Bombay High Court
Rajesh Construction Co.Ltd vs Ravilal Nanji Dedhia on 23 October, 2008
Bench: S. Radhakrishnan, A.V. Nirgude
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bgp
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.670 OF 2007
IN
ARBITRATION PETITION NO.336 OF 2007
1. Rajesh Construction Co.Ltd.,
registered and incorporated under the
provisions of the Companies Act,1956
and having its registered office at
139 Sakseria Chambers, 2nd Floor,
Nagindas Master Road, Fort,
Mumbai - 400 023.
2. Rajesh Raghavji Patel
of Bombay, Indian inhabitant, the
Director of the Rajesh Construction
Ltd. i.e. Petitioner No.1 herein and
having his office at above at 139,
Sakseria Chambers, 2nd Floor,
Nagindas Master Road, Fort, ..Appellants
Mumbai - 400 023. (Ori.Petitioners)
Versus
1. Ravilal Nanji Dedhia
2. Nirmala Ravilal Dedhia
3. Purvi Vijay Dedhia
all of Bombay, Indian inhabitants
residing at 303, Gagangiri Complex,
18th Road, Chembur,
Mumbai - 400 071.
4. Everest Construction Co.
a partnership firm having its
office at 12/12A, Arihant Mansion,
29, Keshavji Naik Road, ..Respondents
Mumbai - 400 009. (Ori.Respondents)
WITH
ARBITRATION APPLICATION NO.43 OF 2008
1. Rajesh Construction Co.Ltd.,
registered and incorporated under the
provisions of the Companies Act,1956
and having its registered office at
139 Sakseria Chambers, 2nd Floor,
Nagindas Master Road, Fort,
Mumbai - 400 023.
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2. Rajesh Raghavji Patel
of Bombay, Indian inhabitant, the
Director of the Rajesh Construction
Ltd. i.e. Applicant No.1 herein and
having his office at above at 139,
Sakseria Chambers, 2nd Floor,
Nagindas Master Road, Fort, ..Applicants
Mumbai - 400 023.
Versus
1. Ravilal Nanji Dedhia
2. Nirmala Ravilal Dedhia
3. Purvi Vijay Dedhia
all of Bombay, Indian inhabitants
residing at 303, Gagangiri Complex,
18th Road, Chembur,
Mumbai - 400 071.
4. Everest Construction Co.
a partnership firm having its
office at 12/12A, Arihant Mansion,
29, Keshavji Naik Road,
Mumbai - 400 009.
5. Shantilal Vershi Haria,
of Mumbai, Indian Inhabitant,
residing at 03/107, Bhaveshwar
Complex, Vidya Vihar (West),
Mumbai - 400 086. ..Respondents
Mr.Shri Hari Aney, Senior Advocate with
Mr.S.C.Tamhane i/b. Tamhane & Co. for the Appellant
in Appeal No.670 of 2007.
Mr.S.U.Kamdar with Mr.Satish Shah i/b. Tamhane & Co.
for the Applicant in Arbitration Application No.43 of
2008.
Mr.D.D.Madon, Senior Advocate with Mr.D.H.Mehta i/b.
S.Pathak & Co. for Respondent Nos.1 and 2.
Mr.Pravin Samdhani, Senior Advocate with Mr.Maulik
P.Vora for Respondent Nos.3 and 4.
Mr.S.Kathawala with Ms.Sandya Tolat i/b.M/s.Vimdalal
& Co. for Respondent No.5 in Arbitration Application
No.43 of 2008 and Noticee in Show Cause Notice No.302
of 2008.
CORAM :- DR.S.RADHAKRISHNAN &
A.V.NIRGUDE, JJ.
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JUDGMENT RESERVED ON : 3RD JULY,2008
JUDGMENT PRONOUNCED ON : 23rd OCTOBER,2008
JUDGMENT (PER : DR.S.RADHAKRISHNAN,J.)
1. Both the above Appeal and the Arbitration
Application have been referred to us for final
disposal by the Hon'ble the Chief Justice.
