IMPORTANT POINT
Arbitrator--Appointment of--Collaboration Agreement--Execution of sale deed from implied competence as per agreement--Challenge to action would lie within power of arbitrator, appointed as per arbitration clause.

S. D. Anand, J.- Relying upon an arbitration clause, the learned Trial Judge allowed a plea preferred by defendant-respondents to refer the matter to the Arbitrator. It is that order dated 7.9.2007 of the learned Additional Civil Judge (Senior Division), Gurgaon which is under challenge in the present petition before this Court.

2. The facts, as apparent from the material obtaining on the file including the Collaboration Agreement (Annexure P5) which was placed on file by means of C.M. No.21331-CII of 2007, are as under.

3. The plaintiff-petitioners and respondent No.1-M/s Omaxe Housing & Developers Ltd. (hereinafter referred to as the respondent builder) are parties to the impugned Collaboration Agreement. Clause 41 thereof, which was relied upon by the learned Trial Court to grant the impugned order, is re-produced as under in the first instance for facility of reference:

"The parties hereto agree that if any dispute and/or difference arises between the parties in respect of the present Collaboration Agreement and the same shall be settled through arbitration by the sole arbitrator namely Shri Rohtas Goel, Chairman & Managing Director of the Company. It is also agreed between the parties that the arbitration process shall be in accordance of the Arbitration and Conciliation Act, 1966. The award so made by the sole arbitrator shall be final and binding on the parties. It is agreed between the parties that the arbitration proceedings shall be conducted in Delhi only. That the Punjab and Haryana High Court at Chandigarh, and Courts in Gurgaon subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction."

4. Thereafter, the plaintiff-petitioners also executed a General Power of Attorney (Annexure P6) authorizing respondent No.1 (and its named nominees) to do a number of acts for purposes of execution/implementation of the impugned Collaboration Agreement.

5. As per the verbal averment made before this Court, respondent No.1 sold away the licence obtained by it and also the land which is the subject of impugned Collaboration Agreement.

6. Respondent No.1 had filed a plea for reference to arbitration on the strength of the above quoted arbitration clause. That plea was upheld by the learned Trial Court.

7. The grievance of the petitioners is that the controversy in the suit is with regard to the incompetence of respondent No.1 to sell the land in suit to respondent No.2. The plea raised thereby is that the matter pertaining to the validity or otherwise of that sale-deed is not referable to arbitration in terms of the arbitration clause mentioned in para No.3 of this order.

8. As would be evident from a perusal of the Clause 10(c) of the Collaboration Agreement, respondent No.1 was entitled to transfer and assign the rights in the licence etc. granted by the competent Authorities to develop and construct a Group Housing Residential Complex on the said land to a third party for such price and on such terms and conditions as the Builders may in consultation with the Owners decide. "In that eventuality, the sale proceeds shall be shared by the parties in the agreed ratio specified herein i.e. 10:90".

9. The impugned sale-deed (or a copy thereof) has not been placed on the file before this Court. If a builder is authorized, on consensual basis, to transfer the rights in the licence, it follows therefrom that the builder would be entitled to transfer the land as well to which (land) that licence is relatable. The mere transfer of a licence, without transfer of the land, would be meaningless and illogical. The converse would also be true.

10. Confronted with the predicament of having to explain the above condition of the impugned Collaboration Agreement, the learned counsel for the plaintiff-petitioners raised an alternative plea to the effect that the petitioners having opted to go to the Civil Court could not be compelled to resort to the arbitration proceedings. I