land it would result in loss of opportunity to sell the land to other parties. 5. The appellant was owner in possession of 05 Kanal 04 Marlas of land situated within the revenue estate of village Tigra, Tehsil and District Gurgaon. She agreed to sell the aforesaid land to the claimant for a sum of Rs.7.32 crores. The claimant paid sum of Rs.five lacs vide cheque dated 26.02.2008 i.e. before the execution of the formal agreement to sell. The agreement to sell was executed on 18.03.2008. The relevant clauses thereof are as under:- "Clause 2 That the buyer had this day paid a total amount of Rs.72,70,000/- (Rupees seventy two lakhs seventy thousand only) vide DD No.12544 dated 15.03.2008 drawnn on AXIS Bank, towards part consideration, the receipt of which the seller hereby admits and acknowledges. The seller also hereby acknowledges receipt of Rs.5,00,000/- (Rupees five lakhs only) vide cheque No.6244 drawn on AXIS Bank dated 26.02.2008. Clause 6 That the seller shall allow the buyer to conduct an official survey [jointly by the Patwari and the architect of the buyer] of the said land to ascertain the exact boundaries thereof, and its clear demarcation and furnish survey plans to the buyer/ advocates of the buyer. Clause 13 The seller is aware that the buyer is negotiating with (i) D.B.Jain the owner of the adjoining consolidated piece and parcel of land bearing khewat No.68, khatoni no.101 mustteel no.1 Rect No.1 Killa no.14(0-3) Mustteel No.1, Kila No.17/1(2-16) Mustteel No.1, Kila No.18/1(1-15) (1-0) total admeasuring in aggregate 4 Kanal 14 marlas situated at village Nangli Umarpur, Gurgaon, district Gurgaon and (ii) Mr.Anantram, Mr.Satpal and Mr.Dhaniram the ownrs of the adjoining land bearing khewat no.67/67, khatauni no.100, mustteel No.1 Killa No.17/2(4-0) mustteel No.1 Killa No.18/2(4-1), kita 2 total admeasuring approximately 8 kanals 1 marla (1 acre) situated at village Nangli Umarpur, district Gurgaon for the purchase of the same. The seller agree that in the event the proposed purchase of such adjoining pieces of land fails to consummate, then in that event, this agreement shall stand terminated and the seller shall refund all the amounts received from the buyer till then." 6. The seller agree that in the event the proposed purchase of such adjoining pieces of land fails to consummate, then in that event, this agreement shall stand terminated and the seller shall refund all the amounts received from the buyer till then." 6. The 1st schedule to the agreement describes the land agreed to be sold by the appellant and its boundaries: "All that piece of land bearing khewat No.34/32, Khatauni No.41, Mustteel no.29, killa no.22/2(3-8) mustteel no.36, kila no.3(1-16), kita 2 total admeasuring 5 kanals 4 marlas situated at village Tigra, District Gurgaon, bounded as follows: North: Road for Sector 56 East: Land of Mr.D.B.Jain and Mr.Antram etc. South: Land of Splendour Builders and Mr.Antram etc. West: Agricultural land" 7. Another amount of Rs.72.7 lacs was paid by demand draft as earnest money to the appellant by the claimant as part consideration as per the recital in the agreement. 8. Similar agreements to sell dated 18.03.2008 were entered into by the claimant with the other two land owners namely Antram Jharia and D.B. Jain. 9. The claimant got a joint survey of the properties conducted on 2.4.2008. This survey revealed that a plot of land measuring approximately 12,000 ft. belonging to HUDA fell between the properties belonging to D.B.Jain and the appellant (Anita Devi). Thus the survey revealed that plots of the appellant and D.B.Jain were not adjacent and contiguous to each other. As the claimant was interested in a single piece of land for setting up of a hotel, it served a notice terminating the agreement alleging that there was misrepresentation on the part of the appellant. 10. Through the claim petition it sought recovery of the amount of Rs.77,70,000/- paid to the appellant and Rs.56,12,261/- as interest from 18.3.2008 till the filing of the claim petition. Another amount of Rs.15,54,000/- was sought as loss of opportunity. 11. The case of the appellant was that there was no misrepresentation on her part. She belongs to the rural area and is a household lady. Her signatures were obtained by misrepresentation. As per the agreement dated 18.3.2008 the sale-deed was to be executed within 34 days i.e. upto 21.4.2008. The claimant having failed to do so the agreement automatically stood terminated and earnest money forfeited. Neither the appellant nor her representative had made any assertion that her land adjoins the land of D.B.Jain. She was only concerned about her property. As per the agreement dated 18.3.2008 the sale-deed was to be executed within 34 days i.e. upto 21.4.2008. The claimant having failed to do so the agreement automatically stood terminated and earnest money forfeited. Neither the appellant nor her representative had made any assertion that her land adjoins the land of D.B.Jain. She was only concerned about her property. As clearly recorded in the agreement to sell she had handed over the copies of the title documents to the claimant so there was no question of the claimant being misled. She also filed a counterclaim seeking damages, etc. from the claimant. 12. The learned Arbitrator framed the following questions as arising for consideration: "1.Who had committed breach of the agreement? 