M/S Techman Shelters Pvt. Ltd vs Sh. Sanjeev Singh & Others
2009 Latest Caselaw 3644 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 OMP No.314/2009

%                                 Date of decision:09.09.2009

M/S TECHMAN SHELTERS PVT. LTD.                        ....Petitioner
                         Through: Mr. Sudhir Nandrajog, Senior Advocate
                                  with Mr. Trideep Pais Mr. Shivam
                                  Sharma & Mr. Rakesh Mishra,
                                  Advocates.

                                Versus

SH. VIJAY CHOUDHARY                                 ... Respondent
                         Through: Mr. Abhay Kumar, Advocate.


                              AND

                       OMP No.318/2009


M/S TECHMAN SHELTERS PVT. LTD.                       ....Petitioner
                         Through: Mr. Sudhir Nandrajog, Senior Advocate
                                  with Mr. Trideep Pais Mr. Shivam
                                  Sharma & Mr. Rakesh Mishra.


                                Versus

SH. SANJEEV SINGH & OTHERS                        ... Respondents
                         Through: Mr. Abhay Kumar, Advocate.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?                 NO

2.    To be referred to the reporter or not?          NO

3.    Whether the judgment should be reported         NO
      in the Digest?


RAJIV SAHAI ENDLAW, J.

1. These petitions, both under Section 9 of the Arbitration and

Conciliation Act, 1996 are in respect of two agreements, informed to

be identical, and entail the same questions of law and fact. Vide

order dated 10.06.2009 in these petitions, after hearing the counsel

for the parties, this court was pleased to direct the parties to

maintain the status quo with respect to title and possession of the

property subject matter of the petitions in terms of the report of the

Court Commissioner appointed on that date. The Commission has

been executed and the Court Commissioner has filed the report in

this court.

2. The respondents have not filed any reply to these petitions.

The counsel for the respondent has urged that as per the agreement,

the parties prior to arbitration are required to approach the named

persons for mediation and the parties had further undertaken not to

approach the Court but to resolve the disputes through mediation as

aforesaid and only if the mediation fails, the matter was agreed to be

submitted for conciliation or arbitration under the Arbitration and

Conciliation Act, 1996.

3. Counsel for the respondent has contended that there is no

averment whatsoever in the petition of the petitioner having

approached the mediators aforesaid or of the mediation having failed

and since the arbitration agreement was to come into effect

thereafter only, even this petition is not maintainable without

process of mediation being followed.

4. It is also contended that these petitions are not maintainable

for the reason of the petitioner having filed the application under

Section 9 of the Act for the same reliefs as claimed in these petitions

before the Court of the Civil Judge, Delhi.

5. The petitioners had prior to the institution of this petition

instituted a suit in the Court of the Civil Judge, Delhi for declaration

and permanent injunction inter alia with respect to their rights in the

same properties. The respondents on being served with the notice of

the said suit filed an application under Section 8 of the Act in the

suit. Thereafter, the petitioner herein filed an application under

Section 9 of the Act in the same suit.

6. During the pendency of the aforesaid proceedings, these

petitions came to be filed and the disclosure of the previous

proceedings was made in the petition and in fact, the counsel for the

respondent also has made a submissions on the basis of the copies of

the pleadings in the suit aforesaid filed along with the petition.

Senior Counsel for the petitioner has pointed out that in fact prior to

approaching this Court, the petitioner had already applied to the

Court of the Civil Judge, Delhi for withdrawal of the application

preferred under Section 9 in the suit. It is fairly stated that the said

application in the suit was misguided and the remedy of the

petitioner was by way of an independent OMP as has now been

preferred. Counsel for the respondent has contended that the

application for withdrawal of application under Section 9 in the suit

was also pending as on the date of the institution of these petitions.

7. In my view, the petitioner would not be disentitled from

maintaining these petitions for the reason of having filed Section 9

application in the suit before the Civil Judge. In view of the

arbitration agreement between the parties, the suit in any case was

barred and not maintainable and thus the question of preferring the

Section 9 application therein did not arise. Therefore, the earlier

proceedings do not come in the way of the petitioner.

