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2024 DIGILAW 291 (KAR)

Riyaz Ahmed Shariff v. Purvankara Projects Ltd.

2024-04-25

C.M.POONACHA, S.G.PANDIT

body2024
ORDER : C.M. Poonacha, J. The present Writ Petition is filed seeking for the following reliefs: "a) Issue a writ of mandamus or any other appropriate directions to the Resp. No.2 to takeup the application (Annexure-D) filed by the petitioners under section 28 of Specific Relief Act in the Arbitration case no.CMP.83/2006 for consideration and disposal in accordance with law; b) Pass any other appropriate order or directions as this Hon'ble court deems fit on the facts and circumstances of the case." 2. The relevant facts necessary for consideration of the present petition are that the first petitioner entered into a Memorandum of Understanding, dated 24.2.2023 [Hereinafter referred to as the 'MOU'] with the first respondent. Due to certain disputes that arose between the parties from the said MOU, arbitration proceedings in CMP No.83/2006 was initiated before the second respondent - the Sole Arbitrator, Hon'ble Mr. Justice Patri Basavanagoud (Retd.,) Hereinafter referred to as the 'Arbitral Tribunal'], wherein the first respondent was the claimant and the first petitioner was the respondent represented by his Power of Attorney Holder - the second petitioner. Vide Award dated 17.12.2012 the Arbitral Tribunal held that the first respondent was entitled to specific performance of the MOU and passed the following order: "In the above circumstances, the claimant is hereby held to be entitled to specific performance of the agreement dated 24.2.2003. Respondent, having already got an extent of 1 acre 1 gunta converted for residential purposes by the order dated 5.3.2003 passed by the Special Deputy Commissioner, Bengaluru, shall pay the development charges to the Municipal Authority concerned, get his name entered in the katha and then shall execute sale deed in favour of the claimant or its nominees, shall deliver the original title deeds and shall also put the claimant in possession of the said land on receipt of the balance of sale consideration from the claimant at Rs. 310/- psf., failing which, the claimant shall get the same done through a Commissioner to be appointed by the Court executing this award. Respondent shall also bear the expenses of this arbitral proceedings. This Arbitral proceeding hereby stands terminated." 3. 310/- psf., failing which, the claimant shall get the same done through a Commissioner to be appointed by the Court executing this award. Respondent shall also bear the expenses of this arbitral proceedings. This Arbitral proceeding hereby stands terminated." 3. The first respondent instituted Execution Case No.1764/2013 to execute the said arbitral Award and pursuant to the order passed by the Executing Court, the registered Sale Deed dated 23.2.2021 was executed through the Court Commissioner in favour of the first respondent in terms of the arbitral Award dated 17.12.2012. 4. The arbitral Award dated 17.12.2012 was challenged under Section 34 of the Arbitration and Conciliation Act, 1996 [Hereinafter referred to as the 'Arbitral Tribunal'] in Com.A.S.No.149/2018 before the LXXXVII Additional City Civil and Sessions Judge (exclusive dedicated Commercial Court) at Bengaluru (CCH-88).[ Hereinafter referred to as the 'Commercial Court'] Vide order dated 1.7.2021 the said Com.A.S.No.149/2108 was dismissed. Being aggrieved, COMAP.No.251/2021 was filed by the second petitioner under Section 13(1-A) of the Commercial Courts Act, 2015[Hereinafter referred to as the 'Act of 2015'] before this Court. A coordinate Bench of this Court vide judgment dated 30.6.2022 dismissed the said appeal. The said judgment dated 30.6.2022 passed in COMAP.No.251/2021 was challenged in SLP (C) No.32794/2022 before the Hon'ble Supreme Court, which was dismissed vide order dated 6.1.2023. 5. Subsequently, the petitioners preferred an application under Section 47 r/w 151 of the CPC in EP No.1764/2013. The Executing Court by order dated 16.11.2022 dismissed the said application. Being aggrieved, the petitioners preferred CRP No.602/2022 before this Court. Vide order dated 13.2.2023 the said Revision Petition was dismissed. 6. Subsequently, the petitioners filed an application under section 28 of the Specific Relief Act, 1963[Hereinafter referred to as the "Act of 1963"] before the Arbitral Tribunal. Alleging that the second respondent - Sole Arbitrator refused to receive the same the present petition is filed. 7. Sri. D.R.Ravishankar, learned Senior Counsel appearing along with Sri. Prithvi Raj B.N, learned counsel for the petitioners would vehemently contend that the right of the petitioners to take recourse to Section 28 of the Act of 1963 is available having regard to the fact that the first respondent has deposited the amounts pursuant to the arbitral Award dated 17.12.2012 after a lapse of 10 years and hence, the petitioners are entitled to seek for rescission of the MOU. It is further contended that the only question that is to be adjudicated is, the forum which is required to adjudicate upon the application of the petitioners filed under Section 28 of the Act of 1963. It is the further submission on behalf of the petitioners that only the Arbitral Tribunal can decide the said application. Hence, he seeks for allowing of the present Writ Petition and granting of the reliefs sought for. 8. Per contra, Sri. Sanjay