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IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
RAKESH MALHOTRA - Petitioner
Versus
SH. GURPAL SINGH - Respondent
O.M.P. (COMM) 541 of 2016 & IA No. 14869 of 2016
Decided On : 15-12-2016
Arbitration - Agreement to Sell - Arbitration and Conciliation Act, 1996, Section 34 - 12.12.2004 - 91
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the rejection of the alternative claim of damages made in relation to an agreement to sell a property. The petitioner had paid a sum of Rs. 20 lacs as part consideration for the purchase of the property but the respondent failed to execute and register the relevant documents for transfer of the property.
Finding of the Court:
The court found that the conduct of the petitioner did not entitle him to seek performance of the Agreement as he had failed to offer the agreed consideration for the property and had also withdrawn the advance money paid to the respondent. The court concluded that the petitioner had rejected the Agreement and elected to seek a refund of the money advanced to the respondent.
Issues: The issues revolved around the petitioner's claim for specific performance of the Agreement, rejection of the alternative claim for damages, and the conduct of the petitioner in relation to the agreement to sell the property.
Ratio Decidendi: The court's decision was influenced by the petitioner's failure to offer the agreed consideration for the property, withdrawal of the advance money paid to the respondent, and lack of evidence to establish the quantum of damages suffered by the petitioner.
Final Decision: The petition was dismissed, and the pending application was disposed of with no order as to costs.
VIBHU BAKHRU, J.
1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') impugning the arbitral award dated 23.07.2016 (hereafter 'the impugned award') made by, Mr. Prem Kumar, ADJ (Retd.), the Sole Arbitrator.
2. The disputes between the parties arose in relation to an agreement to sell dated 12.12.2004 (hereafter 'the Agreement') entered into between the parties for sale of the property bearing No. 381, AGCR Enclave, Delhi - 110092 (hereafter 'the said property'). By the impugned award, the Arbitrator has rejected the petitioner's claim for specific performance of the Agreement and has further also rejected the petitioner's claim for damages made in the alternative.
3. Mr. Dinesh Kumar Gupta, learned counsel appearing for the petitioner fairly stated, at the outset, that the petitioner was not pressing its claim with regard to the specific performance of the Agreement as the same was a discretionary relief; he limited the petitioner's challenge to the rejection of the alternative claim of damages.
4. Mr. Gupta referred to paragraph 91 of the impugned award and submitted that all findings recorded therein except the finding that the petitioner had not offered to pay the conversion charges of Rs. 10,42,147/-, were in favour of the petitioner. He earnestly contended that the Arbitrator had found that the respondent had breached the Agreement and yet had failed to award damages for the same. He also contended that the Arbitrator's finding in relation to petitioner's offer for payment of conversion charges was contrary to the record of the case.
5. The controversy raised in the present petition arises in the following context.
6. The petitioner entered into the Agreement with the respondent, whereby the petitioner agreed to purchase and the respondent agreed to sell the said property for a total consideration of Rs. 1,27,00,000/-. Admittedly, the petitioner paid a sum of Rs. 15 lacs on 14.12.2004 - Rs. 10 lacs in cash and Rs. 5 lacs by way of cheque - to the respondent. Thereafter, the petitioner also paid a sum of Rs. 5 lacs to Sh. Prithi Pal Singh, the brother of the respondent, who was in possession of the said property at the material time. Thus, in all, the petitioner paid a sum of Rs. 20 lacs as part consideration for the purchase of the said property. The petitioner further submits that he called upon the respondent to execute and register the relevant documents for transfer of the said property but the respondent failed to do so.
7. The petitioner claims that he subsequently became aware that the lease of the said property in favour of the respondent was determined by the Delhi Development Authority (DDA) on 25.07.1990. Further, the respondent had also filed a writ petition (W.P. (C) No. 2505/1990, titled "Gurpal Singh v. DDA'') in this Court, inter alia, challenging the determination of the lease and the said petition was dismissed on 13.02.1995.
8. On becoming aware of the determination of the lease and the dismissal of the above mentioned writ petition, the petitioner filed an FIR (being FIR No. 198/2005) on 01.04.2005 with PS Anand Vihar, New Delhi. The petitioner, inter alia, complained that he had been dishonestly induced by the petitioner and two other persons to pay Rs. 20 lacs as the fact that the lease deed in favour of the respondent had been determined and the respondent was no longer competent to transfer the said property had been concealed. The petitioner further complained that he had been cheated of the aforesaid sum and, accordingly, prayed that a case under Section 423/406/420/120-B of IPC be registered against the respondent and the two other persons named in the FIR.
9. In view of the fact that an FIR had been lodged by the petitioner, the respondent filed an application for grant of anticipatory bail before the Additional Sessions Judge (ASJ), Karkardooma, Delhi. The learned ASJ passed an order dated 11.04.2005 and granted th
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