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M/s. Jeyam Constructions, Rep. by its Proprietrix, E. Jayanthi & Another v/s M. Velu & Others

    Original Petition Nos. 197 & 226 of 2021 & Application Nos. 764, 1013 & 1014 2021

    Decided On, 10 August 2021

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE N. SATHISH KUMAR

    For the Petitioners: AL. Ganthimathi, Advocate. For the Respondents: S.R. Sundar, Advocate.



Judgment Text

(Prayer: Original Petition in O.P.No.197 of 2021 has been filed under Section 34 [2] of Arbitration and Conciliation Act, 1996 to set aside the arbitral Award dated 21.12.2019 passed by the Arbitral Tribunal in so far as it relates to the petitioner and O.P.No.226 of 2021 has been filed under section 34 [2] of Arbitration and Conciliation Act, 1996 to set aside the award in so far as the finding given in respect of page No.28, paragraphs 15(2) dated 21.12.2019 passed by the sole arbitrator and consequently, direct the respondents to pay a sum of Rs.5,81,00,000/- [Rupees five crores Eighty one lakhs only] as damages and on account of deviation, unauthorised construction of third floor and encroachment of car parking area and non completion in terms of Construction Agreements in the building.)

1. The Original petition in O.P.No.197 of 2021 has been filed challenging the award of the sole arbitrator granting compensation and also rejecting the counter claim and the Original Petition in O.P.No.226 of 2021 has been filed challenging the arbitral award as against the quantum of compensation claimed by the claimant.

2. Since both the Original Petitions are arising out of the same arbitral award, this court is of the view to dispose both the Original Petitions by way of a common Order.

3. Brief facts leading to the filing of the claim petition is as follows :

The claimants entered into an agreement for construction and a sale deed conveying the UDS. The respondent executed the construction agreement as a sole proprietrix. As per the agreement, the respondent sold the undivided shares of the land mentioned in the schedule property along with the built up area in the first and second floors and a stilt car parking space in the ground floor. The entire ground or stilt floor was allotted specifically for car parking and common area belonging to all the flat owners and the same is in accordance with the approved plan. After the completion of construction of the building, the respondents handed over the respective flat to the lawful owners in the year 2015. Thereafter, under the pretext of repairing some damaged parts in the flat, the respondents continued the construction and had put up illegal construction on the terrace of the second floor by violating the rules. The above construction was against the rules and there were several proceedings before the Court of law. The Courts restrained the respondents from putting up the constructions. Despite the same, illegal construction had been put up by the respondents and undivided share has also been sold to the relatives of the claimants. Hence, the claimant prayed for the following reliefs :

A] to pass an award of permanent injunction restraining the respondent or her men or agents or tenants or henchmen or politician from entering into the premises of the Jeyam Apartments at Old No.15/16, [New No.29/1 & 31/1], V.M. Street, Royapettah, Chennai- 600 014 and not to disturb our peaceful possession in nay manner as the lawful owners of the Jeyam Apartments.

B] to pass an award directing the respondents to pay the sum of Rs.2,50,00,000/- towards damages as stated supra.

C] to pass an award directing the respondents to pay the sum of Rs.5,81,00,000/- on account of deviation, unauthorized construction of 3rd floor and encroachment of car parking and non Jeyam Apartments at Old No.15/16, [New No.29/1 & 31/1], V.M.Street, Royapettah, Chennai – 600 014 byannibilating the legitimate expectations of the claimants herein as stated supra in detail in the claim petition.

D] to pass an award of permanent injunction restraining the respondents, their men and agent in any manner creating further encumbrance, alienation or creating third party rights over the Jeyam Apartments at Old No.15/16, [New No.29/1 & 31/1], V.M. Street, Royapettah, Chennai- 600 014 to the total extent of 3054 sq.ft. comprised in O.S.No.4498, present R.S.No.747, BlockNo.14 within the Sub Registration District of Mylapore, Registration District of South Chennai.

E] to pass an award of permanent injunction restraining the respondents or their men or agents not to claim any right over the Jeyam Apartments at Old No.15/16, [New No.29/1 & 31/1], V.M.Street, Royapettah, Chennai – 600 014.

F] to declare that the total constructed area for the third Claimant is 1680 sq.ft. and the mistake in the construction agreement dated 30.11.2012 between the third claimant and the respondents, as 1100 sq.ft. is directed to be declared/altered/corrected as 1680 sq.ft.

G] To direct the respondents herein to pay the costs to the claimants.

4. The second respondent admitting that she is the absolute owner of the property measuring 1482 sq.ft. in Door No.15/16, Venkatachalam Mudali Street, Meesapet, Royapettah, Chennai 600 014, contented that in the year 2009, the respondents have obtained planning permission for putting up construction in the aforesaid property, which consist of stlit + 2 floors, with a total of 6 units. When the construction was put up as per the plan during the year 2009, which consists only of stilt + 2 floors with 6 units, the respondents were not able to honour the commitment as per the original agreement entered into with their family members. Further, out of the 10 relatives, three of them died and another three were not able to pay the money and only the remaining 4 persons were retained as per the original agreement. Therefore, it is her contention that that the construction was put up simultaneously in the first and second floors in the year 2015 itself and the sale deeds were executed in favour of the claimants and the flats were handed over to the respective owners. Hence, it is their contention that they had filed applications for regularization of the planning permission and the same are pending. Hence, disputed the claim of damages.

5. After completion of pleadings, the arbitral Tribunal has framed the following issues :

[1] Whether the Claimants are entitled to all or any of the claims set out in the claim statement?