Nair, learned counsel for the first respondent contends that the petitioners have exhausted their remedy available under Sections 34 and 37 of the Act of 1996 and the Sale Deed having been executed pursuant to the arbitral Award dated 17.12.2012, the question of considering an application under Section 28 of the Act of 1963 for rescission of the MOU does not arise. He further submits that the present writ petition filed by the petitioners itself is misconceived having regard to the nature of relief sought for. It is further contended that after the arbitral Award dated 17.12.2012 has been fully executed in all respects and the first respondent being in the process of developing the schedule property, the present Writ Petition is filed with oblique motives. Hence, he seeks for dismissal of the present petition. 9. The submissions of both the learned counsel have been considered and the material on record has been perused. The question that arises for consideration is, whether the relief sought for in the present writ petition is liable to be granted? 10. The relevant fact situation is undisputed, inasmuch as pursuant to the dispute that arose between the parties consequent to the execution of the MOU, arbitral proceedings were initiated which resulted in the arbitral Award dated 17.12.2012 wherein it was held that the respondent therein i.e., first respondent herein is entitled to specific performance of the Agreement dated 24.2.2003. In order to execute the said award dated 17.12.2012, the first respondent filed Execution Case No.1764/2013 and that pursuant to the order passed by the Executing Court the registered Sale Deed dated 23.2.2021 has been executed by the Court Commissioner on behalf of the petitioners in favour of the first respondent in execution of the arbitral Award dated 17.12.2012. 11. In order to execute the said award dated 17.12.2012, the first respondent filed Execution Case No.1764/2013 and that pursuant to the order passed by the Executing Court the registered Sale Deed dated 23.2.2021 has been executed by the Court Commissioner on behalf of the petitioners in favour of the first respondent in execution of the arbitral Award dated 17.12.2012. 11. It is further relevant to note that the arbitral Award dated 17.12.2012 was challenged by the petitioners in Com.AS No.149/2018 before the Commercial Court, which was dismissed vide order dated 1.7.2021. Being aggrieved, COMAP No.251/2021 was filed before this Court. A Division Bench of this Court vide judgment dated 30.6.2022 dismissed the said appeal, which order has been upheld by the Hon'ble Supreme Court. 12. It is forthcoming from the aforementioned that the arbitral Award dated 17.12.2012 has become final and binding upon the parties. Further, the said award has been fully executed having regard to the execution of the registered Sale Deed dated 23.2.2021. 13. It is the case of the petitioners that an application under Section 28 of the Act of 1963 was sought to be filed before the second respondent - sole Arbitrator and since he refused to receive the same, the present writ petition is filed, whereunder a mandamus is sought to the Sole Arbitrator to take up the said application. In this context, it is relevant to note that there is no material placed by the petitioners to demonstrate that the Sole Arbitrator has refused to take up the application. 14. Further, in order to consider the case of the petitioners, it is relevant to notice Section 28(1) of the Act of 1963, which reads as follows: "28. In this context, it is relevant to note that there is no material placed by the petitioners to demonstrate that the Sole Arbitrator has refused to take up the application. 14. Further, in order to consider the case of the petitioners, it is relevant to notice Section 28(1) of the Act of 1963, which reads as follows: "28. Rescission in certain circumstances of contracts for the sale or lease of immovable property, the specific performance of which has been decreed.- (1) Where in any suit a decree for specific performance of a contract for the sale or lease of immovable property has been made and the purchaser or lessee does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor or lessor may apply in the same suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the party in default or altogether, as the justice of the case may require." 15. It is forthcoming from Section 28(1) that it is permissible for the vendor to apply in the same suit in which the decree is made to have the contract rescinded. The Hon'ble Supreme Court in the case of Hungerford Investment Trust Ltd., (in liquidation) v. Haridas Mundhra & ors., AIR 1972 SC 1826 after considering various other judgments has held that the Court, which passed the decree for specific performance, has the power to extend the time since that Court retains control over the decree and that the contract between the parties is not extinguished by passing of a decree for specific performance and that contract subsists notwithstanding the passing of the decree. It has been further held that the decree for specific performance is in the nature of a preliminary decree. 16. While it is the contention of the petitioners that the amount in terms of the arbitral Award dated 17.12.2012 was deposited after a lapse of more than 10 years, it is the response of the first respondent that there was no time fixed in the arbitral Award for depositing the money. 