Ardee Infrastructure Pvt. Ltd. vs Anuradha Bhatia
2014 Latest Caselaw 6606 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+                             ARB.A. 21/2014

                                   Judgment reserved on: 01.12.2014
                                   Judgment pronounced on: 09.12.2014
      ARDEE INFRASTRUCTURE PVT. LTD.            ..... Appellant
                    Through: Mr.Anil Kr.Mishra, Advocate alongwith
                             Mr.Saurabh Mishra, Advocate.

                     versus

      ANURADHA BHATIA                                        ..... Respondents
                  Through:               Mr.Kirti Uppal, Sr.Advocate alongwith
                                         Ms.Aastha Dhawan, Advocate.

                                   AND
+                             ARB.A. 22/2014
      ARDEE INFRASTRUCTURE PVT. LTD.                   ..... Appellant
                       Through: Mr.Anil Kr.Mishra, Advocate alongwith
                                Mr.Saurabh Mishra, Advocate.
                versus
      YASHPAL AND SONS                             ..... Respondents
                       Through: Mr.Kirti Uppal, Sr.Advocate alongwith
                                Ms.Aastha Dhawan, Advocate.
      CORAM:
      HON'BLE MS. JUSTICE DEEPA SHARMA

      JUDGMENT

1. Vide this judgment, I dispose of both the appeals as the matter

in issue is involved in both the cases is the same and both the cases

are between the same parties and facts are also similar in both the

cases.

2. The present appeals have been filed against the order of the

arbitrator dated 10.07.2014 whereby the arbitrator has directed the

appellant to furnish the security to the extent of claim in dispute in

favour of the respondents. The facts of the present cases which led to

the arbitration proceedings in short are as under:

3. In both the cases, there were two separate Flat Buyer

Agreements between the respondents and the appellant for sale of two

flats measuring 15000 sq. ft. on the second floor in Plaza Gardenia,

Ardee City, Gurgaon for a total consideration of Rs.45 lacs each. On

the same day, two separate a Memorandums of Understanding

(MOU) were also drawn between the parties and according to the said

MOUs the sale consideration of Rs.45 lakhs was to be paid by the

respondents to the appellant by transfer of certain lands owned by the

respondents in the name of the appellant company. It was agreed in

the said MOUs that the appellant would continue to pay rental

compensation of Rs.3,75,000/- per month in each MOU to the

respondents till the time the possession of the said flats at Plaza

Gardenia, Ardee City, Gurgaon is handed over to the respondents.

Appellant paid the rental compensation in terms of the MOU till

16.09.2010 and thereafter they stopped paying the money. The

respondents invoked the arbitration clause of each MOU vide

arbitration petitions no.239/2011 & 240/2011 and also filed a

petitions under Section 9 of the Arbitration and Conciliation Act

(hereinafter referred to as 'the Act') as O.M.P.Nos.583/2011 &

584/2011. This court disposed of the OMP No.583/2011 & 584/2011

filed under Section 9 of the Act with direction that the petitioners can

seek the interim relief before the arbitrator in terms of Section 17 of

the Act. In Arb.P.Nos.239/2011 & 240/2011 the arbitrator was

appointed by this court. The arbitral proceedings had started before

the arbitrator and the petitioner also filed the applications under

Section 17 of the Act. The said applications were disposed of by the

arbitrator on 05.03.2014 whereby the appellant was directed to pay to

the respondents the compensation amount as agreed between the

parties in the MOUs from October, 2010 onward. The said order was

challenged by the appellant vide Arbitration Appeal Nos.18/2014 &

19/2014. Meanwhile the arbitrator passed another order dated

10.07.2014 in both the arbitral proceedings, which amounts to

modification of the order and the order dated 05.03.2014 culminated

into the said order. The appellant had withdrawn the Arbitration

Appeal Nos.18/2014 & 19/2014.

