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IN THE HIGH COURT OF MADRAS
N. SATHISH KUMAR, J.
K.K. Krishnan Kutty - Appellant
Versus
Green Tree Homes and Ventures Pvt. Ltd. and Ors. - Respondent
O.P. No. 347 of 2018
Decided On : 12-06-2019
Societies Registration Act, 1975 - Section 27 - Arbitration and Conciliation Act, 1996 - Section 34 - Arbitrator appointment - Claim is land owner - Petitions have been filed Section Arbitration and Conciliation Act against the Award passed by Arbitrator appointed by this Court by order filed by First Respondent in the Arbitration proceedings - This O.P. has been filed mainly challenged Award as Arbitrator has gone beyond terms of contract and terminated Joint Development Agreement ground that findings of Arbitrator is perverse patently illegal against fundamental policy of Indian Law filed by Second Respondent in Arbitral proceedings as against Award rejecting claim for damages and compensation filed by Claimant himself challenging Award claim respect of sale consideration in flats sold by first respondent - Since all three Original Petitions are filed against Award passed by Sole Arbitrator appointed by this Court all Original Petitions are disposed of in a Common Order –Held, Court case of Oil and Natural Gas Corporation observed that term public policy of India is required to be interpreted in context of jurisdiction of Court where validity of award challenged before becomes final and executable - Court that an award can be set aside if it contrary fundamental policy of Indian law or interest of India or there patent illegality - In our view said decision will not any way come into rescue of appellant - As noticed above parties have entered into concluded contract agreeing terms and conditions of said contract which was finally acted upon - In such a case parties to said contract cannot back out and challenge award on ground that the same is against public policy - Even assuming ground available to appellant award cannot be set aside because not contrary to fundamental policy of Indian law or against interest of India or on ground of patent illegality - Contract Act and also Section Arbitration and Conciliation Act - As stated above interpretation of contract matter of Arbitrator who is a Judge chosen by parties to determine and decide dispute Apex Court in Mc Dermott International - Burn Standard C explained term patent illegality and that patent illegality must go to root of matter - Public Policy violation should be unfair and unreasonable as shock conscience of Court - supervisory role of Court Section be kept at a minimum level and interference is envisaged only in case fraud bias violation of natural justice Court Projects Limited and another also followed above judgment of the Apex Court and that only in circumstances envisaged decision of Apex Court Award can be interfered dispute with regard to preposition laid down by the judgments cited by counsel for Petitioners - However above judgments are entirely different from of this case and hence those judgments will not help petitioner set aside Award - In instant case Arbitrator has passed a reasoned Award - Court do not find any patent illegality or public policy is violated in Award and Award passed within scope of Act and same cannot be interfered – Petition dismissed
ORDER :
N. SATHISH KUMAR, J.
1. These three Original Petitions have been filed under Section 34 of the Arbitration and Conciliation Act, 1996 against the Award passed by the Arbitrator appointed by this Court by order dated 15.01.2018.
2. O.P. No. 581 of 2018 is filed by First Respondent in the Arbitration proceedings. This O.P. has been filed mainly challenged the Award as the Arbitrator has gone beyond the terms of contract and terminated the Joint Development Agreement dated 08.11.2010 on the ground that the findings of the Arbitrator is perverse, patently illegal, against the fundamental policy of Indian Law.
3. O.P. No. 542 of 2018 is filed by the Second Respondent in the Arbitral proceedings, as against the Award rejecting claim for damages and compensation.
4. O.P. No. 347 of 2018 is filed by the Claimant himself challenging the Award negatived his claim in respect of 37% of sale consideration in 11 flats sold by the first respondent.
5. Since all the three Original Petitions are filed against the Award passed by the Sole Arbitrator appointed by this Court, all the Original Petitions are disposed of in a Common Order.
6. The brief facts leading to file these petitions are as follows:
"3.5 : the amounts on such sale of Saleable Area shall be collected by the developer and deposited in a designated bank account in any Bank/Financial Institution to be operated in the name of Developer. The account shall be operated only for this project."
6 (b) In pursuant to the above terms, First Respondent opened a Current Account in HDFC Bank, Alwarpet Branch on 12.08.2011 in the name of the Company (M/s. Green Tree Homes and Ventures Pvt. Ltd.) bearing Account No. 193986400018 so as to facilitate the deposit of the cheques issued by the flat buyers towards sale consideration and also to transfer 37% share of the claimant. As on 31.12.2014 the First Respondent had sold and registered 263 flats together proportionate Undivided Share (UDS) of the land. The buyers of the flats are members of the Second Respondent Association. Even from March 2014 the First Respondent become irregular in paying the 37% share of the Claimant and subsequently have even stopped in paying the amounts due to the claimant. The First Respondent had misused 37% share of the Claimant for their personal gains and in total violation of the Joint Development Agreement. The First Respondent did not make any improvement in the project by proceeding with the construction even after receiving monies from the buyers. The buyers started questioning about their not getting possession over the flats. The Director of the company Mr. Sathyamoorthy apprehending legal action left the country and there was no other authorised person to represent the company. Thus the project came to a standstill and all the buyers have lost their confidence with the First Respondent. He abandoned the project and had cheated the buyers. Despite the Order passed by the High Court in a contempt application he did not appear before the High Court. Therefore, it becomes necessary that the Joint Development Agreement dated 8.11.2010 shall be terminated and the Claimant should be permitted to enter into development agreements with the members of the Second Respondent Association and also with third parties in order to complete the construction on mutually agreed terms and conditions.
7. The Second Respondent is also made claim pursuant to the Joint Development Agreement between the Claimant and the First Respondent.
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