16. While it is the contention of the petitioners that the amount in terms of the arbitral Award dated 17.12.2012 was deposited after a lapse of more than 10 years, it is the response of the first respondent that there was no time fixed in the arbitral Award for depositing the money. Responding to the same, it is contended on behalf of the petitioners that even if there is no time fixed for depositing the money, the same ought to have been deposited within a reasonable time. 17. As held by the Hon'ble Supreme Court in the case of P. Shyamala v. Gundlur Masthan, AIR 2023 SC 1224 and Sanjay Shivshankar Chitkote v. Bhanudas Dadarao Bokade (died) through LRs., Order dated 8.12.2023 passed in SLP(C) No.24720/2023 the power under Section 28 of the Act of 1963 is discretionary and in considering such an application the Court has also to see all the attending circumstances including the conduct of the parties. 18. In the said context, it is relevant to note that the arbitral Award dated 17.12.2012 was challenged in a proceedings under Section 34 of the Act of 1996 on 13.7.2018 in Com.AS No.149/2018 before the Commercial Court, which was dismissed vide order dated 1.7.2021. As noticed above, the challenge made to the arbitral Award dated 17.12.2012 has been agitated by the petitioners up to the Hon'ble Supreme Court and the same has become final and binding between the parties. It is further relevant to note that consequent to the said arbitral Award, a registered Sale Deed dated 23.2.2021 has been executed through the Court Commissioner pursuant to the order dated 28.2.2019 passed in Execution Case No.1764/2013. 19. Having regard to a plain reading of Section 28(1) of the Act of 1963, it is not possible to accept the contention made on behalf of the petitioners that it is entitled to maintain an application under Section 28 of the said Act even after the process of execution of the decree has been completed. 20. Although the petitioners have sought to rely upon various judgments, the petitioners have not produced any judgment wherein an application under Section 28 of the Act of 1963 has been entertained even after the decree for specific performance has been fully executed. In all the cases that reliance is placed on behalf of the petitioners, the decree was in the stage of being executed. 21. In all the cases that reliance is placed on behalf of the petitioners, the decree was in the stage of being executed. 21. In this context, it is relevant to note that Section 28(1) of the Act of 1963 entitles a vendor to seek for rescission of the contract and empowers the Court to rescind the contract under certain circumstances. However, it is relevant to note that in the present case the contract which was the subject matter of adjudication in the arbitral proceedings and the Arbitral Tribunal having passed the Award dated 17.12.2012, has resulted in execution of the registered Sale Deed dated 23.2.2021. Hence, keeping in mind the dicta of the Hon'ble Supreme Court that the power under Section 28 of the Act of 1963 is a discretionary one and all attending circumstances have to be taken into consideration, as also having regard to the fact that the petitioners are unable to point out any ruling of any Court, wherein an application under Section 28 of the Act of 1963 has been entertained even after the decree for specific performance has been completely executed, we have no hesitation in holding that the petitioners have failed in demonstrating that they are entitled to take recourse to Section 28 of the Act of 1963 in the present case. 22. The petitioners seek to rely upon the judgment of the Hon'ble Supreme Court in the case of Deccan Paper Mills Company ltd. v. Regency Mahavir Properties and ors., (2021) 4 SCC 786 in support of their contention that the expression "court" occurring throughout the Act of 1963 will have to be substituted by the word/s "the arbitrator" or "the Arbitral Tribunal". However, the said judgment will not aid the case of the petitioners since the Hon'ble Supreme Court was considering the entitlement of a party to seek for cancellation of an instrument as contemplated under Section 31 of the Act of 1963 and in the said context, the Hon'ble Supreme Court held that cancellation of a Deed by an executant can be done under Section 31 of the Act of 1963 and the said proceedings is an action in rem and while the cancellation of a Deed by a non-executant is required to be done under Section 34 of the Act of 1963, which is an action in personam. Hence, the said judgment is wholly inapplicable to the facts of the present case. 23. Another reason to deny the relief sought for in the present petition is that the arbitral Award dated 17.12.2012 has been challenged in proceedings under Section 34 as well as under Section 37 of the Act of 1996 and the petitioners have failed in the same. Vide the present application sought to be filed under Section 28 of the Act of 1963, the petitioners are attempting to modify the arbitral Award dated 17.12.2012. Having regard to the scheme of the Act of 1996, an arbitral Award can be challenged only under Sections 34 and 37 of the said Act. Hence, the petitioners have failed to make out any ground for granting of relief on the said aspect also. 24. In view of the discussion made above, the question framed for consideration is answered in the negative. 25. In view of the aforementioned, the writ petition is dismissed as being devoid of merit. No costs.