Bangalore District Court
Chandramma vs M/S Intex Developers Pvt Ltd on 23 January, 2024
1
Com.AP.No.39/2023
KABC170007562023
IN THE COURT OF LXXXIV ADDL. CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.85)
THIS THE 23rd DAY OF JANUARY 2024
PRESENT:
SUMANGALA S. BASAVANNOUR., B.COM, LL.M.,
C/c LXXXIV ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.A.P.No.39/2023
BETWEEN:
1. Smt. Chandramma,
W/o Late Sri.K.V.
Madhegowada,
aged about 62 years
2. Sri.Manohar Gowda M.,
S/o Late Sri.K.V.
Madhegowda,
aged about 37 years,
Both are R/o
Sri.Venkateshwara Nilaya,
Maruthi Nagar Main Road,
Doddaballapur Taluk,
Bengaluru Rural District,
Bengaluru - 561203
3. Sri.P.V.Ramanna Reddy,
S/o Sri.Narayana Reddy,
aged about 52 years,
2
Com.AP.No.39/2023
R/o No.103, 11th Cross,
Lakshmaiah Block,
Ganganagar, Bengaluru -
560032
: PETITIONERS
(Represented by
Sri.Siddanooru
Vishwanatha, Advocate)
AND
1. M/s Intex Developers
Pvt. Ltd., through its
authorized representative
Mr.Rupesh Kumar, having
registered office at No.61,
Okhla Industrial Area,
Phase - II, New Delhi,
New Delhi - 110062
2. Sri.T.Krishnappa Naidu,
S/o Sri.Reddeappa Naidu,
aged about 48 years, R/o
Madanappale, Post
Madanapalle, Chittor
District, Andhra Pradesh -
517 325
(Represented by
Sri.M.B.Gagan Ganapathy,
Advocate)
3. Sri. M. Nagarajan,
Member of Central
Administrative Tribunal
3
Com.AP.No.39/2023
and the Sole Arbitrator,
Arbitration and
Conciliation Centre,
(Domestic & International)
3rd Floor, East Wing,
Khanija Bhavan, Race
Course Road, Bengaluru -
560001
: RESPONDENTS
Date of Institution 15.03.2023
Nature of the petition Petition for setting aside
Arbitral Award
Date on which judgment 23.01.2024
was pronounced
Total Duration Year/s Month/s Day/s
03 07 09
(SUMANGALA S. BASAVANNOR),
C/c LXXXIV Addl. City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This Petition is filed under Section 34 of the Arbitration & Conciliation Act, 1996 r/w Sec.10(3) of the Commercial Courts Act for setting aside the impugned Award dated 28.12.2022 passed by the Sole Arbitrator Sri.M.Nagarajan, Ex.Member of the Central Administrative Tribunal, Bengaluru in A.C.No.32/2019.
4Com.AP.No.39/2023
2. The Brief facts leading to the case are as follows:-
(a) The petitioners have challenged the arbitration award passed by the Sole Arbitrator in A.C.No.32/2019 (CMP No.219/2015) dated 28.12.2022 wherein the claim petition filed by the respondent No.1 was allowed and the petitioners were directed to return and pay a sum of Rs.1,00,00,000/- plus interest at 12% p.a. on the said sum from 12.11.2012 till the date of filing of the claim petition. There petitioner were also directed to pay interest on Rs.1,00,00,000/- at 2% higher than the current rate of interest prevalent under clause (b) of Sec.2 of the Interest Act, 1978 from the date of the award and future interest at 6% p.a. from the date of award till the date of payment.
(b) The Respondent No.1 herein had filed the Claim Petition in A.C. No.32/2019. The claim of the Respondent No.1 in the Claim Petition is that Claimant/ Respondent No.1 is a registered company duly registered under the Companies Act, 1956 dealing in the business of developing the layouts in various places of the globe and is also builder/developer of land. The Petitioner No.3, the Respondent No.2 and Late Sri.Madhegowda had represented to be owning 98 acres of converted land in Sarjapur Area, Bengaluru and accordingly entered into a MOU dated 12.08.2011 with the Claimant Company/ Respondent No.1 5 Com.AP.No.39/2023 herein, for organizing and delivering the land to the extent of 200 at the rate of Rs.50,00,000/- per acre in the villages of Kuthuganahalli, Muglur, Chikkannahalli, Kambarahalli and Kurjuru at Sarjapura Hobli, Anekal Taluk by paying the security deposit of Rs.1,00,00,000/- in the form of Demand Drafts in the name of Late Sri.K.V. Madhegowda, the Petitioner No.3 herein and the Respondent No.2 herein.
