The court ruled that disputes under the Arbitration Act and RERA Act are distinct, allowing the petitioner to invoke arbitration despite prior remedies sought under RERA.

JUDGMENT :

Suvir Sehgal, J.

This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act”) for appointment of an independent sole arbitrator to adjudicate the dispute between the parties.

2. Learned Senior counsel for the petitioner submits that vide allotment letter dated 12.04.2013, Annexure P3, petitioner was allotted a Group Housing plot in Sector 41, Faridabad and Clause 16 thereof provided that all disputes and differences between the parties shall be referred to the sole arbitration of the Commissioner, Municipal Corporation, Faridabad (MCF). He submits that the petitioner was issued a possession certificate on 10.05.2013, Annexure P4. He asserts that the respondent failed to fulfil its obligation under the allotment letter and did not complete the infrastructure and development work, but kept on demanding payment of installments. He submits that vide notice dated 20.12.2019, petitioner invoked the arbitration clause, but before the petitioner could approach this Court, by memo dated 12.05.2020, Annexure P6, respondent demanded a payment of Rs.32,65,27,571/-. Counsel submits that the petitioner has filed a petition under Section 9 of the Arbitration Act and by order dated 09.10.2020, learned ADJ, Faridabad restrained the respondent from resuming the plot, forfeiting the amount paid and from taking any coercive action till the disposal of the instant petition. He submits that this order is subject matter of challenge in connected FAO-13-2021. Asserting that in view of Section 12 (5) of the Arbitration Act, the Commissioner, MCF cannot be appointed as an Arbitrator, learned Senior counsel has requested for the appointment of an independent and impartial arbitrator.

3. Upon notice by this Court, the petition has been contested by filing a reply, wherein it has been submitted that the petitioner has breached the terms and conditions of the allotment letter and has defaulted in deposit of the installments as per the schedule given in the allotment letter. It has been submitted that the payment of the installments does not depend upon the completion of the development work, and on failure of the petitioner to make the timely payment, it is liable to pay interest. During the pendency of the petition, respondent filed miscellaneous applications bringing on record some additional documents.

4. Counsel for the respondent has raised two-fold submissions. It has been firstly argued that before approaching this Court by way of present petition, petitioner had filed a complaint, Annexure P-7, before the Real Estate Regulatory Authority (RERA) on 08.03.2020, which was partly accepted vide order dated 24.11.2022, Annexure R9. He submits that both the parties are in appeal against the said judgment. An argument has been raised by him that the petitioner had two remedies and having chosen to avail the remedy under Real Estate (Regulation and Development) Act, 1996 (for short “the RERA Act”), he was debarred from invoking Section 11 of the Arbitration Act. Second argument raised by counsel for the respondent is that once the RERA had adjudicated upon the matter, the findings recorded by it are binding upon the petitioner and the present petition is barred by the doctrine of res judicata. He has placed reliance upon Indiabulls Housing Finance Limited Versus Deccan Chronicle Holdings Limited and others, (2018) 14 SCC 783, Priyanka Taksh Sood and others Versus Sunworld Residency Pvt. Ltd. and another, 2022 SCC OnLine Del. 4717 and Pallab Ghosh and another Versus Simplex Infrastructures Limited, 2024 SCC OnLine Gau 751 in support of his arguments.

5. The first question to be adjudicated is whether the petitioner had two alternative remedies, one under the RERA Act and the second under the Arbitration Act and having chosen to avail the remedy under the RERA Act, whether it was debarred from filing the present petition. In order to determine this question, it is necessary to examine the r