9911796707
TMI Blog2019 (2) TMI 2084X X X X Extracts X X X X X X X X Extracts X X X X ..... ,525/- pleading that (i) the appellant was the purchaser of land admeasuring 1.7 acres in Block A of Integrated Residential Colony called "Esencia" in the revenue estate of Village Badshapur, Tehsil and District Gurgaon, Haryana; (ii) that the defendant had entered into an agreement with Universal Buildwell Pvt. Ltd. (UBL) to undertake development and construction over the said land of which the UBL failed to perform its part of the agreement; (iii) that the appellant was in the process of finalizing the termination agreement with UBL and was in need of funds, to pay off UBL; (iv) that the appellant had entered into a Memorandum of Understanding (MoU) dated July 12, 2012 with the respondent herein whereunder the respondent had advanced a sum of Rs. 12 Crores to the appellant to enable the appellant pay off UBL and achieve termination of the agreement with UBL and to pay the balance sale consideration to the owners of the land to achieve execution of sale deed of the land in favour of the appellant; (v) that the appellant under the aforesaid MoU has agreed with the respondent and the respondent will carry out work of development and construction of the aforesaid land and proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses in the MoU dated July 12, 2012 reads as under:- "8. That any dispute between the Parties arising out of this MOU shall be subject to provisions of Arbitration and Conciliation Act, 1996 and the venue for arbitration shall be New Delhi. 9. That this Agreement shall be subject to jurisdiction of Courts at Gurgaon." 5. Some of the relevant clauses of the Deed of Cancellation, as noted by the learned Single Judge are as under:- "1. That the MOU dated 12th July, 2012 shall stand cancelled without any Party having any claim against each other except as agreed hereinafter. 2. That SPPL will refund the entire amount of Rs. 12 Crores with interest calculated @24% p.a. The interest will be calculated from the date of receipt of advance of Rs. 12 Crores and till the entire amount together with interest is refunded by SPPL to AHCL. 3. That the entire amount of Rs. 12 Crores together with interest thereon would be refunded by SPPL to AHCL latest by 31st December, 2013 failing which AHCL shall be at liberty to adjust amount due to SPPL in any other account. 4. That AHCL shall not claim any right on the Said Land or the Project being developed on the Said Land. 5. That t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount in the amounts due from the plaintiff to the defendant in any other account, in the light of the defence of the defendant of such adjustment, cannot be said to be arising out of the MoU, to be covered by the arbitration clause in the MoU. 19. The facts and circumstances of the present case thus do not make out a case of survival of the arbitration clause in the MoU." 8. That apart, the learned Single Judge has also relied upon the judgment of the Supreme Court in Damodar Valley Corporation Vs. K.K. Kar (1974) 1 SCC 141; Chatterjee Petrochem Company Vs. Haldia Petrochemicals Ltd. (2014) 14 SCC 574; Hema Khattar Vs. Shiv Khera (2017) 7 SCC 716, Nalini Singh Associates Vs. Prime Time - IP Media Services Ltd. 2008 (106) DRJ 734; C.E. Construction Ltd. Vs. Intertoll ICS Cecons O&M Company Pvt. Ltd. 2017 SCC OnLine Del 6401 and other judgments has dismissed the application. 9. Mr. Vivek Kohli, learned counsel for the appellant would make similar submissions as were made before the learned Single Judge and had also placed reliance on the judgment of the Bombay High Court in Mulheim Pipecoatings GmbH (supra). According to him, there were two obligations under the initial MoU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to incorporate the same. The MoU stands superseded by the Deed of Cancellation. A fresh agreement has been entered without arbitration clause. 13. Insofar as the other submissions made by Mr. Kohli by placing reliance on the judgment in the case of Mulheim Pipecoatings GmbH (supra) is concerned, in Mulheim Pipecoatings GmbH (supra), the Bombay High Court has summarized the law in terms of the following paragraphs:- "(i) The arbitration agreement constitutes a collateral term in the contract which relates to the resolution of disputes and not to the performance of the contract. Whereas the substantive terms of a contract define the rights and obligations of the parties, an arbitration agreement provides for modalities agreed upon by parties for the resolution of their disputes. Parties agree thereby to have their disputes resolved before an arbitral tribunal as distinct from the ordinary courts of law in the jurisdiction; (ii) Upon the termination of the main contract, the arbitration agreement does not ipso facto or necessarily come to an end; (iii) The issue as to whether the arbitration agreement survives or perishes along with the main contract would depend upon the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contract that is brought to an end or it is the existence of the contract which is brought to an end. In the former case, where the further performance of the contract has been brought to an end, the arbitration clause would survive whereas when the existence of the contract is itself brought to an end, the arbitration clause would not survive." (emphasis added) 14. Whereas the reliance placed by the respondent on the judgment of the Coordinate Bench of this Court in Young Achievers (supra), the Court has summarized the law in paras 8 to 16, which are reproduced as under:- "8. We are unable to agree with the submissions of learned counsel for the appellant, though there can be no dispute about the legal proposition propounded aforesaid and the law laid down by the Hon'ble Supreme Court. In fact, there is no quibble over the legal proposition that the arbitration clause would survive the termination/cessation of an agreement and the disputes pertaining to the same would still be resolved by arbitration. In the present case it is not a case of unilateral termination by one of the parties which has occurred. Mutually, a fresh document has been drawn called the Exit Paper, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the existence of the contract and its validity. So too, if the dispute is whether the contract is wholly superseded or not by a new contract between the parties, such a dispute must fall outside the arbitration clause, for, if it is superseded, the arbitration clause falls with it." (emphasis supplied) 10. We may note at this stage that the present is not a case involving the assertion by the respondent of accord and satisfaction in respect of the earlier contracts dated 01.04.2007 and 01.04.2010. In terms of the decision of the Supreme Court in Kishorilal Gupta (supra) (which is a three-Judge bench decision), if that had been the issue raised, the appellant may have been justified in claiming that the said dispute, i.e. whether there has been accord and satisfaction in respect of the two agreements should be referred to arbitration in terms of the arbitration agreement contained in the said two agreements. 11. Reliance placed on para 32 of the judgment in Kishorilal Gupta (supra) rendered by A.K. Sarkar, J in his concurring opinion appears to be misplaced. The Supreme Court in para 32 of the decision in Kishorilal Gupta (supra), after setting out section 62 of the Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the earlier contracts dated 1-4- 2007 and 1-4-2010. If that be so, it could have referred to arbitrator in terms of those two agreements going by the dictum in Union of India v. Kishorilal Gupta and Bros. This Court in Kishorilal Gupta's case examined the question whether an arbitration clause can be invoked in the case of a dispute under a superseded contract. The principle laid down is that if the contract is superseded by another, the arbitration clause, being a component part of the earlier contract, falls with it. But where the dispute is whether such contract is void ab intio, the arbitration clause cannot operate on those disputes, for its operative force depends upon the existence of the contract and its validity. The various other observations were made by this Court in the above-mentioned judgment in respect of "settlement of disputes arising under the original contract, including the dispute as to the breach of the contract and its consequences". The principle laid down by the House of Lords in Heyman v. Darwins Limited was also relied on by this Court for its conclusion. The Collective bargaining principle laid down by the US Supreme Court in Nolde Bros. c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
