The petitioner filed the present Civil Miscellaneous petition under Section 11(5) of the Arbitration and Conciliation Act, 1996, for appointment of sole arbitrator for adjudication of the dispute between the parties in terms of Clause 42 of the Joint Development Agreement dated 01.10.2011 entered into between the parties.
2. It is the case of the petitioner that, petitioner and the respondents have entered into Joint Development Agreement in respect of Sy.No. 27/4 measuring 2 acres 02 guntas, Sy.No.27/1 measuring 29 guntas and Sy.No.27/1 measuring 1 acre situated at Somapur Village, Sarjapura Hobli, Anekal Taluk to build a residential apartment building and the petitioner has also paid amount of Rs.93,00,000/- which would be non-refundable Security Deposit (Goodwill) and the petitioner has paid additional amount of Rs.30,00,000/- according to the petitioner. According to the respondent only Rs.25,00,000/- and respondents have totally received amount of Rs.1,23,00,000/-.
3. It is further stated that the petitioner has to deliver to the respondents, such number of apartment units/flats comprising 35% of the total saleable built up area of the said apartment building to be constructed along with corresponding undivided interest and the petitioner is entitle for all the number of apartment units comprising of the remaining 65% of the total area of apartment building to be constructed over the same.
4. The petitioner has obtained conversion of the said land from agricultural to residential purpose on 03.01.2013 and on 04.01.2013. The petitioner issued notice on 09.07.2014 to respondents and to one Sri Jayaram Reddy calling upon the respondents to register the General Power of Attorney and register Joint Development Agreement dated 01.10.2011 and the said fact is disputed by the counsel for the respondents. He has stated that on 09.07.2014 issued notice to the respondent and others to register General Power of Attorney and register Joint Development agreement dated 1.10.2011. It is further stated the one Sri Jayarama Reddy, Smt. Rathnamma and Sri Mahesh have executed registered Joint Development Agreement, dated 05.02.2015 in pursuant of the General Power of Attorney and Joint Development Agreement dated 01.10.2011and also executed General Power of Attorney dated 05.02.2015 in respect of Sy.No.27/1 measuring 29 guntas in favour of the petitioner.
5. It is further stated that in the first week of February 2015, the petitioner requested the respondents to register the General Power of Attorney and register the Joint Development Agreement dated 01.10.2011 but the respondents are postponing the same on one pretext or other for the reasons best known to them and their agents allegedly trying to interfere with the schedule property by disturbing the development work. He further contented that in terms of Clause 42 of the agreement, the parties have to settle the disputes which arouse between them by invoking provisions of the Arbitration & Conciliation Act, 1996. It was also made clear that the decision of the Arbitrators shall be final and binding on both the parties. Hence, the petitioner issued Arbitration notice dated 08.07.2015 calling upon the respondents to execute the registered General Power of Attorney and registered Joint Development Agreement and to appoint an arbitrator of their choice to resolve the dispute. Accordingly the petitioner proposed the name of one of the former retired District and Sessions Judge, as sole Arbitrator. The respondents received the notice and they did not replied for the notice nor appointed an Arbitrator. Therefore, the petitioner is before this Court.
6. I have heard the learned counsel for the parties to the lis.
7. Sri Rajesh Gowda, learned counsel for the petitioner reiterating the averments made in the petition has contended that, execution of Joint Development Agreement dated 01.10.2011 and the Clause 42 is not in dispute. Legal notice as contemplated under Section 11 (5) of the Arbitration and Conciliation Act, 1996 on 08.07.2015, for referring the matter to the Arbitrator and also appointment of Arbitrator is also not in dispute. Therefore, he sought to allow the petition as prayed for.
8. Per contra, Sri Sanjay Nair, learned counsel for the respondents raised objections with regard to the maintainability of the petition and contended that the document, Joint Development Agreement is a un- registered document and for the said document sufficient stamp duty is not paid and petitioner cannot, by way of notice, direct the respondents to execute separate General Power of Attorney and registered Joint Development Agreement that was not agreed between the parties. He has also raised dispute with regard to the very notice issued by the petitioner and contented that very notice is not maintainable. He further contended that in view of dictum of Honble Supreme Court in the case of Duro Felguera, S.A. vs. Gangavaram Port Limited; (2017)
9 Supreme Court Cases 729 submits that in the guise of legal notice the petitioner cannot demand the respondents to execute and register the documents and get cause of action to the said document. Therefore, he sought to dismiss the petition.
9. Having heard the learned counsels for the parties, it is undisputed fact that the petitioner and the respondents have entered into Joint Development Agreement dated 01.10.2011 in respect of the property more fully described in the Joint Development Agreement and the clause 42 of the Joint Development Agreement reads as under: In the event of any failure to perform any obligations under this agreement by any of the parties, the other party shall be entitled to sue for specific performance and for recovery of damages/compensation to make good the loss sustained by the other party on account of such breach of agreement. In the event of any dispute or differences between the parties herein, the same shall be settled amicably through mutual discussions and conciliations, after giving due notices to the addresses given herein above by Registered Post A.D. In spite of the aforesaid if it is not possible to reach a solution in respect of mutual rights and obligations, such dispute/difference shall be referred to arbitration as per the provisions of the Arbitration & Conciliations Act, 1996. The decision of the arbitrators shall be final and binding on both the parties. For reasons, if the aforementioned project could not be executed or implemented, the parties shall be put to their original positions, and in such an event, the First Party shall refund the entire amounts received by them from the Second Party.
10. It is also not in dispute that the petitioner issued legal notice to the respondents in terms of Section 11(5) of the Arbitration and Conciliation Act on 08.02.2017.
11. In view of the provisions of Sections 7, & 11 of the Arbitration and Conciliation Act, if there is any dispute there is an existence of arbitration agreement which contains clause which provides arbitration pertaining to the dispute which have arisen between the parties, and notice under Section 11(5) has been complied. Therefore, there is no impediment for this Court to appoint sole Arbitrator to adjudicate the dispute between the parties. The very judgment relied upon by the learned counsel for the respondent at para 48 has specifically held as under:
48. Section 11(6-A) added by the 2015 Amendment, reads as follows: 11.(6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement. (emphasis supplied) From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect- the existence of an arbitration agreement is the next question. The resolution to that is simple- it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.
12. In view of the provisions of Sections 7, 11 and 11(A) amended Section 11(6A), contention of the respondents cannot be accepted that the very petition is not maintainable. It is needless to observe that both parties are at liberty to urge all the available contentions before the sole Arbitrator including the stamp duty and it is for the Arbitrator to decide the same.
13. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Honble Mr. Justice K.N.Keshavanarayana, former Judge of this Court is appointed as sole Arbitrator to resolve the disputes between the parties in accordance with law.
14. The Registry is directed to send a copy of this order to the Honble Mr. Justice K.N.Keshavaranarayana and to the Arbitration Centre for reference. Sd/- JUDGE