Delhi High Court
M/S Zoom Motels Pvt Ltd vs M/S Sheranwali Hotels & Resorts ... on 25 September, 2009
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. No.28/2008(u/S 11 of the Arbitration Act, 1996)
% Date of decision: 25th September, 2009
M/S ZOOM MOTELS PVT LTD ....Petitioner
Through: Mr. Dalip Mehra with Ms Akriti,
Advocates.
Versus
M/S SHERANWALI HOTELS & RESORTS ...Respondent
LTD
Through: Mr. H.S. Chandhoke with Mr Shiv
Sapra, Advocates.
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
in the Digest? No
RAJIV SAHAI ENDLAW, J.
1. The parties are admittedly the parties to an agreement dated
10th August, 2007 providing for resolution of disputes under the
Arbitration Act, 1996 with the arbitration proceedings to be held at
Delhi.
2. The counsel for the respondent has opposed the petition on
three grounds. Firstly on the ground of this court being not the
appropriate court having territorial jurisdiction to entertain this
petition; secondly on the ground of agreement aforesaid being
unstamped and unregistered while being required to be compulsorily
registered; and, thirdly on the ground of the agreement having been
abandoned by the parties. As far as the first of the aforesaid pleas is
concerned, it is contended that the agreement was for development
of the immovable property of the respondent at Jammu by the
petitioner in consideration of the petitioner having certain rights in
the said property, post development. It is further contended that
from the IA.No.691/2008, under Section 9 of the Act filed by the
petitioner in these proceedings, it appears that the petitioner is
claiming rights in the property and is claiming appointment of
arbitrator for adjudication of the said rights. The contention is that
the appropriate court within the meaning of Section 2(e) of the Act
to entertain this petition would be the court within whose
jurisdiction the immovable property is situated.
3. If that be the position, undoubtedly in view of the dicta in
Harshad Chimanlal Modi Vs DLF Universal Ltd (2005) 7 SCC
791 this court would not have jurisdiction. However, the counsel for
the petitioner states that he is not claiming any rights in the
immovable property and the claims of the petitioner against the
respondent, of which arbitration is sought are for breach of
agreement by the respondent and consequent losses suffered by the
petitioner.
4. Faced with the aforesaid, the counsel for the respondent has
contended that Section 16 (d)/(e) of the CPC would still apply.
Section 16(d) is for determination of rights in property and Section
16(e) for compensation for wrong to immovable property. The
counsel for the petitioner having stated that no claims in immovable
property situated outside the jurisdiction of this court are claimed,
Section 16(d) does not apply. The claims of the petitioner for breach
of contract would not be for compensation for wrong to immovable
property.
5. Else the agreement itself states that the same is executed at
New Delhi and the parties had also agreed to the venue of
arbitration at New Delhi. This court would thus be the appropriate
court for the adjudication of the claims for breach of contract.
6. The counsel for the respondent has next contended that the
agreement ought to be impounded, being unstamped. Though it is
contended that it is compulsorily registrable but neither is it the case
that the possession of the property in part performance of the
agreement has been delivered to the petitioner either as owner or as
a lessee nor is any clause of the agreement found to be such as
requires registration. The agreement is a development agreement.
The true nature and purport of such an agreement has been
adjudicated by this court in Ansal Property and Industries Pvt
Ltd Vs Anand Nath MANU/DE/0824/1991. It has been held that
such agreements are to exchange in future and are in the nature of
agreements to sell. An agreement to sell without delivery of
possession does not require registration. The counsel for the
respondent states that though the petitioner claims to be in
possession, the respondent does not admit the same; the counsel for
the petitioner states that petitioner's case is of only having put its
equipment on the property. Such an agreement does not require
registration compulsorily. Even otherwise Division Bench of this
court has held in N.I.I.T. Institute of Information Technology Vs
West Star Construction Pvt Ltd MANU/DE/0485/2009 that an
arbitration clause even in a lease deed requiring compulsory
registration although not so registered can be implemented.
7. As far as the request for impounding is concerned, stamp duty
payable on an agreement of such nature is Rs 50/- and the counsel
for the petitioner states that he shall deposit the maximum penalty.
i.e. ten times together with the deficiency in stamp duty with the
Collector of Stamps within four weeks of today.
8. As far as the plea of the agreement being abandoned is
concerned that is on the merits of the dispute and cannot be gone
into at this stage. There is no material before this court on the basis
of which the said plea can be entertained at this stage.
9. Accordingly, Justice Anil Dev Singh (Retd) is appointed as the
arbitrator to adjudicate the disputes and differences in terms of the
arbitration clause contained in the agreement aforesaid and further
limited to the statement aforesaid of the counsel for the petitioner.
The counsel for the parties to fix the fee and other expenses of the
arbitrator in consultation with the arbitrator and to bear the same
equally subject to award as to costs. The parties to appear before
the arbitrator with prior appointment on 23rd October, 2009.
RAJIV SAHAI ENDLAW, J
September 25, 2009
M