[2] Whether the respondents are entitled to any counter claim set out in their defence statement?

[3] Whether the Claimants/respondents entitled to any interest, if so percentage of interest and from what period?

[4] Whether the Claimants/Respondents entitled to cost and if so, what is the cost?

[5] To what other reliefs the parties are entitled to?

6. On the side of the claimant 65 documents were marked and on the side of the respondents 63 documents were marked. The arbitrator also sought assistance of the Engineer and the Commissioner reports have been marked as Ex.X.1 to Ex.X.3. After considering all documents and entire pleadings and evidence, the learned arbitrator passed the following award :

1] The respondents, their men, agents or any other persons shall not interfere with the possession and enjoyment of the claimants flats and their common area.

2] the respondents shall pay to the claimants each a sum of Rs.10,00,000/- [Rupees ten lakhs only] as damages for the reasons set out in para 12 (b) (vii) of this award.

3] The respondents or their men or agents shall not create any further encumbrances, alienation or creating third party rights over Jeyam Apartment at Old No.15/16, [New No.29/1 & 31/1], V.M.Street, Royapettah, Chennai – 600 014 to the total extent of 3054 sq.ft. comprised in O.S.No.4498, present R.S.No.747, Block No.14 within the Sub Registration District of Mylapore, Registration District of South Chennai.

4] The respondents, their men or agents shall not claim any right over the Jeyam Apartments at Old No.15/16, [New No.29/1 and 31/1], V.M.Street, Royapettah, Chennai – 600 014.

5] It is declared that the third Claimant total constructed area is 1680 sq.ft. and not 1100 sq.ft. as projected by the respondent.

6] The counter claim made by the respondents are rejected.

7] The Claimants all put together entitled to a cost of Rs.6 lakhs which shall be payable within 2 months from the date of award.

7. The main contention of the learned counsel appearing for the petitioners in O.P.No.197 of 2021 is that the learned arbitrtor has passed the award granting compensation without any evidence and documents. Further, it is submitted that the claimants admission as to the nature and extent of the property purchased by them has not been considered properly. Hence, it is his contention that the award suffers from patent illegality and vital aspects have not been considered by the arbitrator and as such, the award is liable to be interfered.

8. The learned counsel appearing for the respondents in O.P.No.197 of 2021 submitted there are materials available on record for enhancing the compensation. Despite various Orders passed by the Courts, the petitioners have put up the construction in the second floor and if the building is demolished, the sufferers are only the claimants. They have been pursuing the matter upto the Apex Court. All these factors have not been taken note by the arbitrator while arriving at the compensation. Hence, it is submitted that there are materials available on record to enhance the compensation. The learned arbitrator has restricted the compensation only to Rs.10 lakhs to each of the claimants. Hence, prayed for enhancement of the compensation.

9. Heard both sides and perused the entire materials available on record.

10. It is well settled that the award can be interfered only on the circumstances set out under section 34 of the Arbitration and Conciliation Act. Only on the eight grounds set out in the Section 34 of the Arbitration and Conciliation Act under which the award can be interfered while exercising the jurisdiction under section 34 of the Arbitration and Conciliation Act. The main contention of the respondent is that the award suffers from patent illegality. To interfere under such ground, the illegality in the award must go to the root of the matter and it should shock the conscience of the court.

11. A perusal of the entire award and the evidence, it is seen that the learned arbitrator considered all the materials and evidence, particularly the pleadings of the respective parties and taken note of the violation of the planning permission which infact lead to serious consequences and damage has been calculated considering the various other circumstances. In para 12 of the award, the learned arbitrator has recorded the reasons for awarding the compensation. When the learned arbitrator has considered all the factual aspects and evidence of both the parties, this Court cannot reappreciate the entire evidence under section 34 of the Arbitration and Conciliation Act. The learned arbitrator also taken note of the nature of violations made by the respondent from the very inception, despite the Orders of the Court in several occasions. All the Orders passed against the respondents have also been placed before the learned arbitrator which infact lead the arbitrator to arrive at such a conclusion.

12. Another aspect is the learned arbitrator granting declaration in favour of the third claimant in respect of 1680 sq.ft. The contention of the respondent is that the third claimant is entitled to only 1100 sq.ft. Whereas, the learned arbitrator has held that the third claimant is entitled to 1680 sq.ft. The learned arbitrator in para 12 of the award has infact considered the pleadings of the respective parties in this regard and their evidence and held that the contention of the respondent that he has taken illegal possession is found to be false and held that since t

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he third claimant is already in possession of 1680 sq.ft., he is entitled for the same and the reasons have been recorded by the learned arbitrator. The learned arbitrator also disbelieved the theory of counter claim and given a reason for disbelieving Ex.R.25 which is said to be a statement of accounts relied upon by the respondent. Hence, this Court do not find any patent illegality which goes to the root of the matter. Merely because some other view is also possible, that may not be ground to hold that the award suffers from perversity. In such view of the matter, I do not find any of the grounds contemplated under section 34 of the Arbitration and Conciliation Act to interfere the well reasoned award. 13. Accordingly, both the Original Petitions are dismissed. As far as the Application No.1013 of 2021 is concerned, as the application has been filed for a direction to the respondents to deposit the title deeds to the credit of the original petition, this Court having a limited scope under section 34 of the Arbitration and Conciliation Act, such petition is not at all maintainable before this Court and the same is closed. However, it is for the applicant to work out his remedy in the pending suits between the parties. Consequently, connected other applications are also closed.
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