Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Kar) 220

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
M/s Nirpl Ventures Private Limited Rep. By Its Authorised Representative Mr. K.B. Swamy – Appellant
Versus
Sri. Vijayshekar Thangaiah Major In Age S/o Late George Thangaiah – Respondent
Civil Misc. Petition No. 448 of 2022
Decided on : 29-07-2022

Advocate Appeared:
For the Appellant : Sri. Siddharth Suman, Sr. Counsel
For the Respondent:Sri. K.G. Raghavan, Sri. Counsel For Sri. Shrikara P.K And Sri. Tejas, Advocates

Point of Law: Grant of compensation/damages in addition to specific performance would only arise, if plaintiff/claimant were to establish entitlement for grant of relief of Specific Performance i.e., to say sina qua non for grant of damages would be grant of specific performance.

Headnote:
Civil Procedure Code, 1908 - Order 41 Rule 27 - Arbitration and Conciliation Act 1996 - Section 34, 11 - Specific Reliefs Act , 1963 - Section 21 - Seeking for Specific Performance - Grant of compensation/damages - Power to award compensation in certain cases - Whether applicants prove that award passed under dispute is against terms of contract, evidence placed before Tribunal and decisions cited by applicants before Arbitral Tribunal and as such it is opposed to public policy and patent illegality and as such it is liable to be set aside - Whether applicants have made out grounds to receive documents filed under IA No V under Order 41 Rule 27 - It is clear from above that both relief for Specific performance and prayers for other monetary reliefs sought for by Petitioners was categorically rejected by Arbitral Tribunal (Para 26).
Finding of the Court: Issue of res judicata would have to be considered if there was a dispute between parties as regards whether claims were infact raised and decided or not -The very usage of word ‘reiterate’ of legal notice would establish that petitioners are reiterating their claims which had already been made before arbitrator. A comparison of prayer which had been sought before Arbitral Tribunal and demands made clearly indicates that they are identical. A question of holding a detailed enquiry as to whether res judicata would apply or not therefore would not be required - Court while exercising powers under Section 11 of A&C Act would be required to decide as to whether there is a live-lis which is capable of being referred to arbitration. lis having already been decided in terms of damages in addition to relief of specific performance by arbitral tribunal earlier appointed, in Court considered opinion that, there is no lis which is required to be referred to an arbitrator.
Result: Petition dismissed.

ORDER :

1. The petitioners are before this Court seeking for the following reliefs:

a. To appoint Hon'ble Justice Ashok B.Hinchigeri (Retd.) High Court of Karnataka, Bengaluru, having address as Apartment No.1431, Embassy Habitat, Vasanthnagar, Bengaluru-560 052 as Arbitrator to enter upon reference and pass award in the matter of disputes raised by the petitioners against the respondents for damages; as per clause 35(d) of the Joint Development Agreement dated 11.02.2011 i.e. Annexure-E.

b. to award costs and grant such other relief(s) as this Hon'ble Court deems fit and expedient in the circumstances of the case, in the interests of justice and equity.

2. The petitioners claim that they had entered into an agreement with the father of the respondent herein for joint development of the property owned by the said father in regard to which a Memorandum of Understanding dated 19.10.2007, Supplementary Memorandum of Understanding dated 26.10.2007, Second Supplementary Memorandum of Understanding dated 29.03.2010, Joint Development Agreement dated 11.02.2011 and Supplementary Joint Development Agreement dated 11.02.2014 have been entered into.

3. On an earlier occasion, when there was a dispute between the petitioners and father of the respondents No.1 and 2, an adhoc Arbitral Tribunal has been constituted, when the petitioners appointed their nominee and the father of the respondents appointed his nominee and the said two nominees had appointed the Presiding Arbitrator.

4. The petitioners had filed a claim petition seeking for specific performance of the aforesaid agreements as also damages in addition thereto. The proceedings before the Tribunal being completed, an award was delivered on 25.04.2018. By way of the said award, the reliefs of specific performance as also the damages in addition sought for by the petitioners was rejected. An amount of Rs.100 crores, which was paid as advance, was directed to be refunded after adjusting Rs.55 crores which was claimed by the respondents as damages in the counter claim filed by them.

5. Subsequently the Petitioners had filed a proceedings under Section 34 of the Arbitration and Conciliation Act 1996 (For Short A&C Act), which also came to be dismissed.

6. It is thereafter that the petitioners claiming that the performance of the contract was frustrated on account of actions on part of the Respondents issued a notice stating that in the earlier arbitral proceedings the claim for damages was not considered by the Arbitral Tribunal called upon the respondents to concur with the appointment of its nominee arbitrator, which was not acceded to as such the petitioners are before this court seeking for the aforesaid reliefs.

7. Sri.K.Suman, learned Senior counsel appearing for the petitioners submits that:

7.1. Though the relief of specific performance has been rejected, the Tribunal has not considered the aspect of the damages which has been sought for by the petitioners and as such, the petitioners are entitled to claim for the same.

7.2. The petitioners would be entitled for the damages on account of fresh causes of action, which have arisen subsequent to the award having been rendered inasmuch as there are certain proceedings which had been initiated against the land owners on account of encroachment of karab land, rendering the agreement infructuous and therefore, frustrating the performance of the agreement and as such, the claims of the petitioners are required to be referred to an arbitrator to be arbitrated upon, the respondents not having agreed to the nominee of the arbitrator, this Court could appoint an independent arbitrator.

8. Sri.K.G.Raghavan, learned Senior Counsel appearing for the respondents would submit that:

8.1. The entire claims which have been raised by the petitioners have been adjudicated by the Arbitral Tribunal while rejecting the claim for specific performance, the claim

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2022 Supreme(Kar) 220

Point of Law: Grant of compensation/damages in addition to specific performance would only arise, if plaintiff/claimant were to establish entitlement for grant of relief of Specific Performance i.e., to say sina qua non for grant of damages would be grant of specific performance.

Cases Referred (1)