Delhi District Court
Amit Guglani vs L And T Housing Finance on 19 April, 2025
DLND010069942024
IN THE COURT OF MRS VINEETA GOYAL,
DISTRICT JUDGE (COMMERCIAL-03),
PATIALA HOUSE, NEW DELHI
OMP (Comm) No.186 of 2024
CNR No. DLND01-006994-2024
In the matter of:
1. Mr. Amit Guglani
s/o Mr. Manohar Lal Guglani
2. Ms. Nisha Guglani
w/o Mr. Amit Guglani
Both at : 882/5, Street No.6,
Opp. Bakein Bihari Mandir,
Patel Nagar, Gurgaon,
Haryana - 122001.
(M):+ 91-9717391620
Email ID: [email protected] ........ Petitioners
Versus
1. L&T Housing Finance Ltd.
Through : Managing Director
At : DCM Building, 16 Barakhamba Road,
Connaught Place, New Delhi-110001.
Email ID: [email protected], [email protected]
(M): +91-9158004777, +91-9681298310 Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:23:25
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2. Raheja Developers Ltd.
Through Managing Director
At: W4D 204/05, Keshav Kunj,
Western Avenue, Cariappa Marg,
Sainik Farms, New Delhi-110062.
Email ID: [email protected]
(M): +91-8722108722. ...... Respondents
Date of institution of suit : 02.09.2024
Date of Judgment : 19.04.2025
Appearance : Sh. Chaitanya Rohilla, Ld. Counsel for petitioners.
Sh. Arvind Jadon and Ms. Taru Saxena, Ld. Counsels for
respondent no.1.
Sh. Gurtej Pal Singh and Ms. Ashna Arora, Ld. Counsels for
respondent no.2.
JUDGMENT
1 This is a petition u/s. 34 of the Arbitration and Conciliation Act, 1996 (as amended) (in short 'the Act') filed by the petitioners for setting aside order dated 14.07.2024 passed by Arbitral Tribunal in case file Ref. No.DIAC/7193/11-23 titled as 'Amit Guglani & Anr. Vs. L&T Housing Finance Ltd. & Anr.' on an application u/s. 23(3) of the Act preferred by the petitioners herein.
2 Brief background leading to present petition is that the respondent no.1, a company, is engaged in the business of advancing finance in different categories such as home loans, auto Digitally signed by VINEETA GOYAL VINEETA Date:
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loans, micro loans, etc, under a Scheme of Amalgamation, merged with NLT Finance Limited w.e.f. April 12th 2021. The respondent no.2, a company, engaged in the business of real estate, invited application for allotment by sale of residential units in its residential real estate project 'Raheja Vanya' situated at Sector-99A, Gurgaon, Haryana, on construction link plan. The petitioners booked a residential unit in the 'Raheja Vanya' Project and approached respondent no.1 for a home loan of Rs.67 lakhs towards payment of purchase consideration of the said residential unit. A Tripartite Agreement dated 24.10.2018 was executed between the petitioners, respondent no.1 and respondent no.2. The petitioners and respondent no.2 had also agreed that the pre- equated monthly installments shall be subvented by respondent no.2 for a maximum of 48 months and the respondent no.1 shall be deducting pre-EMIs for the term of this subvention, up front from first disbursement. A loan agreement was also duly entered between petitioners and respondent no.1 on 17.01.2019. The respondent no.1 sanctioned and disbursed home loan to the petitioners vide a letter dated 17.01.2019 as per the terms of the loan agreement. As per the case of the petitioners, on 06.09.2019 the petitioners received a letter from the respondent no.1 regarding the loan account mentioning that BPLR (Basic Prime Lending Rate) of the petitioner's home loan was erroneously mentioned in the sanction letter to be 17.75%. The corrected BPLR was 18.10%. This change / modification in BPLR was contrary to the terms and conditions of the Tripartite Agreement dated Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:23:45 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 3 of 39 24.10.2018. The petitioners raised an objection against the increase of BPLR by way of several communications addressed to respondent no.1 alleging that unilateral modification of BPLR was impermissible. The petitioners also received notice u/s. 13(2) of SARFEASI Act from respondent no.1. Dispute and differences arose between the parties. The petitioners also wrote to Grievance Redressal Officer, however, there was no reconciliation of the dispute. The petitioners sought appointment of independent Arbitrator before Hon'ble Delhi High Court by preferring a petition u/s. 11 of Arbitration and Conciliation Act, 1996 (Arb. P. 1317/2022). The Hon'ble Delhi High Court vide judgment dated 22.08.2023 dismissed the said petition observing that even when the agreement provides unilateral appointment of Arbitrator, it does not exempt a parties from adhering to notice requirement stipulated u/s. 21 of the Act. Moreover, the Hon'ble Delhi High Court observed that in the absence of a notice invoking arbitration u/s.21 of the Act, the court could not exercise jurisdiction u/s.
11(6) of the Act. While the petition filed by the petitioners was dismissed, the Hon'ble High Court clarified that such dismissal would not preclude the petitioners from invoking the arbitration clause 27 in Tripartite Agreement for reference of dispute in arbitration, in accordance with law. Subsequently, the petitioners again preferred a petition u/s. 11 of the Act for appointment of Arbitrator. The Hon'ble Delhi High Court vide its order dated 02.11.2023 passed in arbitration proceedings bearing Arb.
Digitally
P.1143/23 constituted Arbitral Tribunal. signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
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2.1 The petitioners then filed their Statement of Claim
before Arbitral Tribunal, while the arbitration proceedings were pending, the petitioners realizing that new facts and circumstances have arisen since the Statement of Claim was filed by petitioners, the petitioners moved application u/s. 23(3) of the Act claiming that as per clause 7.1 of Agreement to Sell dated 12.10.2018, the respondent no.2 was scheduled to complete the project within a period of 48 months + / - 12 months i.e. grace period (commitment period) from the date of execution of Agreement to Sell. However, even after the expiry of 65 months, the project is far from its completion and still under construction stage. The petitioners learnt that the respondent no.2 had still not applied for OC (Occupation Certificate) with Real Estate Regulating Authority (RERA). The respondent no.2 in dire contravention of the terms as per Agreement to Sell dated 12.10.2018 (herein referred as 'Agreement'), has not still given delivery and possession of the flat in the said project to the petitioners. The petitioners have also stressed that in the Agreement, there is a default clause that in the event the respondent no.2 fails to give possession, the respondent no.2 is liable to pay interest at the rate prescribed for every month of delay. The petitioners till date had paid Rs.32,99,577/- to respondent no.2, thus as per the terms of Agreement, the petitioners are entitled for interest @ 10.85% on the aforesaid amount for every month of delay till handing over the possession of the flat. Further the interest is to be calculated in Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:23:59 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 5 of 39 terms of Haryana Real Estate (Regulation and Development) Rules, 2017. Additionally, the petitioners also claimed that they are entitled for the loss on rental profitability on account of such delay.