4. Vide the present appeals, order dated 10.07.2014 has been

challenged by the appellant before this court on the ground that the

arbitrator has no authority to modify his order dated 05.03.3014 and

that the order amounts to deciding the dispute finally which is not

permissible under the law and that the arbitrator was not authorised to

appreciate the documents and evidence at this interim stage and the

application has been decided without considering the contentions of

the appellant. It is further submitted that arbitrator has wrongly held

that the land were duly transferred to the appellant by the respondents

whereas the documents show that the respondents did not fulfil their

part of obligations and since they have not performed their part of

obligation under the MOUs the respondents cannot enforce their

performance upon the appellant. On these facts it is submitted that

the said order is liable to be set aside.

5. Reply has been filed by the respondents. It is submitted that

arbitrator is fully empowered under Section 17 of the Act to direct the

appellant to furnish security at an interim stage. It is further

submitted that farm lands which were to be transferred to the

appellant already stood transferred through General Power of

Attorney and therefore, the respondents have complied with the terms

and conditions of the MOUs. It is further submitted that the appeals

have no merit and are liable to be dismissed.

6. I have heard the arguments and have perused the relevant

record.

7. It is clear from the above narrated facts that the respondents had

filed a petition under Section 9 of the Act seeking interim protection

from this court by way of O.M.P.Nos.583/2011 & 584/2011. The

court while disposing of the said OMPs had directed the respondents

to approach the arbitrator under Section 17 of the Act. Pursuant to

that the respondents had filed the applications under Section 17 of the

Act before the arbitrator. During the course of the arguments, learned

counsel for the appellant has argued that the applications of the

respondents under Section 17 of the Act is dated 15.3.2012 and the

arbitrator has disposed of them only on 05.03.2014 i.e. after two years

and it has been done at the stage when the matter was ripe and was

already fixed for final arguments and part of the final arguments have

also been heard. It is argued on behalf of the respondents that Section

17 of the act empowers the arbitrator to pass an interim order at any

stage during the arbitral proceedings. It is submitted that arbitral

proceedings were already going on and that it was the appellant who

had been seeking adjournments from the arbitrator for settlement and

on 14.02.2014 they even informed the arbitrator that they were taking

expeditious steps to restore the monthly rent/compensation and hence

it cannot be said that the arbitrator has intentionally delayed the

disposal of the applications under Section 17 of the act. It is

submitted that the arbitrator is empowered to pass an interim order on

applications under Section 17 of the Act at any stage of the

proceedings. It is further argued that while vide 05.03.2014 the

arbitrator had directed the appellant to make the payment of the

rent/compensation under MOUs with effect from October, 2010, the

said order has been modified by the arbitrator to the benefit of the

appellant whereby the appellant has only been asked to secure the

said money by furnishing security to the satisfaction of the

Coordinator, Delhi International Arbitration Centre.

8. I have given careful consideration to the rival contentions and

arguments of the parties.

9. It is pertinent to take note of the proceedings before the

arbitrator since one of the contentions of the appellant is that the

arbitrator had unduly delayed the disposal of the applications of the

petitioner under Section 17 of the act and when the case was fixed for

final arguments instead of passing any order for interim measure

ought to have disposed of the matter finally. This court is considering

the proceedings before the arbitrator in relation to the application

under Section 17 of the Act. The proceedings before the arbitrator

dated 28.05.2012 show that the respondents did not file their reply to

the application under Section 17 of the Act and also did not deposited

the charges of the arbitrator fee etc. and therefore, the arbitrator

adjourned the matter for the next date i.e. 03.07.2012. On 03.07.2012,

the respondents had filed the reply to the applications under Section

17 of the Act as well as reply to the statements of claim and rejoinder

was also filed. The arbitrator thereafter adjourned the matter to

26.07.2012 for argument hearing on the applications under Section 17

of the act and for framing of issues. The arbitral proceedings of

26.07.2014 shows that the arbitrator was informed that the parties

were desirous of settlement, for which they had fixed up time and

place for their meeting. On this basis, the arbitrator adjourned the

matter for hearing for 28.08.2012. Arbitral proceedings dated

28.08.2012 show that the parties had informed the arbitrator that they

were in the process of settling their dispute and sought adjournment.

