IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT, PRATEEK JALAN, JJ.
Bhasin Infotech & Infrastructure Pvt. Ltd. – Appellant
Versus
Ahmad Main and Another – Respondents
First Appeal From Order (OS) (Comm.) No. 205 of 2018, Civil Miscellaneous Application No. 35734, 35735, 35736 of 2018
Decided On : 27-03-2019
Arbitration and Conciliation Act, 1996 - Section 34, 37 - Letter of allotment - Memorandum of Understanding - Arbitration clause - Unregistered agreement - Appellant agreed to allot to the respondents commercial shop - Respondents had paid an amount of Rs. 55 lacs to Bhasin towards the sale consideration of Rs. 1,05,76,350/- - Parties executed a Memorandum of Understanding (MOU) the same day - Readiness and willingness to make the payments after adjusting the amount of Rs. 11,55,000/- - Matter of the MOU and the letter of allotment was identical - Merely because one did not incorporate an arbitration clause whereas the other did, did not invalidate the arbitral proceedings for want of jurisdiction - Defence was neither taken before the arbitrator, nor argued before the Single Judge - Arbitration agreement contained in an unregistered and unstamped agreement is not the questioned - Appeal is without merit and the same is dismissed.
S. RAVINDRA BHAT, J.
1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter referred to as "the Act") impugns the dismissal of the appellant's petition under Section 34 of the Act. The petition had questioned an arbitral award dated 27.01.2018 of a Sole Arbitrator adjudicating the disputes between the parties in relation to the Letter of Allotment dated 22.12.2009.
2. The facts are that by a letter of allotment dated 22.12.2009, the appellant (hereafter "Bhasin") agreed to allot to the respondents commercial shop bearing No. 104 on LG floor with an approximate Super Area of 705.09 sq. ft. in the shopping mall known as 'Grand Venezia' at Greater Noida, constructed by Bhasin on Plot No. SH-3, Site-IV, Industrial Area, Surajpur, Greater Noida (UP). The respondents had paid an amount of Rs. 55 lacs to Bhasin towards the sale consideration of Rs. 1,05,76,350/- and agreed to pay balance consideration and other additional charges/IFMS @ Rs. 500/- per sq. ft. on offer of possession of the unit, calculated on the basis of super area. Simultaneously, with the execution of the above Letter of Allotment, the parties executed a Memorandum of Understanding (MOU) the same day (22.10.2009), whereby Bhasin agreed to pay to the respondents a sum of Rs. 55,000/- per month till handing over of the possession of the shop, as monthly return. By a letter dated 15.07.2015 Bhasin called upon the respondents to pay Rs. 58,10,151/- towards balance payment for allotment. They expressed their readiness and willingness to make the payments after adjusting the amount of Rs. 11,55,000/- towards unpaid assured return amount calculated till August, 2015, by two e-mails. Bhasin, by letter dated 03.08.2015, called upon the respondents to pay the demanded amount within 15 days of the said letter, failing which it threatened to cancel the allotment. The ensuing disputes led to the filing of an application under Section 9 of the Act [OMP (I) No. 477/2015] before this Court. On 02.09.2015, this court, after noting that parties would explore the possibility of an amicable settlement, recorded the undertaking on behalf of Bhasin that no precipitative action shall be taken by it against the shop in question. As the disputes could not be settled, on application under Section 11 they were referred to arbitration. The arbitration proceedings, resulted in the award dated 27.01.2018. The learned single judge dismissed the petition filed by Bhasin.
3. Mr. Sharma, appearing for Bhasin argued that on the date of pronouncement, it had filed an application under Section 12 read with Section 13 of the Act calling upon the Sole Arbitrator to withdraw himself as the Arbitrator. The application was filed because Bhasin claimed knowledge that the Arbitrator had appeared in some other connected petition (being Arbitration Petition No. 467/2017 titled Golden Chariot Recreations Pvt. Ltd. vs. Bewealthy Properties Pvt. Ltd. and Others, in which Bhasin's three Group Companies were respondents. It was submitted that in view thereof, Entry No. 21 of the Fifth Schedule to the Act was attracted giving rise to justifiable doubts on the independence and impartiality of the Sole Arbitrator.
4. Apart from this, the second ground urged was that the disputes were not arbitrable because the arbitration clause was not part of the allotment letter; despite objection, the sole arbitrator ruled otherwise. Since the parties had not entered into an arbitration agreement, the tribunal's award was entirely without jurisdiction.
5. The learned Single Judge's finding on the first point are as follows:
"9. The Arbitrator had been appointed by this Court on 4th November, 2016. The parties had made their final arguments before the Sole Arbitrator on 13th December, 2017. On a request being made on behalf of the petitioner for deferment of pronouncement of the Award on the ground of the petitioner wanting to explore the possibility of an amicable settlement, the Arbitrator fix
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