(c) The Respondents also made to the Claimant to enter into two Agreements of Sale without possession dated 14.12.2011 and 12.01.2012 in respect of Sy. No.141/1 (1 acre), Sy. No.172 (old Sy. No.70) (2 acres), Sy. No.167 (old Sy. No.70) (2 acres) situated at Kuthuganahalli Village. The condition in the said Agreements of Sale was that in case of failure to obtain sale permission within 190 days from the agreement, the Respondents were supposed to return the amount with interest at 18% per annum within 90 days. One more In-continuance MOU dated 10.01.2013 was entered into between the parties changing the task to 54 acres at Rs.75,00,000/- per acre in the very same area within 12 months. In the Clause 5 of the said MOU dated 10.01.2013, the receipt of Rs.1,00,00,000/- was acknowledged. The Claimant Company/Respondent No.1 has sent reminder letters on 15.07.2014 for which the respondents replied vide Reply dated 28.07.2014 and 30.07.2014 and demanded more money.
6Com.AP.No.39/2023
(d) The Claimant Company sent Legal notice dated 03.12.2014 seeking to return the Rs.1,00,00,000/- along with 18% p.a. interest for which Reply Notice dated 19.12.2014 was issued. The claimant company got issued a legal notice dated 09.06.2015 suggesting to appoint sole arbitrator, for which reply notice dated 30.06.2015 was issued refusing to return the amount. With no other option, the claimant company filed CMP No.219/2015 before the Hon'ble High Court of Karnataka, whereby Sri.M.Nagarajan, Ex.Member the Central Administrative Tribunal was appointed as Sole Arbitrator.
(e) Late Sri.K.V. Madhegowda and petitioner No.3 have filed statement of objections stating that the claimant had neglected to perform their part of obligation. Without the performance of their part of obligation, the amount already paid by them will be treated as forfeited. In fact, the claimant admits the failure to pay further sum in the para No.9 while quoting the Clause 6 of the MOU. The respondents had invested huge amounts for making payments to the original owners in order to get the sale deeds registered in favour of the claimant company. As such, the failure on the part of the claimant has resulted in huge loss to the respondents, for which the amount paid by the claimant stands forfeited.
(f) After hearing the arguments advanced by both 7 Com.AP.No.39/2023 counsels, the Sole Arbitrator went on to pass the Award dated 28.12.2022 allowing the Claim Petition.
3. Being aggrieved by the award dated 28.12.2022, this petition is filed on the following grounds:
a) The Sole arbitrator has not considered the objections raised by the petitioners regarding the maintainability of the claim petition in the absence of the original documents. Further, the Hon'ble High Court has observed that the ground is open to be challenged in the suit under Sec.34 of the Arbitration and Conciliation Act, 1996.
b) The claimant company was all along represented by its President one Mr.Shanmugam Venkatesh, S/o late T.K.Venkatesh during the MOU and Agreement. However, the claim petition is filed by some unknown person who is nowhere connected with the alleged transactions.
Therefore, the claimant had no locus standi for filing the claim petition. However, the sole arbitrator did not consider this aspect while passing the award.
c) In view of the death of Late Sri.K.V. Madhegowda, the Claim Petition is not maintainable as against the Legal Representatives i.e., the Petitioners No.1 and 2 herein, 8 Com.AP.No.39/2023 since they were not parties to the alleged Agreement and the MOU, based on which the Claim Petition was filed.
d) The Respondent No.2 herein, though impleaded later, did not appear before the sole arbitrator and remained exparte.
e) The proceedings of the sole arbitrator is vitiated by the fact that the Xerox copies of the documents have been marked (Ex.P1 and Ex.P3 to P7) and without considering the objections raised by the petitioners herein, the claim petition was allowed.
f) The Sole Arbitrator has not considered the evidence put forth by the petitioners herein and went on to pass the award dated 28.12.2022.
g) The alleged payment date is 03.08.2011 and the Civil Miscellaneous Petition filed before the Hon'ble High Court in the year 2015, as such the claim is badly barred by limitation. Hence the claim of the Claimant itself was barred by limitation and therefore the Claim Petition of the Claimant ought to have been dismissed on this ground alone.