2. The above Appeal arises out of a judgment and
order dated 27th August,2007 passed by the learned
Single Judge dismissing the Arbitration Petition
filed under ig Section 9 of the Arbitration and
Conciliation Act,1996 (for the sake of brevity "the
said Act") and the above Arbitration Application
No.43 of 2008 has been filed for the purpose of
appointment of an Arbitrator as per the provisions of
Section 11 of the said Act.
3. The entire controversy in both the above
Appeal as well as the Arbitration Application arises
out of the purported Memorandum of Understanding (in
short MOU) entered upon between the Ravilal Nanji
Dedhia Group and Rajesh Builders Group. It is the
case of the Appellant that a MOU was executed between
the Ravilal Nanji Dedhia Group and Rajesh Builders
Group on 8th November,2004, wherein in Arbitration
clause, both the parties had jointly appointed one
Shantilal Vershi Haria as a sole Arbitrator.
Mr.Aney, the learned Senior Counsel appearing on
behalf of the Appellant contended that it was a joint
venture arrangement, whereby both the parties had
agreed to jointly develop a property situated at
Prabhadevi by demolishing an existing structure.
Mr.Aney, the learned Senior Counsel pointed out that
as per the aforesaid MOU, the share would be on 50:50
percentage sharing basis. Mr.Aney, the learned
Senior Counsel pointed out that before the aforesaid
development could take place, various other
formalities had to be completed as mentioned in
Clause-2 of the aforesaid MOU. It is the case of the
Appellant that pursuant to the aforesaid joint
venture
sum of
agreement,
Rs.31 lacs
the
on
Appellant
10th November,2004
had contributed
and
a
another
sum of Rs.1 Crore on 18th May,2005 and lastly Rs.1.5
Crores on 25th April,2006. Mr.Aney, the learned
Senior Counsel contended that part of the aforesaid
amount was used to pay off the Everest Construction
Company as well as Lake View Developers and even
thereafter for the purpose of obtaining retirement
deed from Satinder Pal Investment Pvt.Ltd.
4. Mr.Aney, the learned Senior Counsel pointed
out that when his client came to know about a public
notice issued by the proposed buyer Everest
Construction Co. on 3rd July,2007, immediately a
notice was given by Appellant's Advocate stating that
there is a joint venture agreement subsisting between
the Rajesh Builders Group and Dedhia Group.
Thereafter within a period of four days, the
Appellants through their Advocate invoked the
Arbitration clause seeking arbitration. Thereupon, a
letter was received from the Advocate of Ravilal
Dedhia dated 17th July,2007 requesting inspection of
the purported MOU and other relevant documents.
Similarly, even the Advocate for Respondent Nos.2 and
3 sought inspection of the said MOU and denied that
Respondent Nos.2 and 3 had executed any such MOU.
5. Thereafter, the Appellant's Advocate on 21st
July,2007 wrote to the said Shantilal Vershi Haria
requesting
letter of
inspection of
Appellant's
the said
Advocate,
MOU.
on
To
24th
the said
July,2007
Mr.Shantilal Haria sent a reply stating that the
original MOU which was in his possession will be
offered for inspection to both the sides.
6. In the meanwhile on 7th August,2007, the
Arbitration Petition came to be filed under Section 9
of the said Act for an injunction pending the
arbitration. In the said proceedings, on 17th
August,2007, Mr.Haria filed an Affidavit stating that
the Respondents had misrepresented and had taken a
letter dated 17th July,2007 as if the original MOU
was in his possession and stated that the same was
not in his possession. On the very same day, the
Respondent No.1 also filed an Affidavit denying any
agreement between Everest Construction Co. and the
Petitioners, however, in the said Affidavit, it is
admitted by the Respondent No.1 that the Rajesh
Builders Group had paid him Rs.2.81 Crores but the
same was only by way of a friendly loan. On 23rd
August,2007, the Respondent No.1 had filed an
Affidavit giving details of payments made. On 27th
August,2007 Mr.Haria had filed a further Affidavit
stating that the earlier Affidavit was filed without
reading it and also the original MOU was kept with
him with the consent of both parties. However, the
original MOU was not traceable, as the same was
misplaced in his office. In the aforesaid second
Affidavit
that he
dated
had
27th
made
August,2007
an incorrect
Mr.Haria
statement
also
in
stated
his
earlier Affidavit that the MOU was not in his
possession and as such he prayed for withdrawal of
his earlier Affidavit.
