TMI Blog2021 (12) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... d.) Kailash Gambhir and respondent in its reply has proposed name of Mr. Justice (Retd.) Manmohan Singh as the second Arbitrator. Even otherwise, once respondent has proposed the name of second Arbitrator, it cannot be permitted to take objection of delay and latches as well as application of Clause-36 to the Addendum Agreement dated 19.04.2011 to the present case. This Court finds that the disputes inter se parties are arbitrable and can be adjudicated by the arbitral tribunal. A part of petitioner s land has been transferred by the respondent to a third party i.e. M/s MGF Developments Ltd. - petition disposed off. - ARB.P. 637/2021 - - - Dated:- 24-12-2021 - HON'BLE MR. JUSTICE SURESH KUMAR KAIT For the Appellant : Mr. Kanhaiya Singhal, Mr. Rishabh Jain, Mr. Udit Bakshi, Mr. Prasanna, Mr. Chetan Bhardwaj Ms. Heena Tangri, Advocates For the Respondent : Mr. Dhanesh Relan, Mr. Arindam Dey Ms. Saubhagya Sundriyal, Advocates JUDGMENT 1. Petitioner No.1- M/s Tarun Aggarwal Projects LLP and petitioner No.2- M/s Prajakta Colonilers Pvt. Ltd. entered into a Collaboration Agreement dated 07.05.2009 in the capacity of owner of land admeasuring approx. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er induced petitioners to enter into an Addendum dated 19.04.2011 to the Collaboration Agreement and offered to irrevocably allot 05 plots of total area measuring 2160 sq.yd. approximately as non-refundable security/consideration for due performance of all of their obligations. Thereby, in terms of Addendum Agreement dated 19.04.2011 the petitioners and respondent amicably settled all their disputes with the understanding that the land in question was still capable of being licensed into a residential plotted colony, after being released from acquisition proceedings in terms of policy decisions of State Government. Thereby, in terms of Addendum dated 19.04.2011 parties agreed to apply for license within 15 days thereof and further agreed that the respondent shall carry the development work for providing for all kinds of amenities, facilities, utilities, basic infrastructure facilities including lighting, potable water, landscaping, sewerage, etc. at the cost expenses of petitioners @ Rs.40 lac per acre and also agreed that the respondent shall irrevocably allot 5 plots measuring total area of 2160 sq. yds. to the satisfaction of petitioners, as a non-refundable security/considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete violation of the Clause-17 of the original collaboration agreement dated 07.05.2009 and Clause-19 of the Addendum Agreement dated 19.04.2011, respondent transferred a part of land owned by petitioners to a third party i.e. M/s MGF Developments Ltd., as per the scheme of arrangement between the respondent and M/s MGF Developments Ltd. (in Company Petition No. 689/2016). Further, petitioners vide letter dated 17.05.2017 called upon the respondent to executed a cancellation deed but to no avail. 6. Learned counsel for petitioners empathically submitted that respondent was under the obligation to fulfill the terms and conditions of the Addendum Agreement dated 19.04.2011 and on its failure to do so, petitioners have suffered huge loss, as had the petitioners received the license, they would have got 14550 sq. yd. developed area in the year 2014 i.e. after 03 years of the execution of the Addendum Agreement at the rate of Rs.37,400/- per sq.yd and if the said area would have been sold in the year 2014, petitioners would have approximately received amount of Rs.53,83,50,000/- and would have earned more than Rs.50 crores of interest. However, in the notice of demand dated 27.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untenable, baseless and unwarranted, however, an alternative prayer has been made to appoint Mr. Justice (Retd.) Manmohan Singh as the second Arbitrator to adjudicate the disputes between the parties. 9. Lastly, learned counsel for respondent submitted that in the demerger of the respondent-Company, development rights over part of the land (3.40 acres) subject matter of Collaboration Agreement dated 07.05.2009 now vests with M/s MGF Developments Ltd. and therefore, it is a necessary party to the present proceedings. In support of above submissions, learned counsel for respondent has relied upon decisions in Oriental Insurance Company Limited Vs. Narbheram Power and Steel Private Limited (20018) 6 SCC 534; United India Insurance Company Limited Anr. Vs. Hyundai Engineering and Construction Company Limited Ors. (2018) 17 SCC 607; Vidya Drolia Ors. Vs. Durga Trading Corporation (2021) 2 SCC 1 and DLF Home Developers Ltd. Vs. Rajapura Homes Pvt. Ltd. Anr. 2021 SCC OnLine SC 781. 10. In rejoinder, the stand of petitioners is that it is the case of continuing cause of action as respondent has not admitted the termination of the Collaboration Agreement and it is still persi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for resolution of disputes through arbitration and whether the aggrieved party has made out a prima facie arbitrable case. The limited jurisdiction, however, does not denude this Court of its judicial function to look beyond the bare existence of an arbitration clause to cut the deadwood. A threejudge bench in Vidya Drolia (Supra), has eloquently clarified that this Court, with a view to prevent wastage of public and private resources, may conduct prima facie review at the stage of reference to weed out any frivolous or vexatious claims .. XXXXX 20. To say it differently, this Court or a High Court, as the case may be, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator. On the contrary, the Court(s) are obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act. Such a review, as already clarified by this Court, is not intended to usurp the jurisdiction of the Arbitral Tribunal but is aimed at streamlining the process of arbitration. Therefore, even when an arbitration agreement exists, it would not prevent the Court to decline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated that in the event of failure of respondent to comply the said legal notice within 30 days, dispute resolution process shall be contemplated. The petitioners also proposed name of Mr. Justice (Retd.) Kailash Gambhir as Arbitrator to settle the disputes in terms of Clause-37 of the Addendum Agreement dated 19.04.2011. 17. Further, it is the stand of petitioners that after respondent failed to comply with the terms of Collaboration Agreement dated 07.05.2009, that the parties had entered into the Addendum Agreement dated 19.04.2011 settling all the disputes. Meaning thereby, the terms stipulated in Collaboration Agreement dated 07.05.2009 stood superceded by the Addendum Agreement dated 19.04.2011, which is subject matter of dispute in the present petition. The aforesaid Addendum Agreement dated 19.04.2011 notes the disputes resolution clause as under:- Dispute Resolution Jurisdiction 36. In case of any conflict or difference arising between the parties or in case the either party refused or neglects to perform its part of the obligations under this Addendum Collaboration Agreement, inter-alia as mentioned in Clauses 3, 6 9 hereinabove, then the other party sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sq. yards of the plots. Subject to due performance of its obligations as contained in this agreement, the Developer shall be left with no right, title or interest of whatsoever kind or nature on 2160 sq. yards of the plots and their ownership shall vest with the owner absolutely and forever. In case of any substantial defect in the title of the owner w.r.t. 2160 sq. yards of the plots then the Developer shall immediately allot and the owner shall become entitled to alternative similarly situated plots of same sizes, free from any defect to the owner or its successors-ininterests incur. 9. The OWNER have agreed that simultaneous to the execution of this Addendum to Collaboration Agreement dated 07.05.2009, the DEVELOPER shall allot/transfer title of 5 plots measuring 2160 sq. yards approx. in favour of the OWNER or its nominees, to the satisfaction of the OWNER, the OWNER shall within a period of 10 days from the date of the execution of this Addendum Collaboration Agreement withdraw, at the litigation of the land as detailed in Schedule-II to this agreement, relating to the land owned and possessed by the DEVELOPER for which either license had been granted by DTCP or in process ..... X X X X Extracts X X X X X X X X Extracts X X X X
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