Rajesh Gupta S/O Late Shri Harish ... vs M/S Parth Infratech Pvt. Ltd
2022 Latest Caselaw 4813 Raj/2

          HIGH COURT OF JUDICATURE FOR RAJASTHAN
                      BENCH AT JAIPUR

                S.B. Arbitration Application No. 90/2019

Rajesh Gupta S/o Late Shri Harish Chandra Gupta, Aged About
81 Years, R/o Plot No. B-22, Shiv Marg, Banipark, Jaipur (Raj)
                                                                       ----Petitioner
                                       Versus
M/s Parth Infratech Pvt. Ltd., (SNG Group) 707, Paris Point,
Collectorate Circle, Jaipur 302016 (Rajasthan)
                                                                   ----Respondent

For Petitioner(s) : Mr. Ajay Kumar Bajpai, Sr. Adv.

assisted by Mr. Nitesh Pareek For Respondent(s) : Mr. Rajesh Maharshi with Mr. Ankit Bishnoi

HON'BLE MR. JUSTICE PANKAJ BHANDARI

Order

ORDER RESERVED ON :: 07/07/2022 ORDER PRONOUNCED ON :: 14/07/2022

1. The applicant has moved this arbitration application under

Section 11 of the Arbitration and Conciliation Act, 1996

(hereinafter referred to as "the Act of 1996") seeking appointment

of an arbitrator.

2. It is pleaded in the application that a Development

Agreement was executed between the applicant and non-applicant

on 08.11.2012. There was an arbitration clause and initially, when

dispute arose between the parties, the same was referred to the

arbitrator and the arbitrator vide its order dated 17.10.2017 has

passed the award, aggrieved by which, both the parties have

approached the Commercial Court and the objections filed by the

parties under Section 34 of the Act of 1996 has been dismissed by

the Commercial Court vide its order dated 27.08.2019. It is also

(2 of 5) [ARBAP-90/2019]

pleaded in the application that a Memorandum of Understanding

(hereinafter referred to as "the MOU") was executed between the

parties on 06.03.2013, however, even after the execution of the

MOU, the possession of the flats falling in the share of the

applicant has not been delivered to him.

3. It is contended by counsel for the applicant that the

applicant time and again had approached the non-applicant, but

the non-applicant has not handed-over the possession of the flats

falling in his share. The applicant has also served a legal notice on

16.02.2019 and suggested the name of Justice Gauri Shankar

Saraf (Retired) as arbitrator, but the non-applicant has not agreed

for appointment of an arbitrator. Counsel appearing for the

applicant has placed reliance on Indian Oil Corp. Ltd. Versus M/s.

SPS Engineering Ltd.: 2011 (3) SCC 507, Dolphin Drilling Ltd.

Versus Oil & natural Gas Corp. Ltd.: 2010 (3) SCC 267.

4. Non-applicant has submitted its reply to the application. It is

stated in the reply that the dispute raised in the instant application

has already been decided and no new dispute has been put forth

in the instant application. Therefore, no cause of

arbitration/dispute arises between the parties and the applicant is

not entitled to have an arbitrator appointed by the Court. In

rejoinder, the applicant has contended that delivery of 23 flats was

given to the applicant, however, remaining 31 flats of "B" Block

were not delivered to the applicant. It is also contended in the

rejoinder that the dispute is still existing as 31 flats have not been

delivered and instead of delivering the flats, the non-applicant has

demanded a sum of Rs.4,34,80,018/- from the applicant.

5. Counsel for the non-applicant has placed reliance on

Gammon India Ltd. & Ors. Versus National Highways Authority of

(3 of 5) [ARBAP-90/2019]

India: AIR 2020 Delhi 132, Lloyds Steel Industries Limited

Versus Oil and Natural Gas Corporation Ltd.: AIR 1997 Bom

337, Dadri Cement Company & Ors. Versus Bird & Co. (P) Ltd.:

AIR 1974 Delhi 223, Young Achievers Versus IMS Learning

Resources Private Limited: (2013) 10 SCC 535, DLF Home

Developers Limited Versus Rajapura Homes Private Limited &

Ors.: 2021 (5) ARBLR 196 (SC) and M.R. Engineers and

Contractors Private Limited Versus Som Datt Builders Limited:

(2009) 7 SCC 696.

