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2019 (9) TMI 321

..... the Societies Registration Act to Arbitration - HELD THAT:- Clause 19 shall be applicable in the event of any dispute and difference arising among the parties out of, in connection with or relating to the agreement - In the present case, the developers, owners, societies and the original owners and even subsequent societies formed are parties to the agreement and the Addendum. It is also required to be noted and, as observed hereinabove, the dispute is with respect to sharing of the rent of the leased space and it can be said that the respondents are also claiming the share relying upon the Development Agreements; Supplementary Development Agreements and the Addendum. Therefore, the dispute can be said to in connection with or relating to the Agreements also. Clause 19 of the Addendum to the Supplementary Development Agreement shall be squarely applicable and therefore the disputes between the respondents and the appellants for which the respondents initiated proceedings under the Societies Registration Act, are required to be referred to the Arbitration and/or to the Arbitral Tribunal - both the High Court and the learned District Judge have committed grave error in not referring .....

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..... the members of the appellant no. 1 Society. It appears that, thereafter, an Addendum to the Supplementary Development Agreement was executed by inter alia the appellants and the respondents (excluding the lessee, HCL Technologies Limited) on 12.03.2010. Clause 19 of the Addendum provides for the mechanism to resolve the dispute between the parties (which shall be dealt with here-in-below). Clause 13 of the Addendum is with respect to the collection of lease rents in respect of the extends leased out in a given building earmarked as the share of the owners till the completion. Clause 16 empowers the societies to determine and collect monthly maintenance charges from the owners and Clause 18 provides that the owners are liable to pay the proportionate share of common expenses for upkeep and maintenance to the societies. 3.2 A cold shell of building H1B was completed by the developer and appellant no. 1 Society converted the same to warm shell by setting up the air conditioning facilities, backup generators and backup power implementation, building management system implementation, electrical works and civil works and the funds for the same were raised by appellant no. 1 Society by wa .....

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..... vocate appearing on behalf of the appellants has vehemently submitted that, in the facts and circumstances of the case, the High Court has materially erred in dismissing the appeals and confirming the order passed by the learned District Judge dismissing the applications filed under Section 8 of the Arbitration and Conciliation Act, 1996. It is vehemently submitted by Shri Jayant Bhushan, learned Senior Advocate appearing on behalf of the appellants that the High Court has failed to appreciate Clause 19 of the Addendum to the Supplementary Development Agreement dated 12.03.2010 in proper perspective while dismissing the applications of the appellants under Section 8 of the Arbitration and Conciliation Act, 1996. 4.1 It is vehemently submitted by the learned Senior Advocate appearing on behalf of the appellants that the dispute between the appellants and the respondents is the quantum of the share claimed by the respondents in the lease rents collected by appellant no. 1 Society. It is submitted that the respondents are claiming their share in the rent collected by appellant no. 1 Society relying upon the relevant provisions of the Development Agreements and the Supplementary Develo .....

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..... resent appeals and quash and set aside the impugned common judgment and order passed by the High Court and consequently allow the three applications filed under Section 8 of the Arbitration and Conciliation Act and refer the dispute between the parties for which the respondents filed an application under Section 23 of the Societies Registration Act to Arbitration. 5. Shri Joy Basu, learned Senior Advocate appearing on behalf of the contesting respondents has opposed the present appeals and has supported the impugned common judgment and order passed by the High Court. 5.1 It is vehemently submitted by the learned Senior Advocate appearing on behalf of the respondents that, in the facts and circumstances of the case and considering the relevant sub-clauses of Clause 19 of the Addendum, the High Court has rightly not interfered with the order passed by the learned District Judge while not referring the dispute to Arbitration and not appointing the Arbitrator. 5.2 It is vehemently submitted by learned Senior Advocate appearing on behalf of the respondents that on fair reading of Clause 19 of the Addendum, only the disputes and differences arising between the Owners [Sub-clause (c) of C .....

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..... societies would be the sole authorities to collect/receive the lease rents in respect of the extends leased out in a given building earmarked as the share of the owners in the completion and pool the entire revenue generated from each of the buildings by way of lease rents and distribute the same to the owners, prorata to their respective shares in the buildup space in the project after addressing the liabilities towards loans. Therefore, the dispute between the respondents and the appellants with respect to the sharing of the rent with respect to the leased space can be said to be related to the Addendum and/or in connection with or relating to the Addendum. 7. Clause 19 of the Addendum, which is the arbitration clause and provides how to settle the dispute between the parties, reads as under: The owners agree that any dispute between the Owners, including the dispute relating to this Addendum and all questions relating to its interpretation shall be construed in accordance with the laws of India, without reference to its principles of conflicts of law. Except as otherwise specifically provided in this Agreement, the following provisions apply in the event of any dispute or differ .....

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..... he same shall be referred to arbitration. However, sub-clauses (c), (d) and (e) provide for different procedure in the event of any disputes and differences between the owners; between two or more societies or owners who are the members of two different societies and between two or more owners of the space in the same building. Sub-clause (c) of Clause 19 provides that any disputes or differences whatsoever arising between owners, which could not be resolved by the parties through negotiations, within a period of 30 days from the service of the notice of dispute, the same shall be referred to and shall finally be settled by the arbitration in accordance with the (Indian) Arbitration and Conciliation Act, 1996. Sub-clause (d) of Clause 19 provides that in the event of any dispute which involves two or more societies or owners who are the members of two different societies, the arbitral tribunal shall comprise of three or more arbitrators. It further provides, who shall be appointed as a presiding arbitrator; who shall be the Chairman of the arbitral tribunal and the venue of the arbitration . Sub-clause (e) of Clause 19 provides that in the event of any dispute which involves two or .....

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