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IN THE HIGH COURT OF DELHI
Suresh Kumar Kait, J.
Navita Suhag - Appellant
Versus
Divine Infracon Pvt. Limited - Respondent
Arb.P. 624 of 2021, Arb.P. 625 of 2021 and Arb.P. 626 of 2021
Decided On : 02-08-2021
Court affirmed the right to appoint an arbitrator under mutual agreement for disputes arising from contractual misrepresentation and non-payment of rent.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - Three petitions filed seeking appointment of an arbitrator due to disputes arising from misrepresentation and non-payment of rent by developer - Specific agreements including Hotelier Buyer's agreement and lease agreements served as the foundation of the claims. (Paras 1, 2, 12)
(B) Arbitration - The court determines an agreement for arbitration exists and both sides agree to the appointment of an arbitrator without dispute over the terms - Justice (Retd.) B.A. Khan appointed as Sole Arbitrator to adjudicate the dispute between the parties. (Paras 12, 13)
Facts of the case:
Petitioners invested in units of commercial property believing in false representations made by the respondent regarding the project’s legality and returns; after initial compliance in rent payment, the respondent ceased payments starting March 2016.
Findings of Court:
The court allowed the petitions, confirming the existence of the arbitration agreement and appointing an arbitrator for dispute resolution.
Issues: The petitions primarily address the appointment of an arbitrator due to non-payment of rent and misrepresentation by the respondent.
Ratio Decidendi: Arbitration is appropriate given the mutual acknowledgment of disputes and the existence of an arbitration clause in the agreements.
Result: Petitions allowed and an arbitrator was appointed.
JUDGMENT (Oral)
Suresh Kumar Kait, J. The hearing has been conducted through video conferencing.
1. The above noted three petitions have been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of Arbitrator for adjudication of disputes pending inter se parties and for grant of cost of petition in favour of the petitioners and against the respondent.
2. The background of the case is that petitioners have been allured into investing their hard-earned money on the basis of false promises, misrepresentation by the respondent, who is said to be a Developer constructing commercial complexes, hotels, residential buildings etc. According to petitioners, respondent deceived the petitioners by showing brochure/prospectus, making false representations and of having false permissions and sanctions from the concerned authorities about the project in question. Respondent assured the petitioners having completed all legal formalities regarding execution of the project and of good monthly return by way of rent of the said premises to be leased on the basis of lock-in period for a period of 18 years or any other period. Thus, the petitioners believing the representations of the respondent, invested their hard-earned money in the properties of respondent.
3. In the first captioned petition [ARB.P. 624/2021], petitioner is the owner of Unit No.23-B on the Ground Floor of MTRB situated at the Soul City Mall at Plot No.4, Sector 13, Dwarka City Centre, Dwarka, New Delhi110075. The case of petitioner is that as agreed with respondent, upon payment of a sum of Rs.40,00,000/-(forty Lacks) as sale price pertaining to the Unit No. 23 B, admeasuring Built Up area 9.2903 Sq. Meters ( 100 Sq. Feet) and having super area 18.5806 Sq. Meters (200 Sq. Feet) at ground floor of the plot bearing no. 4 situated at Sector 13 Dwarka New Delhi known as "Soul City Mall", they entered into a "Hotelier Buyer's" agreement dated 11.01.2014.
4. As per Hotelier Buyer Agreement, a separate lease deed in respect of property in question was to be executed giving the possession, control and management of the said unit to the hotelier to sub lease/sub license/assign the said shop/unit for the management as suitable for the purpose. Subsequently sale deed dated 04.02.2014 was also registered in the office of sub registrar, SR -II, Basai Darapur Delhi. Thereafter, petitioner and respondent also entered into a lease agreement dated 17.04.2014 with the respondent for a period of 18 years at a monthly rent of Rs.40,000 per month commencing from 18.01.2014, which was subject to 15% increase after every three years and interest @9% was to be paid for any delay in payment of monthly rent. According to petitioners, the respondent continued to pay the rent till March, 2016 but thereafter stopped paying the monthly rent.
5. Similar are the grounds put-forth in other two petitions. Petitioner in the above captioned second petition [ARB.P. 625/2021] is the owner of two Units bearing No.23-F and 23-I on the Ground Floor of MTRB situated at the Soul City Mall at Plot No.4, Sector 13, Dwarka City Centre, Dwarka, New Delhi-110075, who had paid a sum of Rs.46,50,000/-(Forty Six Lacs Fifty Thousand only) as sale price pertaining to the Unit No. 23-1 admeasuring Built Up area 9.2903 Sq. Meters (100 Sq. Feet) and having super area 18.5806 Sq. Meters (200 Sq. Feet) and Rs.93,00,000/-(Ninety Three Lacs only) as sale price pertaining to the Unit No. 23-F admeasuring Built Up area 18.5806 Sq. Meters ( 200 Sq. Feet) and having super area 37.1612 Sq. Meters (400 Sq. Feet) at ground floor of the "Soul City Mall". Petitioner herein also had entered into a "Hotelier Buyer's" agreement dated 15.04.2014, sale deed 18.06.2014 and lease deed dated 16.07.2014 with the respondent. According to the lease deed, respondent had to pay rent @Rs.80,000/-and Rs.40,000/-respectively for both the units to the petitioner. However, after March, 2016, respondent stopped payi