h) The Respondents 1(a) and 1(b) (the Petitioners No.1 9 Com.AP.No.39/2023 and 2 herein) the Legal Representatives viz., wife and son of deceased Sri. Madhegowda. The Legal Representatives of the deceased Sri. Madhegowda are totally unaware of the claims made in the Claim Petition and hence the Claim Petition was not maintainable against them. But the Sole Arbitrator has ignored this aspect.
i) The PW-1 (Claimant) has admitted during the cross- examination that: "It is true that Mr.Ramana Reddy is not a party to any one the documents at Ex.P4 to P6." As such, the claim petition ought to have been dismissed. But the Sole Arbitrator has not considered are this admission.
j) The Claimant Company (Respondent No.1 herein) has produced the Xerox copies and got them marked through PW-1 as Ex.P.3 to 7, 9 and 10. The Xerox copies have been marked by the Sole Arbitrator noting that they have been marked subject to production of original of the same or convincing the tribunal as to the marking of the Xerox copies. But the PW-1, during his cross- examination, has admitted that "The original documents were lost by the claimant somewhere in Delhi." The Claimant has not substantiated their claim with 10 Com.AP.No.39/2023 supporting documents. In the absence of the original documents the claim petition was not maintainable.
k) The correct position of law is that the GPA ends with the death of the GPA Holder. Hence the GPA of the deceased Respondent No.1 Sri.K.V.Madhegowda ended with his death. Therefore, the LRs of the deceased Sri.Madhegowda have no contractual obligation.
l) The photocopies of the documents are inadmissible in evidence in view of the Judgment of the Hon'ble Apex Court in Appeal (Civil) No.2060/2007 arising out of SLP (C) No.12625/2005 'Smt.Yashoda Vs. Smt.K.Shobha Rani.'
m) RW-1 (Petitioner No.3 herein) and the RW-2 (Petitioner No.1 herein) have withstood the cross- examination by the counsel for claimant. RW-1 has disputed all claims of the Claimant since he is not a party to any of the alleged documents, while RW-2 has stated that he has no knowledge about the alleged transaction. Since the Claimant Company has failed to produce the original documents, the Claims of the Claimant remain not proved against the Respondent No.2, while the Claim Petition is not maintainable as against the Legal representatives i.e. Respondent 1(a) 11 Com.AP.No.39/2023 and 1(b) for lack of contractual obligation on their part. Hence the Claim Petition was liable to be dismissed.
n) The Petitioner No.3 and deceased Sri. Madhegowda had made sincere efforts to perform their obligation as per the MOU and agreements. They have registered 5 acres of land, which is now worth more than Rs.2,75,00,000/- under the agreements in favour of Respondent No.1 Company, for an advance amount of just Rs.1,00,00,000/-. They had invested huge amounts for making payments to the original owners in order to get the sale deeds registered in favour of the Claimant Company and therefore, the failure on the part of the Claimant Company has resulted in huge loss to them. The correspondences and legal notices issued by the Claimant Company have been suitably replied by them. But the Sole Arbitrator has ignored this aspect, while passing the impugned award.
p) The Petitioners have no other alternative/efficacious remedy for their grievance except approaching this Hon'ble Court with this Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996.
4. The 1st respondent has filed objections stating that -
12Com.AP.No.39/2023
(a) The petition is wholly frivolous, bereft of merits, bad in facts as well as in law and the petition is also an abuse of process of this court and hence liable to be dismissed in limine amongst other grounds:
(i) None of the grounds envisaged under Section 34(2) of the Arbitration and Conciliation Act, 1996 have been made out by the Petitioner;
(ii) The Hon'ble Arbitrator in its Award dated 28.12.2022 has rightly held that Respondent is liable to return and pay a sum of Rs.1,00,00,000/- along with an interest as mentioned in para (a) and (b) of the Award in order to avoid unjust enrichment of the Petitioners, as the Respondent No.1 has not received any sort of consideration for the amount paid.
(iii) The present petition is an attempt of the Petitioner to deny the Respondent the payments that are lawfully due;
(iv) The petition been filed solely for the purpose of unlawfully harassing the Respondent and to unjustly enrich themselves with the amounts without fulfilling their reciprocal obligations and reciprocal consideration as per contractual obligations. The petitioners have falsely stated and produced misleading facts in the 13 Com.AP.No.39/2023 appeal including attempting to convey the impression that the petitioners have registered sale deed of 5 acres of land in favour of the Respondent No.1 with intentionally unclear language.
