Back
2018 Supreme(Del) 2975
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
Jai Narain & Anr. - Petitioners
Versus
Rajender Singh & Ors. - Respondents
ARB.P. 35 of 2014, O.M.P. 995 of 2013 & I.A. 17925 of 2014
Decided On : 29-10-2018
For the Petitioner: Mr. Rishi Kumar proxy counsel for Mr. Rajesh Rai
For the Respondents: Mr. Sanat Kumar, Mr. Vinayak Batta and Mr. Sunil Kumar Jha
The central legal point established in the judgment is the requirement for a valid and genuine arbitration agreement to maintain the Section 9 and Section 11 petitions.
Headnote:
Arbitration & Conciliation Act - Agreement to Sell - Section 9, Section 11 - 20
Fact of the Case:
The dispute arose from an Agreement to Sell for the purchase of a property. The Petitioners claimed readiness to pay the balance sale consideration, while the Respondents claimed an extension of the completion date and forfeiture of the advance payment.
Finding of the Court:
The court found that there was no valid and genuine arbitration agreement between the parties, leading to the dismissal of the Section 9 and Section 11 petitions. However, the Petitioners were allowed to avail of any other available remedies.
Issues: Existence of a valid arbitration agreement, validity of the Agreement to Sell, and the receipt of the advance payment were the key issues.
Ratio Decidendi: The court's decision was influenced by the lack of a valid arbitration agreement and the disputed authenticity of the Agreement to Sell.
Final Decision: Both petitions were dismissed, and the interim order was allowed to continue for eight weeks, providing the Petitioners with the opportunity to seek alternative remedies.
Prathiba M. Singh, J.
1. The present petitions, one under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter, ‘the Act’) and the second under Section 11 of the Act are filed seeking interim relief’s and appointment of an Arbitrator.
2. The disputes arise out of Agreement to Sell dated 10th August, 2011 by which the Petitioners had agreed to purchase property bearing Mustil No. 55-Khasra No.3 (4-16), 4/1 (05), 4/2 (4-13), 5 (4-16), 7/1 (1-16), 7/2 (17), Mustil No. 61-Khasra No.11/1 (2-8), 20/2 (4-16), Mustil No. 62-Khasra No.16 (4-16), 24 (4-16) and 25 (4-08) total area admeasuring 37 Bigha 01 Biswa i.e. 7.7 acres situated in revenue estate of village Jharoda, Tehsil-Najafgarh, New Delhi (hereinafter, ‘suit property’). The total sale consideration agreed between the parties was Rs.7,71,87,500/-. The Petitioners paid a sum of Rs.77,18,750/- i.e. 10% of the sale consideration as advance money and part payment in the following manner: -
Rs.7,18,750/- in cash
Rs.70,00,000/-by cheque
Disputes arose between the parties in respect of the performance of their respective obligations under the said agreement to sell.
3. It is the case of the Petitioners that they were ready and willing to pay the balance sale consideration but the No Objection Certificate (hereinafter, ‘NOC’) which was to be obtained by the Respondents from the concerned authorities was not obtained.
4. On the other hand, it is the case of the Respondents that the last date for performance was extended from 10th March, 2012 to 30th May, 2012. Within the said period, the Respondents, had obtained the NOC. Thus, despite obtaining the NOC, the Petitioners having failed to pay the balance sale consideration, the Respondents forfeited the amounts already paid.
5. Disputes thus arose between the parties. The Petitioners filed the present OMP seeking the following relief’s: -
“(a) Restraining the Respondents their agents, associates or assigns from creating any third party rights with regard to subject property bearing Mustil No. 55-Khasra No.3 (4-16), 4/1 (05), 4/2 (4-13), 5 (416), 7/1 (1-16), 7/2 (1-7), Mustil No. 61-Khasra No. 11/1 (2-8), 20/2 (4-16), Mustil No. 62-Khasra No.16 (4-16), 24 (4-16) and 25 (4-08) total area admeasuring 37 Bigha 01 Biswa i.e. 7.7 acres situated in revenue estate of Village Jharoda, Tehsil-Najafgarh, New Delhi and subject matter of the agreement dated 10.08.2011.”
6. In OMP 995/2013, the stand of the Respondents was that the agreement which was placed on record by the Petitioners was a tampered/forged and fabricated document. According to the Respondents, there was no arbitration clause in the Agreement to Sell and the only clause was that disputes would be subject to jurisdiction of Courts at New Delhi. Considering the competing stands of the parties, learned Single Judge of this Court on 28th February, 2014, had passed the following order :
“I have heard learned counsel for the parties and proceed to deal with the aspect of making of interim arrangement at this stage. It is not in dispute that the parties entered into an agreement to Sell on 10.08.2011 where under the petitioner agreed to purchase and the respondent agreed to sell their agricultural land admeasuring 37 bighas 1 biswa for a total consideration of Rs.7,71,87,500/-. However, disputes have arisen between the parties, as each is claiming other to be in breach of the agreement. According to the petitioner, the date for completion of the transaction was 10.03.2012-by which date the respondent was required to obtain the NOC, so that the sale deed could be executed on the said date while making payment of the balance consideration. According to the petitioner, clause 20 of the Agreement to Sell contains an arbitration clause providing that the dispute shall be referred to an Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act, 1996, mutually. According to the petitioner, clause 18 of the Agreement provides that in case the petitioner fails