2.2 The petitioners, on the strength of these pleas, moved an application u/s. 23(3) of the Act seeking permission to allow the supplementary claims of the claimant (petitioners herein) to be taken on record for adjudication. With a detailed order dated 14.07.2024 (hereinafter referred to as impugned order), the said application was dismissed by Ld. Arbitrator.
3 Aggrieved by this, the petitioners has filed the instant petition on the grounds as follows :-
a) The Ld.Arbitrator failed to appreciate that the Tripartite Agreement dated 24.10.2018 is the main or umbrella agreement between the petitioners and respondents and the Agreement to Sell dated 12.10.2018 is connected with Tripartite Agreement inextricably and the disputes raised in the present application as well as Statement of Claim by the petitioners can only be resolved by reading the covenants of both the agreements. The Hon'ble Delhi High Court while deciding Section 11 application of the petitioners in Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr., 2043 DHC 5279, has observed in para 30 as under :-
"30. From a reading of the aforementioned judgments, it Digitally signed by VINEETA GOYAL VINEETA Date:
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clearly emerges that where there are two agreements which are connected and interlinked and both contain Arbitration Clauses, which are not similar to one another, in order to determine the nature of the arbitral proceedings, the two documents have to be read in harmony or reconciled and parties should get the disputes resolved under the main or umbrella agreement. Applying these principles, this Court finds merit in the contention of the Petitioners that reference to arbitration has to be made by invoking the Arbitration Clause in the Tripartite Agreement which reads as follows :-"
b) The Ld. Sole Arbitrator failed to appreciate that the Hon'ble High Court has categorically observed that the Tripartite Agreement is to be the umbrella agreement for adjudication of disputes between the petitioners and respondents.
c) The Ld. Sole Arbitrator failed to appreciate that the present case is similar to the case which was decided by Hon'ble High Court in arbitration No.1317/2022. The Buyer Builders Agreement is only a breach of Tripartite Agreement i.e. main / umbrella agreement and has to be read together. In the said petition, the respondent no.1 has raised the argument since the issue pertains to loan agreement, hence the dispute resolution clause should be applicable. This argument was rejected by Hon'ble Court. In the present case also, the respondent no.2 is raising the similar arguments that since the issue pertains to Buyer Builder Agreement, hence the Dispute Resolution clause in the said Agreement should be applicable. The petitioners Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:24:15 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 7 of 39 submitted that issues raised in supplementary Statement of Claim have to be adjudicated by the Arbitral Tribunal and they are very well within the scope of reference of the Tribunal.
d) The Ld.Sole Arbitrator failed to appreciate that no separate notice u/s. 21 of the Act is required to be issued by the petitioners to the respondents.
e) Ld. Arbitrator failed to appreciate that the arbitration agreement in the Tripartite Agreement dated 24.10.2018 does not require the Ld. Arbitrator to decide only the specifically referred dispute hence the petitioners after filing the Statement of Claim, add / supplement to the claims already made.
f) The Ld. Arbitrator failed to appreciate that arbitration agreement in the Tripartite Agreement dated 24.10.2018 does not require the Ld. Arbitrator to decide only the specifically referred dispute, whom the petitioners can after filing of Statement of claim, add / supplement to the claims already made.
g) The Ld. Arbitrator failed to appreciate that remedy available to the petitioners under RERA Act is in addition to the remedy available under other special statutes and the availability of alternative remedy is not a bar to the entertaining of a petition filed under the Act. But once elected, then the other remedy will not lie in respect of same dispute. Petitioners have not initiated any proceedings Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:24:24 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 8 of 39 under RERA Act, hence election of remedy of arbitration is not barred.
4 The respondent no.2, on the other hand, appeared and in their reply raised various objections inter alia that the instant petition is not maintainable u/s. 34 of the Act since the impugned order dated 14.07.2024 is not an interim award ; that Tripartite Agreement dated 24.10.2018 is not an umbrella Agreement ; that this Tripartite Agreement was executed only after the institution of Agreement to Sell dated 12.10.2018 between petitioners and respondent no.2 which does not contain an arbitration clause ; that clause 33 of the Agreement provides that disputes arising between the parties is to be adjudicated by an Adjudicating Officer and the jurisdiction cannot be assumed in the absence of arbitration clause in the Agreement. The respondent no.2 also urged that Section 23(3) of the Act does not envisage fresh claims.
4.1 At the outset, Ld. Counsel for respondent no.2 has raised an objection that rejection of application of petitioners seeking supplementary Statement of Claim by Ld. Arbitrator vide order dated 14.07.2024, does not constitute the interim award in terms of Section 2(1)(c ) of the Act and is not challengeable u/s. 34 of the Act.
4.2 In case of Cinevistaas Ltd. v. Parsar Bharti 2019 SCC OnLine Del 7071, the Hon'ble Delhi High Court has held that Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:24:32 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 9 of 39 under Section 2(1)(c) of the Act, an award includes an 'Interim Award', and whether an impugned order constitutes an Interim Award or not is to be decided by seeing the nature of order and not the title of the application. The relevant paragraph of the judgment is reproduced herein below :-
"22. The question that then arises is whether the order of the Ld. Arbitrator constitutes an 'Award'. Under Section 2(1)(c), an award includes an 'interim award'. Whether the impugned order in the present case constitutes an interim award or not is to be decided by seeing the nature of the order and not the title of the application, which was decided. ..."
4.3 Ld. Counsel further submitted that from a bare reading of para 11.15 of the impugned order dated 14.07.2024, it is evident that the impugned order dated 14.07.2024 makes a determination qua the jurisdiction of the arbitral tribunal and not on the additional claims of the petitioners.
4.4 Further, in the case of Punj Lloyd Ltd. v. Oil and Natural Gas Corporation Ltd., 2016 SCC OnLine Bom 3749 , the Hon'ble Bombay High Court has held that an order of the tribunal refusing to allow amendment to the claim did not constitute an Interim Award or a final award and such order was not amenable to appeal under Section 34 of the Act. The relevant paragraph is being reproduced hereinbelow:-
Digitally signed by VINEETA GOYAL VINEETA Date:
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"17. Section 2(1)(c) of the Act provides that the arbitral award includes an interim award. A conjoint reading of section 2(1)(c) of the Act with section 34 clearly indicates that an application for setting aside an arbitral award under section 34 can be only made only if the award is final or interim. Insofar as the application for amendment is concerned, the said application was made under section 23 of the Act. The decision was taken by the arbitral tribunal under section 23(3) of the Act. Insofar as submission of learned Counsel for the petitioner that in view of the rejection of the application for amendment by the arbitral tribunal with regard to additional claims proposed to be made by the petitioners, the same has attained finality and thus, such a decision has to be construed as an award within the meaning of section 2(1)(c) of the Act is concerned in my view, since there was no adjudication of the claim made by the petitioners on merits, which is an essential requirement for construing any decision as an award within the meaning of section 2(1)(c) of the Act, such a decision rejecting an application for amendment of the claim cannot be construed either as an interim award or as a final award."