8. As far as other contention of the respondent is concerned,

though there is some ambiguity in the arbitration agreement i.e

whether the same constitutes an agreement for arbitration or not but

in view of the pleadings of the respondents in the previous

proceedings aforesaid and on which reliance is placed in this Court

also, the respondents have within the meaning of Section 7 (4) (c) of

the Act admitted the existence of the arbitration agreement. Senior

counsel for the petitioner also drawn attention to the application

under Section 8 preferred by the respondents, wherein, the

respondents have stated that a serious dispute had arisen between

the parties, they ought to be referred for arbitration as per the

agreement and the petitioner herein had abused the process of the

Court by instituting the suit.

9. The clause aforesaid on which reliance is placed by the

respondent in my view does not bar a petition under Section 9 of the

Act. Even if the arbitration is agreed to be preceeded by mediation,

the fact remains that the parties had agreed to arbitration. Once

such an agreement exists, the Court would be empowered under

Section 9 and any party entitled to a relief under Section 9 would be

entitled to approach the Court. Merely because the parties had

agreed to preceed arbitration with mediation cannot prohibit the

remedies available to them in law and the clause in the agreement

prohibiting the parties from approaching the Court till mediation, is

found to be against public policy. The interim measures to which a

party may be entitled to, may become infructuous if the filing of the

petition under Section 9 has to be deferred during mediation. The

parties had not agreed to any time schedule also for mediation.

10. The senior counsel for the petitioner has in this regard also

cited M.K. Shah Engineers & Contractors Vs. State of Madhya

Pradesh (1999) 2 SCC 594. The Supreme Court held that the steps

preceeding the coming into operation of the arbitration clause,

though essential are capable of being waived.

11. The counsel for the respondent has also urged that till now the

petitioner has not approached the agreed mediators and if the

petitioner still approaches the mediators, the need for arbitration

may not arise. On enquiry, it is informed that the respondents have

also not approached the mediators till date. The dispute between the

parties are pending since long. From the conduct of the respondents

of having not taken any steps for mediation and of applying under

Section 8 of the Act, the respondents are deemed to have waived

mediation as a precursor to arbitration. In any case, if the parties

feel the need for approaching the mediators, the parties would still

be entitled to do so.

12. The Senior Counsel for the petitioner has also urged that para

16 of the order dated 10.06.2009 is ambiguous and may lead to

further disputes. The petitioner had agreed to at its own cost raise

construction on the land/property of the respondents; in lieu thereof

the built up area was agreed to be shared by the parties; the

petitioner had also advanced some monies to the respondents which

were agreed to be refunded by respondents on completion of

construction. Attention is invited to Clauses 10 & 11 of the

agreement between the parties, wherein, the respondents have

agreed not to sell, use, mortgage, lease or convey their entitlement

of the built up area in the property until the refund of the monies to

the petitioner. Counsel for the respondent has controverted the

same by drawing attention to Clause 19 of the agreement,

whereunder, the respondents are entitled to compensation from the

petitioner for delay in construction. It is contended that the

petitioner delayed the construction and hence, the respondents are

entitled to compensation and thus, no monies are refundable by the

respondents to the petitioner. However, all that is to be the subject

matter of the arbitration and the respondents cannot decide for

themselves that the delays were occasioned owing to the petitioner

or the amount of compensation due to them or for no refund being

due to the petitioner for this reason.

13. The parties having contracted that the respondents shall not

sell their entitlement of the built up area also till settlement of the

dues of the petitioner, till the same is done and which can be done

only in arbitration, the respondents are not entitled to sell any

portion of their entitlement also of the built up area of the property.

14. Accordingly, these petitions are disposed of directing both the

parties to maintain status quo qua title, possession and use for the

properties subject matter of these petitions, in terms of the report of

the Local Commissioner. No order as to costs.

15. Senior Counsel for the petitioner has expressed apprehension

of breach of the said order. Considering the locality and nature of

disputes the SHO concerned is directed to ensure compliance of the

order.

RAJIV SAHAI ENDLAW (JUDGE)

September 9th, 2009 rs