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IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Dinesh Kumar Yadav (HUF) - Appellant
Versus
Aims Sanya Developers (P.) Ltd. - Respondent
Arb.P. 27 of 2021
Decided On : 14-07-2021
A party can seek arbitration under Section 11(6) of the Arbitration and Conciliation Act, 1996, even if there are claims regarding limitation, as such issues should be decided by the arbitral tribunal.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Reference of disputes to arbitration - Petition filed seeking appointment of an arbitrator for disputes arising from a Space Buyer Agreement - The court found no justifiable basis for rejecting the request for reference due to limitation. (Paras 1, 6, 7, 9)
(B) The arbitration clause in the agreement mandates that disputes are to be settled by a sole arbitrator. The court deemed it appropriate to refer the disputes to arbitration at the Delhi International Arbitration Centre (DIAC). (Paras 7, 9)
Facts of the case:
The appellant and respondent entered into an agreement for an office space, wherein the respondent failed to construct and hand over possession, defaulted on assured returns, and did not respond to a notice invoking the arbitration clause.
Findings of Court:
Disputes were referred to arbitration, appointing an arbitrator from DIAC.
Issues: The primary issue was whether the claims were barred by limitation.
Ratio Decidendi: The court determined that even if limitation was claimed, such issues should be settled before the arbitral tribunal, not as a reason to dismiss the arbitration petition.
Result: Petition allowed.
| Table of Content |
|---|
| 1. petition for arbitration reference under act (Para 1 , 2 , 3) |
| 2. claim of limitation defense by respondent (Para 5) |
| 3. court's observations on arbitration clause and proceedings (Para 6 , 7 , 8) |
| 4. reference of disputes to arbitration finalized (Para 9 , 10) |
ORDER (Oral)
(Video-Conferencing)
1. This is a petition under Section 11(6) of the Arbitration & Conciliation Act, 1996 (`the 1996 Act') seeking reference of the disputes between the parties to arbitration.
2. The substratum of the disputes, as captured in paras 10 to 12 and 14 to 17 of the petition may be reproduced, verbatim, thus:
"10. That the Respondent has also entered into a Space Buyer Agreement dated 07.09.2010, which also includes annexure including the terms and conditions of payment of monthly assured returns payable by the Respondent to the Petitioner.
11. That the cost of the said office space was agreed to be at Rs.4,439.61 per sq. ft. (basic sale price) i.e. total cost of Rs.44,28,111/- (Rupees Forty Four Lacs Twenty Eight Thousand One Hundred and Eleven Only).
12. That the Respondent had represented to the Petitioner that it shall pay monthly assured returns @Rs.85.01 per sq. ft. per month till the time the possession is not handed over by the Respondent to the Petitioner. Accordingly, a total sum of Rs.84,790/- (Rupees Eighty Four Thousand Seven Hundred and Ninety Only) per month is payable by the Respondent to the Petitioner till the time the possession of the proposed office complex is not handed over by the Respondent to the Petitioner.
***
14. That under Clause 18 of the said agreement, the Respondent was to complete the construction and handover the possession of the allotted unit to the Petitioner within 36 months from the date of booking i.e. 26.07.2010. A period of 6 months was also reserved as grace period. As such, the Respondent was liable to handover the possession latest by 25.01.2014.
15. That the abovesaid period of 42 months from the date of booking including the grace period had already expired. In fact, a period of 84 months had also expired after that. What to say to the completion of project and handing over of the possession, no construction, whatsoever has been started by the Respondent till date. In fact, the Respondent had abandoned the project. The Respondent has further committed various fraudulent acts. However, the Petitioner is not mentioning those acts in the present proceedings as they are not relevant here.
16. That the Respondent has also failed and neglected to make the monthly payment of assured returns calculated @ Rs.85.01 per sq. ft. per month in terms of the Space Buyer Agreement dated 07.09.2010 under the assured returns plan. The Respondent has defaulted in making the payment of assured returns since 01.05.2016. The cheques issued towards the assured returns have also got dishonored. As such, assured returns calculated @ Rs.85.01 per sq. ft. per month w.e.f. 01.05.2016 till 30.11.2020 is due and payable by the Respondent to the Petitioner.
17. That in these circumstances, the Petitioner got issued and served upon the Respondent a notice of demand dated 05.08.2020 thereby invoking the arbitration clause. The following claims were made in the said notice of demand:
a) Refund of an amount of Rs.40,06,708/- (Rupees Forty Lacs Six Thousand Seven Hundred and Eight Only)
b) Payment towards the assured returns calculated @ Rs.85.01 per sq. ft. per month w.e.f. 01.05.2016 till 31.07.2020 and further a payment of Rs.84,790/- per month toward the assured returns till the time the entire payment is made.
c) Payment of interest @ 18% p,a. on the arrears of amount of monthly-assured returns from the date of the amounts becomes due till its realization."
3. The notice, dated 5th August, 2020, addressed by the petitioner to the respondent did not meet with any response from the respondent. 30 days having elapsed since the date of the notice, the petitioner has approached this Court under Article 11(6) of the 1
