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2018 Supreme(Del) 2482
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
Sainik Welfare ORG - India – Petitioner
Versus
Nehra Infrastructures and Others – Respondents
O.M.P. Nos. 88, 89 of 2014
Decided On : 17-08-2018
For the Petitioners: Mr. P.D. Prasad Rao, Mr. Satyavan Kudalwal, Mr. Atul Pandey.
For the Respondents: Mr. Kamal Nijhawan, Mr. Chirag Mudgal.
Headnote:
Settlement Agreement - Charitable Trust - Charitable and Religious Trusts Act, 1920 - [Charitable and Religious Trusts Act, 1920] - The court discussed the Settlement Agreement dated 6th August, 2014, and its implications on the parties' obligations, particularly regarding service tax payments and possession of flats. The court held that the Settlement Agreement, though not constituting an award under the Arbitration and Conciliation Act, 1996, was binding on the parties and could be converted into a decree. The court also addressed the abatement of the arbitration clause and the authority of the mediation center under Section 89 of the CPC, ultimately allowing the Settlement Agreement and passing a decree in its terms.
Fact of the Case:
The Petitioner, a charitable trust, filed Section 9 petitions seeking interim orders to secure flats for defense and paramilitary forces personnel. The Respondents, local builders, had assured ownership of plots and entered into MoUs for construction. Disputes arose over service tax and possession of flats, leading to criminal complaints and subsequent Settlement Agreements.
Finding of the Court:
The court found that the Settlement Agreement was binding and had been given effect to by the parties. It held that the Settlement Agreement, though not constituting an award under the Arbitration and Conciliation Act, 1996, could be converted into a decree. The court also addressed the abatement of the arbitration clause and the authority of the mediation center under Section 89 of the CPC.
Issues: The issues involved the validity and enforceability of the Settlement Agreement, the abatement of the arbitration clause, and the authority of the mediation center under Section 89 of the CPC.
Ratio Decidendi: The court held that the Settlement Agreement, though not constituting an award under the Arbitration and Conciliation Act, 1996, was binding on the parties and could be converted into a decree. It also addressed the abatement of the arbitration clause and the authority of the mediation center under Section 89 of the CPC.
Final Decision: The Settlement Agreement was taken on record, and the Section 9 petitions were disposed of. The court allowed the Settlement Agreement and passed a decree in its terms, addressing the outstanding issues of service tax payments and possession of flats.
PRATHIBA M. SINGH, J.
I.A. 2307/2018 & O.M.P. 88/2014
I.A. 2308/2018 & O.M.P. 89/2014
1. The present applications have been filed by the Petitioner with the prayer that the Settlement Agreements dated 6th August, 2014, entered into between the Petitioner and the Respondents, in both matters, should be taken on record.
2. The present Section 9 petitions were filed by the Petitioner, which is a registered public trust (NGO) created under the provisions of the Charitable and Religious Trusts Act, 1920. The NGO has been established for the welfare of the defence and paramilitary forces personnel. Respondent No. 1, Nehra Infrastructure is a local builder working in the field of construction. Respondent No. 2 Mr. Naveen Nehra and Respondent No. 3 Mr. Mohinder Singh Nehra are persons controlling the affairs of Respondent No. 1. The said Respondents were engaged in the construction of the various group housing projects at Dwarka, New Delhi. The Respondents had assured the Petitioners that they are legally owners of two plots i.e. Plot No. 167, Sector 26, Dwarka, Lal Dora, Village Bhartal, New Delhi (hereinafter, ‘Veer Sadan’) and Plot No. 353, Sector-26, Dwarka Lal Dora Village Bhartal, New Delhi (hereinafter, ‘Soldier Square’).
3. The Petitioner was interested in building fully developed flats in order to provide group housing to soldiers, both serving and retired. Memoranda of Understanding (MoU) were entered into on 8th October, 2010 and 27th August, 2011 for construction of flats in Veer Sadan and Soldier Square. In respect of the Soldier Square project, MoU dated 27th August, 2012 stood cancelled, and a fresh MoU was entered into on 2nd March, 2012.
4. There were delays in the execution of the projects. Substantial amounts of money were already paid to the Respondents. However, after receiving the substantial sums from the Petitioner, the Respondents demanded service tax and escalation charges vide letter dated 27th April, 2013, which led to disputes between the parties. Various criminal complaints came to be filed between the parties. The present section 9 petitions were filed on 9th January, 2014 seeking various interim orders to secure the flats.
5. Vide order dated 22nd January, 2014 status quo was directed to be maintained in respect of the flats in Soldier Square and Veer Sadan. During the pendency of these two section 9 petitions, a Settlement Agreement has been entered into between the parties before the Mediation Centre, Tis Hazari, where the bail applications of the Respondents 2 & 3 were pending. The Settlement Agreements dated 6th August, 2014 were duly entered into and signed between the parties. The Settlement Agreements were taken on record by the Court and the Respondents were even granted bail. Pursuant to the Settlement Agreement, parties performed their respective obligations. All the payments were made. Possessions of the flats were handed over. The Respondents appointed a Power of Attorney holder and Sale deed were executed. However, one issue in respect of service tax remained outstanding. The clause, in the Settlement Agreement dated 6th August 2014, relating to service tax reads as under:
“.......
8. The total service tax of Rs. 85,77, 146/- shall be equally divide in six installments of Rs. 14,29,524/- each and paid along with the balance payments of soldier square ,however proof of the service tax challan deposited to govt. department shall be submitted to the first party by the second party before due date of release of next scheduled payment. In case proof of service tax payment is not produced, the next due installment of the service tax shall be held by the first party till it is produced but not later than 30 Dec 2014. In case the Service Tax Department grants any rebate or refund on the service tax deposited by the second party against the two complexes, it shall be returned back to the first party by the second party on its own without any reservations or reasons on the issue. However, if there i
