Existence of an arbitration agreement obligates the parties to resolve disputes through arbitration, and defenses regarding performance issues must be addressed in arbitration, not as a basis to contest the arbitration initiation.

JUDGMENT

Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 11 of the Arbitration & Conciliation Act, 1996 (hereafter the `A&C Act'), inter alia, praying that an Arbitrator be appointed to adjudicate the disputes that have arisen between the parties in connection with an Agreement to Sell dated 11.12.2014.

2. In terms of the said Agreement to Sell, the respondent had agreed to sell the land ad-measuring 3 Bighas and 17 Biswas situated in Revenue Estate of Village Ladpur, Tehsil Kanjhawala, District North-West, Delhi-110081 for a total sale consideration of Rs.1,82,87,500/-. The said Agreement to Sell also records that the respondent had received a sum of Rs.18,30,000/- towards advance sale consideration.

3. The Sale Deed of the said property was required to be executed within a period of three months that is, on or before 11.03.2015. Admittedly, the respondent failed to execute the said Sale Deed in performance of the Agreement to Sell. In view of the above, the petitioner sent a notice dated 16.08.2016 calling upon the respondent to return the sum of Rs.18,30,000/-, however, the respondent failed to comply with the said demand.

4. In the circumstances, the petitioner filed a Civil Suit [CS No.172/2017] before the District Court on 27.05.2017. The respondent opposed the said suit on the ground that there was an Arbitration Agreement existing between the parties and filed an application under Section 8 of the A&C Act for the said purpose. The said application was taken up for hearing on 10.10.2017 and the Court dismissed the suit by referring the parties to arbitration.

5. Thereafter, the petitioner issued a notice dated 04.12.2017 under Section 21 of the A&C Act suggesting the name of an Advocate to be appointed as an Arbitrator. The petitioner states that the respondent did not respond to the said notice. It is in the aforesaid context, that the petitioner filed the present petition under Section 11 of the A&C Act.

6. The Agreement to Sell includes an Arbitration Clause that reads as under:

"12. Dispute Resolution

That the parties further agree that in the event of any dispute or difference arising between the parties relating to any of the terms of this Agreement or regarding implementation thereof, the same shall be referred for adjudication to a sole arbitrator to be appointed in terms of the provisions contained in the Arbitration & Conciliation Act, 1996 or any other enactment in force at the relevant time. The arbitral proceedings shall be conducted in accordance with the provisions of the above enactment. The parties shall be bound by the award given by the above arbitrator. The seat of Arbitration will be at Delhi and the Courts at Delhi only will have the jurisdiction."

7. The learned counsel appearing for the respondent does not dispute that the parties had entered into the Agreement to Sell or that the same includes an Arbitration Agreement. He also does not dispute that the respondent had received a sum of Rs.18,30,000/- as part consideration for the property agreed to be sold in terms of the aforementioned Agreement to Sell dated 11.12.2014. He has, however, opposed the present petition on two grounds. First, he submits that the respondent had acquired the rights in the said property in terms of the Agreements entered into with one Mr. Balwan, who did not honour his agreement. This is because he, in turn, had entered into an agreement with one Mr. Sajjan Kumar and one Mr. Pardeep Kumar for the said property and they had not honoured their commitment. He submits that there is no default on the part of the respondent in performing his obligations u