4.5 Ld. Counsel for the respondent no.2 further referring to Sections 16 and 23(3) of the Act submitted that when a Tribunal determines its jurisdiction, as in the present case, the aggrieved party has no remedy except waiting for the final award and challenging the same under Section 34 of the Act. This is also evident from Section 37 of the Act which provided for Appeals. Section 37 of the Act does not provide any appeal against any order under Section 16 of the Act.
Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
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4.6 Ld. Counsel for respondent no.2 further argued that
Section 23(3) of the Act makes it evident that the provision only permits 'amendment' or "supplementation' of claim or defence". It does not provide for the supplementation or addition of a completely different claim. Amendment and supplementation are incremental in nature, whereas by way of the present application, the petitioners are defeating the legislative intent. The sole legislative intent behind the same is only to ensure that the proceedings are not derailed or impeded - the mere asking of a party.
4.7 Ld. Counsel for respondent no.2 further submitted that in the case of Lindsay International Private Limited vs IFGL Refractories Limited, 42 SCC OnLine Cal 1880, the Hon'ble Court looked into the meaning of the arbitration award as defined in Section 2(1) (c) and 31(6) of the Act and further analysed the scope of Section 23 of the Act respectively. The Hon'ble Court considered whether the order in question meets the criteria for an interim award capable of being challenged through Section 34 of the Act or whether it is simply an order that must be kept outside the remedy available under Section 34 of the Act. In the present case, the Hon'ble Court opined that the introduction of a new cause of action, which is not a part of the subject matter of reference cannot amount to an "interim award" under the ambit of Section 31(6) of the Act.
Digitally
signed by
VINEETA
VINEETA GOYAL
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4.8 While relying in case of Vil Rohtak Jind Highway
Pvt. Ltd. Vs National Highways Authority of India, 2022 SCC OnLine Del 4670, Ld. Counsel submitted that the the Hon'ble Court has held that an order can be considered as an 'interim award', if it completely decides an issue. Thus, finality is the key to identifying whether an 'interim order' qualifies as an 'interim award'. It is only when the nature of an award is final in the sense that it conclusively decides an issue, the award would qualify as an interim award. The Hon'ble Court has opined that the impugned order is not an interim award.
4.9 Further, in the case of Punita A. Bhardwaj vs Rashmi Juneja, 2022 SCC OnLine Del 2691 , the Hon'ble Court was of the view that the statute clearly vests discretion in the arbitral tribunal to disallow a party to amend or supplement its pleadings on the ground that the application is belated. The relevant paras are as under :-
"18. The three judgments of this Court cited by learned counsel for the parties must be read in the context of this provision. The statute clearly vests discretion in the arbitral tribunal to disallow a party to amend or supplement its pleadings on the ground that the application is belated. In Container Corporation, the amendment was rejected by the arbitral tribunal on this ground and the challenge under Section 34 of the Act was held not to be maintainable. In Cinevistaas and Lt.Col. H.S. Bedi Retd. on the other hand, the Court came to the conclusion that the rejection of the Digitally signed by VINEETA GOYAL VINEETA Date:
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amendments were in the nature of final adjudication of the claims and defences proposed to be raised. It is this factor which clothed the orders of the tribunal with the characteristic of finality and rendered them susceptible to challenge as interim awards. This distinction, in my view, is the key to determining the maintainability of the present petition.
19. In the facts of the present case, the learned arbitrator has proceeded only on the ground that the amendment was sought belatedly. Paragraphs 12 and 13 of the impugned order make this position clear, and in fact, in paragraph 13, the learned arbitrator has stated that "expression of any view herein before will not be treated as expression on the merit of the case".
20. Further, it is evident that the suit was filed before this Court as far back in 2014 and referred to arbitration in the year 2016. The application for amendment was filed by the petitioner only on 21.07.2017. Even thereafter, it is recorded by the learned arbitrator that the matter proceeded without the petitioner seeking an adjudication of the said application until 04.11.2019, when the impugned order was passed. In the meanwhile, proceedings continued before the learned arbitrator, and issues appear to have been framed in these proceedings on 17.05.2018. During the pendency of the present petition before this Court also, I am informed that the parties have proceeded to lead evidence before the learned arbitrator and the proceedings are now at the stage of final arguments. "
4.10 Further in the case of NTPC Lid vs Larsen and Turbo Limited & Anr., 2023 SC Online, the Hon'ble Court held that the Tribunal has only rejected the application for amendment on the ground that same has been made after a long lapse of time. Thus, the impugned order not having the nature of an interim award, the petition filed under Section 34 of the Act shall not be Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:25:09 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 14 of 39 maintainable. The relevant paragraph is being reproduced herein below:
"54. The facts in Cinevastaas (supra) and the facts herein as demonstrated above are at variance inasmuch in the present case, the Tribunal has only rejected the application for amendment on the ground that the same has been made after a long lapse of time. In fact, it has granted liberty to the petitioner herein to invoke a fresh arbitration insofar as the claims sought to be put forth through the application are concerned. Surely, the petitioner shall be at liberty to take all pleas on the maintainability of the claims in such arbitration. In fact, from paragraph 7.20 of the impugned order, it can be seen that the Tribunal has refrained itself from going into the issue of limitation and waiver. In other words, the issue of limitation with regard to the merits of the updation/amendment sought by the petitioner has not been adverted to by the Tribunal at all. If that be so, it cannot be said that such claims of the petitioner have been decided finally, and as such the impugned order does not fulfill the requirements toner have been decide finally, and as such the impugned order does not fulfill the requirements of an award or an interim award under the Act of 1996. So the impugned order not having the nature of an interim award, this Court is of the view that the petition under Section 34 shall not be maintainable."
4.11 Ld. Counsel for respondent no.2 further submitted that no notice u/s. 21 of the Act was given to respondent no.2. Entire purpose of invoking an arbitration by way of a mandatory notice under Section 21 of the Act, a requirement which the petitioners did not comply with initially, is to provide the opposite parties with the nature and scope of the claims. In the present case there was not even a whiff about any dispute arising out of Agreement to Sell in the notice sent by the petitioners under Section 21 of the Act. Therefore, the petitioners cannot add any Digitally signed by VINEETA GOYAL VINEETA Date:
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claim at their own pleasure and will and referred to the case of Alupro Building Systems Pvt. Ltd. vs Ozone Overseas Pvt. Ltd. 2017 SCC OnLine Del 7228, wherein the Hon'ble Court was pleased to uphold that the significance of invoking arbitration proceedings in terms of Section 21 of the Act is to ensure that party against whom the arbitration is being invoked should know what the claims are. The intent behind making the other party/ recipient aware about all of the claims is to provide due opportunity to the recipient to point out if some of the claims are time barred, or barred by law or are untenable in fact.
