The arbitration clause in an agreement remains valid and enforceable even after the agreement's expiration, and the dispute is alive, subsisting, and arbitrable if notices for arbitration are served within the limitation period.

The present application under section 11(6) of the Arbitration and Conciliation Act, 1996 (for short `the Act’) has been filed by the two petitioners. It was originally filed as against opposite parties no. 1 to 10 being first set and opposite parties no. 11 to 20 being opposite party second set, but in course of the proceedings the petitioners agreed to delete opposite party second set i.e. opposite parties no. 11 to 20. As such this application subsists only in relation to opposite party first set. Petitioner no.2 is the builder, whereas, petitioner no.1 is the Project Partner and opposite party first set are the land-lords.

2. Pleadings being complete, with consent of the parties, this application was heard for final orders.

3. Shri Jagannath Singh, learned counsel appeared for the petitioners in support of the application and Shri Lalit Kishore, learned senior counsel and Principal Additional Advocate General argued on behalf of opposite party first set.

4. It appears that opposite party first set were in possession of certain lands contiguous to Boring Road in the town of Patna. Petitioner no.2 being a builder entered into an agreement with the land owners-opposite party first set for commercial development of the plot of land as aforesaid. He got building plan sanctioned and started development work, but could not make any substantial headway. He then persuaded one M/s Magestic Construction to join as Project Partner and the work again started with consent of opposite party first set, but again partial constructions having been made, the work got stranded and the said M/s Magestic Construction withdrew with consent of the land-lords. Then petitioner no.1 came forward and agreed to become Project Partner to complete the project and, accordingly, a Tripartite Agreement was executed between petitioner no.1 being Project Partner, petitioner no.2 being the builder and opposite party first set (land-lords) being agreement dated 17.09.2002, which is Annexure 1 to this application. This agreement, inter alia, provided for division of built up area as amongst the parties. They authorized the builder and the Project Partner to settle premises to get rent, which would partly finance completion of the project. The said agreement also had a clause for arbitration in case of dispute, which is clause 19 of the Tripartite Agreement, which is quoted hereunder :-

“Clause-19-That dispute/differences, if any, arising out of this agreement shall be decided, resolved and settled by three arbitrators, one from each part of the parties hereto and decision of majority shall be final and binding upon the parties hereto this Agreement.”

5. The construction was to be over and completed by the year 2005. It appears that one of the premises in the Commercial Complex, which was being developed known as Harihar Chambers, was allotted to one Dr. Madan Mohan Prasad. When possession was not being given to him, he filed a request case before this Court being Request Case No. 28 of 2006 against the original developer and others including petitioner no.2. The matter was referred to arbitration and on 28.012008, an arbitral award was passed, inter-alia, directing petitioner no.2 to deliver possession of the premises, as claimed, to the said claimant i.e. Madan Mohan Prasad. As noticed above, the builder was permitted to realize rents from premises, which had been constructed to enable him to finance the project and complete the same. In the year 2008, he suddenly found that those tenants stopped paying rent to him. He was then forced to file eviction suits in the civil court in the year 2008. In these suits, these tenants took a plea that they were paying rents to the land-lords i.e. opposite party first set and challenged the right, title and interest of the petitioners to claim rents.

6. Thus, it now became clear that the land-lords i.e. opposite party first set took control of the entire building to the exclusion of the builder and the Project