Delhi High Court
Confoss Construction vs Manavsthali Co-Op. Group Housing ... on 1 November, 1994
Equivalent citations: 56 (1994) DLT 681
Author: R Lahoti
Bench: R Lahoti
JUDGMENT
R.C. Lahoti, J.
1. This order disposes of the main petition under Section 20 of the Arbitration Act as also three interlocutory applications: (a) IAs 7592/94 under Order 39 Rules 1-2 CPC filed by the petitioner and (b) IA No. 8733/94 under Order 39 Rule 4 CPC filed by (the respondent; (the latter application has been treated by the respondent as reply to the petitioner's application) and (C) I.A.9231/94 under Order 39 Rules 1-2 CPC, filed by respondent seeking an injunction against the petitioner.
2. The petitioner is a building contractor. The respondent is a Cooperative Group Housing Society. The petitioner entered into a contract with the respondent Society for construction of 99 flats. The contract dated 30.11.1987 is not in dispute. It also contains an arbitration clause.
3. Disputes have arisen between the parties. While the petitioner alleges his security deposit to have been illegally withheld by the respondent and other claims as shown in the final bill and on account of interest having not been released by the respondent, the respondent alleges breach of contract on the part of the petitioner and apart from forfeiting the security deposit claims other recoveries outstanding against the petitioner. What is not in dispute is that the disputes raised by either party are liable to be referred to adjudication by an Arbitrator.
4. He main petition (registered as a suit) under Section 20 of the Arbitration Act, 1940 is allowed. Mr. G.C. Jain, a retired Judge of this Court is appointed as an Arbitrator, who shall enter upon the reference within one month of the communication of this order. Parties shall file their disputes before the Arbitrator, who shall adjudicate upon them in accordance with law. The Arbitrator would be paid Rs. 20,000/- by way of arbitration fees to be shared equally by both the parties.
LA. NO. 7542/94 & 8733/94
5. The flats are lying completely built up according to the petitioner. The petitioner seeks allotment and delivery of the flats to the members of the Society being stayed till the settlement of the disputes raised and release of the amount payable to the petitioner. The prayer has been vehemently opposed by the respondent submitting that if allotment is stayed that would ruin the flats day by day and innocent members of the Society for whom the flats are meant would suffer irreparably for no fault of theirs. The submission of the learned Counsel for the petitioner is that the Society does not exist independently of its members and once allotment is made and flats occupied by the members, the Society would become defunct and in that event of the claims of the petitioner being upheld and decreed, there will be left nothing from which to realise the fruits of decree.
6. It is yet to be determined as to who would be liable to whom out of the two and in what amount. Apart from that the petitioner must be in a position to satisfy the test of balance of convenience and irreparable injury to be entitled to the grant of an injunction. In the opinion of this Court the balance of convenience does not lie in favor of the petitioner. The petitioner is not going to suffer any irreparable injury so long as means can be devised to protect his interest.
7. The Society does not have any capital of its own and independently of its members. If a liability for any amount payable to the petitioner arises and falls on the Society contribution shall have to be made by the members to meet the same.
8. Having heard the learned Counsel for the parties on all the aspects relevant to the matters this Court is satisfied that the following arrangement would meet the ends of justice and adequately protect the interests of both the parties :
(i) That the Society may proceed to make allotment and deliver possession over the flats to its members. However, every allotment shall make a mention of the pendency of this dispute for adjudication before the Arbitrator and shall also mention that in the event of any additional liability arising on the Society towards the petitioner the allottee shall remain liable to meet such liability proportionate with his share.
(ii) That written consent of the allottee to the above said obligation shall be obtained by the Society. Only such of the allottees would be given possession of the flats as would consent to the amount proportionate to their liability being recovered from the flat allotted to them in the event of their failure to fulfilll such obligation.
(iii) Copy of each such allotment and consent of the allottee shall be made available immediately to the petitioner for his record.
IA NO. 9231/94
9. By this application the respondent seeks a direction to the petitioner to remove his labour and material from the site and deliver possession over some of the remaining flats which are lying complete from the petitioner's side. Counsel for the petitioner has stated that the petitioner would remove his labour and material within four weeks and deliver possession over the flats to the Society. In view of that statement, no orders are called for.
10. Suit and three IAs stand disposed of accordingly.
