Housing & Urban Dev. Cor. Ltd vs Ansal Properties & Ind. Ltd
2012 Latest Caselaw 2154 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Date of Judgment:29.3.2012

+                  C.R.P. 230/2005


HOUSING & URBAN DEV. COR. LTD               ..... Petitioner
                 Through: Mr.A.K.Singh, Advocate with
                           Ms.Sheenu Vats, Law Officer.

                   versus


ANSAL PROPERTIES & IND. LTD             ..... Respondent
                  Through: Ms.Amrita Singh, Advocate.



      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

1 Order impugned is the order dated 15.03.2005. The application

filed by the defendant in the pending suit under Section 8 of the

Arbitration and Conciliation Act (hereinafter referred to as the „said

Act‟) had been allowed; the dispute pending had been referred to the

sole Arbitrator; this was in terms of the arbitration clause contained in

the agreement dated 01.08.1995.

2 Record shows that the plaintiff i.e. Housing & Urban

Development Corporation Ltd. had filed a suit for mandatory injunction

against Ansal Properties; a prayer was made to the effect that the

defendant be directed to demolish the pump room and HT panel

installed in the area depicted in the site plan marked in blue colour and

in red colour. The defendant had offered a consideration of

`1,68,80,93,200/- to the plaintiff for the allotment of shopping arcade

site at HUDCO place, Andrews Ganj, New Delhi on terms and

conditions stipulated in the brochure. On 10.03.1995, the plaintiff had

issued a letter of allotment on the terms and condition contained therein

calling upon the defendant to accept the terms and conditions along with

car parking space for 210 cars; the first installment of 50% of the total

consideration was required to be paid on or before 06.04.1995; balance

was to be paid in two installments as indicated in the allotment letter

dated 10.03.1995. In terms of clause 1 of the agreement, 200 square

meters of this space could be sub-leased for installation of facilities such

as air-conditioning plant and other services. It is not in dispute that 50%

of the first installment was paid by the defendant; the agreement to sub-

lease dated 01.08.1995 was executed; this was a tripartite agreement

between the President of India, the plaintiff and the defendant; the terms

of the allotment letter dated 10.03.1995 was made a part and parcel of

this agreement of sub-lease dated 01.08.1995 physical site was handed

over to the defendant on 10.11.1995. A shopping arcade was

constructed. The respondent was also given 200 square meters in the

plant room on license basis on 10.11.1995 in terms of the letter of

allotment and in terms of the agreement to sub-lease for the purpose of

installation of service facilities such as air-conditioning and other misc.

services. Contention of the plaintiff was that the respondent has

illegality put up an HT Panel in the area under the possession of the

plaintiff. The defendant vide letter dated 03.07.1998 sought permission

of the plaintiff to place water tanks and pumps in the underground

portion as per the location plan; permission was not granted yet the

defendant had installed these tanks as also two pressure pumps;

contention of the plaintiff was that this is an illegal and unauthorized

user of the said premises. Inspite of repeated efforts calling upon the

respondent to remove the HT Panel and to demolish the pump room

which was in terms of the communications of the plaintiff dated

24.03.2000, 13.06.2000, 22.06.2000, 24.08.2000, 13.09.2000 and

11.10.2000, the respondent did not acceded to this request. The legal

notice dated 24.11.2000 was also served upon the defendant as also a

subsequent letter dated 18.01.2001. Left with no alternative, the present

suit for mandatory injunction was filed by the plaintiff.

3 In the course of cross-examination of the witnesses, the present

application under Section 8 of the said Act was filed. The impugned

order had allowed this application on 15.03.2005.

4 Vehement contention of the petitioner before this Court is that

this order suffers from an illegality; provision of Section 8 of the said

Act have not been considered in the correct perspective; this application

should have been filed before the first statement was filed on the

substance of the dispute; the matter was under cross-examination when

this application was filed; the impugned order thus suffers from an

illegality; it is liable to be set aside.

5      Arguments have been countered.

6      Record shows that the issues had been framed on 11.03.2002;

issued No. 2 reads herein as under:-

"Whether the suit of the plaintiff is not maintainable in view of arbitration agreement between the parties as mentioned in para 2 of the written statement?

OPD"

7 It was at the stage of the evidence of the plaintiff that the

application under Section 8 of the said Act was filed. Written statement

had been filed in 2001; present application has been filed on 29.10.2004.

8 There is no doubt to the fact that if all the ingredients of Section 8

of the said have been complied with; there is little option left with the

Court but to refer the matter to arbitration. The arbitration clause was

contained in the agreement dated 01.08.1995.

9 Record shows that the written statement was filed on 25.4.2001.

Admittedly a preliminary objection had been taken about the jurisdiction

of the civil court; contention being that since there is an arbitration

clause and the disputes have to be referred to arbitration. However the

averments made in the written statement clearly show that all answers

on the merits of the controversy had been answered in this written

statement; the filing of this written statement clearly shows that the

defendant had submitted himself to the jurisdiction of the civil court.

The application under Section 8 of the said Act was filed only on

29.10.2004.

10 The expression "first statement on the substance of the dispute"

contained in Section 8(1) of the 1996 Act is contra distinct from the

"written statement" it implies the submission of the parties to the

jurisdiction of the judicial authority; there must be a finding that the

party has waived its right to invoke arbitration clause; where the party

has himself submitted itself to the jurisdiction of the civil court as it was

so in the instant case and the written statement filed by the defendant

had answered the merits of the dispute; it is clear that the party in fact

had waived its right to invoke the arbitration clause. Application under

Section 8 of the Arbitration Act was in fact filed much later as noted

supra.

11 In this background impugned judgment referring the disputes of

the parties to the arbitration has committed an illegality. It is

accordingly set aside.

12 Reliance by the learned counsel for the petitioner upon the

judgment of Apex Court reported in AIR 2006 SC 280 Rashtriya Ispat

Nigam Ltd. Vs. Verma Transport Company in this factual scenario is

misplaced.

13 The parties are directed to appear before the District & Sessions

Judge, Tis Hazari on 18.4.2012 at 10.30 AM who shall assign the case

to the concerned court for the disposal of the suit on its merits. With

these directions, petition is disposed of.

INDERMEET KAUR, J MARCH 29, 2012 A/nandan