IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
K.K. Krishnan Kutty - Appellant
Versus
M/s. Green Tree Homes and Ventures Pvt.Ltd. – Respondent
O.P.Nos.347, 542 and 581 of 2018
Decided on : 12-06-2019
Arbitration and Conciliation Act, 1996 - Section 34 - Specific Relief Act - Section 27 – Buyers of flats are members - Claim for damages and compensation - First Respondent in Arbitration proceedings - has been filed mainly challenged Award as Arbitrator has gone beyond terms of contract and terminated Joint Development Agreement on ground that findings of Arbitrator is perverse patently illegal against fundamental policy of Indian Law - Second Respondent in Arbitral proceedings as against Award rejecting claim for damages and compensation - Claimant himself challenging Award negatived his claim in respect of sale consideration in flats sold by first respondent – Held, Power of Court to set aside Award would be exercised only in cases where Court finds that Arbitral Award is on face of it erroneous or patently illegal or in contravention of provisions of Act - In the case on hand considering entire findings of Arbitrator this court do not find any materials to show that this case requires interference Section of Act - Swan Gold Mining Ltd Hindustan Copper Ltd reported Apex Court - Arbitration and Conciliation Act corresponds to Section of Arbitration Act making a provision for setting aside arbitral award - In terms of sub-section of Section of Act an arbitral award may be set aside only if one of conditions specified therein is satisfied - Arbitrator’s decision is generally considered binding between parties and power of Court to set aside award would be exercised only in cases where Court finds that arbitral award is on fact of it erroneous or patently illegal or in contravention of provisions of Act - It is a well settled proposition that Court shall not ordinarily substitute its interpretation for that of Arbitrator – Similarly when parties have arrived at concluded contract and acted on the basis of those terms and conditions of contract then substituting new terms in contract by Arbitrator or by Court would be erroneous or illegal – Petition dismissed
ORDER :
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:
6.(a) The Claimant is the land owner. He acquired land to an extent of 3.91 Acres in Pududpakkam Village, Kancheepuram District. He entered into a Joint Development Agreement dated 8.11.2010 with the First Respondent company. He has also executed two General Power of Attorneys in favour of the First Respondent on 11.11.2010 and 22.07.2011. Several persons have booked for their respective flats in that area. In one of the clause in the Joint Development Agreement in para 3.5, it is stipulated as under:
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. The members of the Second Respo
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