Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
Daulat Ram Dharam Bir Auto Private Limited & Ors. – Appellants
Versus
Pivotal Infrastructure Private Limited & Ors. – Respondents
Arb.P. 1230 of 2021 and O.M.P.(I) (COMM.) 29 of 2020
Decided On : 27-04-2023
The court held that the dispute between the parties was arbitrable and appointed an arbitrator to adjudicate the dispute. The court also held that the claims of the petitioner were not ex facie stale claims and that the petition under section 11 of the Arbitration and Conciliation Act, 1996 (the Act) needed to be allowed.
Fact of the Case:
The petitioner, a company, entered into a collaboration agreement with the respondent, another company, for the development of a real estate project. The petitioner was to receive 10% of the built-up area of the project land. The respondent subsequently assigned its rights under the collaboration agreement to a third company. The petitioner filed a petition under section 11 of the Act seeking the appointment of an arbitrator to adjudicate a dispute with the respondent regarding the non-delivery of the 10% built-up area. The respondent opposed the petition, arguing that the dispute was not arbitrable and that the claims of the petitioner were barred by limitation.
Finding of the Court:
The court held that the dispute between the parties was arbitrable. The court found that the arbitration clause in the collaboration agreement was broad enough to cover the dispute. The court also held that the claims of the petitioner were not ex facie stale claims. The court noted that the petitioner had filed the petition within three years of the issuance of the occupation certificates for the project. The court also noted that the Supreme Court had held that the rule is to refer claims to arbitration in case of the slightest doubt.
Issues: 1. Whether the dispute between the parties was arbitrable. 2. Whether the claims of the petitioner were barred by limitation.
Ratio Decidendi: 1. The court held that the dispute between the parties was arbitrable because the arbitration clause in the collaboration agreement was broad enough to cover the dispute. 2. The court held that the claims of the petitioner were not ex facie stale claims because the petitioner had filed the petition within three years of the issuance of the occupation certificates for the project and because the Supreme Court had held that the rule is to refer claims to arbitration in case of the slightest doubt.
Final Decision: The court allowed the petition and appointed an arbitrator to adjudicate the dispute between the parties.
JUDGMENT
V. Kameswar Rao, J.
ARB.P. 1230/2021
1. It is a case where the petitioner Nos. 1 to 3 (`Petitioner Group') are companies duly incorporated under the provisions of the Companies Act, 1956 (`Act of 1956'), have filed the instant petition under section 11 of the Arbitration and Conciliation Act, 1996 (`Act of 1996') with the following prayers:
"PRAYER
That in the light of arbitration agreement existing between the parties, a dispute covered by the arbitration Agreement having arisen and the parties having failed to agree upon the appointment of an arbitrator, it is prayed that this Hon'ble Court may be pleased to:
a. Appoint an Arbitrator and refer the aforementioned dispute to the Ld. Arbitrator for adjudication;
b. Pass such other/further order(s) as this Hon'ble Court may deem fit and proper in the interest of justice."
2. Whereas the respondent No. 1 herein, is also a company duly incorporated under the provisions of the Act of 1956, having its registered office at Plot No.12, Sector-4, Faridabad, Haryana-121004.
3. It is stated that the respondent No. 2 is also a company duly incorporated under the provisions of Act of 1956 and was earlier a part of the Petitioner Group. However, currently the same is under liquidation and is thus being sued through its Liquidator appointed by the National Company Law Tribunal.
4. Facts leading to the filing of the instant petition (as it relates to the Petitioner Group) are: that the Petitioner Group together with the respondent No.2, each of whom owned a piece of land, handed over the possession of parcel of their lands to the respondent No.3 (which is also a company incorporated under the provisions of the Act of 1956, [`Original Developer' herein]) and permitted the latter to develop, construct and complete the building on such lands, i.e., built-up area at projects titled as `Royal Heritage' & `Faridabad Eye' under License No. 78 of 2009 & 33 of 2010, granted by Directorate of Town and Country Planning, Haryana, (`DTCP'), Haryana, ['project land']. While the Petitioner Group and the respondent No.2 provided their piece of land for development and construction of buildings, the respondent No.3, in exchange of same, undertook the obligation to provide 10% share in the built-up area of the project land to the Petitioner Group. It is pertinent to mention here that the respondent No.3, being the Original Developer in respect of the project land has been arrayed as a Pro-forma Party, since the impleadment thereof is necessary for proper adjudication of the present petition.
5. It is also stated, after that the Original Developer undertook the steps to conduct development over the project land by applying for licenses and other necessary compliances.
6. It is stated, the Petitioner Group and the respondent No. 2 companies transferred the development rights over the said project land to the respondent No.3 through Collaboration Agreements dated June 04, 2007, while retaining the rights, title and interest to the land underneath amongst themselves. It is also stated that as per the Collaboration Agreements, the respondent No. 3 was to have 90% share over the built-up area (FSI) and the remaining 10% share over the built-up area was to be handed over back to the Petitioner Group and the respondent No.2, respectively. That under the aforesaid agreement, the respondent No. 3 was therefore designated as the `Original Developer'.
7. It is further stated that the respondent No. 3 (in its capacity as the Original Developer, having the development rights under the Collaboration Agreement) thereafter, entered into the Deed of Assignment, dated February 27, 2008 and by virtue of that, the Petitioner Group and the respondent No. 2, being signatories to it, further assigned the development rights to the respondent No.1 for a consideration of Rs.6,47,89,944/-. As a result, the respondent No.1 stepped into the shoes of the respondent No. 3 and was thus designated as the `Assignee Developer'.
8. It
A new cause of action cannot revive an arbitration petition previously dismissed as barred by limitation; the original denial of the agreement remains effective.
The main legal point established in the judgment is that a purportedly fresh cause of action cannot extend the limitation period for filing an arbitration petition, and the court may dismiss a petiti....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
