A transaction involving cash payments does not automatically invalidate the contract unless clear evidence of intent to evade tax is established.

COMMON ORDER

1.Two Original Petitions are filed Challenging the Arbitral Award passed by the learned sole Arbitrator dated 14.09.2020.

1.a. O.P.No.546 of 2020 has been filed by the 1^st Respondent before the Arbitral Tribunal to set aside the Award No.1 of 2018 dated 14.09.2020 on the file of the Arbitral Tribunal, as being illegal and and opposed to public policy.

1.b. O.P.No.87 of 2021 has been filed by the Claimants before the Arbitral Tribunal to set aside the Award and dismiss the claim petition preferred by the Claimant.

1.c The parties are arrayed as per their own rankings before the Arbitral Tribunal. The Petitioner who filed O.P.No.546 of 2020 is referred as 1^st Respondent and the Petitioners who filed O.P.No.87 of 2021 is referred as Claimants for the convenience sake.

1.d. Since both the Petitions are arising out of the same Award, the same are disposed by way of this Common Order.

1.e. This Court while entertaining these petitions, issued limited notice on the arbitrability of the dispute alone vide order dated 02.12.2020.

2. The brief facts leading to file these Original Petitions are as follows:

2.a. The Claimants who are Respondents in main O.P.No.546 of 2020 owned a total extent of 9.80 Acres of land in Sholinganallur Village, Kanchipuram District comprised in Survey Nos.329/aB (329/3B1B as per patta), 329/2, 329/3A, 328/3A, 328/1B (328/1B1 as per patta), 328/1B (328/1B2 as per patta) and 328/3B. The 1^st Respondent company approached the Claimants and offered to purchase the entire extent of 9.80 Acres including those 2 Acres which was agreed to be sold to M/s. Clan Laboratories. After negotiation, the Claimants have agreed to sell the entire 9.80 Acres to the 1^st Respondent. Memorandum of Understanding (MOU) dated 23.07.2014 came to be executed by the parties. By the said MOU the parites fixed the total sale consideration at Rs.73.50 Crores which was to be paid in five installments. On the date of MOU Rs.2 Crores was paid by cash. By the same MOU, 2^nd Respondent was appoined as an Escro Agent who shall be the custodian of the MOU and the original title deeds. The 2^nd Respondent also agreed that in the event of any dispute between the Claimants and 1^st Respondent, he shall act as sole Arbitrator between the parites.

2.b. Apart from Rs.2 Crores in cash, another Rs.10 Crores also paid by cash and the 1^st Respondent also issued a cheque drawn on Axis Bank for a sum of Rs.30,23,34,000/- without filling the name and the date of cheque and the 2^nd Respondent filled up his name and the date of cheque as 25.09.2017. However, the cheque was dishonoured and the 2^nd Claimant prosecuted 1^st Respondent for the offence under Section 138 of the Negotiable Instruments Act in CC.No.121 of 2018.

2.c. It is the further case of the Claimants that the Respondents 2 and 3 have colluded with 1^st Respondent and played fraud upon the Claimants and have cheated the Claimants by handing over the original title deeds and the MOUs to the 1^st Respondent. Subsequent agreemeent dated 20.10.2014 also came into existence between the parties. It is also the case of the Claimant that in the meanwhile they executed sale deeds in favour of the 1^st Respondent on l0.11.2014 and 12.11.2014 for total extent. In nutshell, it is the case of the Claimant that the Respondents are liable to pay the balance sum of Rs.34.20 Crores as per the Memorandum of Understanding entered between the parties and claimed various claims including the purchase money agreed between the parties in the Memorandum.

3.a. 1^st Respondent took a defence that the Claim Petition