4.12 Ld. Counsel for respondent no.2 further vocifirously contended that the petitioners have wrongfully claimed that Tripartite Agreement dated 24.10.2018 is the main or umbrella agreement between the petitioners and the respondents. The Tripartite Agreement was excuted only after the Agreement to Sell dated 12.10.2018, hence the petitioners' averment that the said Tripartite Agreement is the umbrella agreement is neither tenable nor logical. Ld. Counsel emphasized that it is well settled that an umbrella Agreement's arbitration clause will be applicable to interlinked or independent agreements. However, an interlinked agreement's arbitration clause ought to have a specific reference to the main or umbrella agreement. It is submitted that the two agreements which were directed to be construed harmoniously by the Hon'ble High Court vide its order dated 22.08.2023 were the Tripartite Agreement dated 24.10.2018 and the Home Loan Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:25:24 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 16 of 39 Agreement dated 17.01.2019 only. In terms of paragraph no. 30 of the judgment dated 22.08.2023 under Section 11 of the Act, it was held that where there are two agreements which are connected and interlinked and both contains the Arbitration clauses which are similar to one another, in order to determine the nature of the arbitral proceedings, both the documents will have to be read harmoniously and the parties should get the disputes resolved under the main or umbrella agreement. Importantly, the Hon'ble High Court was not adjudicating upon the interlinkage of Agreement to Sell with Tripartite Agreement dated 24.10.2018 and the Home Loan Agreement dated 17.01.2019. Further, no claims have been based on the Agreement to Sell either in the invocation notice, the petitions under Section 11 of the Act or the Statement of Claim. Hence, there was no occasion for the Hon'ble High Court to have adjudicated upon the said issue. Ld. Counsel further urged that Agreement to Sell does not contain any arbitration clause. Clause 33 of the said Agreement provides for dispute resolution through appointment of adjudicating officer appointed by RERA, which reproduced as under :-
"33. DISPUTE RESOLUTION-
All or any disputes arising out of or touching upon or relating to the terms and conditions of this Agreement, including the interpretation and validity of the terms thereof and the respective rights and obligations of the Parties, shall be settled amicably with mutual discussions, by holding 3 meetings mutually recorded, failing which the same shall be settled through the adjudicating officer appointed under the Act". Digitally signed by VINEETA VINEETA GOYAL Date:
GOYAL 2025.04.19 17:25:31 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 17 of 39 4.13 Ld. Counsel addressed the plea taken by petitioners that Tripatite Agreement is an umbrella Agreement and urged that it is well settled that an Arbitrator derives its powers from an Arbitration Agreement. A conjoint reading of the aforementioned clauses clearly shows that the Tribunal cannot go beyond the Arbitration Agreement and assume jurisdiction for the Agreements which are not a part of the same transactions and especially where the jurisdiction has expressly been conferred upon RERA. Pertinently, Agreement to Sell dated 12.10.2018 was executed only between the respondent no.2 and the petitioners. The respondent no.1 is a common party in the Tripartite Agreement and the Home Loan Agreement. However, respondent no.1 is not a party to the said Agreement and hence has no right, interest or role in the said Agreement. Therefore, a corollary cannot be drawn to claim that Agreement to Sell will also be subject to arbitration.
4.14 Ld. Counsel further submitted that the option to 'elect' a remedy is only available when such remedy is available. According to Snell's Principles of Equity the 'Doctrine of Election' of remedies is applicable only when there are two or more co-existent remedies available to the litigants at the time of election. In the present case, the 'Doctrine of Election' cannot apply to the petitioners since in terms of the aforementioned Clause 33 of the said Agreement, it is clear that in case disputes Digitally signed by VINEETA GOYAL VINEETA Date:
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arose between the parties, the said disputes will be adjudicated by an adjudicating officer appointed under the RERA and not by an Arbitrator. Therefore, it is submitted that the petitioners have wrongfully relied upon a clause i.e. the arbitration clause which does not exist between the parties. Even otherwise, in terms of Section 7(5) of the Act, there is no clause in either of the three agreements which links the arbitration clauses in the other two agreements to the Agreement to Sell.
5 Refuting the above submissions, Ld. Counsel appearing on behalf of petitioners argued that as per Section 2(1)(c) of the Act, an arbitral award includes an interim award. Section 31(6) of the Act allows the Arbitral Tribunal to make an interim award on any matter on which it may make a final award. The Hon'ble Supreme Court in IFFCO v. Bhadra Products (2018) 1 SCR 848, had clarified that an interim award is a final determination of a specific issue within the arbitration.
5.1 Ld. Counsel for petitioners further relied upon the observations made by the Hon'ble Division Bench of the Delhi High Court in MBL Infrastructure Ltd. v. Rites Limited (2023:DHC:2912), wherein it has been categorically held that an order rejecting an amendment application that forecloses claims constitutes an interim award and more specifically para 3, 9.2, 10, 14 to 16 to argue that the rejection of the amendment application was an interim award under Section 2(1)(c) of the Act, the Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:25:47 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 19 of 39 relevant para are reproduced as under :-
"9.2 Therefore, it was held by the Supreme Court in the IFFCO case (supra) that there can be an interim award which finally decides an issue, prior to culmination of proceedings by a final award.
xxxxxxx 12.1 In our view, the extract from the judgment of the Supreme Court in IFFCO case (supra) is clear and categoric. A decision of an Arbitral Tribunal which brings a quietus to an issue before it and is an order which the Arbitral Tribunal is empowered to pass at the final stage would constitute an interim award within the meaning of Section 31(6) as also Section 34 of the Act. xxxxxx 14 The amended claims are stated to be claims based on events subsequent to the filing of the Statement of Claim. The Impugned Arbitral Order by rejecting the Amendment Application has finally adjudicated upon the additional claims of MBL for the work done upto the completion of the Project, as the right of MBL to proceed further with its additional claims has effectively been foreclosed. 15 MBL would not be able to proceed with adjudication of its additional claims without an amendment to the Statement of Claim since, to adjudicate upon the additional claims, the Arbitral Tribunal would be required to allow the Amendment Application and take on record the amended claims, permit RITES to file an amended statement of defence, and thereafter, permit both parties to adduce evidence in respect of their respective contentions. 16 The Arbitral Tribunal's approach as reflected in paragraph 17 of the Impugned Arbitral Order, which is, that MBL could agitate its claim before "competent authority" is inexplicable. The arbitral disputes between MBL and RITES with respect to the Project are being adjudicated by the Arbitral Tribunal in the present proceedings. Clause 25 of the contract between the parties is the disputes settlement and arbitration clause which encompasses all disputes between the parties. Referring certain disputes to Digitally signed by VINEETA VINEETA GOYAL Date:
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5.2 Ld. Counsel further submitted that the facts of MBL Infrastructure Ltd. v. Rites Limited (supra) are squarely applicable to the present case. In MBL Infrastructure (supra), the Arbitral Tribunal rejected an amendment application and granted liberty to approach another forum, but the Hon'ble Delhi High Court has held that this amounted to an interim award. Similarly, in the present case, the Ld. Arbitrator rejected the amendment / supplementation application, yet observed that the petitioners could avail remedies before another forum. This approach was specifically rejected by the Hon'ble Delhi High Court in MBL Infrastructure Ltd. (para 16), where it was held that such a ruling effectively forecloses claims and amounts to a final adjudication. He thus submitted that the order dated 14.07.2024 constitutes an interim award under Section 2(1)(c) of the Act. It forecloses the petitioners' right to amend/supplement their claim within arbitration, thereby making a final determination on an issue. As per MBL Infrastructure Ltd. v. Rites Limited (supra) , such an order qualifies as an interim award and is amenable to challenge under Section 34 of the Act. The observation allowing recourse to another forum is legally untenable, as held by the Hon'ble Division Bench of the Delhi High Court. He thus submitted that impugned order is in the nature of an award. Digitally signed by VINEETA GOYAL VINEETA Date:
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5.3 On merits, Ld. Counsel for petitioners submitted that
the Tripartite Agreement dated 24.10.2018 is the main or umbrella agreement between the petitioners herein and the respondents and the Agreement to Sell dated 12.10.2018 is connected with the Tripartite Agreement inextricably and the disputes raised in the present application as well as in the Statement of Claim by the petitioners can be resolved by reading the covenants of both the agreements.