2. Whether there is any misrepresentation by the respondent, if so its effect. 3. Whether claimant is entitled to the amount claimed? 4. Whether earnest money has rightly been forfeited? 5. Whether the counter claim can be entertained or not? 6. Whether respondent is entitled to any amount, if so how much? 7. Relief." 13. The learned Arbitrator noted that while describing the boundaries of the land in the agreement sell it was mentioned that on the east of the land of the appellant was the land of D.B.Jain, which was described as contiguous. But the survey revealed that between the lands of the appellant and D.B.Jain there was a piece of land belonging to Haryana Urban Development Authority. Thus, the lands were not contiguous. He thereby concluded that the appellant had given incorrect description of the boundaries in the agreement to sell. Further, though there was no specific mention in the agreement to sell that the land was required for setting up a hotel, the witness of the claimant Vikram Seth in his statement had clearly indicated that the land was required for setting up of a hotel and three contiguous plots were intended to be purchased. There was no suggestion to him on behalf of the appellant that the claimant did not want to set up a hotel. 14. The learned Arbitrator concluded that the claimant wanted to purchase contiguous pieces of land for setting up a hotel. It was represented to it that the land of the appellant, D.B.Jain and Antram Jharia were contiguous. The claimant had wanted to get a joint survey of the land done before entering into the agreement to sell. 14. The learned Arbitrator concluded that the claimant wanted to purchase contiguous pieces of land for setting up a hotel. It was represented to it that the land of the appellant, D.B.Jain and Antram Jharia were contiguous. The claimant had wanted to get a joint survey of the land done before entering into the agreement to sell. The agent of the land owners insisted that such survey be done only after entering into an agreement. Immediately after the agreement the survey was conducted which revealed that the lands were not contiguous. The claimant realised that there had been misrepresentation about the contiguous nature of the land. It immediately terminated the contract. Accordingly, it was concluded that the appellant had committed breach of the agreement as there was misrepresentation on her part and the claimant was within its right to terminate the agreement. 15. Award was passed against the appellant for a sum of Rs.77,70,000/-. The claimant was also held to be entitled to interest @ 7.5% per annum from the date of appointment of the Arbitral Tribunal till final payment. The counter claim of the appellant was dismissed. 16. In the petition under Section 34 of the Act filed by the appellant against the arbitral award it was contented by her that the award was contrary to the provisions of law and in conflict with public policy and being patently illegal was liable to be set aside. 17. The learned Court rejected their contentions and dismissed the petition. 18. The Court held that the agreement dated 18.3.2008 had to be performed within 34 days. The appellant (seller) had permitted the claimant (buyer) to conduct a survey of the land to ascertain the exact boundaries. All the records pertaining to the title, location plan and copy of the master plan had already been given to the lawyer as per the stipulation in the agreement itself. It was an admitted fact that the agreement had been got drafted by the claimant. On the basis of evidence before it, the Arbitral Tribunal observed that the witness of the appellant had admitted that the appellant was aware of two other land owners and that the claimant was negotiating with them. There were prior negotiations between the parties before the execution of the agreement which was clear from the fact that advance payments had been made to the appellant before the execution of the agreement. There were prior negotiations between the parties before the execution of the agreement which was clear from the fact that advance payments had been made to the appellant before the execution of the agreement. The survey conducted after the execution of the agreement revealed that the boundaries as described in the agreement were not correct. Thereafter the claimant terminated the contract by sending a notice. From this it could no way be concluded that the Arbitrator had decided the dispute contrary to the terms and conditions of the agreement or that the award was against public policy or vitiated on any ground. 19. Before us also the appellant has not been able to establish as to how the award is vitiated on any ground. 20. It is clear that the appellant was aware of the requirement of the claimant of one compact piece of land. The misrepresentation by the appellant about her land being contiguous is evident on record. Apart from the other evidence taken note by the Arbitral Tribunal, Clause 13 of the agreement reproduced above clearly indicates that the appellant was aware of the claimant negotiating with two other buyers having adjoining consolidated piece of land. The appellant agreed that in the event the purchase of the adjoining pieces of land fails, her agreement would stand terminated and she would refund all the amounts received. 21. Thus there is no infirmity in the award. This appeal is dismissed.