Karnataka High Court
Mr. Justice Pradeep D Waingankar(Retd) vs Pebble Bay Developers Private Limited on 8 August, 2019
Author: B.Veerappa
Bench: B.Veerappa
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8th DAY OF AUGUST 2019
BEFORE
THE HON'BLE Mr. JUSTICE B.VEERAPPA
CIVIL MISCELLANEOUS PETITION NO.226/2019
BETWEEN:
1. MR. JUSTICE PRADEEP D WAINGANKAR)
(RETD) S/O LATE SRI. DATTATRAY WAINGANKAR,
AGED ABOUT 65 YEARS
PRESENTLY R/AT APARTMENT NO.101,
GREEN LEAF "RAGA" APARTMENTS,
11TH MAIN, 14TH A CROSS,
MALLESWARAM WEST,
BANGALORE-560 003
2. SMT. SONALI P WAINGANKAR
W/O SRI. PRADEEP D WAINGANKAR,
AGED ABOUT 65 YEARS
PRESENTLY R/AT APARTMENT NO.101,
GREEN LEAF "RAGA" APARTMENTS,
11TH MAIN, 14TH A CROSS,
MALLESWARAM WEST,
BANGALORE-560 003
PETITIONER NOS. 1 AND 2 ARE
REP. BY THEIR DULY CONSTITUTED AGENT
AND POWER OF ATTORNEY HOLDER
MISS SAMIDHA P WAINGANKAR,
D/O SRI. PRADEEP D WAINGANKAR,
MAJOR
RESIDING AT APARTMENT NO.101,
GREEN LEAF "RAGA" APARTMENTS,
11TH MAIN, 14TH A CROSS,
MALLESWARAM WEST,
BANGALORE-560 003 .... PETITIONERS
(BY SRI. GIRIDHAR S.V. ADVOCATE)
2
AND:
1. PEBBLE BAY DEVELOPERS PRIVATE LIMITED
(FORMERLY KNOWN AS GALLERIA DEVELOPERS
PRIVATE LIMITED)
A COMPANY DULY REGISTERED AND
INCORPORATED UNDER THE COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE AT RAHEJA
CHAMBERS, LINKING ROAD AND MAIN AVENUE,
SANTA CRUZ (W) MUMBAI 400 054,
BY ITS DIRECTORS
2. PEBBLE BAY DEVELOPERS PRIVATE LIMITED
(FORMERLY KNOWN AS GALLERIA DEVELOPERS
PRIVATE LIMITED)
A COMPANY DULY REGISTERED AND
INCORPORATED UNDER THE COMPANIES ACT 1956,
HAVING ITS BRANCH OFFICE AT JW MARRIOTT,
24/1, VITTAL MALLYA ROAD, BANGALORE-560 001,
BY ITS DIRECTORS
3. PEBBLE BAY DEVELOPERS PRIVATE LIMITED
(FORMERLY KNOWN AS GALLERIA DEVELOPERS
PRIVATE LIMITED)
A COMPANY DULY REGISTERED AND
INCORPORATED UNDER THE COMPANIES ACT 1956,
HAVING ITS SITE OFFICE AT NO.521-526, 1ST MAIN
ROAD, TEACHERS COLONY, SANTHOSAPURAM,
1ST BLOCK, KORAMANGALA, HSR LAYOUT,
5TH SECTOR, BANGALORE,
KARNATAKA-560034,
BY ITS DIRECTORS .... RESPONDENTS
(BY MS.SHEEBA ISAKHAM FOR SRI.AJESH KUMAR
ADV., FOR RESPONDENTS)
THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER
SECTION 11(5) OF THE ARBITRATION AND CONCILIATION
ACT, 1996 PRAYING TO DIRECT THE APPOINTMENT OF
THE HON'BLE MR. JUSTICE ASHOK.B.HINCHIGERI
(RETD.,) FORMER JUDGE, HIGH COURT OF KARNATAKA,
AS THE SOLE ARBITRATOR IN TERMS OF CLASUE 9 OF
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THE AGREEMENT OF SALE EXECUTED ON 23/08/2016 AS
AT ANNEXURE-B TO ENTER UPON REFERENCE AND TO
ADJUDICATE THE DISPUTE BETWEEN THE PETITIONERS
AND THE RESPONDENT IN TERMS OF THE NOTICE OF
DEMAND DATED:01/04/2019 AS AT ANNEXURE-C.
ETC.
THIS PETITION COMING ON FOR ADMISSION, THIS
DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioners have filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of sole Arbitrator to adjudicate the dispute between the parties in terms of clause 9 of the Agreement of Sale dated 23.08.2016 entered into between the parties.
2. It is the case of the petitioners that the respondents advertised the development of a project titled "Pebble Bay Koramangala" and in continuation of the same offered to construct apartments in the said premise for sale in favour of the such intending purchasers. The petitioners agreed to purchase one residential apartment to be constructed bearing Unit 4 No.303, to be situated on the third floor of Tower-A having a super built area of 1815 square feet together with two covered car parking space to be situated in the basement floor. The petitioners have executed a Booking Form and in terms of the same, the petitioners paid an initial advance of Rs.10,00,000/- on 31.07.2016 vide cheque No.842244 dated 31.07.2016 drawn on State Bank of India, Cauvery Bhavan Branch, Bangalore. In accordance with the Booking Form, an agreement of sale was entered into between the parties on 23.08.2016 whereby the terms and conditions of the construction and the subsequent conveyance of Apartment bearing No.303 was reduced into writing. The property agreed to be purchased by the petitioners is morefully described in the petition schedule.