The arbitrator fixed up the matter for 12.10.2012. On 12.10.2012,

issues were framed and the matter was fixed for evidence. Therefrom

the proceedings before the arbitrator continued till 06.08.2013, during

which period evidence etc. were recorded. The matter was fixed for

final arguments on 05.09.2013. On that date, adjournment was sought

on behalf of the respondents and the matter was again fixed for

21.09.2013 for final arguments. On 21.09.2013 the arguments could

not be concluded and the matter was fixed for 18.11.2013. The

proceedings dated 18.11.2013 clearly show that on that day the

appellant's counsel represented to the arbitrator that they were still in

the process of settling their dispute with respondents and for that

purpose Mr.Amit Kaicker, consultant of appellant also met

Mr.Yashpal Mehra, the respondent and discussed some proposal and

adjournment was sought and also represented that in case efforts of

settlement fails, the arbitrator could take up the matter for final

disposal including the question of interim order regarding payment of

compensation as provided in agreement. The arbitrator thereafter

adjourned the matter and the date was fixed as 05.12.2013. Arbitral

proceedings dated 28.01.2014 show that the parties were still engaged

in the process of settling their disputes. The arbitrator listed the

matter again for 14.02.2014. The proceedings before the arbitrator

dated 14.02.2014 clearly show that the appellant had informed the

arbitrator that they were taking expeditious steps to restore the

payment of monthly rent/compensation. The relevant portion of the

order dated 14.02.2014 of the arbitrator is reproduced hereunder:

"Mr.Mishra on instructions states that after the meeting between claimants and one of the directors of the respondents there appears to be an agreement on the part of respondents to take expeditious steps to restore the payment of monthly rent/compensation. On the tribunal's insistence and on instructions Mr.Mishra states that concrete schedule of payment and the rent/compensation will be conveyed within ten days from today to the claimants. Mr.Mishra submits that above is without prejudice to respondents' pleas in defence. Mr.Mehra, one of the claimants is not opposed to ten days time being given. He submits that date when the payment will commence should also be communicated forthwith. Counsel for respondents states that such date will also be communicated within 10 days from today. The schedule of dates of payment should also cover the

arrears, if any. Other items in dispute will be taken up and dealt with before this tribunal after 10 days."

10. The proceedings dated 05.03.2014 show that the parties could

not reached to any settlement regarding fixing up the schedule of

payment of arrears of monthly rent/compensation and the arbitrator

proceeded to deal with the question of interim relief to the

respondents and thereafter directed to make the payment of monthly

rent/compensation starting from October, 2010 till date to the

respondents. Thereafter, arbitrator in modification of his order dated

05.03.2014 directed the appellant to furnish the security of the

Coordinator of Delhi International Arbitration Centre instead of

making the payment to the respondents. The above proceedings

before the arbitrator clearly show that the parties have been constantly

seeking time for settling their dispute. It is apparent from the

proceedings that the arbitrator refrained himself from passing any

interim order since parties were interested in settling their dispute,

and arbitrator has been facilitating them in their efforts. It is also

reflected in the proceedings dated 14.02.2014 that the appellant

pursuant to a meeting between the claimants and the directors of the

appellant appeared to have been in agreement to take expeditious

steps to restore the payment of monthly rent/compensation. It,

therefore, cannot be said that delay on the part of the arbitrator in

taking up the matter for taking interim measures have in any way

caused any prejudice to appellant. Also the modification of the order

dated 05.03.2014 of the arbitrator is not prejudicial to the interest of

the appellant since while vide order dated 05.03.2014 they were

directed to make the payment of the rent/compensation from October,

2010 to the respondents, by modification order dated 10.07.2014, they

were directed to secure the said amount. Section 17 of the Act

empowers the arbitrator to pass any order as part of interim measures

for protection of the subject matter of the dispute. In the present case,

one of the subject matter of the dispute is payment of

rent/compensation under MOU to the respondents. The order of the

arbitrator protecting the subject matter of the dispute therefore is not

contrary to law. This order does not amount to final adjudication of

the dispute between the parties because the arbitrator has directed the

appellant to secure this amount with the Coordinator, Delhi

International Arbitration Centre.

11. For the reasons discussed above, it is apparent that there is no

force in the appeals. The appeals are, therefore dismissed with no

order as to costs.

DEEPA SHARMA, J

DECEMBER 09, 2014 rb