Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Senthilkumar Ramamoorthy, J.
A. Murugan & Others - Petitioner
Versus
M/s. Rainbow Foundation Ltd, Anoop Chand Jain, Chennai & Others - Respondent
O.P. Nos. 698 & 711 of 2012
Decided On : 26-11-2019
Arbitration and Conciliation Act 1996 - Section 34 - Payment of balance sale consideration - statement of claim requesting for specific performance - Purchasers further stated that prepared and to hand over a sale deed to be executed by Vendors and a power of attorney to be executed by Vendor Thus dispute arose between parties and in se facts and circumstances after exchanging notices through lawyers arbitration clause in Agreement was invoked and arbitration proceedings were initiated by Purchasers Agreement seeking specific performance of Agreement- In said Arbitration after pleadings were completed learned Arbitrator framed issues and each of parties adduced both oral and documentary evidence- Purchasers adduced evidence through three witnesses and filed documents which were exhibited as Exhibits Vendors adduced evidence through six witnesses and filed documents which were exhibited as Exhibits consideration of pleadings evidence and oral arguments Arbitrator held that Purchasers are entitled to specific performance of Agreement upon payment of balance sale consideration to Vendors within two months from date Award and directed Vendors to execute and register sale deed/power of attorney in favour of Purchasers or nominees within from receipt of balance sale consideration –Held, Tribunal disregarded vital documentary evidence namely lawyer’s notices and 8respectively) wherein re is no reference to alleged cheques although notices were subsequent to dates on which were allegedly drawn- Instead Arbitrator largely relied on oral evidence - in spite of denial by Vendor that were attempted to be handed over to him - on this critical issue that goes to root of matter and impressions of learned Arbitrator as to veracity or of witnesses- Moreover affidavit filed implications thereof were also disregarded by Arbitral Tribunal- Court also find that learned Arbitrator disregarded fact that admittedly received a sum towards refund of advance paid by him along with compensation and failed to consider implications and instead focused entirely on receipt (and its genuineness which becomes irrelevant when receipt of sum not denied by party concerned- therefore it may be concluded that material evidence which has a strong bearing on entitlement to specific performance was also over looked and this also makes out a case for interference with Award as per principles laid down in Paragraph of judgment Hon’ble Supreme Court in Associate Builders case judgments that were relied upon effect that time is not of essence of a contract in respect of immovable property also provide that this is only a rebuttable presumption and that it is subject to a contract contrary- In this case clause unequivocal that time is of essence and said clause also provides for forthwith determination as consequence of not performing within time- judgment in case is relevant but nothing turns on it because termination in this case was per terms judgment in case with regard to non-necessity of producing money prove readiness and willingness is distinguishable in context Clauses whereby payment of balance sale consideration and conclusion of transaction case as y are discernible on face of Award especially with regard to awarding of specific performance of a contract in spite of non-compliance with Clauses Agreement and determination of Agreement as a consequence - Award is patently illegal and is liable to set aside – Order accordingly
ORDER :
Prayer in O.P.No.698 of 2012: Original Petition is filed under Section 34 of Arbitration and Conciliation Act, 1996 to set aside the Award dated 20.08.2012 passed by the Arbitrator.
O.P.No.711 of 2012: Original Petition is filed under Section 34 of Arbitration and Conciliation Act, 1996 to set aside the Award dated 20.08.2012 passed by the Arbitrator.
1. The first respondent in the arbitration is the Petitioner in O.P. No.711 of 2012 whereas the 2, 3, 4 and 5th respondents therein are the Petitioners in O.P. No.698 of 2012. Both the O.P.’s are filed to set aside the Award dated 20.08.2012 and, therefore, they are disposed of by this common order.
2. I heard the learned Senior Counsel, Mr.T.V.Ramanujam, on behalf of the Petitioners in O.P.No.698 of 2012 and Respondents 2 to 5 in O.P.No.711 of 2012, Mr.R.Thiagarajan, the learned counsel for the first respondent in both O.P.’s and Mr.Shah, the learned counsel for the 3rd Respondent in O.P. No.698 of 2012 and 6th Respondent in O.P. No.711 of 2012. For the sake of convenience, the Petitioner in O.P. No.711 of 2012 is referred to individually as Vendor No.1 and the Petitioners in O.P. No. 698 of 2012 are referred to as Vendors No.2. They are collectively referred to as the Vendors. Similarly, the first Respondent in both O.P.’s is referred to individually as the Purchaser company and the 3rd Respondent in O.P. No.698 of 2012 and 6th Respondent in O.P. No.711 of 2012 as Purchaser No.2. They are referred to collectively as the Purchasers.
3. The subject matter of the dispute is an Agreement of Sale dated 08.06.2006 (the Agreement) between the Petitioners in the two O.P.’s as the Vendors, on the one hand, and M/s. Rainbow Foundations Ltd and Mr. P. Dinesh Kumar as the Purchasers, on the other. As per the terms of the Agreement, the Vendors agreed to sell and the Purchasers agreed to purchase the property described in the schedule thereto for a total sale consideration of Rs.5 crores. Out of the said total sale consideration, it is the admitted position that a sum of Rs.1 crore was paid by the Purchasers by demand drafts dated 08.06.2006. The Agreement further provided that the Purchasers agree to pay the balance sale consideration of Rs.4 crores on or before the date of registration of the sale deed or within 30 days from the date of the Agreement, whichever is earlier. As per clause 11 of the Agreement, time is of the essence of the contract and in the event of non payment of sale consideration, the Agreement will not be kept subsisting after 7th July 2006. According to the Vendors, the Purchasers did not pay the balance sale consideration within the stipulated 30 day period and instead requested for an extension of time. Therefore, by a telegram dated 08.07.2006, the Agreement was terminated by the Vendors and the Purchasers were directed to take a refund of the advance amount. This was followed by a lawyer’s notice dated 09.07.2006, wherein the Purchasers were informed about the termination of the Agreement and the advance amount of Rs.1 crore was refunded after forfeiting 25% thereof as per the terms of the Agreement. On the other hand, the case of the Purchasers is that they met the Vendors on 05.07.2006, 06.07.2006 and 07.07.2006 and offered to pay the balance sale consideration by two cheques dated 07.07.2006 for a sum of Rs.55,00,000/- and Rs.3,45,00,000/- respectively and that the Vendors refused to receive the cheques on the ground that they were in the midst of a pooja and that, therefore, the transaction could be concluded later. The Purchasers further stated that on 07.07.2006, they prepared and endeavoured to hand over a sale deed to be executed by Vendors No. 2 and a power of attorney to be executed by Vendor No.1. Thus, a dispute arose between the parties and in these facts and circumstances, after exchanging notices through lawyers, the arbitration clause in the Agreement was invoked and arbitration proceedings were initiated by the Purchasers under the Agreement se
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