7. Finally, all the parties had argued before the
learned Single Judge with regard to the Arbitration
Petition filed under Section 9 of the Act, and the
learned Single Judge by his detailed judgment and
order dated 27th August,2007 had criticised the
conduct of the Arbitrator and found that there were
serious disputes between the parties as to the very
existence of the MOU. The learned Single Judge had
expressed doubt about any right, title and interest
in property so created in favour of the Rajesh
Builders Group. Under these facts and circumstances
of the case, the learned Single Judge had dismissed
the above Arbitration Petition filed under Section 9
of the Act.
8. Aggrieved thereby, the present Appeal has been
filed by the Appellant and also a Notice of Motion
No.3830 of 2007 has been taken out for an appointment
of a Court Receiver and injunction restraining the
Respondents from creating any third party rights in
the said property. On 31st October,2007, the above
Appeal was admitted by the Division Bench, however no
ad-interim or interim reliefs were granted.
9.
In the aforesaid Notice of Motion before the
Appellate Court, both the Ravilal Dedhia and Purvi
Dedhia had filed two separate Affidavits-in-reply
both dated 10th December,2007 and had alleged that
the Respondent had in fact entered into a joint
venture agreement on 31st August,2007 with one
Gagangiri Nirmal Pvt.Ltd to develop the said
property. On 25th January,2007, a public notice was
duly published that the Respondent No.4 and Gagangiri
Nirman Pvt. Ltd. were negotiating for a joint
development of the said property. In response to the
same, on 30th January,2008, the learned Advocate for
the Appellants wrote a letter to the Advocate who
issued a public dated 25th January,2008 affirming
that the MOU dated 8th November,2004 was valid and
subsisting and that the Appellants had filed a lis
pendens notice and the Respondent No.4 was intending
to defeat the rights of the Appellants in the
property even though the Notice of Motion was
pending.
10. Mr.Aney, the learned Senior Counsel pointed
out that the learned Single Judge had erroneously
dismissed the aforesaid Arbitration Petition filed
under Section 9 of the Act and in fact the learned
Single Judge ought to have granted necessary reliefs
under Section 9 of the Act. Mr.Aney, the learned
Senior Counsel strongly contended that the aforesaid
original
Rs.100/-
MOU
on
ig was
8th
duly
November,2004
executed on
and
a
both
stamp
the
paper of
parties
had kept it with the learned Arbitrator Mr.Haria in
safe custody. Mr.Aney contended that merely because
the learned Arbitrator had himself misplaced the
original MOU, it does not mean that there is no MOU
between the Ravilal Dedhia Group and Rajesh Builders
Group. Mr.Aney also contended that there is no
dispute that his clients had paid total sum of
Rs.2.81 Crores to the said Ravilal Nanji Dedhia.
Therefore, Mr.Aney contended that the said amount was
utilised by Ravilal Nanji Dedhia Group to remove
various obstacles as mentioned in clause-2 of the
MOU. Therefore, Mr.Aney stated that now after
utilising the said amount Ravilal Nanji Dedhia Group
cannot back track and that they have to act on the
basis of the said MOU.
11. Mr.Aney also emphasised that pursuant to the
said joint venture agreement, the Everest
Construction Company as well as Lake View Developers
and Satinder Pal Investment Pvt.Ltd. have retired
and only Dedhia Group and Rajesh Builders Group
remained, so as to enable the Rajesh Builders Group
and Dedhia Group to jointly develop the said
property.
12. Mr.Aney, the learned Senior counsel having
regard to the aforesaid facts and circumstances of
the
Affidavit
case
of
and
the
also
learned
in
Arbitrator
view of
Mr.Haria
the
that
categorical
the
duly engrossed original MOU was with him and the same
has been misplaced in his office and as such the
Court ought to protect the interest of the Appellants
and the learned Single Judge had committed a serious
error in not granting the relief sought in the said
proceedings.
