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Appasamy Real Estates Ltd, Rep. By its Director, Ravi Appasamy, having its registered office at Chennai v/s C.T. Senthilnathan

    Arb. O.P. (Comm.Divn.) No. 42 of 2021

    Decided On, 21 September 2021

    At, High Court of Judicature at Madras


    For the Petitioner: Sathish Parasaran, Senior Counsel for R. Partharasarathy, Advocate. For the Respondent: A.R.L. Sundaresan, Senior Counsel, A.L. Gandhimathi, Advocate.

Judgment Text

(Prayer: Original Petition filed under Section 11(6) of Arbitration and Conciliation Act, 1996, praying to appoint an Arbitrator on behalf of the Respondent in terms of Clause 20 of the Agreement dated 31.03.2019 to adjudicate upon the disputes that have arisen between the parties in relation to the said agreement.)

(This case has been heard through video conference)

1. This Original Petition has been filed for appointment of Arbitrator to resolve the dispute arose in the Joint Development Agreement. The parties are governed by the contract of Joint Development Agreement executed between them on 31.03.2019, in which clause 19 provides for reference to the arbitration.

2. As per the said agreement, the Petitioner has agreed to develop the property owned by the respondent and also agreed to construct a residential complex. The sale consideration payable to the Respondent was agreed to be 60% of the total sale proceeds of the total developed area of 1,50,000 sq.ft. to be put up in the said property by the Petitioner as defined under the Agreement. The payment of sale consideration was specifically agreed upon between the parties in clause 8 of the Agreement.

3. It is the contention of the Petitioner that they have paid a sum of Rs.5,00,00,000/- (Rupees five crores only) towards security deposit and also further sum of Rs.3,00,00,000/- (Rupees three crores only) was agreed to be deposited towards further security deposit on handing over vacant possession of subject property. Pursuant to the terms of Agreement, the Petitioner had taken all steps towards development of project and spent huge sum towards the requisite statutory clearances. However, suddenly, the Respondent has transferred the security deposit amount to the account of Petitioner and has failed to adhere to the terms of Agreement in spite of repeated reminders. As the dispute having arisen between the parties and having remained unresolved in spite of several attempts to amicably resolve the disputes with the Respondent, the Petitioner has invoked to refer the dispute for arbitration as per clause 19 of the contract. Hence, this Petition has been filed seeking for appointment of Arbitrator.

4. The Respondent has filed a Counter that the Agreement cannot be enforced in the eye of law since it is an unregistered and unstamped Agreement and it is against the Registration Act. Therefore, the document cannot be used for referring the dispute between the parties for arbitration. It is not in dispute that the contract entered between the parties provides for arbitration, in which, clause 19 reads as follows :-

“19.In the event of any dispute, controversy, claim or disagreement of any kind whatsoever between or among the parties including the interpretation or breach of the terms contained in this Agreement (hereinafter to as “Dispute”), arising between the Parties, the Parties shall first attempt to resolve such Dispute through negotiation. The Party that claims that a Dispute has arisen, must serve a written notice on the other Party specifying the particulars of such Dispute (hereinafter referred to as “Dispute Notice). Such Dispute or part thereof arising under or in connection with this Agreement which could not be settled by Parties through negotiations, after the period of sixty (60) days from the service of the Dispute Notice or such longer period as may be agreed by the Parties in writing, shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 (as amended or supplemented thereafter).”

5. Heard the submissions of learned Counsel appearing for Petitioner as well as the Respondent and perused the records.

6. What is to be seen under Section 11 of the Arbitration and Conciliation Act is the existence of the agreement. As the Contract itself provides for dispute resolution by way of Arbitration, which is binding on the parties, this Court is inclined to appoint an Arbitrator to resolve the dispute arose between the parties. It is open to the Respondent herein to raise all their objections before the learned Arbitrator including validity and enforcement of the Contract. It is also made it clear that the application has been mainly objected on the legal ground, as the facts are not germane in Sec.11 Application.

7. In such view of the matter, having regard to the Joint Development Agreement dated 31.03.2019 entered into between the parties and both the parties without prejudice to rights, have no objection to refer the dispute for Arbitration, it is ordered as follows :

i) Honourable Mr. Justice K.Kannan, Former Judge, Madras High Court, residing at New No.22, Gilchrist Avenue, Opp. Harrington Road, Chetpet, Chennai-600 031, Contact No.M-097800 08145 / Landline No.4868 7374/2815 4145 is appointed as the Arbitrator to enter upon reference and adjudicate the disputes inter se the par

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ties. ii] That the learned Arbitrator appointed herein, shall after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of the Order. iii] That the learned Sole Arbitrator appointed herein shall be paid fees and other incidental charges, fixed by him and the same shall be borne by the parties equally. 8. This Original Petition is ordered accordingly, leaving the parties to bear their own costs.