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2018 Supreme(Del) 2408

IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SHAKDHER, J.
SANDEEP SONI - Petitioner
Versus
SANJAY ROY & ORS. - Respondents
ARB. P. No.413 of 2017
Decided on : 06-09-2018

Advocate Appeared:
For the Appellant :Mr. Alakh Kumar and Mr. Rakesh Saini, Advocates.
For the Respondent: Mr. Arjun Mitra and Ms. Ritika Mitra, Ms. Rajani Chauhan, Adv.

The main legal point established in the judgment is that the existence of an arbitration agreement is the primary consideration for appointing an Arbitrator under Section 11 of the 1996 Act, and issues such as fraud allegations and registration/stamp duty concerns should be left for the Arbitrator to decide.

Headnote:

Arbitration Appointment - Collaboration Agreement - Arbitration and Conciliation Act, 1996, Section 11 - 1996 Act Section 11

Fact of the Case:

The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 seeking the appointment of an Arbitrator in relation to a Collaboration Agreement. The respondent contested the petition, alleging fraud and manipulation in the execution of the agreement, and raised objections regarding registration and stamp duty.

Finding of the Court:

The court analyzed the issues of late Mrs. Kalyani Roy's interest in the subject property, the seriousness of the fraud allegation, and the impact of registration and stamp duty on appointing an Arbitrator. The court found that Mrs. Kalyani Roy had absolute interest in the property, the fraud allegation was not substantiated, and the registration and stamp duty issues did not prevent the appointment of an Arbitrator.

Issues: The issues included the nature of Mrs. Kalyani Roy's interest in the property, the seriousness of the fraud allegation, and the impact of registration and stamp duty on appointing an Arbitrator.

Ratio Decidendi: The court held that Mrs. Kalyani Roy had absolute interest in the property, the fraud allegation was not substantiated, and the registration and stamp duty issues did not prevent the appointment of an Arbitrator.

Final Decision: The petition was allowed, and Mr. R.V.Easwar was appointed as the Arbitrator in the matter.

JUDGMENT :

RAJIV SHAKDHER, J.

Preface & Background Facts:

1. This is a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (in short “1996 Act”). The petitioner seeks the appointment of an Arbitrator in terms of Collaboration Agreement dated 09.08.2016 (hereafter referred to as 'Collaboration Agreement') executed between himself and, one, Late Mrs. Kalyani Roy.

1.1 Late Mrs. Kalyani Roy is the mother of respondent 1 to 4.

1.2 The Collaboration Agreement pertains to an immovable property described as: D-603, Chittaranjan Park, New Delhi – 110019 (hereafter referred to as the “subject property”).

2. At the very outset, it would be pertinent to state that respondent no.2 and 3 have no objection to the prayer made in the instant petition for appointment of an Arbitrator. Presently, respondent no.1 is the only person who seeks to contest the petition.

2.1 At this juncture, it would also be relevant to note that respondent no.4 appears to have left his home of origin some 17 years ago and, is since, then untraceable. Though an attempt was made to serve respondent no.4 via the usual method as well as via substituted service, the exercise carried out proved to be futile. Resultantly, respondent no.4 has been proceeded ex-parte vide order dated 17.10.2017.

3. The record shows (and with regard to the same there appears to be no dispute) that the father of respondent no.1 to 4 had executed a registered Will dated 15.03.1988, whereby, he had bequeathed the subject property in favour of his wife late Mrs. Kalyani Roy.

3.1 I may only enter a caveat at this juncture, qua this aspect, which is, that there is a contest between the petitioner and respondent no.2 and 3 on one side and respondent no.1 on the other as to the nature of the right which was vested in late Mrs. Kalyani Roy with regard to the subject property by virtue of the Will dated 15.03.1988. According to respondent no.1, his mother, late Mrs. Kalyani Roy had only a life interest in the property and, therefore, could not have executed the Collaboration Agreement with the petitioner.

3.2 While, I will elaborate on this aspect of the matter in the later part of my judgment, suffice it to say, for the moment, that late Mrs. Kalyani Roy, prior to her death, which took place on 19.01.2017, executed a registered Will dated 30.03.2016, whereby she bequeathed the subject property in favour of respondent no.1 to 4.

3.3 This Will, inter alia, also provided that in case respondent no.4 was not found within one year of the demise of Mrs. Kalyani Roy, his share would devolve upon her four grand children.

4. It is also pertinent to note that the subject property stood mutated in favour of Mrs. Kalyani Roy in the records of the L&DO. This aspect, apparently, is reflected in the L&DO’s communication dated 06.05.1995. The subject property, evidently, was also converted into a freehold property and a conveyance deed dated 07.12.2001 was executed in favour of late Mrs. Kalyani Roy.

4.1 In so far as the aforesaid aspects are concerned, it is not disputed before me that respondent no.1 along with other siblings conveyed his no objection to the L&DO.

5. It is in the backdrop of these facts and circumstances that the instant petition was filed to seek appointment of an Arbitrator.

5.1 At this juncture, it may be relevant to note certain other attendant facts.

5.2 The petitioner avers that pursuant to the Collaboration Agreement, late Mrs. Kalyani Roy was paid a sum of Rs.25 lacs/- as advance. Furthermore, it was only on 25.09.2016 (as averred by the petitioner) that late Mrs. Kalyani Roy handed over the possession of first floor, second floor and terrace of the subject property to the petitioner. Impediment qua access to the said floors, according to the petitioner, was caused by respondent no.1 (who resides on the ground floor of the subject property), by locking up the main gate on the ground floor.

5.3 It is the petitioner’s case that given these circumstances, a Supplementary Agreement dat











































































































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