Santosh Pandey vs Felicity Estates Private Limited And Ors

The applicant-Santosh Pandey alongwith two others Chandani Bhuchar and Anju Marwaha entered into a Development Agreement dated 9.9.2013 (hereinafter 'development agreement') with Felicity Estates Private Limited the non-applicant having its registered office at C-2/2449, Vasant Kunj, New Delhi. In terms of the said agreement two plot i.e. one bearing nos. A-241 ad measuring 472.22 sq. yards and the other A-242 also ad measuring 472.22 sq. yards belonging to the applicant alongwith Chandani Bhuchar and Anju Marwaha were to be developed by the non-applicant whose directors were Gagan Nayyar and Sudhir Kumar Marwaha. Clause (ix) of the Development Agreement reads as under:-

"(ix) Any dispute, differences, controversy or claim ("Dispute") arising between the parties out of or in relation to or in connection with this agreement of the breach, termination, effect, validity, interpretation or application of this agreement of as to their rights, duties or liabilities there under, or as to any act, matter or thing arising out of, consequent to or in connection with this agreement, Shall be settled by the parties by mutual negotiations and agreement If, for any reason, such dispute cannot be resolved amicable by the parties, the same shall then be referred to and settled by way of arbitration proceedings in accordance with the arbitration and conciliation act, 1986 or any subsequent enactment or amendment there to (the "Arbitration Act") each of the parties shall a point and arbitrator within 30 days of the receipt by a party of the other party's request to intimate arbitrations. The two arbitrators so appointed shall then jointly appoint a third arbitrator within 18 days of the date of appointment of the second arbitrator, such III arbitrator shall act as the Chairman of the tribunal. Arbitrators not appointed within the time limit set forth in the preceding sentence Shall be appointed in accordance with the arbitration act. The three arbitrator appointed in pursuance of this clause shall be herein referred to as "The Arbitrators" or "The Tribunal". The decision of the arbitrators shall be final and binding upon the parties. The venue of arbitration proceedings shall be Jaipur. The language of the arbitration and the award shall be English. The cost of arbitrators appointed and other cost of arbitration shall be borne by the parties in equal proportions."

Disputes having arisen in relation to and in regard to the Development Agreement vide notice dated 6.5.2018 the applicant through counsel referring thereto nominated its arbitrator under Clause (ix) of the development agreement and required the nonapplicant to so appoint its nominee as arbitrator to facilitate constitution of the requisite Tribunal at the earliest failing which the applicant would be left with little option and invoke the Act of 1996 for appointment of the Arbitral Tribunal.

In response to the said notice, a Director of the nonapplicant company-who had been served notice in that capacity- stated that the company was not active and none was holding the position of Director for reason beyond control. It was submitted that in the circumstances the arbitration clause was not operable. However it was not stated that the non-applicant company had been liquidated. In the circumstances the application seeks appointment of the Arbitral Tribunal.

Reply to the petition has been filed only on behalf of an Director of the non-applicant-company one Rohit Kumar Buchar. The company itself has not filed any reply despite being served. In the reply of Rohit Kumar Buchar, Director of the company it has been stated that the application at the instance of only one of the three owners of the two plots developed under the agreement dated 9.9.2013 is not maintainable. It has further been stated that the answering non-applicant Rohit Kumar Buchar cannot be personally held liable for the obligations of the non-applicant company under the development agreement nor in fact he was even a party in personal capacity to the agreement. Merits of the applicant's claim have also been denied. It has also been submitted that no effort at amicable settlement was made and hence the Arbitral Tribunal under Clause (ix) of the Development Agreement cannot be appointed. The issue of limitation baring this application has also been raised.

Heard. Considered.

The registered and stamped development agreement dated 9.9.2013 has not been disputed. The applicant is one of the parties thereto. She has raised certain disputes arising from the development agreement relating to her own rights thereunder and placed on record her counsel's notice to the non-applicant company through its Director for appointing an Arbitral Tribunal in terms of Clause (ix) of the development agreement to adjudicate the dispute raised by her. That the notice was addressed to Rohit Bhuchar as Director of the non-applicant company is only a misdescription and it cannot be held for that reason that the nonapplicant company was not sent the notice or not required to act in terms of its obligation towards arbitration under Clause (ix) of the development agreement. That prior to the receipt of the notice dated 6.5.2018 sent by the applicant, Rohit Kumar Buchar had resigned as Director of the company has not been stated nor document in support filed. As far as the applicant alone not being competent to file this application, I am of the considered view that as a party to the development agreement dated 9.9.2013 with an arbitration clause and her personal rights adumbrated thereunder, she has the right to seek arbitration no matter that the other 2 owners of the plots under the development agreement have not joined her. In any event it is not the non-applicant's case that no dispute relating to or arising out of the development agreement dated 9.9.2013 obtains. On the issue of the claims of the applicant being hit by limitation as agitated in the reply, I am of the considered view that here limitation is a question of law and fact based on evidence/ appreciation and appropriately left to the Arbitral Tribunal to address. The applicant has invoked the Clause (ix) of the development agreement dated 9.9.2013. She has stated that the disputes have arisen therein and have not been amicably settled despite several efforts. A notice for appointment of Arbitral Tribunal as per agreed procedure under the development agreement was sent by the applicant's counsel by the registered post on 6.5.2018 but to no avail. On the facts of the case it is thus apparent that the agreed procedure for appointment of the Arbitral Tribunal has failed.

Therefore I am of the considered view that this application under Section 11 (6) of the Act of 1996 deserves to be allowed. Shri Umesh Kumar Sharma, C-601, Mewar Apartment, Haldi Ghati Apartment, Pratap Nagar, Jaipuir-302033 (94143-23890) is appointed as sole arbitrator to adjudicate all disputes/ differences between the parties arising out of and relating to the Development Agreement dated 9.9.2013. The non-applicant will be free to take all defences included that of limitation. The arbitrator shall if warranted make requisite disclosure under Section 11 (6) of the Act of 1996. Payment of the cost of Arbitration proceedings and arbitration fee shall be made as per the fourth schedule of the Act of 1996 as amended from time to time and computed as directed by the Arbitrator.

A copy of this order be communicated to Shri Umesh Kumar Sharma, C-601, Mewar Apartment, Haldi Gahti Apartment, Pratap Nagar, Jaipuir-302033 (94143-23890) for entering upon the reference and proceed thereon as per the Act of 1996 as amended from time to time and adjudicate all disputes/ differences (factual and legal) between the parties arising out of/ relating to the development agreement dated 9.9.2013.

The application stands allowed accordingly.