Delhi High Court
Jai Narain & Anr vs Rajender Singh & Ors on 29 October, 2018
$~5 & 15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 29th October, 2018
+ ARB.P. 35/2014
JAI NARAIN & ANR ..... Petitioners
Through: Mr. Rishi Kumar proxy counsel for
Mr. Rajesh Rai, Advocate.
(M:9718844435)
versus
RAJENDER SINGH & ORS ..... Respondents
Through: Mr. Sanat Kumar, Senior Advocate
with Mr. Vinayak Batta and Mr. Sunil
Kumar Jha, Advocates for R-1 to 3
and 5 to 7. (M:9873980084)
AND
+ O.M.P. 995/2013 & I.A. 17925/2014
JAI NARAIN & ANR ..... Petitioners
Through: Mr. Rishi Kumar proxy counsel for
Mr. Rajesh Rai, Advocate.
(M:9718844435)
versus
RAJENDER SINGH & OTHERS ..... Respondents
Through: Mr. Sanat Kumar, Senior Advocate
with Mr. Vinayak Batta and Mr. Sunil
Kumar Jha, Advocates for R-1 to 3
and 5 to 7. (M:9873980084)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. The present petitions, one under Section 9 of the Arbitration &
Conciliation Act, 1996 (hereinafter, 'the Act') and the second under Section
11 of the Act are filed seeking interim reliefs and appointment of an
Arbitrator.
2. The disputes arise out of Agreement to Sell dated 10th August, 2011
by which the Petitioners had agreed to purchase property bearing Mustil
No.55- Khasra No.3 (4-16), 4/1 (05), 4/2 (4-13), 5 (4-16), 7/1 (1-16), 7/2 (1-
7), Mustil No.61 - Khasra No.11/1 (2-8), 20/2 (4-16), Mustil No. 62- Khasra
No.16 (4-16), 24 (4-16) and 25 (4-08) total area admeasuring 37 Bigha 01
Biswa i.e. 7.7 acres situated in revenue estate of village Jharoda, Tehsil-
Najafgarh, New Delhi (hereinafter, 'suit property'). The total sale
consideration agreed between the parties was Rs.7,71,87,500/-. The
Petitioners paid a sum of Rs.77,18,750/- i.e. 10% of the sale consideration as
advance money and part payment in the following manner: -
Rs.7,18,750/- in cash
Rs.70,00,000/- by cheque
Disputes arose between the parties in respect of the performance of their
respective obligations under the said agreement to sell.
3. It is the case of the Petitioners that they were ready and willing to pay
the balance sale consideration but the No Objection Certificate (hereinafter,
'NOC') which was to be obtained by the Respondents from the concerned
authorities was not obtained.
4. On the other hand, it is the case of the Respondents that the last date
for performance was extended from 10th March, 2012 to 30th May, 2012.
Within the said period, the Respondents, had obtained the NOC. Thus,
despite obtaining the NOC, the Petitioners having failed to pay the balance
sale consideration, the Respondents forfeited the amounts already paid.
5. Disputes thus arose between the parties. The Petitioners filed the
present OMP seeking the following reliefs: -
"(a) Restraining the Respondents their agents,
associates or assigns from creating any third party
rights with regard to subject property bearing Mustil
No.55- Khasra No.3 (4-16), 4/1 (05), 4/2 (4-13), 5 (4-
16), 7/1 (1-16), 7/2 (1-7), Mustil No.61 - Khasra
No.11/1 (2-8), 20/2 (4-16), Mustil No.62- Khasra
No.16 (4-16), 24 (4-16) and 25 (4-08) total area
admeasuring 37 Bigha 01 Biswa i.e. 7.7 acres situated
in revenue estate of Village Jharoda, Tehsil-Najafgarh,
New Delhi and subject matter of the agreement dated
10.08.2011."
6. In OMP 995/2013, the stand of the Respondents was that the
agreement which was placed on record by the Petitioners was a
tampered/forged and fabricated document. According to the Respondents,
there was no arbitration clause in the Agreement to Sell and the only clause
was that disputes would be subject to jurisdiction of Courts at New Delhi.