3. It is further contended by the petitioners that in terms of Clause-9 of the agreement between the parties that all disputes and differences between the parties shall be referred to Arbitration in terms of Arbitration and Conciliation Act, 1996. Thereafter, the 5 petitioners have effected a total payment of Rs.52,91,982/- pursuant to the agreement of sale. There has been no progress in the construction of the said apartments whatsoever and in the interregnum, the respondents issued a communication dated 03.01.2019 indicating that they did not have the necessary funds to construct the Apartment and they are unable to secure funding for the project. It was also indicated that the project is intended to be handed over to 'Ozone Group' requesting the concurrence of the petitioners for such assignment. Petitioners are not agreeable to such an assignment and on account of the breach committed by the respondents in compliance with the terms and conditions of the contract, the petitioners have suffered severe loss of funds taking into consideration, the increase in the price of a similarly placed apartments in the vicinity of the schedule property. In those circumstances, the petitioners were constrained to issue legal notice calling upon the respondents to comply with the terms and conditons of 6 the agreement of sale, failing which, the petitioners would be entitled to refund of the amount together with interest on the same as also damages suffered by the petitioners as a consequence of such breach. The petitioners informed to the respondents that in the event of non-compliance of such demand, the same would constitute as a dispute which is arbitral in accordance with Clause-9 of the agreement of sale. Accordingly, legal notice came to be issued on 01.04.2019 and the same was replied by the respondents on 06.06.2019 agreed to reach for an amicable resolution. Thereafter, nothing happened. Petitioners are force to file the present petition for the relief sought for.
4. I have heard learned counsel for the parties to the lis.
5. Sri. Giridhar S.V., learned counsel for petitioners reiterating the averments made in the petition contended that there is no dispute between the 7 parties with regard to the agreement entered into between the parties on 23.08.2016 in respect of sale of apartment in a project titled "Pebble Bay Koramangala". The petitioners have paid total sum of Rs.52,91,982/- In spite of the same, the respondents have not proceeded to construct the apartment and issued a letter dated 03.01.2019 indicating that they did not have the necessary funds to proceed with construction. Despite issuing legal notice on 01.04.2019, the respondents did not come forward to refund the amount. The petitioners informed the respondents that in the event of non compliance of such demand, the same would constitute as a dispute which is arbitral in accordance with Clause 9 of the agreement of sale. The respondents on receipt of the notice have issued an interim reply without concurring or dissenting with the nomination of the Arbitrator. Therefore, sought to allow the petition.
6. The respondents have not filed objections to the main petition. Ms. Sheeba Essa Khan, learned 8 counsel appearing for respondents sought for dismissal of the petition.
7. Having heard the learned counsel for parties, it is undisputed fact that the respondents issued Booking Form in respect of a project titled "Pebble Bay Koramangala" and it is also not in dispute that the petitioners and the respondents have entered into an agreement of sale dated 23.08.2016 in respect of sale of an apartment to be constructed bearing Unit No.303 situated on the third floor of Tower-A having a super built area of 1815 square feet together with two covered car parking space to be situated in the basement floor. It is also not in dispute that in terms of the agreement entered into between the parties, there is arbitration clause to refer for all the disputes arising in connection with this agreement. The arbitration clause-9 of the Agreement reads as under:
9. "Dispute Resolution":
In the event of any dispute or difference arising between the parties hereto in regard 9 to any matter relating to or connected with this Agreement, the same shall be referred to Arbitration in accordance with the Arbitration and Reconciliation Act, 1996 and the decision of the Arbitrator shall be final and binding on both the parties; the venue of Arbitration shall be Bangalore and conducted in the English language and the Court at Bangalore shall have the jurisdiction in regard to this Agreement. Notwithstanding this clause in the event of this agreement being terminated due to clause 4(b) of Article II above, this clause also shall stand terminated. Provided further, the purchaser shall-
a. Have no right to file any interim application or suit to obtain an injunction to stay or restrain the development of 'SCHEDULE A & B' properties or any portion thereof by the VENDOR or the alienation of the other flats which are not subject matter of this Agreement under any circumstance as the VENDOR and other persons will suffer injury/loses/damages etc. and the PURCHASER shall not file any suit or commence any proceeding without prior notice thereof being given in writing to the VENDOR and 10 b. prior to initiation of any arbitration or legal proceeding the PURCHASER is false or frivolous or the claim or case is dismissed due to lack of merit or default or for any cause then this agreement shall be terminated and the sums paid by the PURCHASER shall stand forfeited and the VENDOR shall have the right to sell the said flat to a third party without further notice.
8. It is also not in dispute that the petitioners have complied the provisions of Section 7(5) of the Arbitration and Conciliation Act by issuing legal notice. In the reply the respondents specifically stated that they are agreed to resolve the disputes between the parties amicably.
9. For the reasons stated above, the civil miscellaneous petition is allowed. Hon'ble Mr. Justice Ashok B. Hinchigeri, former Judge of this Court is appointed as a sole arbitrator to adjudicate the dispute in terms of clause-9 of the agreement of sale dated 23.08.2016 entered into between the parties. 11
10. Registry is directed to send a copy of this order to Hon'ble Mr. Justice Ashok B. Hinchigeri, former Judge of this Court as well as to the Arbitration Centre, Bengaluru, for reference forthwith.
Sd/-
JUDGE JS/-