5.4 Ld. Counsel further submitted that the Hon'ble Dehi High Court while deciding the Section 11 application of the petitioners in Amit Guglani and Anr. Vs. L&T Housing Finance & Anr (supra), had categorically held the Tripartite Agreement dated 24.10.2018 to be the umbrella agreement for the adjudication of disputes between the petitioners & respondents. The Builder Buyer Agreement (in short 'BBA') is only a branch of the Tripartite Agreement i.e. main/umbrella agreement and have to be read together. Ld. Counsel further submitted that in Arb.P. 1317/2022, the respondent no.1 had raised the argument that since the issue pertains to the loan agreement, hence the dispute resolution clause in loan agreement should be applicable. This argument was effectively rejected by the Hon'ble Court. In the present case also, the respondent no.2 is raising the similar argument that since the issue pertains to the BBA, hence the dispute resolution clause in the BBA should be applicable. Ld. Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:26:21 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 22 of 39 Counsel submitted that the issues raised in supplementary Statement of Claim have to be adjudicated by Arbitral Tribunal and they are very well within the scope of reference of this Tribunal.
5.5 Ld. Counsel for petitioners further submitted that no separate notice U/s 21 of the Act is required to be issued by the petitioners to the respondents. The Hon'ble Supreme Court of India in the judgment of Civil Appeal No. 4987/201 'State of Goa Vs. Praveen Enterprises' had categorically held:-
"16. There can be claims by claimant even without a notice seeking reference. Let us take an example where a notice is issued by a claimant raising disputes regarding claims 'A' and 'B' and seeking reference thereof to arbitration. On appointment of the arbitrator, the claimant files a claim statement in regard to the said claims 'A' and 'B'. Subsequently if the claimant amends the claim statement by adding claim 'C' [which is permitted under section 23(3) of the Act] the additional claim 'C' would not be preceded by a notice seeking arbitration. The date of amendment by which the claim 'C' was introduced, will become the relevant date for determining the limitation in regard to the said claim 'C', whereas the date on which the notice seeking arbitration was served on the other party, will be the relevant date for deciding the limitation in regard to Claims 'A' and 'B'."
5.6 Ld. Counsel reiterates that the arbitration agreement in the Tripartite Agreement dated 24.10.2018 does not require the Ld. Arbitrator to decide only the specifically referred disputes, hence the petitioners can, after fling the Statement of Claim, ad/supplement to the claim also made. Ld. Counsel further argued Digitally signed by VINEETA GOYAL VINEETA Date:
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that the remedy available to the petitioners under the RERA is in addition to the remedies available under other special statutes and the availability of alternative remedies is not a bar to the entertaining of a petition filed under the Act. But once elected, then the other remedy will not lie in respect of the same dispute. Hence, once a RERA proceeding is initiated, the present application under the Act would not lie. However, in the present case, petitioners have not initiated any proceeding under RERA Act, hence election of remedy of arbitration is not barred. Upon a conjoint reading of Sections 88 and 89 of RERA Act, it clearly emerges that provisions of RERA Act would be in addition to, and not in derogation of, any other law, and that the provisions of RERA would have effect notwithstanding anything inconsistent with any other law in force. The supplementary claims are arbitrable and are within limitation. The arbitral proceedings are at a very nascent stage and the respondent no.2 has not yet filed the Statement of Defence to the Statement of Claim by the petitioners.
6 Having regard to arguments advanced by Ld. counsels for parties and perused the record, the first issue that needs to be decided is maintainability of this petition u/s. 34 of the Act. The primary contention of respondent no.2 is that impugned order is neither an award nor an interim award in terms of Section 2(1)(c ) r/w Section 31(6) of the Act. There is no final determination of Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:26:35 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 24 of 39 prayers sought to be raised by the petitioners in supplementary Statement of Claim in their application. The Ld. Arbitrator rejected the contention and allowed the petitioner's to avail appropriate facility before any other forum / court in accordance with law.
7. Section 2(1)(c) of the Act states that the term "arbitral award" shall includes an interim award. At the same time Section 31(6) of the Act states that any time during arbitral proceedings, Arbitral Tribunal may make an interim award on any matter which it can make a final award. In case of Satwant Singh Sodhi vs. State of Punjab, (1999) 3 SCC 487, the Hon'ble Apex Court held as under :-
"6. The question whether interim award is final to the extent it goes or has effect till the final award is delivered will depend upon the form of the award. If the interim award is intended to have effect only so long as the final award is not delivered, it will have the force of the interim award and it will cease to have effect after the final award is made. If, on the other hand, the interim award is intended to finally determine the rights of the parties it will have the force of a complete award and will have effect even after the final award is delivered. . . . . ."
8 The Hon'ble court in Cinevistaas Ltd. (supra), applied the principles of Shah Babulal Khimji v. Jayaben D. Kania & anr. (1981) 4 SCC 8, to hold that while determining whether the order passed by the Arbitral Tribunal can be considered to be an interim award regard should be had to whether the order determines the substantial rights of the parties. It was held, as under :-
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"35. Arbitral proceedings are not meant to be dealt with in a straightjacket manner. Arbitral proceedings cannot also be conducted in a blinkered manner. There could be various situations wherein, due to inadvertent or other errors, applications for amendments/corrections may have to be moved. So long as the disputes fall broadly within the reference, correction and amendments ought to be permitted and a narrow approach cannot be adopted. The principles of Shah Babulal Khimji (supra) would have greater application in arbitral proceedings as the said judgment lays down the principle, that the substantive rights affected ought to be seen, while determining what kind of orders are challengeable. An interim order of the present kind rejecting a large number of additional amounts/claims would constitute an interim award under Section 2(1)(c) of the Act.
