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2018 Supreme(Del) 999
IN THE HIGH COURT OF DELHI AT NEW DELHI
MUKTA GUPTA, J.
The Uniworld Garden Apartment Owners Association - Plaintiff
Versus
Unitech Realty Private Ltd. - Defendant
CS(OS) 396 of 2016
Decided On : 09-01-2018
For the Plaintiff :Mr. Jatin Mongia, Mr. Rohan Sharma and Mr. Raghav Kakkar, Advocates.
For the Defendant :Mr. Mriganga Dutta, Mr. Arjun Taneja, Mr. Rajiv Virmani, Mr. Atul Malhotra and Ms. Samprikta Ghosal, Advocates.
Headnote:
Civil Procedure Code, 1908 - Section 20 - Agreement to Sell - Venue of agreement - Right of plaintiff - Jurisdiction, admitted - Parties choose the venue of arbitration at Gurgaon - Held, plaintiff is not bound by the arbitration clause - Agreement on the venue of arbitration to be Gurgaon or such other place as may be mutually agreed between the parties has no application - Defendant is working for gain in Delhi - This Court has territorial jurisdiction to try the suit.
Civil Procedure Code, 1908 - Order 37 Rule 3 (5) - Arbitration and Conciliation Act, 1996 - Section 8 - Admission - Leave to defend, denied - Interest awarded - Admissions of the defendant to deposit the IBMS by the defendant with the plaintiff - Admission of the defendant vide its email including the IBMS amount @8.25% - Defendant admitted the liability to hand over IBMS amount - Filing of the company petition by the plaintiff does not bar its remedy to recover the amount due by way of a civil suit - Deposit of the defendant of part payment pursuant to the order of the company court further fortifies the claim of the plaintiff - Defendant has admitted the rate of interest @8.25% which can be treated as the prevailing interest rate - No leave to defend is required to be granted to the defendant - Application is dismissed.
Civil Procedure Code, 1908 - Order 37 Rule 3(5) - Arbitration and Conciliation Act, 1996 - Section 8 - Agreement to Sell - Execution - Territorial jurisdiction - Determination of - Parties choose the venue of arbitration at Gurgaon - It deserves to be rejected for the reason this Court has already held that the plaintiff is not bound by the arbitration clause - An agreement on the venue of arbitration to be Gurgaon or such other place as may be mutually agreed between the parties has no application - Defendant does not dispute that its registered office is in Delhi - Defendant is working for gain in Delhi as per Section 20 of CPC - This Court has territorial jurisdiction to try the suit - Claim of the plaintiff is based on admissions of the defendant to deposit the IBMS by the defendant with the plaintiff - Suit having been instituted on 25th July, 2016 the same is within the period of limitation - Filing of the company petition by the plaintiff does not bar its remedy to recover the amount due by way of a civil suit - Deposit of the part payment pursuant to the order of the company court further fortifies the claim of the plaintiff - Plaintiff is not entitled to seek interest @18% - Leave to defend denied.
I.A. Nos.1404/2017 (under Order XXXVII Rule 3 (5) CPC) and 1405/2017 (under Section 8 of the Arbitration and Conciliation Act, 1996)
1. Plaintiff has filed the present suit under Order XXXVII inter alia seeking a recovery of a sum of Rs.17,76,64,952/- along with interest @18% per annum from the defendant on the basis of unequivocal and written admissions on part of the defendant about its liability to hand over the Interest Bearing Maintenance Security (in short ‘IBMS’) to the plaintiff association once the association is formed. The said IBMS had been collected by the defendant from the individual apartment owners and was to be handed over when the association was formed to take over the maintenance of the apartment complex. It is the case of the plaintiff that though the plaintiff was formed in the year 2006, the plaintiff was prevented from taking over of the complex due to failure of the defendant to complete the complex in all respects in time and thereafter as well despite repeated requests to hand over the possession after the complex was equipped with all basic and essential facilities.
2. The plaintiff inter alia relies upon the admissions of the defendant vide its email dated 24th January, 2009 enclosing the IBMS amount @8.25% as on 31st December, 2008; defendant’s letter dated 5th April, 2011 responding to the plaintiff’s letter dated 18th March, 2011 admitting the liability to hand over IBMS amount; handing over letter dated 20th August, 2013 enclosing the IBMS amount with interest @8.25% till 31st August, 2013; balance sheet of the financial year 2012-13 and 2013-2014 and affidavit of defendant dated 11th March, 2015 filed in Company Petition No.513/2004. Reliance is placed on the decisions reported as AIR 1999 Bom 340 BOI Finance Limited vs. Padma Alloy Casting Private Limited & Ors., 2001 (1) Mh.L.J. 687 R. Kumar & Co. vs. Chemicals Unlimited AIR 2003 and Bom 168 Sun N Sand Limited vs. V.V. Kumar.
3. Responding to the plea of defendant that there is an arbitration clause in the Agreement to Sell it is contended that the plea ought to have been taken as part and parcel of the leave to defend application and not by way of separate application under Section 8 of the Arbitration Act. It is claimed that the plaintiff association is a society registered under the Societies’ Registration Act, 1860 thus a separate legal entity, independent of its individual apartment owners, hence any arbitration agreement entered between the members would not be binding on the plaintiff association. Reliance is placed on the decisions reported as AIR 1946 Bom 516 Satyavart Sidhantalankar & Ors. vs. Arya Samaj, Bombay, AIR 1958 AP 773 Pamulapati Buchi Naidu College Committee vs. Govt. of A.P. & Ors. and AIR 1970 Pat 163 K.C. Thomas vs. R.L.Gadeock & Anr.
4. In the alternative it is also submitted that money was deposited by the individual members of the plaintiff association in terms of Clause 5 of the Maintenance and Service Agreement (in short ‘M & S Agreement’) which agreement did not contain an arbitration clause. As regards the contention relating to rate of interest the same can be as per the prevailing bank rate and mere non-mentioning of rate of interest will not be a triable issue requiring grant of leave to defend. No substantial defence having been raised in terms of the decision reported as 2017 (1) SCC 568 IDBI Trusteeship Services Ltd. vs. Hubtown Ltd. the applications are liable to be dismissed and the suit be decreed. Reliance is further placed on the decisions reported as AIR 2002 Bom 481 Suraj Sanghi Finance Ltd. vs. Credential Finance Ltd. & Ors., AIR 2003 Bom 92 Motorola India Limited vs. Kiklu I. Malani and AIR 2003 Bom 111 Leela Capital and Finance Ltd. vs. Modiluft Limited.
5. Responding to the summary suit filed by the plaintiff, the defendant filed two applications being I.A. No. 1404/2017 under Order XXXVII Rule 3 (5) CPC seeking leave to defend and I.A No. 1405/2017 under Section 8 of the Arbitration and
