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IN THE HIGH COURT OF DELHI AT NEW DELHI
Mini Pushkarna, J.
Satinder Kumar Gupta - Appellant
Versus
Divine Infracon Private Limited & Ors. - Respondents
Arb.P. 324 of 2022, with Arb.P. 330 of 2022 & Arb.P. 332 of 2022
Decided On : 15-11-2022
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11(6)
Fact of the Case:
The petitioner granted interest bearing loans to the respondents and entered into Hotelier - Buyer Agreements for serviced apartments. The respondents defaulted on loan repayment and failed to execute sale deeds for the apartments. The petitioner sought arbitration for the disputes.
Finding of the Court:
The court found that the disputes between the parties were linked and associated with each other, and the non-signatory respondents were required to be joined in the arbitral proceedings.
Issues: Whether non-signatory respondents can be referred to arbitration despite not being parties to the Hotelier - Buyer Agreements containing the arbitration clause.
Ratio Decidendi: The court held that the disputes were fundamentally connected and associated with each other, and the non-signatory respondents were required to be joined in the arbitral proceedings.
Final Decision: The matters were referred to the arbitration of a former Judge of Delhi High Court, and the parties were directed to seek disclosures from the arbitrator before commencement of the arbitration proceedings. All rights and contentions of the parties were left open for consideration by the arbitrator.
JUDGMENT
Mini Pushkarna, J. - The present petitions have been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter called the Act) seeking appointment of a sole arbitrator for adjudication of disputes that have arisen between the petitioner on the one hand and respondents on the other hand.
2. It is the case of the petitioner that in the year 2015, petitioner was approached by respondent No.3 and his wife respondent No.4, partners of respondent No.2, seeking financial assistance in the form of loans. Pursuant thereto, petitioner agreed to provide the financial assistance to the respondent No.3 and 4, partners of respondent No.2, in the form of interest bearing loans.
3. It is the case of the petitioner that in order to fraudulently induce the petitioner into parting with his hard earned money and granting interest bearing loans, the respondent No. 3 and 4, partners of respondent No.2, had furnished a copy of board resolution of respondent No.2 dated 05.01.2015 to the petitioner, recording the factum of availing an interest bearing loan of Rs.3 crores from the petitioner, which was to be re-paid with interest at the commercial rate of 18% per annum compounded annually. Thus, petitioner transferred a sum of Rs. 3 crores (Rupees Three Crores) into the bank account of respondent No.2 through RTGS from IDBI Bank, Pitampura on 06.01.2015.
4. It is submitted that in order to secure the repayment of the aforementioned interest bearing loans of Rs. 3 crores granted by petitioner, respondent No.2 and its partners, i.e., respondent No.3 and 4 also executed an irrevocable promissory note in favour of the petitioner, jointly and severally promising to pay the petitioner, sum of Rs. 3 crores along with interest thereon at the commercial rate of 18% per annum compounded annually.
5. In support of the above transaction and to document its execution, a statement of confirmation of accounts dated 01.04.2015 was also prepared by the petitioner, which was duly confirmed and acknowledged by and for on behalf of respondent Nos. 2, 3 and 4.
6. It is the case of the petitioner that the respondents again approached the petitioner in the month of April, 2015 expressing their financial troubles and sought to offer three serviced apartments at Plot No.4, Sector 13, Dwarka, New Delhi-110075, purportedly valued at Rs. 1 crore each, against the interest bearing loans availed from the petitioner. The respondents had represented, assured and warranted to the petitioner that they shall execute the registered conveyance and transfer the title to the three service apartments, in favour of the petitioner against the interest bearing loans availed from the petitioner. It is submitted on behalf of the petitioner that he was fraudulently induced into agreeing to the above referred proposal made by respondents and in pursuance thereof, three Hotelier - Buyer Agreements were executed between the respondent No.1 and the petitioner in respect of the three serviced apartments.
7. The first Hotelier - Buyer Agreement was executed between respondent No.1 and petitioner on 21.04.2015 in respect of Serviced Apartment No. 1032, Plot No.4, Sector 13, Dwarka, New Delhi - 110075.
8. The second Hotelier - Buyer Agreement was executed between respondent No.1 and petitioner on 21.04.2015 in respect of Serviced Apartment No. 1005, Plot No.4, Sector 13, Dwarka, New Delhi - 110075.
9. The third Hotelier - Buyer Agreement was executed between respondent No.1 and petitioner on 14.05.2015 in respect of Serviced Apartment No. 1034, Plot No.4, Sector 13, Dwarka, New Delhi - 110075.
10. It is submitted that the three Hotelier - Buyer Agreements unequivocally record and register the express promise made to the petitioner that the respondents shall execute the sale deed in respect of the respective service apartments in favour of the petitioner. However, the respondents in breach of their contractual obligations, miserably defaulted in executing the sale deeds i
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