Considering the competing stands of the parties, learned Single Judge of this
Court on 28th February, 2014, had passed the following order:
"I have heard learned counsel for the parties and
proceed to deal with the aspect of making of interim
arrangement at this stage. It is not in dispute that the
parties entered into an agreement to Sell on
10.08.2011 where under the petitioner agreed to
purchase and the respondent agreed to sell their
agricultural land admeasuring 37 bighas 1 biswa for a
total consideration of Rs.7,71,87,500/-. However,
disputes have arisen between the parties, as each is
claiming other to be in breach of the agreement.
According to the petitioner, the date for completion of
the transaction was 10.03.2012- by which date the
respondent was required to obtain the NOC, so that the
sale deed could be executed on the said date while
making payment of the balance consideration.
According to the petitioner, clause 20 of the Agreement
to Sell contains an arbitration clause providing that
the dispute shall be referred to an Arbitrator in
accordance with the provisions of the Arbitration and
Conciliation Act, 1996, mutually. According to the
petitioner, clause 18 of the Agreement provides that in
case the petitioner fails to get the sale deed executed in
its favour or in favour of some other person by the
closing date i.e. 10.03.2012, the earnest money and
any additional money paid by the petitioner to the
respondents shall not be forfeited.
The case of the petitioner is that the respondents
did not obtain the NOC by 10.03.2012 and, therefore,
the sale transaction could not be completed by the said
date. The petitioners claims that the respondents
expressed difficulty in concluding the transaction by
claiming that there were differences in their family,
and they agreed to refund the money received by the
respondents of Rs.77,18,750/- along with 12% interest.
The case of the petitioner is that the respondents
did not return the said amount and, instead sent a
notice on 13.06.2012 claiming that the transaction had
not been completed by 30.05.2012 as per the extended
date and, therefore, the amount of Rs.77,18,750/- has
been forfeited by the respondent.
The petitioner states that after learning that the
respondents had obtained the NOC on 30.05.2012, the
petitioner had also expressed its willingness to
complete the transaction. However, the respondents
have not heeded to this request.
In this background, the petitioner has preferred
this petition to seek a restraint against the respondents
from dealing with the said parcel of the land.
Upon issuance of notice, the respondents have
filed their reply. The case of the respondents is that
there is no arbitration agreement in existence between
the parties. The respondents have filed a copy of the
Agreement to Sell stated to have been executed
between the parties. The agreement set up by both the
parties are, more or less, similar. The material
difference is that on the first page - which is on a
stamp paper, the signatures of the petitioner is also
present in the copy, and in original filed by the
petitioners, where as in the copy filed by the
respondents, only the signatures and thumb
impressions of the respondents are present. In the
copy/ original filed by the petitioner, the signatures of
neither party is found in intervening pages. In the copy
filed by the respondents signatures and thumb
impressions of all the defendants are found. The last
page filed by the petitioner (in copy and in original)
bears the signatures and thumb impressions of the
respondents; the signatures of the petitioners, and;
signatures of two witnesses. However, in the copy filed
by the respondents, the signature of only one witness is
to be seen on the last page. The page containing
clauses 17 to 23, as filed by the petitioner contains
clause 18, as well as clause 20 (the arbitration
agreement), whereas the copy filed by the respondents
shows that clause 18 had been struck out in hand, and
clause 20 does not contain the arbitration agreement.
The clause reads, "This agreement shall be governed
by laws of India and dispute (s), if any, shall be subject
to jurisdiction of courts at New Delhi." The copy of the
agreement filed by the respondents also contains one
material difference in clauses 22 and 23. Whereas, the
agreement filed by the petitioner bears the date
"10.03.2012" in both the clauses, in the copy filed by
the respondents, the date is "30.05.2012" as the
completion date. According to the respondents, the
petitioner could not complete the transaction by
10.03.2012 and, therefore, sought extension of time till
30.05.2012. Accordingly, the page containing clauses
17 to 23 alone were replaced after carrying out the
necessary modification of dates, and the same was
signed by the respondents and their thumb impressions
are affixed. The case of the respondents is that the
petitioner being the agreement purchaser retained the
original agreement, while the respondents were only
provided with a photocopy of the said agreement.
