The main legal point established in the judgment is that the order passed by the Arbitrator under section 17(1)(ii)(b) of the Arbitration and Conciliation Act, 1996 was a proper exercise of jurisdiction, considering the past conduct of the appellant and the compelling circumstances under which the application was preferred by the respondent.

JUDGMENT :

Tushar Rao Gedela, J.

1. The petitioner challenges the judgement dated 02.02.2023 passed by the learned First Appellate Court in Arb. A (COMM) No.06/2022 titled “M/s Splendor Buildwell Pvt. Ltd. & Anr. v/s Mrs. Parminder Jit Kaur” and batch matters filed under Section 37 of the Arbitration and Conciliation Act, 1996 assailing the order dated 19.04.2022 passed by the learned Arbitrator under section 17 (1)(ii)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), whereby the learned First Appellate Court dismissed the appeal and upheld the order of the Arbitrator.

2. FACTS IN BRIEF :

2.1 A Space Buyer Agreement dated 28.07.2017 and Memorandum of Understanding dated 28.07.2017 came to be entered into between the parties whereby space no. 404 in Tower D, Spectrum I, Sector 58, Village Behrampur, District Sohna, Gurugram (Haryana) was allotted to the respondent having super area of 765 sq. Feet, at a consideration amount of Rs.22,95,000/- with GST of Rs.2,75,400/. The respondent thus paid a total amount of Rs.25,70,400/- to appellant for purchase of the aforesaid office space. In the MoU dated 28.07.2017, the appellant assured the respondent to pay assured return @ Rs.71.50/- per sq. ft per month from 04.08.2017 till the obtaining the completion certificate and thereafter to pay Rs.60/- per sq. feet per month till the said unit is leased out to a prospective lessee.

2.2 It is not in dispute that assured return was paid by the appellant to the respondent from 01.08.2017 till 30.04.2018 but thereafter, the assured return was stopped being paid by the appellant to the respondent. It is also not in dispute that the completion certificate was issued on 25.09.2018 and occupancy certificate was issued to the appellant on 06.09.2019.

2.3 It is the case of the respondent that although initially Unit No. 404 was allotted to the Respondent, but the appellant unilaterally allotted a different unit bearing no. 615, admeasuring 765 sq. feet located at Tower D of the same project and subsequently respondent came to know that the appellant had sold the unit no. 404 in Tower D without his knowledge and consent in March 2020 to some other person. It is stated that the respondent in these circumstances filed a Petition under section 9 of the Act and on 08.07.2021, the appellant through its counsel, gave an undertaking not to create any third party interest / rights in the subsequent allotment and the said undertaking was recorded vide order dated 09.07.2021 by the then Ld. District Judge (Commercial Court01), South East, Saket, New Delhi. It is stated that the respondent got issued a legal notice dated 12.11.2020 calling upon the appellant to make the payment towards assured return along with future interest and also execution of conveyance deed in favour of the respondent with respect to the said unit. It is stated that the appellant replied to the said legal notice vide reply dated 29.12.2022 whereby appellant denied to pay the claims of the respondent and rather demanded an amount of Rs.29,00,479/- from the respondent.

2.4 It is stated by the parties, that on an application filed u/s 11 of the Act by the Respondent, this Court, vide the Order dt. 20.09.2021 appointed the Sole Arbitrator.

2.5 The respondents apprehending that the appellant may not pay the due amount as per the MoU as the assured returns were not paid since May 2018, coupled with the fact that the appellant was facing about 25 similar litigations with respect to the same project, filed an application u/s 17 of Act before the Arbitrator with the prayer to secure the amount of Rs.30,37,755/- by way of deposit till the passing of the award.

3. CONTENTIONS OF THE PARTIES:

3.1 Mr. Sudhir Nandrajog, learned Senior Counsel appears for the appellant and at the outset invites attention of this court to the letter dated 6/1/2021 (stated to be actually 6/1/2022) at page 243 of the paperbook to submit that the petitioner has offered the possession of the sub