HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No. 90/2019
Rajesh Gupta S/o Late Shri Harish Chandra Gupta, Aged About
81 Years, R/o Plot No. B-22, Shiv Marg, Banipark, Jaipur (Raj)
----Petitioner
Versus
M/s Parth Infratech Pvt. Ltd., (SNG Group) 707, Paris Point,
Collectorate Circle, Jaipur 302016 (Rajasthan)
----Respondent
For Petitioner(s) : Mr. Ajay Kumar Bajpai, Sr. Adv.
assisted by Mr. Nitesh Pareek For Respondent(s) : Mr. Rajesh Maharshi with Mr. Ankit Bishnoi HON'BLE MR. JUSTICE PANKAJ BHANDARI Order ORDER RESERVED ON :: 07/07/2022 ORDER PRONOUNCED ON :: 14/07/2022
1. The applicant has moved this arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") seeking appointment of an arbitrator.
2. It is pleaded in the application that a Development Agreement was executed between the applicant and non-applicant on 08.11.2012. There was an arbitration clause and initially, when dispute arose between the parties, the same was referred to the arbitrator and the arbitrator vide its order dated 17.10.2017 has passed the award, aggrieved by which, both the parties have approached the Commercial Court and the objections filed by the parties under Section 34 of the Act of 1996 has been dismissed by the Commercial Court vide its order dated 27.08.2019. It is also (Downloaded on 18/07/2022 at 09:19:58 PM) (2 of 5) [ARBAP-90/2019] pleaded in the application that a Memorandum of Understanding (hereinafter referred to as "the MOU") was executed between the parties on 06.03.2013, however, even after the execution of the MOU, the possession of the flats falling in the share of the applicant has not been delivered to him.
3. It is contended by counsel for the applicant that the applicant time and again had approached the non-applicant, but the non-applicant has not handed-over the possession of the flats falling in his share. The applicant has also served a legal notice on 16.02.2019 and suggested the name of Justice Gauri Shankar Saraf (Retired) as arbitrator, but the non-applicant has not agreed for appointment of an arbitrator. Counsel appearing for the applicant has placed reliance on Indian Oil Corp. Ltd. Versus M/s. SPS Engineering Ltd.: 2011 (3) SCC 507, Dolphin Drilling Ltd. Versus Oil & natural Gas Corp. Ltd.: 2010 (3) SCC 267.
4. Non-applicant has submitted its reply to the application. It is stated in the reply that the dispute raised in the instant application has already been decided and no new dispute has been put forth in the instant application. Therefore, no cause of arbitration/dispute arises between the parties and the applicant is not entitled to have an arbitrator appointed by the Court. In rejoinder, the applicant has contended that delivery of 23 flats was given to the applicant, however, remaining 31 flats of "B" Block were not delivered to the applicant. It is also contended in the rejoinder that the dispute is still existing as 31 flats have not been delivered and instead of delivering the flats, the non-applicant has demanded a sum of Rs.4,34,80,018/- from the applicant.
5. Counsel for the non-applicant has placed reliance on Gammon India Ltd. & Ors. Versus National Highways Authority of (Downloaded on 18/07/2022 at 09:19:58 PM) (3 of 5) [ARBAP-90/2019] India: AIR 2020 Delhi 132, Lloyds Steel Industries Limited Versus Oil and Natural Gas Corporation Ltd.: AIR 1997 Bom 337, Dadri Cement Company & Ors. Versus Bird & Co. (P) Ltd.: AIR 1974 Delhi 223, Young Achievers Versus IMS Learning Resources Private Limited: (2013) 10 SCC 535, DLF Home Developers Limited Versus Rajapura Homes Private Limited & Ors.: 2021 (5) ARBLR 196 (SC) and M.R. Engineers and Contractors Private Limited Versus Som Datt Builders Limited: (2009) 7 SCC 696.
6. I have considered the contentions raised by the learned counsel for the parties.
7. Admittedly, there is an arbitration clause as the dispute between the parties was earlier referred to the arbitrator and an award has been passed, which was challenged by both the parties under Section 34 of the Act of 1996 and the application under Section 34 of the Act of 1996 filed by both the parties stood rejected by the Commercial Court. In Dolphin Drilling Ltd. (supra), it was held by the Apex Court that if another dispute has cropped up, arbitration clause can be invoked again.
8. Admittedly, the non-applicant agreed to handover the possession of 40% share of flats to the applicant and vide MOU entered into between the parties, certain flats were retained by the non-applicant for completing the construction work, however, those flats have not yet been handed-over to the applicant, thus, there is a dispute, which still subsists between the parties. The non-claimant is claiming a sum of Rupees Four Crores and the claimant is claiming delivery of the flats without paying any amount. The objection of counsel for the non-applicant that the dispute is barred by res-judicata, cannot be looked into by this (Downloaded on 18/07/2022 at 09:19:58 PM) (4 of 5) [ARBAP-90/2019] Court when the matter is merely pertaining to the appointment of an arbitrator under Section 11 of the Act of 1996 as held by the Apex Court in Dolphin Drilling Ltd. (supra). The judgment referred to by the counsel for the non-applicant Lloyds Steel Industries Limited (supra) where the contract was put to an end and it was substituted with a new contract noticing their rights and the arbitration clause in the original contract was held to have perished. The said ruling cannot be applied to the facts of the present case as the parties never intended to perish their arbitration clause and the understanding which took place was only with regard to the delivery of the flats. The arbitration agreement was not cancelled by the parties.
9. The judgment in Dadri Cement Company & Ors. (supra) has no applicability to the facts of the present case, as in the case before the Delhi High Court, the original contract was substituted by a fresh contract and in the fresh contract, there was no arbitration clause. However, in the case before this Court, there is no fresh contract. Young Achievers Versus IMS Learning Resources Private Limited (supra) was a case in which the original agreement was superseded/novated by another agreement. The Delhi High Court held that if the agreement containing arbitration clause is superseded/novated by a substituted agreement between the parties, the arbitration clause of the original agreement does not survive. The above case has also no applicability to the facts of this case.
10. This Court is of the considered view that the agreement entered into between the parties for referring disputes to the arbitrator has not been superseded/novated merely because some flats were given to the non-applicant for making repairs therein. (Downloaded on 18/07/2022 at 09:19:58 PM)
(5 of 5) [ARBAP-90/2019] Admittedly, the non-applicant has not returned possession of the remaining 31 flats of "B" Block and thus, there still exists a dispute between the parties. I, therefore, deem it proper to allow the arbitration application. This Court appoints Mr. Justice S.K. Keshote (Retired), 10 Eden Garden, Flat No.302, Bajaj Nagar Enclave, Near Gandhi Nagar, Railway Station, Jaipur, as an arbitrator to decide the dispute.
11. The appointment of the sole arbitrator is subject to the declarations being made under Section 12 of the Arbitration and Conciliation Act, 1996 with respect to the independence and impartiality, and the ability to devote sufficient time to complete the arbitration within prescribed period.
12. The arbitrator shall be entitled to lay down fees as provided under Manual of Procedure for Alternative Disputes Resolution, 2009 as amended from time to time.
13. Registry is directed to intimate Mr. Justice S.K. Keshote (Retired) and obtain his formal consent.
(PANKAJ BHANDARI),J SUNIL SOLANKI /PS (Downloaded on 18/07/2022 at 09:19:58 PM) Powered by TCPDF (www.tcpdf.org)