13. Mr.Madon, the learned Senior Counsel appearing
on behalf of Respondent Nos.1 and 2 very strongly
contended that there is absolutely no MOU dated 8th
November,2004. He pointed out that when the
inspection of the purported original MOU dated 8th
November,2004 was sought, neither the Appellants nor
the learned Arbitrator could show the original MOU
duly signed by all the parties. Mr.Madon contended
that the purported MOU appears to be a concocted
document, in the sense, if in reality a MOU had been
executed on 8th November,2004 involving such a huge
sum and wherein a Chartered Accountant Mr.Haria has
been appointed as the sole Arbitrator and both the
Groups consists of well versed businessmen and they
would obviously have atleast a xerox copy of the
original MOU which would have clearly indicated that
such an MOU has been executed on 8th November,2004.
14. Mr.Madon, the learned Senior Counsel contended
that finally what is sought to be relied upon on is a
document
and a
which
print-out
ig was
which
stored
was
in
also
the
relied
computer
upon
of
before
Mr.Haria
the
learned Single Judge and the same is also relied upon
before us. The said print-out indicates that the
draft document has been sent by one Mr.Dinesh Chandra
to Mr.Shantilal V. Haria, Chartered Accountant on
8th November,2004 at 11.45 a.m. The said
communication also indicates that the document has
been saved as "ecc-Memorandumbyharia". Mr.Madon,
also pointed out that neither the learned Arbitrator
nor the Appellants categorically state that as to
when the aforesaid MOU was exactly executed, in which
place and at what time. Mr.Madon stated that all
these facts are very relevant since, the said
document appears to be a draft. It only mentions
_____day (blank) of November,2004. Similarly, at the
end of said document also it does not indicate that
the same was signed by any of the parties. Mr.Madon
also contended that the Dedhia Group did not have a
copy of this document. Mr.Madon, the learned Senior
Counsel pointed out that even though the aforesaid
MOU was drafted by Mr.Haria the same is not averred
by him in both the Affidavits filed by him.
15. Mr.Madon also pointed out that the aforesaid
sum of Rs.2.81 Crores had been advanced as a loan by
the Appellants to Ravilal Nanji Dedhia individually
and out of the said amount, a sum of Rs.1.5 Crore has
been returned back to the Appellants as far back as
on
all
5th
the
ig May,2006.
tax returns as
Mr.Madon
well as
also
the
produced
Profit
before
and
us
Loss
business loss accounts which clearly indicate that
the entire amount of Rs.2.81 Crores was received by
Ravilal Nanji Dedhia as and by way of a loan and in
fact out of the said amount of Rs.2.81 Crores, a sum
of Rs.1.5 Crores have been returned back as mentioned
hereinabove. Mr.Madon emphasised that all these
facts clearly indicate that there is no real MOU. If
the Appellant wants to invoke the said Arbitration
clause, then the Memorandum of Undertaking has to
exist. Under these facts and circumstances of the
case Mr.Madon contended that the judgment and order
passed by the learned Single Judge was fully
justifiable and this Court ought not to interfere
with the same.
16. Mr.Madon also referred to the certain
following serious discrepancies in the purported MOU
which was annexed to the Arbitration Petition under
Section 9 and the Arbitration Application filed under
11(6) of the said Act. Both the above Arbitration
Petition and the Arbitration Application have been
filed by the Appellants.
Difference between MOU annexed to the Arbitration
Petition No.336 and annexed to the Arbitration
Application and Additional Affiavit of Respondent
No.5. ig Annexed to the Petition
Sr.No. Page Para No. Annexed to the Petition
No.
1. 1 heading thereof be mean and
include
2. 1 heading to the context or
meaning thereof be mean
include their respective
3. 1 heading Administrators and
assigns
4. 3 Main The party of Second part
Agree shall cause
para 2(e)
5. 4 Para 2 Total permissible FSI as
per Bombay Municipal
Corporation rules
6. 6 Para 9 Shall be referred to any
arbitration under
7. 6 Execution Shri Ravilal Nanji Dedhia
clause
Annexed to the Application and to the Affidavit of
Shantilal Haria
Sr.No. Page Para No. Annexed to the Application
No. and to the Affidavit of
Shantilal Haria
1. 1 heading thereof be deemed to
include
2. 1 heading to the context and
meaning thereof be deemed
to mean and include
their respective
3. 1 heading administrators and
assignors
4. 3 Main The party of First part
Agree shall cause
ig para 2(e)
5. 4 Para 2 Total permissible FSI as
per BMC rules.