From the aforesaid, it is clear that a serious
dispute has arisen with regard to existence of the
arbitration agreement itself. In the light of the
judgments of the Supreme Court in National
Insurance Co. Ltd. Vs. M/s Godhara Polyfab Pvt. Ltd.
AIR 2009 SC 170 and Bharat Rasiklal Ashra Vs.
Gautam Rasklal Ashra AIR 2011 SC 3562, the said
issue would have to be decided by this Court, as the
jurisdiction of this Court to deal with the present
petition is dependent on the determination of the issue
whether, or not, an arbitration agreement exists
between the parties. If no such agreement exists, this
Court would have no jurisdiction. On the other hand, if
such an agreement exists, this petition would be
maintainable and this Court would have jurisdiction to
deal with this petition.
Whilst the said inquiry is undertaken, it is
necessary to make an appropriate interim
arrangement.
A perusal of the petition shows that at one stage,
according to the petitioner, the petitioner had agreed
to take back the earnest money along with interest @
12% per annum. I may note that this is only the version
of the petitioner, and not the respondents. However,
from the averment made in para 12 of the petition, it
appears that the petitioners have accepted the position
that the agreement need not be proceeded to
conclusion, and the petitioner allegedly accepted the
return of earnest money deposited along with interest
@ 12% per annum from 10.08.2011. However, there is
no document in writing to support this plea.
The submission of the petitioner is that the NOC
was not obtained by the respondents by 10.03.2012. To
this, the response of the respondents is that the
respondents are illiterate villagers. They had signed
the requisite forms so as to enable the petitioner to
obtain the NOC. The petitioners themselves failed to
obtain the NOC by 10.03.2012.
Be that as it may, in my view, at this stage,
interest of justice would be served if the respondents
are directed that in case they deal with the property in
question, from out of sale proceeds received, an
amount of Rs.77,18,750/- shall be retained by them in
a fixed deposit and shall not be dealt with or
encumbered till the decision of this petition. I find no
justification in continuing either the statement of the
respondents made on 18.11.2013 or the direction,
directing maintenance of status-quo with regard to title
in possession of the suit property, since the petitioners,
even according to their pleadings, accepted the closure
of the agreement. They cannot, therefore, claim any
stake in the property in question. Their interest, if any,
is restricted to the monetary claim for refund with, or
without interest. Accordingly, the order dated
18.11.2013 stands modified as aforesaid.
The following issue is framed:
1. Whether the Agreement to Sell set up by the
petitioner is the true and correct agreement, or
the one set up by the respondents is the true
and correct agreement between the parties?
(Onus upon parties).
The parties are at liberty to file additional
documents within two weeks.
The petitioner shall file the list of witnesses along
with affidavits by way of evidence of the petitioners'
witnesses within four weeks with advance copy to the
respondents.
List the matter before the Joint Registrar on
17.04.2014 for fixing dates for trial on the aforesaid
issue."
After the petitioners close their evidence, the
respondents shall similarly lead evidence before the
Joint Registrar, where after the matter shall be placed
before the Court."
7. Thus, the learned Single Judge had, while passing the interim order,
framed an issue in order to adjudicate upon the existence of the arbitration
agreement between the parties.
8. Pursuant to the said issue being framed, parties led their evidence in
the matter. Petitioners filed the affidavits of Shri Jai Narain (PW-1), Shri
Satpal Yadav (PW-2) and Shri Chander (PW-3). The Respondents filed the
evidence of Shri Vijender Singh (RW-1). The cross-examination of the
witnesses were recorded before the Joint Registrar.
9. It is important to note that in the cross-examination of PW-1, the
witness specifically states that the agreement Exhibit-PW-1/B, original of
which was placed on record by the Petitioners, was changed several times.
He admits that he had signed on all the pages of the agreement, however, in
Exhibit-PW-1/B, the signatures appear only on the first and the last page.