9 In MBL Infrastructure Ltd. (supra), the Hon'ble Division Bench reiterated in the above principles in the following words :-
"In our view, the extract from the judgment of the Supreme Court in IFFCO case (supra) is clear and categoric. A decision of an Arbitral Tribunal which brings a quietus to an issue before it and is an order which the Arbitral Tribunal is empowered to pass at the final stage would constitute an interim award within the meaning of Section 31(6) as also Section 34 of the Act."
10 In Goyal MG Gases Pvt. Ltd. vs. Panama Infrastructure Developers Pvt. Ltd. & Anr., 2023 SCC Online Del 1894 , the Hon'ble Court dealt with principles applicable to determine if the order amounts to an interim award or not in the following words :-
"20. It is reflecting that an order would said to be an award or interim award when it decides a substantive dispute which exists between the parties. It is essential before an order can be understood as an award that it answers the attributes of the decision on the merits of the dispute between the parties or accords in conclusively Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:26:58 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 26 of 39 settling a dispute which pertains to core issue. Therefore to qualify as an award it must be with respect to an issue which constitutes a vital aspect of the dispute. As held in the case of Rhiti Sports the order passed by the arbitral tribunal would have the attributes of an interim award when same decides the matters of moment‟ or disposes of a substantive claim raised by the parties. Accordingly, an order passed by the Arbitral Tribunal rejecting the application for impleadment neither decides the substantive question of law nor touches upon the merits of the case. The impugned order, as such, has not travelled the distance to answer the attributes of determination of an issue."
11 In the present case, the Ld. Arbitrator has held as under :-
"12. Conclusion of the Tribunal 12.1 Upon examination of legal position of law surrounding Section 23(3) of the Arbitration Act, 1996, to my mind, the Tribunal is not necessarily required to confine itself to the aspect of delay in making a request for amendment / supplementation. In case, the Tribunal finds that there is no arbitration clause at all between the parties in the Agreement from which the dispute emanates, then the said position cannot be ignored while adjudicating the application under Section 23(3) of the Act, 1996. Existence of arbitration clause relating to supplementary Statement of Claim is sine qua non for allowing the amendment / supplementation under Section 23(3) of the Arbitration Act, 1996.
12.2 Therefore, the Application under Section 23(3) is dismissed for the same not maintainable in the present Arbitration proceeding as there is no arbitration clause in Builder Buyer Agreement dated 12.10.2018 executed between the Claimant and Respondent no.2. Furthermore, the claims / disputes now sought to be raised by the Claimant by virtue of Supplementation are not arising out of or in connection with the Tripartite Agreement dated 24.10.2018, but relate exclusively to Builder Buyer Agreement, which ex facie does not contain arbitration clause to enable administering of alternative dispute resolution under the provision of the Arbitration Act, 1996. 12.3 Hence, I am unable to persuade myself to allow the application by exercising powers bestowed under Section Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:27:06 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 27 of 39 23(3) of the Arbitration and Conciliation Act, 1996 as without any arbitration clause, the provisions of the Arbitration Act,1996 cannot be triggered. 12.4 However, it is made clear that the present order will not come in the way of the Claimant to avail appropriate remedy before any other forum / court in accordance with law. Further time spent in relation to the claims sought by way of the present amendment / supplementation application would not be counted towards the period of limitation, should the claimant avail other legal remedies."
12 From the meaningful reading of above findings of the Tribunal, it is evident that Ld. Arbitrator has given a final finding that the claims / disputes sought to be raised by the petitioners by virtue of supplementation are not arising out of or in connection with the Tripartite Agreement but related to Builders Buyers Agreement which ex facie does not contain arbitration clause.
The Ld. Arbitrator gave a final adjudication on one of the pleas of the petitioners which the petitioners had tried to raise that Tripartite Agreement is an umbrella Agreement and the Agreement to Sell is connected with the Tripartite Agreement inextricably and the disputes raised by way of the application u/s. 23(3) of the Act of the petitioners as well as the claims can be resolved only by reading the covenants of both the parties, what emerges from the above findings, it does comprises a final determination of core issue between the parties and attributes to the decision of the foreclosing the claims with the Arbitrator. Accordingly, in the considered opinion of this court, the impugned order has feature of finality and as such impugned order is Digitally amenable to challenge u/s. 34 of the Act. signed by VINEETA VINEETA GOYAL GOYAL Date:
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13 Now, adverting to merits, it is useful to refer claims/pleas filed by petitioners in original Statement of Claims and in the application to allow supplementary claims. The petitioners in original Statement of Claim have sought reliefs as follows :-
"36. That in terms of the disputes in above-mentioned paragraphs - 9 to 16. the claimants claim following reliefs from the respondent No.1:
i. To declare that the letter dated 06.09.2019 by the respondent no.1, was in breach of terms of tripartite agreement / loan agreement dated 25.10.2018 & 11.10.2018 respectively.
ii. To award damages to the tune of INR 14 lacs for a breach by a unilateral modification in the contract without the consent of the parties of the Tripartite agreement dated 24.10.2018 along with interest of 18% from 06.09.2019 and pendente lite, and;
iii. To award damages to the tune of INR 4 lacs for ruining of credit score of the claimants which resultantly led to rejection of a top up loan for a different property owing to which the claimants had to sell off their-another property to make-up for their deficit monies for finance along with interest of 18% from 06.09.2019 and pendente lite, and; iv. Direct the respondent no. I to refund the extra interest collected by the respondent no.1 from loan A/c no. xxxxxxxxxxxxxxx816, to the claimants and respondent no.2, in terms of modification of BPLR from 17.75 % to 18.10% from 06.09.2019, and;
v. Cost of litigation may also be awarded in favour of the claimants vi. Pass any other/further orders) as this Hon'ble Arbitral Tribunal may deem fit and proper in the interest of justice.
14. It may be noted that in the original Statement of Claim, the petitioners are seeking reliefs being aggrieved by the fact that respondent no.1 unilaterally and arbitrarily increased Digitally signed by VINEETA GOYAL VINEETA Date:
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BPLR from 17.75% to 18.10%. In the said Statement of claim, there is no averment with regard to the Agreement to Sell dated 12.10.2018.
15. In the application, to allow supplementary Statement of Claim, the petitioners sought to add reliefs against respondent no.2 as under :-
"RELIEF
18. That in terms of the disputes in above-mentioned paragraphs, the claimants claim following reliefs from the respondent No.2:
i. To direct the respondent no.2 to pay a sum of Rs.1,16,805.03 as interest from 11.10.2023 till the completion and final delivery of the project, @10.85% on Rs. 32,99,577, payable each month by the respondent no.2 to the claimants, for every month of delay since 11.10.2023 till the handing over of the possession of the said apartment for residential usage of the claimant, and;
ii. To award and direct the respondent no.2 to pay the claimants a sum of Rs. 1,80,000/- (Rs.30,000 x 6 months of loss on profitability) as compensation on account of loss on profitability and the loss on rental income from 11.10.2023 till the date of filing of the supplementary claim i.e., 09.03.2024, incurred by the claimants owing to the delay in the delivery of the project by the respondent no.2, and;
iii. To award and direct the respondent no.2 to pay the claimants Rs. 30,000/- as monthly compensation (on delay after 09.03.2024) on account of loss on profitability and the loss on rental income from 09.03.2024 till the date of completion of the project by respondent no.2, and; iv. Any other compensation on account of mental agony suffered by the claimants owing to the delay in performance of the agreement to sell dated 12.10.2018 by the respondent no.2, and;
v. Cost of litigation may also be awarded in favour of the claimants."
