Jugal Kishore Vats vs Sarita Sharma And Anr.
1985 Latest Caselaw 458 Del

JUDGMENT

Sultan Singh, J.

(1) This first appeal is directed against the judgment and order dated 6th June, 1984 of the Additional District Judge, Delhi staying the plaintiff's suit for possession against the defendants-respondents under Section 34 of the Arbitration Act.

(2) Briefly these- are the facts. Jugal Kishore Vats, appellant filed a suit for possession against the defendants. He has alleged that he is a member of the Sarai Julaina Co-op House Building Society Ltd., that the society had allotted him Plot No. 49 in Sukhdev Vihar, New Delhi by a registered deed dated 17th October, 1973 between the President of India, the said society and the plaintiff and thus the lease-hold rights were transferred to him, that be got the building plans sanctioned, that on 20th November, 1978 he entered into an agreement with defendant No. 1 for the construction of a residential house on the said plot, that he executed a power of attorney in favor of defendant No. 2 and a Will in favor of defendant No. 1, that he received Rs. 49,000.00 from defendant No. 1. In terms of the said agreement, defendant No. 1 had agreed for the construction of a building for a sum of Rs. one lac within a period of two years. Defendant No. 1 wax to receive 25% profit from the plaintiff after the completion of the building. Thus defendant No. 1 was entitled to Rs. 1,25,000.00 besides refund of Rs. 49,000.00 paid by defendant No. 1 to the plaintiff as security for due performance of the agreement, after obtaining completion certificate and giving one month's notice in writing to the plaintiff demanding the amount of Rs.1,25,000.00and Rs. 49,000.00. It was also agreed that possession of the building and the plot would remain with defendant No. 1 until she has been paid in full in terms of the agreement. Further it was provided that if the plaintiff fails to pay to defendant No. 1 within one month from the receipt of notice, defendant No. 1 would be entitled to claim transfer of lease-hold rights in consideration of Rs. 49,000.00. There are also other terms agreed to by the parties.

(3) The plaintiff has alleged that in terms of the agreement defendant No. 1 was to complete the house within two years, obtain completion certificate and to give notice in writing demanding a sum of Rs. 1,25,000.00 besides Rs. 49,000.00that defendant No. 1 has not completed the building as yet, and she has committed the breach of the various terms of the agreement, that the construction made by her-is defective and of a very poor quality. A notice dated 28th January, 1982 was sent by the plaintiff to defendant No. 1 which was replied. The plaintiff therefore claims that. defendants having committed breach of the agreement of the building construction are not entitled to retain possession, and are liable to deliver possession to him. The plaintiff has thus prayed for a decree for possession besides return of all original documents delivered to defendant No. 1.

(4) The defendant filed an application under Section 34 of the Arbitration Act alleging that the disputes had arisen between the parties and the disputes which are subject matter of the suit are within the frame work of the arbitration clause entered into writing by them. The plaintiff appellant in reply submits that the subject matter of the suit does not fall within the scope of the arbitration clause. The trial court, as already stated stayed the suit.

(5) Clause 21 of the agreement of Building Construction dated 20th November, 1978 reads as under : "THAT in case of any dispute arising out of this agreement whether as to the interpretation of the various clauses or meaning of any word touching the rights and obligations of the parties whatsoever, the matter shall be referred to an Arbitrator to be appointed by the parties hereto, whose decision shall be final, and binding on the parties subject to the proviso that the decision of the arbitrator is within the framework of and in consonance with the spirit and letter of the terms, provisions and conditions of this agreement".

Learned counsel for the appellant submits that the arbitration clause is restricted to the interpretation of the various clauses or the meaning of any word touching the rights and obligations of the parties under the agreement. He submits that all disputes between the parties cannot be subject matter of the arbitration. Reading of the arbitration clause as above it leaves no doubt that all disputes relating to the agreement in question including the dispute regarding interpretation of the clauses of the agreement are to be referred to the arbitration. The plaintiff has filed a suit for possession alleging that there has been a breach of the various terms of the agreement. The case of the defendants on the other hand is that there has been no breach and the subject matter of the suit is covered by the arbitration clause. Learned counsel for the respondents submits that the suit for possession cannot be decided without reference to various clauses of the agreement, that the question of interpretation of various clauses is involved for determining whether the defendants have committed the breach of any clause of the agreement. I have gone through the entire agreement of building construction. Various clauses confer various rights and impose various obligations on the parties to the agreement. The suit of the plaintiff for possession is based on the alleged violation of the agreement. To determine whether there is breach of terms of the agreement, it is necessary to interpret various clauses of the agreement. In other words, it means that to determine the disputes between the parties various clauses of the agreement arc to be interpreted. If it is assumed for the sake of argument that the arbitration clause applies only to the interpretation of various clauses of the agreement or the meaning of any words touching the rights and obligations of the parties I am of the opinion that the claim of the plaintiff for possession of the plot of land cannot be decided without interpreting the various clauses of the agreement in question. In other words, it will be necessary to have recourse to the terms of the agreement between the parties to determine the matters in dispute, namely, whether the appellant is entitled to claim a decree for possession against the respondents. There is thus no infirmity in the order of the trial court staying the suit for possession. There is no merit in the appeal. It is dismissed with costs.