JUDGMENT :

NAVIN CHAWLA, J.

CAV.48/2023

1. As the learned counsel for the respondent has appeared on advance notice and has been heard, the Caveat stands discharged.

I.A.1153/2023 (exemption)

2. Allowed, subject to all just exceptions.

3. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to the as the ‘Act’) challenging the Arbitral Award dated 27.09.2022 passed by the learned Sole Arbitrator adjudicating the disputes that had arisen between the parties in relation to the Memorandum of Understanding for ‘Option to Surrender’ dated 11.08.2016 (in short, ‘the MOU’) executed between the parties.

4. By way of the Impugned Award, the learned Sole Arbitrator has held the respondent herein to be entitled to Rs.80,45,044/- with interest at the rate of 12% per annum from the date of the filing of the Statement of Claim till the realization thereof from the petitioner herein. The petitioner has further been directed to foreclose the loan amount/account with the HDFC Bank within a period of six weeks of passing of the Award.

5. The learned counsel for the petitioner submits that the Impugned Award is liable to be set aside inasmuch as it ignores and is, in fact, contrary to the express terms of the MOU between the parties. He submits that the learned Sole Arbitrator has found that the respondent had exercised his option to surrender the allotment vide email dated 11.04.2019. In terms of Clause 6 read with Clause 3 of the MOU, such option could be exercised by the respondent only before the expiry of 34 months from the ‘Effective Date’. Clause 3 of the MOU stipulates the ‘Effective Date’ as 10.03.2016. He submits that, therefore, the option to surrender could have been exercised by the respondent only till 10.01.2019 and not thereafter. As the email dated 11.04.2019 is admittedly after the said period, the same was not enforceable.

6. He further submits that the parties had also entered into discussions resulting in the Minutes of Meeting dated 07.01.2020 between the parties. In the said discussions it was agreed that the petitioner shall bear and pay the Equated Monthly Installments (in short, ‘EMI’) of loan taken by the respondent on the apartment till the possession is offered to the respondent; if the respondent requested for exit till possession of the apartment is offered to him, the petitioner was to find a suitable buyer for the unit. He submits the petitioner has paid the EMI to the HDFC bank in terms of the settlement arrived at between the parties and as recorded in the Minutes of Meeting dated 07.01.2020. The petitioner continues to pay such EMIs even today. He further submits that it is based on such Minutes of Meeting that the learned Sole Arbitrator vide his order dated 06.09.2021, passed under Section 17 of the Act, directed the petitioner to deposit the balance EMIs with the HDFC bank and also continue to pay the EMIs thereafter. He submits that therefore, the offer of surrender stood modified in terms of the Minutes of Meeting and could not have been relied upon by the Arbitrator in the impugned Award.

7. On the other hand, the learned counsel for the respondent submits that as far as the plea of exercise of the right of surrender not being within the time stipulated in the MOU, this was not even the case of the petitioner pleaded before the learned Sole Arbitrator. He has drawn my attention to the Affidavit of Evidence of Mr. G.S. Sachdeva, authorized representative of the petitioner, before the learned Sole Arbitrator, wherein the witness stated that the offer of surrender was to be exercised within a month from 09.05.2019.

8. On the plea of the Minutes of Meeting, he submits that the Minutes of Meeting which were circulated by the petitioner were not accepted by the respondent and the respondent added paragraph 5 to the same. The said addition, however, was not acceptable to the petitioner, as is also mentioned in the paragraph 32 of the present petition. Therefore,