6. 4 Para 9 Shall be referred to
arbitration under
7. 6 Execution Shri Ravilal Nanji Dedhia
clause Chairman of Ravilal Nanji
dedhia Gr
17. Mr.Madon, the learned Senior Counsel in that
behalf referred to a judgment of the learned Single
Judge in the case of M/s.Charu Trading Company
Pvt.Ltd. Vs. M/s.Saimangai Investrade Ltd. & Ors.
in Arbitration Petition No.479 of 2001 decided on
17th September,2001,
September,2001 wherein, the learned Single
Judge had categorically held that the Courts can
intervene only in those cases provided by the Act and
in respect of the same, where there is an Arbitral
Agreement in terms of Section-7 of the Act.
18. Mr.Madon also referred to another judgment of
the learned Single Judge in the case of Shri.Pramod
Chimanbai Patel Vs. M/s.Lalit Constructions & Anr.
2002(4) ALL MR 345, wherein the learned Single Judge
had clearly held that unless and until the document
is signed by both the parties, there cannot be any
arbitration agreement, as per Section 7 of the Act.
The learned Single Judge had taken a view that both
the parties have to sign the agreement, failing which
there cannot be any agreement which can be acted upon
and treated as an Arbitration Agreement.
19.
the case,
Under the aforesaid facts and circumstances of
Mr.Madon stated that the judgment and order
passed by the learned Single is fully justifiable and
this Court ought to dismiss the above Appeal.
19. Mr.Madon also referred to the judgment of the
Hon'ble Supreme Court in the case of Atul Singh and
Ors. Vs. Sunil Kumar Singh and Ors. (2008)2 SCC
602, especially paragraph No.16, which makes it clear
that unless and until there is an agreement as
defined under Section 7 of the Act there cannot be
any arbitration between the parties.
20. Mr.Samdani, the learned Senior Counsel
appearing on behalf of Respondent Nos.3 and 4
referred to Section 7 of the Act, which reads as
under:
7. Arbitration agreement:
agreement
(1) In this Part, "arbitration agreement"
means an agreement by the parties to submit to
arbitration all or certain disputes which have
arisen or which may arise between them in
respect of a defined legal relationship,
whether contractual or not.
(2) An arbitration agreement may be in the
form of an arbitration clause in a contract or
in the form of a separate agreement.
(3) An arbitration agreement shall be in
writing.
(4) An arbitration agreement is in writing if
it is contained in -
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams
or other
ig means of telecommunication which
provide a record of the agreement; or
(c) an exchange of statements of claim and
defence in which the existence of the
agreement is alleged by one party and not
denied by the other.
(5) The reference in a contract to a document
containing an arbitration clause constitutes
an arbitration agreement if the contract is in
writing and the reference is such as to make
that arbitration clause part of the contract.
21. Mr.Samdani, the learned Senior Counsel also
pointed out, that an arbitration agreement will have
to be in writing, which is mandatory as per Section
7(3) of the said Act. He also pointed out Section
7(4) of the Act, that if the arbitration is in
writing then it should be a document signed by the
parties. The contention of Mr.Samdani is that in the
instant case, whatever document which has been
produced before the Court does not contain any
signature of any party. In fact, it should contain
the signatures of both the parties. He also referred
to Section 2(h) of the Act, which defines "party" to
the effect that the party means a party to an
arbitration agreement. Mr.Samdani pointed out that
the aforesaid expression of Ravilal Nanji Dedhia
Group and Rajesh Builders Group contain various
companies, partnership firms etc. and it is a very
anomalous situation if it is were to be stated that
only Mr.Ravilal Nani Dedhia could sign on behalf of
the entire Group and similarly Rajesh Raghavji Patel
could sign on behalf of the entire Rajesh Builders
Group. The purported agreement should indicate as to
who are the members of the Group and who had
authorised
on behalf
the
of
aforesaid
the
Ravilal
entire Group
Nanji
and
Dedhia
also who
to sign
had
authorised Rajesh Raghavji Patel to sign on behalf of
the entire Rajesh Builders Group. Hence, Mr.Samdani
contended that in the instant case, there is no
established arbitration agreement as contemplated
under the provisions of Section 7 of the Act. In
that behalf, Mr.Samdani referred to and relied upon a
judgment of the learned Single Judge in the case of
Jeweltouch (India) Pvt.Ltd. Vs. Naheed Hafeez
Quaraishi (Patrawala ) & Ors. 2008(3) Mh.L.J.54 and
also another judgment of the learned Single Judge in
the case of Shaw Wallace Distilleries Ltd. Vs.