Digitally signedVINEETA by VINEETA GOYAL GOYAL Date: 2025.04.19 17:27:30 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 30 of 39 16 It may be noted that claims raised in supplementary Statement of Claim by petitioners are on different foundation and reliefs are being sought against respondent no.2. The claims are premised on account of breach of covenants of handing over the possession of flat in terms of Clause 7.1 of Agreement to Sell. Section 33 of the Agreement to Sell entered into between petitioners and respondent no.2 provides that all or any disputes arising out of or touching upon or relating to the terms and conditions of this agreement, including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties, shall be settled amicably with mutual discussions by holding three meetings mutually recorded, failing which same may be settled through the adjudicating officer appointed under the Act. Agreement to Sell also provides definition of Act means the Real Estate (Regulation and Development) Act, 2016.
17. This shows that in this Agreement, there is no arbitration clause. Further, a conjoint reading of above clause along with definition explicitly spells that in case of dispute arose between the parties, the said dispute will be adjudicated by adjudicating authority appointed under the Act meaning thereby Real Estate (Regulation and Development) Act, 2016 not by an arbitration.
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18. Perusal of impugned order shows that Ld. Arbitrator considered the application of the petitioners and hold that in the original Statement of Claim, the reliefs are sought against respondent no.1 which is financial institution engaged in funding loan, on the other hand, in the supplementary Statement of Claim, reliefs are sought, are directed against respondent no.2 in relation to handing over possession of flat purchased in terms of Builder Buyer Agreement. Therefore, the facts and claims /disputes raised in the original claim are completely unrelated and divorced from the facts and claims/reliefs on the basis of which, the Supplementary Statement of Claim is preferred. Further, the Ld. Arbitrator while dealing and rejecting with the issue of Builder Buyer Agreement is subservient to the Tripartite Agreement, the later being main/umbrella agreement returned the findings as under:-
"11. REASONS AND FINDINGS OF THE TRIBUNAL 11.11 I cannot agree with the said submission for multiple reasons. First, Builder Buyer Agreement is earlier in time than the Tripartite Agreement and was entered in to for the specific purpose of drawing out the covenants for sale/purchase of the flat in the Project "Raheja Vanya"
which was being developed by the Respondent No. 2. Under the said Builder Buyer Agreement, there is no obligation on the home buyer to purchase a flat through the method of financing on loan. Thus, the subsequent Agreement in the present case is Tripartite Agreement, and not Builder Buyer Agreement. Therefore, it is not logical to hold that the Tripartite Agreement becomes an Umbrella Agreement, when it is subsequent executed. Second, Builder Buyer Agreement and Tripartite Agreement have been entered for different purposes. While the former is in the nature of agreement to sell, the latter is for availing loan for financing the sale/purchase of the flat. The parties are Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:27:54 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 32 of 39 also not common in the both the Agreements. Moreover, Respondent No. 1 which is financial institution has no role whatsoever in the execution of the Builder Buyer Agreement and breach of any covenants of such agreement. Third, there is no reference, specific or implied, of the Builder Buyer Agreement in the Tripartite Agreement and vice-versa. Assuming that the Tripartite Agreement was the Umbrella Agreement, in that case as well there is no further specific reference of arbitration clause contained in the said Tripartite Agreement to be adopted by the parties as modicum of resolution of disputes in the Builder Buyer Agreement. It is not the case of the Claimants in the Application that Tripartite Agreement is a standard form contract and specific reference is not required. The settled position of law in relation to doctrine of incorporation of arbitration clause by reference was amplified in M.R. Engineers and Contractors Pvt. Ltd. v. Som Datt Builders Ltd, reported at (2009) 7 SCC 696, wherein it has been held that for an arbitration clause existing in another document to be incorporated by reference, there has to be a clear intention of the parties to incorporate the arbitration clause in the contract. There has to be a specific reference to incorporate the arbitration clause in a contract. The only exception to the aforesaid position as provided in MR Engineers (supra) is where the contract provides that the standard form of terms and conditions of an independent trade or professional institution shall apply to the contract. In such contracts, the terms including the arbitration clause are deemed to be incorporated by a mere reference. It is also to be seen that the arbitration clause contained in another document is applicable to the dispute between the parties to the contract. In the present case, contrary to the case set up by the Claimants, the Builder Buyer Agreement, envisages resolution of disputes under the RERA Act, exclusively, and thus, in my limited view, ousts other remedies available to either party. There is no doubt in the intention of parties to which forbade resort to any other adversarial form of litigation, except taking legal remedies under the RERA Act. The proposition canvassed by the Claimants' Counsel that RERA Act is in addition to other remedies would not hold water in the present case, as the parties in Clause 33 Builder Buyer Agreement have pre- elected the legal remedy out of the options available to them. Fourthly, the submission that the Builder Buyer Agreement and Tripartite Agreement are inextricably Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:28:01 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 33 of 39 connected in their body and spirit is also not correct. The purpose of both the agreements are quite different and distinct as stated above. It is further not the case of the Claimant that for adjudication of disputes raised in the Supplementary Statement of Claim, holistic reading of covenants of Builder Buyer Agreement and Tripartite Agreement are required.
11.12 Tribunal also finds the vehement reliance of Claimant's counsel on the observation contained in Para 27- 30 of the judgment dated 22.08.2023 in Arb P 1317 of 2022 ( Amit Guglani & Anr. Vs. L&T Housing Finance & Anr.', 2023:DHC:5979) rendered between the same parties to be misconceived. The point raised by the Claimant misses the central issue before the Hon'ble Delhi High Court as captured in Para 14 of the said judgment. The Ld Single Judge explicitly records that "the first issue that this Court is required to examine is whether the dispute arising under the Loan Agreement is integrally connected with the Tripartite Agreement. Necessity of resolving this conundrum arises on account of the preliminary objection taken by Respondent No.l that under the Loan Agreement, the exclusive jurisdiction to decide the disputes lies with the Courts at Kolkata. Therefore, if the Court comes to a conclusion that the Petitioners cannot invoke the Arbitration Clause under the Tripartite Agreement, this Court will lack the territorial jurisdiction to entertain this petition."
