Prompt initiation of arbitration proceedings is crucial when seeking interim relief under Section 9 of the Arbitration and Conciliation Act, 1996.

JUDGMENT :

Subodh Abhyankar, J.

1. This appeal has been preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (for short "Act, 1996") by the appellants assailing the order dated 23.4.2019 passed in MJC No. 40/2018 by the Second Additional District Judge, Bhopal, whereby the application filed under Section 9 of the Act, 1996 by the appellant has been rejected.

2. Shorn of details, in brief the facts of the case are that the appellant/firm is a registered partnership firm engaged in the business of real estate investment, development and its sale. The appellant/firm is also a registered colonizer with the Municipal Corporation, Bhopal. Pursuant to its business, the appellant/firm entered into a Joint Venture Development Agreement with the respondents on 21.2.2014, the same was registered on 13.3.2014 with respect to the joint development of the property bearing Khasra No. 147/9/1/6 admeasuring 0.36 acres, and Khasra No. 147/9/1/4 admeasuring 0.72 acres at Village Bawariya Kalan, Tahsil Huzur District Bhopal. Under this Joint Venture Agreement the appellant was to develop the property on the land of the respondents, the land owner. The development included the multi-storied apartments/fats on the land in question, the sale consideration of which after completion was to be shared in the agreed proportion between the appellant firm and the respondents as per the various clauses of the Joint Venture Agreement. Clause 3 of the said agreement provided that the subject property was to be developed within a period of 36 months. Clause 8 provided that procuring the necessary permissions and making expenditure with respect thereof shall be the solitary responsibility of the second party i.e. the appellant/Fortune Builders who was also to procure all the necessary permissions and accordingly start the development work. Clause 13 provided the division of the constructed property in the ratio of 43:57 and Clause 20 provided that wherever the signature and endorsement of the first party (i.e. the land owner Mr. Kamdar) are required, the same shall be provided immediately by the land owner and vide Clause 25 and 27, it was agreed that if the area is not developed within 36 months, then a penalty of Rs. 5,000/- per fat, per month shall be payable by the appellant firm. Thus, the case of the appellant/firm is that the time was not the essence of the contract, as the same was extendable on payment of penalty by the second party to the first party.

3. It is further the case of the appellant firm is that the parties also agreed that the appellant shall pay a sum of Rs. 50 lakhs to the respondents and thus two cheques of Rs. 25 lakhs each dated 19.11.2013 were given by the appellant to the respondents. The appellant's further case is that as per the Joint Venture Agreement it was agreed that the respondents shall extend the entire assistance and shall sign on all the documents, wherever required towards procuring any permission from any authority for effecting the development over the subject land and thus as a precondition for carrying out any development on the land, it was necessary for the appellants to have procured the building permission/sanctioned from the Bhopal Municipal Corporation, which could have been sanctioned only after production of maps as signed by the land owner with the plan of the whole building.

4. It is further case of the appellant/firm that on two different occasions, the employee of the appellant/firm namely Radheshyam Malviya contacted and approached the respondents for signing of the duly prepared building maps, which were prepared by their architect, but the respondent/land owner avoided endorsing the aforesaid building plan map and for this reason despite being ready and willing to execute the project, the starting point of the whole project namely sanctioning of building permission map could not be achieved, hence for this reason the development work on the said project could not start on the subject di