Kamal Wineries & Anr. in Arbitration Petition No.131
of 2003 decided on 9th June,2003,
June,2003 wherein the learned
Single Judge had categorically held that there has to
be a finding recorded that there exists an
arbitration agreement between the parties which is
necessary for making an interim order under Section 9
of the Act. Mr.Samdani also referred to a Division
Bench judgment of this Court in the case of Oberai
Construction Pvt.Ltd. Vs. Worli Shivshahi Co.Op.
Housing Society Ltd. in Appeal No.619 of 2007 In
Arbitration Petition (L) No.233 of 2007 decided on
30th January,2008, wherein also this Court had held
that an Application under Section 9 of the Act can be
entertained only if there is an arbitration
agreement, then only the learned Judge can assume
jurisdiction under the said Section and if there is
no
signed
clear
by
ig evidence
the parties,
that
then,
an
there is
arbitration
no question
agreement
of
invoking Section 9 of the Act for granting relief.
In the said judgment, this Court had held that if
there is no arbitration agreement, even the Court
cannot exercise the power under Section 11 of the
Act, since there is no concluded contract between the
parties.
22. Under these circumstances, Mr.Samdani
contended that the order passed by the learned Single
Judge is fully justifiable and this court ought not
to interfere with the same.
23. Right at the outset, Mr.Kamdar appearing on
behalf of the Applicants in the above Arbitration
Application, referred to and relied upon a judgment
of the Hon'ble Supreme Court in the case of SBP & CO.
Vs. Patel Engineering Ltd. and Anr. (2005) 8 SCC
618,
618 especially paragraph 47, which deals with the
scope of the powers of the learned Chief Justice of
the High Court or the Chief Justice of India while
exercising the power under Section 11 (6) of the Act
for the purpose of appointment of an Arbitrator.
24. Mr.Kamdar also referred to and relied upon
another judgment of the Hon'ble Supreme Court in the
case of Larsen & Toubro Ltd. Vs. Fertilizer &
Chemicals Travancore Ltd. (2008) 1 SCC 252,
252 with
regard
case, it
to
is
the named
contended
Arbitrator,
that
as
Mr.Haria
in
is
the
a
instant
named
Arbitrator. Mr.Kamdar also referred to another
judgment of the Hon'ble Supreme Court in the case of
Rodemadan India Ltd. Vs. International Trade Expo
Centre Ltd. (2006) 11 SCC 651,
651 contending that this
Court can even record evidence as to the subsistence
of the agreement in the manner in which the said
agreement was executed so that the Applicant is not
deprived of the remedy of getting the Arbitrator
appointed. Mr.Kamdar further referred to and relied
upon a decision of the Hon'ble Supreme Court in the
case of Aurohill Global Commodities Ltd. Vs.
Maharashtra STC Ltd. (2007) 7 SCC 120,
120 to contend
that whether the contract is non-est or otherwise can
be decided by the Arbitrator and only on that ground,
the arbitration application ought not be dismissed.
25. Mr.Kamdar, the learned Counsel further sought
to contend that the learned Arbitrator could go into
the issue whether there is an arbitration agreement
or not and this Court need not go into the same. In
that behalf Mr.Kamdar, referred to and relied upon a
judgment of the learned Single Judge in Smt.Satya
Kailashchandra Sahu and Ors. Vs. M/s.Vidarbha
Distillers, Nagpur and Ors. AIR 1998 BOMBAY 210,
210 and
another judgment of Delhi High Court in the case of
Jansatta Shakari Awas Samiti Ltd. Vs. M/s.Organic
India 2006(1) R.A.J. 124 (Del.).