11.13 In light of the issue raised, the Hon'ble Delhi High Court in Para 26 held that a holistic and conjoint reading of the Tripartite and Loan Agreements respectively shows that at the time of entering the Tripartite Agreement, there was consensus ad idem on the terms and conditions contained therein which comprehensively, in my view, encompass the conditions of payment of loan under the Loan Agreement, including EMIs and interest rates etc. and there is an overlap. Non-payment of increased BPLR may amount to breach of the Tripartite Agreement whereunder the unit of the Petitioners has been mortgaged in favour of the lender and thus both the Agreements are inseparable and interconnected.
11.14 The observations of the Hon'ble Delhi High Court in aforesaid judgment dated 22.08.2023 are ostensibly confined to the Tripartite and Loan Agreement, that is, the two agreements before it, which related to funding of the loan to the Claimants on certain terms, albeit, the purpose Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:28:08 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 34 of 39 of the loan was to purchase the flat from Respondent No. 2. There is no reference of the Builder Buyer Agreement in entire judgment and hence, it cannot be concluded that the Tripartite Agreement was the main/umbrella even in relation to the Builder Buyer Agreement. 11.15 For all the above reasons, I hold that the Builder Buyer Agreement cannot be construed as ancillary or intricately linked/connected to the Tripartite Agreement. I further hold that there is no valid and subsisting arbitration clause between the parties in terms of Section 7(5) of the Arbitration Act, 1996 in the Builder Buyer Agreement."
19 From the above findings of the Ld. Arbitrator, it is evident that allegations in the supplementary Statement of Claim primarily concern the terms of Agreement to Sell dated 12.10.2018. The genesis of the transaction in the said Agreement to Sell contains the recitals about allotment of subject flat in residential project of respondent no.2, definitions, terms etc. Clause 33 of Agreement to Sell as extracted above, the Dispute Resolution Clause specifies that parties agreed to resolve the dispute through the adjudication authority appointed under the Act. This indicates that the parties have pre-elected the legal remedy out of options available to them. This clause contains an inbuilt mechanism for adjudication of disputes arising between the petitioners and respondent no.2. Meaning thereby, this clause unambiguously conveys the intention that disputes arising out of Agreement to Sell would be governing only to parties and there is no arbitration clause. This intention of parties cannot be rewritten by reading it in conjunction with arbitration clause contained in Tripartite Agreement so as to enlarge its scope. Digitally signed by VINEETA VINEETA GOYAL GOYAL Date:
2025.04.19 17:28:15 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 35 of 39 20 In case of M R Engineers and Contractors Private Limited vs Som Datt Builders Limited, (2009) 7 SCC 696 : (2009) 3 SCC (Civ) 271 (supra), Hon'ble Supreme Court was analyzing a question where the PWD had entrusted the work under a contract to the respondent which contained an Arbitration Clause. The respondent in turn had hired the appellant as a sub-contractor to execute the work. Disputes arose between the parties and the appellant filed an application under Section 11 of the Act invoking the Arbitration Clause incorporated in the main contract between the PWD and the respondent. Hon'ble Supreme Court held:
"We will give a few instances of incorporation and mere reference to explain the position (illustrative and not exhaustive). If a contract refers to a document and provides that the said document shall form part and parcel of the contract, or that all terms and conditions of the said document shall be read or treated as a part of the contract, or that the contract will be governed by the provisions of the said document, or that the terms and conditions of the said document shall be incorporated into the contract, the terms and conditions of the document in entirety will get bodily lifted and incorporated into the contract. When there is such incorporation of the terms and conditions of a document, every term of such document (except to the extent it is inconsistent with any specific provision in the contract) will apply to the contract. If the document so incorporated contains a provision for settlement of disputes by arbitration, the said arbitration clause also will apply to the contract."
21 The principle which emerges from the provisions of Section 7(5) is elucidated in paragraph 19 of the judgment, which is extracted below:
"Sub-section (5) of Section 7 merely reiterates these well-Digitally signed by VINEETA
VINEETA GOYAL Date: GOYAL 2025.04.19 17:28:24 +0530 OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 36 of 39 settled principles of construction of contracts. It makes it clear that where there is a reference to a document in a contract, and the reference shows that the document was not intended to be incorporated in entirety, then the reference will not make the arbitration clause in the document, a part of the contract, unless there is a special reference to the arbitration clause so as to make it applicable."
22 The approach of composite Arbitration was under
consideration of the Hon'ble Delhi High Court in Libra Automotives Private Limited vs. BMW India Private Limited and Another, 2019 SCC OnLine Del 9073, and under the circumstances where parties entered into number of contracts the following was held:-
22. The Court while exercising its power under Section 11 of the Act, cannot recast the terms of the Contract and direct the parties to go for a composite arbitration contrary to the procedure prescribed under the arbitration clause provided in distinct arbitration agreements. The overlapping of the issues does not mean that the arbitration proceedings under the two respective contracts cannot commence and continue independently. Fundamental feature of an arbitration agreement is that there is an understanding between the parties to adopt alternate mechanism for the adjudication of the future disputes that arise between them.
The law does not prescribe any standard form of arbitration agreement and the parties are free to agree upon a procedure and designate the private forum where the parties would like to go in case the disputes and differences arise between them. Thus, there is to be consensus ad-idem between the parties regarding the choice of the forum.
23 In yet another case, Hon'ble Delhi High Court in Huawei Telecommunications (India) Co. Pvt. Ltd. Vs BSNL & anr., Neutral Citation No-2020:DHC:1416, ARB.P.-591/2019 Digitally signed by VINEETA GOYAL VINEETA Date:
GOYAL 2025.04.19
17:28:33
+0530
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dated 27.02.2020, has held that Arbitration Agreement between one contract cannot be incorporated into another contract, unless there is a clear intention of the parties to do so while entering into a second agreement.
24 Reverting to the case in hand, appropriately guided by judgments (supra) and applying to the facts of this case, there is no infirmity in the impugned order passed by ld. Arbitrator. Ld. Arbitrator was right in observing that Builder Buyer Agreement cannot be construed as ancillary or intricately linked to Tripartite Agreement and there is no subsisting arbitration clause between the parties in terms of Section 5 of the Act in the Agreement.
25 Further, it is no more res integra that arbitration proceedings emanates from the contract, there must be an arbitration clause, which must be invoked by the parties to the contract. The requisite condition of invoking of arbitration clause being mandatory has been held in number of cases. In the case in hand, there was not even a whisper about any dispute arising out of Agreement to Sell in the notice sent by the petitioners u/s. 21 of the Act to the respondents. Therefore, at no point of time, conditions of Section 21 of the Act have been complied with.
26 In view of above discussion, there is no infirmity in the impugned order passed by ld. Arbitrator. Accordingly, the present petition is dismissed. Digitally signed by VINEETA GOYAL VINEETA Date:
GOYAL 2025.04.19
17:28:41
+0530
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Parties are left to bear their own cost.
File be consigned to record room.
Digitally signed
VINEETA by VINEETA
GOYAL
GOYAL Date: 2025.04.19
17:28:51 +0530
Pronounced in the open Court (VINEETA GOYAL)
on this 19th April, 2025 District Judge (Commercial-03)
Patiala House, New Delhi
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 39 of 39