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IN THE HIGH COURT OF JUDICATURE AT MADRAS
SENTHILKUMAR RAMAMOORTHY, J.
M/s. First Post, Rep. by its Partner Mr.V.Ramesh Kumar Reddy, Chennai - Appellant
Versus
R. Vijayambal & Others - Respondent
O.P. No. 1039 of 2019 & A. No. 9625 of 2019
Decided On : 12-01-2022
Arbitration and Conciliation Act, 1996 - Section 34(2) - Indian Contract Act, 1872 - Section 205 - Original Side Rules - Order XLIII Rule 7 - Land Dispute - Arbitral award - Set aside of - Dispute is between a developer, Petitioner and land owners, Respondents - Petitioner was also claimant before Arbitral Tribunal and Respondents herein were respondents therein - Petitioner is a registered partnership firm, which is represented by one of its partners - Petitioner and Respondents entered into a Joint Development Agreement (JDA) in relation to development of lands - Whether to award pendente lite interest or not - Held, Under Section 34 of Arbitration Act, court does not sit in appeal over decision of an arbitral tribunal. Consequently, with regard to appraisal of evidence, te court interferes when relevant award is based on no evidence, irrelevant evidence or if vital evidence is disregarded - In case at hand, net payout to Petitioner is partly towards amounts advanced by Petitioner to Respondents in terms of JDA and partly towards cost of construction after setting off amounts realized by Petitioner from sale of three plots - Such conclusion cannot be characterised as patently illegal or contrary to public policy so as to warrant interference - While on this issue, it should be noticed that post-Award interest at 18% per annum was granted - Petitioner has failed to make out a case to interfere with Award - Arb.O.P. dismissed.
JUDGMENT
Prayer: This Petition has been filed under Section 34(2) of the Arbitration and Conciliation Act, 1996 read with Order XLIII Rule 7 of Original Side Rules praying to set aside the Award dated 07.03.2019 passed by the Sole Arbitrator, Mr. Justice G.M.Akbar Ali (Retired) directing the Respondents to pay a sum of Rs.3,51,91,767/- (Rupees Three Crore Fifty One Lakhs Ninety one thousands seven hundred and sixty seven only) with interest at the rate of 18% p.a. from the date of passing the award till the date of payment, to the Petitioner and allow all the claims of the Petitioner.
1. The dispute is between a developer, the Petitioner herein, and the land owners, the Respondents herein. The Petitioner was also the claimant before the Arbitral Tribunal and the Respondents herein were the respondents therein. An Arbitral Award dated 07.03.2019(the Award) is challenged.
2. The Petitioner is a registered partnership firm, which is represented by one of its partners, Mr.V.Ramesh Kumar Reddy. The Petitioner and Respondents entered into a Joint Development Agreement dated 06.05.2015(the JDA) in relation to the development of lands situated in Old R.S.No.1 and New R.S.No.1/1, bearing Survey Nos.1/73, 1/74 at Injambakkam Village, Sholinganallur Taluk, Kancheepuram District of an aggregate extent of about 4.19 acres. As per the JDA, the developer had agreed to develop 20 plots and construct villas thereon. The sharing ratio under the JDA was 35% to the land owners and 65% to the developer. As a result, 7 out of the 20 plots were to be developed and handed over to the land owners and 13 plots were to be developed and retained or sold by the developer. Each villa was to have a built up area of about 4500 sq.ft. Such villa was envisaged to be a ground plus one construction. The entire construction cost was to be borne by the developer. The JDA envisaged that the developer would pay monetary consideration of Rs.4,20,00,000/- in the manner specified in Clause 7 thereof. Out of the sums specified in Clause 7, the developer paid a sum of Rs.20,00,000/- on 14.08.2014 and Rs.1,00,00,000/- on the date of execution of the JDA. A further sum of Rs.2,00,00,000/- in total was paid under multiple cheques between 18.05.2015 and 05.04.2016. Further payments of about Rs.4.85 crores also appear to have been made. Thus, in total, it appears that a sum of Rs.8,05,00,000/- was paid by the developer to the land owners.
3. In connection with the implementation of the JDA, the land owners were required to and executed two irrevocable Powers of Attorney on 07.05.2015, which were registered as Document Nos.90 of 2015 and 3554 of 2015 at the SRO, Neelankarai. Pursuant to the JDA, the developer undertook development and construction work. According to the developer, three villas on Plot Nos.8,10 and 11 were fully constructed. As regards Plot Nos.1 and 20, the construction was midway. Out of the 13 plots, which were allotted to the share of the developer, three plots were sold by making use of the Powers of Attorney.
4. By notice dated 23.07.2016, the land owners informed the developer that they had decided to cancel the Power of Attorney Deed bearing Document Nos.90 of 2015. By a separate notice, the developer was informed that the Power of Attorney Deed bearing Document No.3554 of 2015 was also being cancelled. Subsequently, it transpired that Deeds of Cancellation dated 27.07.2016 were registered in the jurisdictional SRO for cancellation of both the Powers of Attorney. After issuing a reply notice dated 10.08.2016 to the effect that the above mentioned Powers of Attorney cannot be cancelled since they are coupled with interest, the developer invoked the arbitration clause in the JDA. Shortly thereafter, by notice dated 27.08.2016, the land owners cancelled the JDA. After indicating the payments made by the developer to the land owners by communication dated 21.10.2016, the developer also indicated that it is accepting the cancellation of the JDA.
5. In these circum
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