(Del.)
26. Both the learned Senior Counsel Mr.Madon and
Mr.Samdani repeated and reiterated the very same
arguments which were advanced in the above Appeal,
mainly to contend that when there is no clear
material before this Court to justify that the MOU
was duly executed by both the parties and as the same
is absent, there is no arbitration agreement and then
there is no question of appointing any Arbitrator
under Section 11(6) of the Act.
27. After having heard all the learned Counsel and
the learned Senior Counsel for the respective parties
and after perusal of the record, we find that none of
the aforesaid payments which were purportedly made in
pursuance of the joint venture agreement dated 8th
November,2004 i.e. to say three payments of Rs.31
lacs were paid on 10th November,2004, Rs.1 Crore was
paid on 18th May,2005 and Rs.1.5 Crores were paid on
25th April,2006, there is no covering letter sent
along with the aforesaid three payments, indicating
that the same was pursuant to the above arguments
dated 8th November,2007. Another pertinent fact to
note is that all the aforesaid three payments were
made individually to Ravilal Nanji Dedhia. There is
also no dispute that the aforesaid payments were made
by crossed cheques. It is rather strange for the
Appellants being seasoned businessman and builders to
enter
the MOU
into
ig a MOU
though the
and not
purported
even
original
retain
MOU
xerox
had
copy of
been
handed over to the Arbitrator. None of the aforesaid
three payments indicate that they were made towards
the aforesaid purported MOU.
28. Another vital aspect to be noted here is that
the aforesaid sum of Rs.1.5 Crore was returned back
on 5th May,2006 i.e. much before the aforesaid
dispute arose and the Appellants had immediately
encashed the said cheque and took the money back and
they never protested as to why the said Rs.1.5 Crore
has been returned back which has been paid to
Respondent Nos.1 and 2 towards the aforesaid joint
venture. The Appellants whereas contended that they
came to know about Respondents backing out of the
aforesaid joint venture, only on 3rd July,2007 in
view of Respondent No.4's public Notice. However,
Appellants had accepted Rs.1.5 Crores which was
returned back on 5th May,2006, without any protest
whatsoever.
29. Another pertinent fact is to note is that all
the tax returns and business and loss accounts filed
by the Respondents clearly indicate that the
aforesaid amount of Rs.31 lacs has been paid on 10th
November,2004 and another Rs.1 Crore has been paid on
18th May,2005 and Rs.1.5 Crores paid on 25th
April,2006 were all had received by the Respondent
No.1, individually, as a friendly loan.
30. Neither Mr.Aney nor Mr.Kamdar could clearly
indicate from the record as to the time and place
where the aforesaid purported MOU was executed and
who had all signed the same.
31. Under the aforesaid facts and circumstances of
the case, it is explicitly clear that the Appellants
have failed to establish that there is a valid
arbitration agreement duly executed by the parties so
as to invoke relief under Section 9 of the Act as
well as relief under Section 11(6) of the Act.
32. In view thereof, under these circumstances,
there is no error or illegality in the order dated
27th August,2007 passed by the learned Single Judge
and the Appeal is totally devoid of merits. Hence,
the same stands dismissed with costs.
33. Since, the Appellants have totally failed to
establish that there is an arbitration agreement
dated 8th November,2004 entered into between the
parties, there is no question of invoking
jurisdiction under Section 11(6) of the Act for the
purpose of appointment of an Arbitrator. Hence, the
said Application also stands dismissed with costs.
34. After the above judgment was pronounced,
Mr.Shah,
stay of
the
this
learned
order
Counsel
for a
for
period
the
of
Appellant
six
sought
weeks.
Mr.Samdhani, the learned Senior Counsel for the
Respondent Nos.3 and 4 very strongly objected for
granting any stay stating that there was no
ad-interim-relief was granted in the above Appeal and
as such no stay should be granted and the same will
cause serious prejudice to his clients' interest.
35. Having regard to the aforesaid facts and
circumstances of the case, we are not inclined to
grant any stay in the above.
(A.V.NIRGUDE,J.) (DR.S.RADHAKRISHNAN,J.)
