M/S Opaque Infrastructure Pvt Ltd vs M/S Millennium Realtech Pvt Ltd
2014 Latest Caselaw 5914 Del

      * IN THE HIGH COURT OF DELHI AT NEW DELHI
+                                 O.M.P. 745/2014
%                         Judgement pronounced on: 18.11.2014

      M/S OPAQUE INFRASTRUCTURE PVT LTD ..... Petitioner
                         Through: Mr Harish Malhotra, Senior Advocate
                         with Mr R.K. Modi, Advocate

                         versus

    M/S MILLENNIUM REALTECH PVT LTD ..... Respondent
                  Through: Mr B.R. Sharma and Mr Satpal Singh,
                           Advs.
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA

JUDGMENT (ORAL)

1. The present petition has been filed under Section 9 of the Arbitration

and Conciliation Act, 1996 (hereinafter referred to as "the Act") by the

petitioner, who was the builder under a Collaboration Agreement dated

07.11.2011 between him and the respondent. The respondent was the owner

of plot of land admeasuring 1148 square yards in Khasra No. 260, situated in

the revenue estate of village Bahapur, Tehsil Kalkaji, New Delhi. Under this

Collaboration Agreement, a vertical building was to be raised comprising of

Wing-1 (South West Side) and Wing-2 (North East Side). Under the

agreement, it was the obligation of the owner, i.e., the respondent to seek

requisite permissions, sanctions and approvals for development on the said

plot at his costs and expenses after getting the building plan sanctioned from

the concerned authorities. The sanctioned plan was to be obtained within 60

days of the date of execution of this collaboration agreement. As per the

terms, the petitioner had paid a sum of Rs. 50 lakhs to the respondent on

execution of this Collaboration Agreement. As per clause 5(c) of the said

Collaboration Agreement, the petitioner was required to pay a sum of Rs. 1

core 50 lakhs to the owner, i.e., the respondent on his getting the

approval/sanction plan of the building approved from the concerned

department within 60 days of the signing of this Collaboration Agreement. It

is the admitted fact that uptil now, the respondent has not obtained any

sanctioned plan of the building from the concerned department. After

waiting for about two years, the petitioner wrote a letter dated 07.03.2013

asking the petitioner to act as per the terms of the agreement. The

respondent, however, instead of acting as per the terms of the agreement,

i.e., obtaining the sanctioned plan, offered to refund the security amount of

Rs. 50 lakh to the petitioner and sent the said amount by way of a cheque

along with his letter dated 22.03.2014. Vide this letter, the respondent also

terminated the Collaboration Agreement as null and void. The ground taken

by the respondent in this letter was that the petitioner was not financially

sound and had not developed any property and that he had not submitted the

requisite documents showing his capability to raise such a construction. The

said letter was duly replied by the petitioner vide letter dated 02.07.2014,

whereby he refused to accept the refund of the security amount and took the

plea that there was no such term or the condition in the agreement that the

petitioner was required to submit its financial credentials to the respondent

and also invoked the arbitration clause. Thereafter, the petitioner had moved

this Court under Section 9 of the Act with the prayer that so long their

dispute is resolved by the Arbitrator, the situs of the dispute, i.e., the

property should be protected and the respondent be restrained from selling,

transferring, or parting with the possession of the disputed property.

2. This Court vide order dated 15.07.2014 by way of ad interim

injunction, restrained the respondent from creating any third party interest in

the disputed property.

3. The respondent filed an application under Order 39 Rule 4 of CPC

praying for the vacation of the stay. It has also been requested by the

respondent that the said application be considered as their reply to the

petition of the petitioner under Section 9 of the Act. In their application, the

respondent has submitted that since the petitioners are not financially sound

and also have no experience to develop the building, they are not capable of

raising the construction on the said property and, therefore, the respondent

does not want that the property be developed by them. It is also submitted

that the respondent is ready to return the security amount of Rs. 50 lakh to

the petitioner.

4. During the course of arguments on the previous date before this

Court, the respondent offered to deposit the security amount of Rs. 50 lakh

with the Registrar General of this Court and accordingly, the respondent was

allowed to do so and pursuant to that, the respondent had deposited a sum of

Rs. 50 lakh as a security with the Registrar General of this Court. The

money has been kept in FDR.

5. Arguments have been heard.

6. There is no doubt that there exists a dispute between the parties

relating to the Collaboration Agreement entered into by the parties

voluntarily. There is no dispute to the fact that the Collaboration Agreement

was not conditional to the petitioner disclosing his financial status or his

experiences. It is also not in dispute that under the agreement, it was for the

respondent to obtain the sanctioned plan and all the other requisite

permissions from the concerned departments, before the obligation of the

petitioner to make the payment of Rs 1 crore 50 lakh would have arisen.

There is also no dispute to the fact that the respondent has no where

contended that he took any steps pursuant to the terms and conditions of the

Collaboration Agreement, to get the plan sanctioned. The only plea taken is

that the petitioner is not capable to fulfil the conditions of the Collaboration

Agreement. All these facts clearly show that prima facie it is the respondent

who has failed to comply with the terms and conditions of the Collaboration

Agreement and that there exists an arbitrable dispute between the parties. It

is also clear that despite the petitioner invoking the arbitration clause vide

his letter dated 02.07.2014, asking the respondent to nominate the three

Arbitrators, the respondent has not moved any further in this direction.

7. In view of this, I am satisfied that the property, which is the situs of

the dispute between the parties, needs to be protected.

8. At this stage, the learned counsel for the respondent has argued that

there is no need to pass a separate order and the property is protected under

Section 52 of Transfer of Property Act. However, Section 52 of Transfer of

Property Act deals with entirely different situation. Section 9 of the

Arbitration and Conciliation Act, despite the existence of Section 52 of the

Transfer of Property Act, confers right and jurisdiction upon the Court to

pass appropriate order in order to protect the subject matter of arbitration.

9. In view of this, the petitioner has a prima facie case in his favour and

he would suffer an irreparable loss and injury. It is apparent that if the stay

is not granted and the respondents are permitted to create third party interest

pending arbitral proceedings, it may create multiplicity of litigations. The

balance of convenience thus also lies in favour of the petitioner. I hereby

confirm my order dated 15.07.2014 and restrain the respondent, its agents

and employees from, in any manner, dealing, selling, transferring or parting

with possession of the plot of land admeasuring 1148 square yards in Khasra

No. 260, situated in the revenue estate of village Bahapur, Tehsil Kalkaji,

New Delhi.

10. The order shall remain effective till the termination of the arbitration

proceedings or till the same is modified by the Arbitrator.

11. At this stage, learned counsel for the respondent makes a request that

in view of this order, he may be permitted to withdraw the amount of Rs.50

lakhs which he had deposited with the Registrar General of this Court. He is

permitted to do so. The amount of Rs. 50 lakh be returned to the respondent.

12. The petition stands disposed of.

DEEPA SHARMA (JUDGE) NOVEMBER 18, 2014 BG