M/S. Anant Raj Industries Limited vs Somesh Kumar Bishnoi
2009 Latest Caselaw 894 Del

*                   IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    ARBITRATIONN APPLICATION NO.418/2008

%                          Date of Decision: 19.03.2009

M/s. Anant Raj Industries Limited                          .... Petitioner

                          Through Mr.Sanjay Ghose and Mr.Rahul Kumar,
                                  Advocates

                                   Versus

Somesh Kumar Bishnoi                                      .... Respondent

                          Through Mr.Ajay Mehrotra, Advocate

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR

1.     Whether reporters of Local papers may be                YES
       allowed to see the judgment?
2.     To be referred to the reporter or not?                  NO
3.     Whether the judgment should be reported in              NO
       the Digest?


ANIL KUMAR, J.

*

1. This is a petition under Section 11 of the Arbitration &

Conciliation Act, 1996 for appointment of a presiding Arbitrator for

adjudicating the disputes and differences between the petitioner and

the respondent.

2. The petitioner contended that it is a company duly incorporated

and registered under the Companies Act, 1956. The petition has been

filed by Mr.Pankaj Nakra, who is allegedly authorized to sign, verify and

file the petition on behalf of the petitioner.

3. The petitioner is alleged to be engaged in real estate business in

and around NCT of Delhi. It is contended that it used to purchase

lands with an intention to develop the same into

hotels/motels/residential/IT parks/group housing areas etc. and

entered into an agreement dated 6th December, 2006 with respondent

as he had represented to the petitioner that he had requisite experience,

contacts and arrangements to manage the purchase of land measuring

approximately 1500 acres at villages Fazalwas, Chandla, Dungervas,

Gwalior, Binola, Bilaspur, Pathredi, etc. having sufficient and

reasonable frontage of National Highway - 8. It is contended that the

respondent had assured the petitioner that he would be able to manage

to purchase the said land for the petitioner.

4. Pursuant to the representations made by the respondents,

agreement to sell dated 6th December, 2006 was entered into between

the parties and as per the agreement the petitioner was not to be

concerned about the rates of the sale consideration paid to the

occupiers of the said land. It is contended that at the time of execution

of registration of sale deeds in favor of the petitioner or its subsidiaries

or nominees, the sale consideration was to be paid directly to the land-

owners/occupiers/villagers at the rates fixed by the respondent.

However, the respondent was to be paid at the fixed rate of

Rs.50,00,000/- per acre and the sale consideration payable to the land-

owners/occupiers/villagers was deductable from the said sale

consideration agreed between the petitioner and the respondent.

5. The petitioner asserted that the respondent had agreed that he

will perform the obligation under the said agreement within a period of

15 months from the date of its execution and on failure to perform the

obligations, he will refund all the amounts paid by the petitioner or its

subsidiaries or nominees to the respondent. The respondent is also

alleged to have agreed to pay pre-determined liquidated damages of

Rs.5.00 crore per acre within a period of five days from the expiry of the

period of 15 months agreed in the agreement dated 6th December, 2006

in case of failure of the respondent to purchase 1500 acres of land for

the petitioner.

6. The petitioner has further contended that the agreement dated 6th

December, 2006 also has an arbitration agreement that if any dispute

or difference arose between the parties, the same would be referred to

arbitration. Regarding the procedure for arbitration, it was agreed that

one arbitrator was to be appointed by each of the parties and in case of

differences between the said two arbitrators, the Presiding Arbitrator

shall be appointed by the two Arbitrators whose decision shall be final

and binding.

7. The petitioner asserted that he and his subsidiaries had paid a

total amount of Rs.25,03,78,200/- for the purchase of 45.25 acres of

land and the respondent has failed to perform his part of obligation to

get the title documents of 1500 acres of land transferred in the name of

the petitioner within a period of 15 months. The respondent is also

alleged to have issued cheques in discharge of his liabilities in the name

of subsidiaries of the petitioner. However, when the cheques were

presented, it transpired that the account had been closed. When the

respondent was contacted about it, he represented to the petitioner not

to initiate proceedings under Section 138 of Negotiable Instruments Act

and consequently believing the representations made by the

respondent, the petitioner did not initiate proceedings under Section

138 of Negotiable Instruments Act in respect of the cheques which were

dishonored.

8. The respondent is alleged to have issued further cheques in May

2008, however, the said cheques were also returned dishonored on

account of insufficient funds in the accounts of the respondent. Thus

disputes have arisen between the petitioner and the respondent.

9. In the facts and circumstances, the petitioner issued a legal

notice dated 5th July, 2008 calling the respondent to pay a total

outstanding amount of Rs.1,00,03,78,200/-. By the legal notice dated

5th July, 2008, the petitioner also proposed to appoint Mr.Justice S.N.

Sapra (retd.), resident of B-64, Sector-14, Noida, U.P. as petitioner's

Arbitrator. The respondent sent a reply dated 2nd August, 2008 to the

legal notice dated 5th July, 2008 and proposed appointment of Mr. M.K.

Bansal, Retired District and Sessions Judge, resident of 175, Hope

Apartment, Sector-15, Part-11, Gurgaon as his nominee Arbitrator.

10. It is contended that after the appointment of Mr.Justice S.N.

Sapra (Retd.) as the Arbitrator of the petitioner and Mr.M.K. Bansal,

Retried District and Sessions Judge as the Arbitrator of the respondent,

the Arbitrators appointed by the parties have not been able to appoint a

Presiding Arbitrator. In the circumstances, the petitioner filed the

present petition on 6th November, 2008.

11. After notice was served on the respondent, Mr. Ajay Mehrotra

Advocate appeared on behalf of the respondent and sought time to file

the reply. Despite the time given to the respondent, reply has not been

filed. No sufficient reason has been disclosed for granting more time to

the respondent to file the reply. The right of the respondent to file the

reply is therefore, closed.

12. This is not disputed that the arbitrator's appointed by the

petitioner and the respondent have not been able to agree on the name

of the presiding arbitrator. The learned counsel for the petitioner has

contended that the petitioners had given about eight names of retired

High Court judges. However, the respondent has not consented to the

appointment of any one of them as the presiding arbitrator. The learned

counsel for the respondent has refuted this and contended that on

behalf of the respondent the names for the presiding arbitrator were

given, however, the petitioner did not agree to any one of them.

13. Learned counsel for the parties were therefore, given another

opportunity to agree on a presiding arbitrator by consensus. The

learned counsel for the parties were however unable to agree on the

name of any retired High Court judge for appointment as the presiding

arbitrator. In the circumstances, it was proposed to appoint a retired

Supreme Court judge as the presiding arbitrator. The learned counsel

for the parties, however, have not agreed for appointment of a retired

Supreme Court judge as the presiding arbitrator. In the circumstances

the learned counsel for the parties, therefore, asked for appointment of

any retired High Court judge deemed appropriate as the presiding

arbitrator.

14. In the facts and circumstances and considering the request made

by the counsel for the parties, Mr. Justice Vijender Jain (Retd.), resident

of House no. 136, Sector 15,NOIDA UP ( Phone nos. 0120-2511535 ;

9711009541) is appointed as the presiding Arbitrator. The arbitration

panel comprising of presiding arbitrator, appointed by this court, and

the petitioner's arbitrator and the respondent's arbitrator shall decide

all the disputes between the parties and shall devise its procedure. With

these directions the petition is disposed of and the parties are left to

bear their own costs.

March 19, 2009                                    ANIL KUMAR, J.
'sb/Dev'