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2018 Supreme(Mad) 598
IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
Puravankara Projects Limited represented by its Managing Director, Ashish Puravankara, Bangalore – Petitioner
Versus
Galaxy Properties Private Limited represented by its Director, Mohammed Ibrahim, Chennai – Respondent
OP. No. 433 of 2017 & A. No. 3477 of 2017
Decided On : 20-02-2018
For the Petitioner:T.R. Rajagopalan, SC for M/s. Paul & Paul, Advocates.
For the Respondent:T.V. Ramanujam, SC for C. Jagadish, Advocate.
Headnote:
The court held that the arbitrator's award was valid and enforceable, and dismissed the petition to set aside the award. The court found that the parties had entered into a valid and binding agreement, and that the arbitrator had not exceeded his authority in making the award.
Fact of the Case:
GPPL and PPL entered into a Memorandum of Understanding (MOU) for the acquisition of 1000 acres of land in Tamil Nadu. The MOU was revived and extended by an amended MOU in 2007. GPPL acquired 23.7134 acres of land through its subsidiary company NDPL and 19.08 acres of land through its subsidiary company VDPL. GPPL and PPL entered into share purchase agreements for the purchase of shares of NDPL and VDPL. The agreements could not be enforced, and the parties mutually agreed to cancel the transactions. GPPL and PPL executed cancellation deeds and returned the advances paid. GPPL initiated arbitration proceedings, claiming that PPL had breached the MOUs and claiming damages of Rs.485,02,99,781/-. PPL filed a counter claim of Rs.186 crores towards damages and also claimed the Rs.10 lakhs paid as advance under the MOU.
Finding of the Court:
The court found that the parties had entered into a valid and binding agreement, and that the arbitrator had not exceeded his authority in making the award. The court held that the arbitrator's award was valid and enforceable, and dismissed the petition to set aside the award.
Issues: Whether the arbitrator's award was valid and enforceable.
Ratio Decidendi: The court held that the arbitrator's award was valid and enforceable because: * The parties had entered into a valid and binding agreement. * The arbitrator had not exceeded his authority in making the award.
Final Decision: The court dismissed the petition to set aside the arbitrator's award.
1. This Original Petition has been filed under Section 34 of the Arbitration and Conciliation Act, challenging the award dated 22.12.2016 and the additional award, dated 22.02.2017, passed by Hon'ble Mr.Justice J.Kanakaraj, former Judge of this Court, Sole Arbitrator.
2. In and by the impugned award, the Sole Arbitrator had granted as follows:-
“There will be an award in favour of the claimant for the said amount of Rs.24,68,10,000/- (as per modification, dated 22.02.2017) payable by the Respondent. This amount will carry further interest at 12% p.a. from the date of the award till the date of realisation. All other claims of the claimant are rejected. Equally, the counter claim of the Respondent is also rejected. Both parties will bear their respective costs.”
3. For the sake of convenience, the parties hereinafter shall be referred to as they were arrayed in the arbitration proceedings, namely, Puravankara Projects Limited (PPL), who is the Petitioner herein, hereinafter shall be called as the Respondent or PPL and Galaxy Properties Private Limited (GPPL), who is the Respondent herein, hereinafter shall be called as the Claimant or GPPL.
4. The Claimant and the Respondent had entered into a Memorandum of Understanding, dated 22.11.2006 for acquisition of 1000 acres of land in one conjoint and contiguous block, in part of Vittavidagai Village, part of Pappankuli Village of Sriperumbudur Taluk, part of Athivakkam Village, Thirumalpattu Village, Alapakkam Village and part of Singadivakkam Village in Kancheepuram Taluk/Sriperumbudur Taluk, in the District of Kancheepuram. The Claimant had stated that they were doing real estate business and the Respondent was looking to buy lands to develop the same. The Claimant had approached the Respondent and offered to acquire lands for the benefit of the Respondent. They had offered to acquire about 450 acres, starting from Chennai-Bangalore National Highway (NH4) with about 650 ft. frontage at an average rate of Rs.38 lakhs per acre and another 550 acres behind and abutting the said land at an average rate of Rs.35 lakhs per acre.
5. The Respondent had entrusted the work of acquiring such lands to the Claimant. The Claimant had further held out that they already had 270 acres of land in the name of their nominees or associate companies. At the time of Memorandum of Understanding, the Respondent had paid a sum of Rs.10 lakhs as advance, by cheque no.143319, dated 13.11.2016, drawn on ICICI Bank Limited, Chennai. It was further agreed in the Memorandum of Understanding that the Claimant shall produce all necessary title deeds before finalising the sale deed. The Respondent also reserved a right to issue public notice. With respect to registration, it was agreed that at a time not less than 100 acres shall be registered and this should be conjoint starting from 650 ft. wide frontage land facing the Chennai-Bangalore National Highways.
6. The entire exercise was divided into four phases. The registration should be done phase by phase. Phase-I included part of Vittavidagai Village, Pappankuli Village and Athivakkam Villages. Phase II included Alapakkam Village and Phase III included Thirumalpattu Village. Phase IV included part of Singadivakkam Village. It was further held out that initially 50 acres of land facing the road should be registered along with the back portion of 50 acres in the Phase I itself. Thereafter, 25 acres abutting the land facing the road should be registered along with 75 acres in the back portion. A detailed sketch was also attached with the Memorandum of Understanding. The Claimant had agreed to arrange for survey of the land before the date of registration and also agreed that the sale price shall be subject to physical measurement of the area. More importantly, both the parties agreed that acquisition of the entire 1000 acres of land shall be completed within