The relevant portion of his cross-examination is set out herein below:
"Mahender Singh on behalf of the other defendants
also signed on the first and last page of the agreement
and I signed all the pages of first agreement. Meena,
petitioner No.2 has also signed all the pages of first
agreement. EX PW1/B bears my signature on first page
at point A and at page at point A and it bears the
signatures of petitioner No.2 Meena Singh on the first
and last page at Point B. It is correct that Ex PW1/B
does not bear our signatures on the other pages signed
by me, Meena Singh and Mahender Singh on all pages.
Vol It may be with my counsel. I do not know what
period of time the agreement was extended.
....................................
The first and last pages are original and rest are
changed and I do not know who has changed the
same."
10. The other two witnesses on behalf of the Petitioners stated that they
had no personal knowledge about the changes made in the intervening
pages.
11. Insofar as the Respondents' witness RW-1 is concerned, he admits
that the sum of Rs.77,18,750/- was received. He stated that he and all his
brothers had signed and put their thumb impressions on all pages of the
documents. He states that he received only a photocopy of the agreement.
He also states as under: -
"The agreement between the parties was executed
only twice. First time, all the pages were signed and
second time, only two pages were changed for
extension of time. All the respondents had signed on
the said two pages also. The agreement signed for
extension of time is Ex.RW1/2 and page 17 was
changed and signed by all the respondents."
12. According to him, the agreement was signed on two occasions. On the
first occasion, all pages were signed by all parties but on the second
occasion only two pages were changed for extension of time.
13. A perusal of the two versions of the agreement which have been
placed on record shows that in one of the agreements, i.e., Exhibit PW-1/B,
there exists an arbitration clause. This agreement which is in original, bears
the signatures/thumb impressions of the parties only on the first and last
pages. Even the signatures of the witnesses appear only on the last page. The
intervening pages bear no signatures. The arbitration clause appears in the
penultimate page, which is an intervening page. The same reads as under:
Agreement filed by the Petitioner Exhibit PW-1/B
"20. Any dispute arising out of this agreement shall
be referred to arbitration in accordance with
the provisions of arbitration and conciliation
act, 1996 as may be amended and by a sole
arbitrator to be appointed by mutual consent by
the parties and shall be subject to exclusive
jurisdiction of court at New Delhi.
14. However in the version of the agreement RW1/1, filed by the
Respondents there is no arbitration clause. This is a copy of the agreement to
sell which bears the thumb impressions on all pages, of the Respondents.
One witness has signed the agreement. The impugned clause 20 as contained
in both the agreements filed on record reads as under:-
Agreement filed by the Respondent RW1/1
" 20. This agreement shall be governed by laws of
India and disputes(s), if any, shall be subject to
jurisdiction of court at New Delhi."
15. On the basis of the evidence which has been adduced, including the
testimony of PW-1, that he had signed along with the other two purchasers
on all the pages of the agreement but the original which is produced on
record does not contain the signs of the Petitioners on all pages, but only on
the first and last page, and signature of PW-1 on the last page, it is held that
the agreement PW-1/B, relied upon by the Petitioners dated 10th August,
2011 cannot be considered to be valid and genuine.
16. The copy of the agreement to sell filed by the Respondents i.e., RW-
1/1 bears the thumb impressions of several of the Respondents on various
pages and the signatures of Shri Jai Narain on the last page. This version of
the agreement does not contain the arbitration clause.
17. It is accordingly held that there is no arbitration agreement between
the parties. Under these circumstances, the Section 9 and Section 11
petitions are not maintainable. The same are liable to be dismissed. Ordered
accordingly.
18. However, since the factum of the execution of agreement to sell as
also the receipt of the amount of Rs.77,18,750/- is not in dispute, the
Petitioners cannot be rendered remediless. The interim order which has been
passed on 28th February, 2014 shall continue for a period of another eight
weeks, allowing the Petitioners to avail of any remedies, which may be
available to them, in law. The said interim order would only be in operation
subject to any orders which may be passed by the appropriate court, which
may be seized of the disputes between the parties. If after a period of eight
weeks, no order is passed by any Court of competent jurisdiction, the
interim order shall stand automatically lifted.
19. Both petitions are dismissed. No order as to costs.
PRATHIBA M. SINGH
JUDGE
OCTOBER 29, 2018
Rekha
