Back
2025 Supreme(Online)(Mad) 56848
IN THE HIGH COURT OF JUDICATURE AT MADRAS
N.ANAND VENKATESH, J
Mrs.Bharathi Radhakrishnan – Appellant
Versus
Rema Vasudevan – Respondent
Original Application No.527 of 2025 & Arbitration O.P.(Com.Div.)No.394 of 2025
For the Appellants/Petitioners: Mr.T.V.Ramanujam, SC for Ms.Ramya Rangarajan
For R1 to R3 in both OA & OP: Mr.V.Raghavachari, SC for Mr.R.Jayaprakash
For R4 in OA: Mr.S.Saravana Kumar
For R5 & R6 in OA: Mr.N.Manokaran
The court held that the question of limitation regarding the enforceability of a contractual agreement must be determined by an arbitrator, not at the preliminary stage.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 and Section 11 - Interim injunction - Parties entered into a sale agreement, where the applicant sought to restrain respondents from altering property pending arbitration - The issue of limitation was raised concerning the agreement's enforceability after repetitive legal notices and subsequent sale deeds executed to third parties - The court emphasizes that matters of limitation require consideration by the Arbitrator - Sole arbitrator appointed to resolve disputes among parties. (Paras 1-32)
(B) Limitation - Court reaffirmed that the determination on limitation should await the Arbitrator's evaluation of factual and legal questions arising from the contract, including conditions of possession and obligations under the agreement. (Paras 11, 30)
| Table of Content |
|---|
| 1. initial applications for injunction and arbitration. (Para 1 , 2 , 3) |
| 2. background of the sale agreement and its conditions. (Para 4 , 5 , 6) |
| 3. dispute over limitations regarding performance under the agreement. (Para 10 , 11 , 12 , 13 , 14) |
| 4. court's limitations on its role versus arbitrator's authority. (Para 15 , 17 , 18) |
| 5. conclusion allowing the appointment of the arbitrator. (Para 30 , 31 , 32) |
COMMON ORDER
O.A.No.527 of 2025 has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Act) seeking for an interim order of injunction restraining the respondents from in any manner altering the physical features of the schedule mentioned property pending the arbitral proceedings.
2. Arb.O.P.(Com.Div.)No.394 of 2025 has been filed by the very same applicant seeking for appointment of an arbitrator to resolve the disputes between the applicant and respondents 1 to 3 that have arisen under the registered sale agreement dated 16.10.2019.
3. Heard the respective learned counsel on either side.
4. The case of the applicant/petitioner is as follows :
(i) Respondents 1 to 3 entered into a sale agreement dated 16.10.2019 with the applicant, by which, they agreed to sell the property more fully mentioned in the schedule to her for a total sale consideration of Rs.7.60 Crores. Pursuant to that, respondents 1 to 3 also received an advance amount of Rs.25 lakhs from the applicant. Clause 5 of the sale agreement dated 16.10.2019 deals with payment of the balance sale consideration of Rs.7.35 Crores within a period of six months and completion of sale. Clause 7 deals with the duty cast on respondents 1 to 3 to deliver possession of the schedule mentioned property to the applicant at the time of execution of the sale deed with all the required original title documents.
(ii) The schedule mentioned property is in possession of a tenant namely the 7th respondent in O.A.No.527 of 2025. According to the applicant, Clauses 5 and 7 of the sale agreement dated 16.10.2019 must be read together and handing over possession of the schedule mentioned property along with the original title deeds is a condition precedent for execution of the sale deed.
(iii) During January 2022, respondents 1 to 3 suggested that the sale could go on without possession by reducing the sale consideration to Rs.6 Crores. Based on that, a draft sale deed was prepared and the applicant's husband sent the same through whatsapp to the third respondent. Further, the third respondent made certain corrections in the draft sale deed and sent the document back to the applicant's husband.
(iv) Respondents 1 to 3 did not proceed further and they changed their stance stating that they would evict the tenant, hand over possession and receive the full consideration of Rs.7.60 Crores after giving credit to the advance amount of Rs.25 lakhs, which was already received by the applicant. One Mr.P.Vasudevan (who is none other than the husband of the first respondent and father of respondents 2 and 3) along with respondents 1 to 3 also filed eviction proceedings in RLTOP No.415 of 2020 on the file of the 12th Judge, Small Causes Court, Chennai against the tenant and obtained an order of eviction on 31.1.2025. However, the tenant continued to be in possession of the schedule mentioned property.
(v) While so, respondents 1 to 3 executed two sale deeds in favour of both the fourth respondent as well as respondents 5 and 6, dated 21.4.2025. On applying for the certified copies of the sale deeds dated 21.4.2025, it came to light that each sale deed has been executed for a sale consideration of Rs.3.25 Crores. In the light of the above development, a trigger notice dated 20.5.2025 under Section 21 of the Act came to be issued by the petitioner to the respondents proposing to invoke the arbitration clause in the sale agreement dated 16.10.2019.
(vi) Respondents 4 to 6 are not bona fide purchasers for value and they were fully aware of the registered sale agreem