6. I have considered the contentions raised by the learned

counsel for the parties.

7. Admittedly, there is an arbitration clause as the dispute

between the parties was earlier referred to the arbitrator and an

award has been passed, which was challenged by both the parties

under Section 34 of the Act of 1996 and the application under

Section 34 of the Act of 1996 filed by both the parties stood

rejected by the Commercial Court. In Dolphin Drilling Ltd. (supra),

it was held by the Apex Court that if another dispute has cropped

up, arbitration clause can be invoked again.

8. Admittedly, the non-applicant agreed to handover the

possession of 40% share of flats to the applicant and vide MOU

entered into between the parties, certain flats were retained by

the non-applicant for completing the construction work, however,

those flats have not yet been handed-over to the applicant, thus,

there is a dispute, which still subsists between the parties. The

non-claimant is claiming a sum of Rupees Four Crores and the

claimant is claiming delivery of the flats without paying any

amount. The objection of counsel for the non-applicant that the

dispute is barred by res-judicata, cannot be looked into by this

(4 of 5) [ARBAP-90/2019]

Court when the matter is merely pertaining to the appointment of

an arbitrator under Section 11 of the Act of 1996 as held by the

Apex Court in Dolphin Drilling Ltd. (supra). The judgment referred

to by the counsel for the non-applicant Lloyds Steel Industries

Limited (supra) where the contract was put to an end and it was

substituted with a new contract noticing their rights and the

arbitration clause in the original contract was held to have

perished. The said ruling cannot be applied to the facts of the

present case as the parties never intended to perish their

arbitration clause and the understanding which took place was

only with regard to the delivery of the flats. The arbitration

agreement was not cancelled by the parties.

9. The judgment in Dadri Cement Company & Ors. (supra) has

no applicability to the facts of the present case, as in the case

before the Delhi High Court, the original contract was substituted

by a fresh contract and in the fresh contract, there was no

arbitration clause. However, in the case before this Court, there is

no fresh contract. Young Achievers Versus IMS Learning Resources

Private Limited (supra) was a case in which the original agreement

was superseded/novated by another agreement. The Delhi High

Court held that if the agreement containing arbitration clause is

superseded/novated by a substituted agreement between the

parties, the arbitration clause of the original agreement does not

survive. The above case has also no applicability to the facts of

this case.

10. This Court is of the considered view that the agreement

entered into between the parties for referring disputes to the

arbitrator has not been superseded/novated merely because some

flats were given to the non-applicant for making repairs therein.

(5 of 5) [ARBAP-90/2019]

Admittedly, the non-applicant has not returned possession of the

remaining 31 flats of "B" Block and thus, there still exists a

dispute between the parties. I, therefore, deem it proper to allow

the arbitration application. This Court appoints Mr. Justice S.K.

Keshote (Retired), 10 Eden Garden, Flat No.302, Bajaj Nagar

Enclave, Near Gandhi Nagar, Railway Station, Jaipur, as an

arbitrator to decide the dispute.

11. The appointment of the sole arbitrator is subject to the

declarations being made under Section 12 of the Arbitration and

Conciliation Act, 1996 with respect to the independence and

impartiality, and the ability to devote sufficient time to complete

the arbitration within prescribed period.

12. The arbitrator shall be entitled to lay down fees as provided

under Manual of Procedure for Alternative Disputes Resolution,

2009 as amended from time to time.

13. Registry is directed to intimate Mr. Justice S.K. Keshote

(Retired) and obtain his formal consent.

(PANKAJ BHANDARI),J

SUNIL SOLANKI /PS

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