The court recognized that arbitration agreements are binding and disputes regarding time-bar claims should be determined by the arbitrator, given the circumstances of the parties' ongoing negotiations.

JUDGMENT :

Shampa Sarkar, J.

1. This is an application under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act). The arbitration clause is contained in the agreement dated April 13, 2012. Clause 14 of the said agreement provides that any dispute or difference between the parties, relating to or arising out of the said agreement or any act, deed or proceeding done or to be done in pursuance of the said agreement, shall be referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The arbitration shall be held at Kolkata and shall be in English language.

2. Mr. Rudraman Bhattacharya, learned senior Advocate for the petitioner submitted that the respondent no. 1 was a Company. The respondent no. 2 was the Director of the respondent no. 1. The respondents entered into a development agreement with the petitioner. A sum of Rs. 1 crore was the total consideration payable for two flats on the third floor of the proposed building along with two car parking spaces, as described in the Schedule of the said agreement. Although, the payment was made on April 13, 2012, no formal agreement was executed on the date of payment. The development agreement was executed on April 13, 2012. According to the agreement, the respondents were required to deliver the aforesaid flats and the parking spaces to the petitioner, within December 2013. The time for performance of the agreement was extended from time to time, as the respondents were unable to obtain the sanction plan from the concerned Municipal Corporation. The petitioner allegedly called upon the respondents on various occasions to either execute a deed of sale and deliver the possession of the two flats along with the car parking spaces or refund the entire consideration. It was contended that, the respondent no. 2 assured the petitioner that, the issue would be resolved. By a letter dated 15th December, 2020, the respondents informed the petitioner that they had decided to sell the land on which the project was to be constructed and return the due of Rs. 1 crore which had been advanced by the petitioner, along with Rs. 25 lakhs, as penalty. The petitioner was requested to provide the copy of the original agreement, so that the same could be handed over to the land buyer. Further request was made that, upon receipt of full payment of Rs. 1.25 crores, the petitioner should cancel the agreement dated April 13, 2012 and be a confirming party to the sale of the land.

3. In spite of offering to refund the money with penalty, the respondents neither prepared any deed of sale to third party buyers nor did the respondents refund the money as indicated in the aforementioned letter. Although, no progress had been made in the area of construction, the balance sheet of the respondent no. 1 continuously showed that the work was in progress. The Director of the petitioner received information from reliable sources and also came across copies of the balance sheet of the company of the respondent. Upon perusal of such documents, the petitioner became apprehensive that, the rightful claim of the petitioner would be denied and defeated in a clandestine manner. From the balance sheet for the financial year 2021 – 2022, it appeared that payment of Rs. 1.25 crores was made by the respondent no. 2 to the respondent no. 1, as advance against property. Part of the amount was