Delhi High Court
Vva Developers Pvt. Ltd & Ors. vs Improve Vyapaar Pvt. Ltd. on 26 February, 2018
$~39
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 26th February, 2018
+ O.M.P. (COMM) 93/2018 & IA No. 2779/2018 & 2780/2018
VVA DEVELOPERS PVT. LTD & ORS. ..... Petitioners
Through: Mr.Vinod Tyagi, Adv.
versus
IMPROVE VYAPAAR PVT. LTD. ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
IA No. 2780/2018 (Exemption)
Allowed, subject to all just exceptions.
IA No. 2779/2018 (Stay)
As the petition itself has been dismissed, the application is also
dismissed as having becoming infructuous.
O.M.P. (COMM) 93/2018
1. This petition, filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'Act'), is
challenging the Arbitral Award dated 06.11.2017 passed by the Sole
Arbitrator in Case Ref. No. DAC/1609-3-17 titled as M/s. Improve
Vyapaar Pvt. Ltd. vs. M/s. VVA Developers (P) Ltd.
OMP (COMM) 93/2018 Page 1
2. The counsel for the petitioner submits that the disputes between
the parties were in relation to the Memorandum of Understanding
dated 18.03.2013 executed only between the petitioner no.1 and the
respondent. He submits that the petitioner no. 2 and 3 were not party
to the said MOU as well to the Arbitration Agreement and had been
wrongly impleaded in the Arbitration Proceedings, being the
Directors of the Petitioner No.1 Company. On being asked if any plea
of mis-joinder was taken before the Arbitral Tribunal, the learned
counsel for the petitioner concedes that no such plea had been taken
before the Arbitrator. In view of Section 4 and 16 of the Act, in my
opinion, this plea cannot be now taken to challenge the Impugned
Award. The petitioner no. 2 and 3, having not taken such plea before
the Arbitrators, are deemed to have waived their objection to such
impleadment and are deemed to have submitted themselves to the
jurisdiction of the Arbitrator.
3. It is further contended by the counsel for the petitioner that the
claim filed before the Arbitral Tribunal was clearly barred by Law of
Limitation. He submits that even in the Statement of Claim, in
paragraph 21 thereof, the respondent had contended that the cause of
action for filing of the claim petition arose on 31.06.2013, and upon
failure of the petitioner no. 1 to refund the amount, on 31.08.2013. He
submits that as the invocation of Arbitration was only on 03.09.2016,
the claim was barred by Law of Limitation. He further contends that
the two payments of Rs.45 lakhs and 7.50 lakhs made by the
petitioner no. 1 were on account of Sale / Booking of flats that had
fallen in the share of the respondent and in terms of Clause 5 of the
OMP (COMM) 93/2018 Page 2
Memorandum of Understanding. He, therefore, submits that this
payment was not a payment of "Debt" or "Interest" thereon and,
therefore, could not be used for extension of period of limitation
under Section 19 of the Limitation Act, 1963.
4. I am unable to agree with the submissions made by the counsel
for the petitioner. The fact that the payments of Rs. 45 lakhs and 7.50
lakhs being made by the petitioner no. 1 to the respondent on
24.09.2013 and 06.12.2013, that is, within the period of limitation is
not denied. It was for the petitioner to show on what ground or reason
these payments had been made, if they were not made in part-payment
of the debt owed. The contention of the petitioner that these payments
were made in accordance with Clause 5 of the Memorandum of
Understanding and upon Sales / Booking of the flats falling in the
shares of the respondent has been rejected by the Arbitral Tribunal on
the ground that the petitioner no. 1 has not rendered any proof in
support of such a plea.
5. The Arbitral Tribunal has further relied upon the fact that the
petitioner no. 1 had also not raised any demand for the balance
payment from the respondent and this itself shows that both the
parties acted on the understanding that the agreement stood
terminated and the amount had to be refunded back by the petitioner
no.1 to the respondent.
6. Barring making a reference to a table given in the present
petition showing Unit number(s), certain amounts as principle and tax
paid etc., there is absolutely no proof of any such transaction filed by
the petitioner.
OMP (COMM) 93/2018 Page 3
7. In any case, this being a finding of fact arrived at by the
Arbitral Tribunal upon appreciation of the evidence led before him,
this Court, in exercise of its power under Section 34 of the Act,
cannot re-appreciate the same to arrive at a different conclusion.
8. The Supreme Court in Associate Builders v. Delhi
Development Authority, AIR 2015 SC 620, held as under:
"It must clearly be understood that when a court is
applying the "public policy" test to an arbitration award,
it does not act as a court of appeal and consequently
errors of fact cannot be corrected. A possible view by the
arbitrator on facts has necessarily to pass muster as the
arbitrator is the ultimate master of the quantity and
quality of evidence to be relied upon when he delivers his
arbitral award. Thus an award based on little evidence or
on evidence which does not measure up in quality to a
trained legal mind would not be held to be invalid on this
score. Once it is found that the arbitrators approach is
not arbitrary or capricious, then he is the last word on
facts."
9. The counsel for the petitioner further contends that the Arbitral
Tribunal has erred in holding that the project itself was to be
completed and delivered by 30.06.2013. He draws my reference to
Clause 10 of the Memorandum of Understanding to show that the
petitioner no. 1 was only to obtain all the "required sanctions and
approvals on or before 30.06.2013" and not to complete the
construction thereof. He submits that as the petitioner had obtained
the requisite sanctions and approvals, the respondent was not entitled
to claim refund of the amount paid by it or interest thereon.
10. In my view, the petitioner is merely trying to take the benefit of
OMP (COMM) 93/2018 Page 4
a clerical error in the Award on this aspect. The Arbitrator, in the
Impugned Award has clearly held that the petitioner no. 1 was to
obtain the requisite sanction and approval by 30.06.2013, which it had
failed to obtain. The Arbitral Tribunal holds that the petitioner no. 1
has not filed any evidence or material on record to show that the
requisite sanction and approval had in fact been obtained by the
petitioner no.1 before the said date. There is no challenge to this
finding of the Arbitral Tribunal. In view of the same, in terms of
Clause 11 of the Memorandum of Understanding, the respondent had
become entitled to the refund of the amount along with interest at the
rate of 18% per annum. I, therefore, do not find any error in the
Impugned Award on this account.
11. The last contention of the counsel for the petitioner is to the
award of interest at the rate of 18% per annum in favour of the
respondent. Here again the Arbitrator, relying upon Clause 11 of the
Memorandum of Understanding, has granted such interest in favour of
the respondent. The Arbitrator has also denied to the respondent the
benefit of Clause 12, which provides for compensation in favour of
the respondent. As the Arbitrator has acted in terms of the contract
between the parties, the Impugned Award cannot be faulted.
12. In view of the above, I find no merit in the present petition and
the same is accordingly dismissed, with no orders as to costs.
NAVIN CHAWLA, J
FEBRUARY 26, 2018/rv
OMP (COMM) 93/2018 Page 5