(v) There are no merits whatsoever in this petition and the same is liable to be dismissed with exemplary costs;
(vi) The Petitioner has only sought an order to set aside the arbitration award without seeking any further relief.
Even on this ground, the petition is not maintainable;
(vii) The Petitioner intentionally in bad faith approached the High Court to in W.P.No.11295/2022 to frustrate the Respondents by dragging the matter when they had access to legal advice and could have come before this forum earlier.
(b) The award passed by the arbitrator is sound and contractual rate of interest as agreed to between the parties has been rightfully considered while awarding contractual rate of interest from date of award till date of payment along with the return of other amounts with interest till claim filing date. The claimant, respondent No.1 herein rightfully mitigated their losses when the other party did not perform their contract by ensuring quid quo or equivalent consideration as per agreed 14 Com.AP.No.39/2023 terms. Hence, the other parties have no legal right to forfeit any amount of the claimant, respondent No.1 herein has rightfully upheld by the arbitrator after addressing that the claim is not barred by limitation due to the continuing breach by the opposite party after initial acknowledgment of debt that had extended limitation amongst other things.
(c) The arbitrator has looked into who has been in custody of the original documents, who is withholding the original documents and also considered whether the originals have been misplaced while also considering corroborating evidence, facts and admissions amongst other things while coming to the conclusion that the respondent No.1 should rightfully succeed in its claim. The sole arbitrator has acted with righteousness and the opposite parties are wrongly alleging bias only with the sole intent of protracting proceedings and misleading this court to make wrongful gains for themselves where they have retained substantial lands that were not transferred as per the agreement in addition to retaining moneys owed to the respondent No.1 as a result of non performance of contractual obligations by them.
(d) The legal heirs are the successors to Sri.K.V.Madhegowda, they all have benefited from the
transaction and moreover in the said agreements successors of 15 Com.AP.No.39/2023 each party are explicitly included to mean being party to such agreements in such contingencies. The petitioner and the respondent No.2 are one party as receipts of payments were mutually divided among them and subsequently, through the MOU dated 10.01.2013, Mr.Ramana Reddy and Mr.K.V.Madhegowada had acknowledged receipt of the total payment of Rs.1,00,00,000/- from the respondent No.1 and also acknowledged liability of the respondent No.2. The respondent No.1 has rightly been awarded damages claimed with contractual rate of interest in accordance with law. Hence, the respondents pray to dismiss the petition with exemplary costs.
5. Heard arguments and perused the records.
6. Based on the above contentions of both parties, and the arguments of both Advocates, following Points arise for my consideration:-
1. Whether there are grounds to set aside the Impugned Award under Section 34 of the Arbitration & Conciliation Act?
2. What Order?
[
7. My findings on the above points are as follows:-
Point No.1:- In the negative Point No.2:- As per the final Order for the following reasons.16
Com.AP.No.39/2023 REASONS
8. Point No.1: - This award is challenged by the petitioners herein on the ground that the Sole arbitrator has not considered the objections raised by the petitioners regarding the maintainability of the claim petition in the absence of the original documents. Further, the Hon'ble High Court has observed that the ground is open to be challenged in the suit under Sec.34 of the Arbitration and Conciliation Act, 1996. The sole arbitrator is vitiated by the fact that the Xerox copies of the documents have been marked (Ex.P1 and Ex.P3 to P7) and without considering the objections raised by the petitioners herein, the claim petition was allowed. The Claimant has not substantiated their claim with supporting documents. In the absence of the original documents the claim petition was not maintainable.
9. On perusal of the records it reveals that during the course of chief examination of Pw1, the present petitioner has raised objection for marking of xerox copy of the MOU and other documents, the tribunal has consider the objection and marked xerox copy of MOU and other documents at Ex.P3 to P7 subject to production of original of same or convincing the tribunal as to the marking of the Xerox copies of the MOU dated 12.08.2011 and other documents as Ex.P3 to P7.
17Com.AP.No.39/2023
10. The learned arbitrator at Page 12 para 28 of the award discussed regarding marking of xerox copy of documents as Ex.P3 to P7. At para 30 stated that it is necessary to refer to Sec.63 and Sec.65 of the Indian Evidence Act and also considered Sec.19 of the Arbitration and Conciliation Act and the same reads as under:
"19. Determination of rules of procedure :
(1) The Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872."
In view of the above provision, it requires to be said that Sec.63 and 65 of the Evidence Act are not applicable to an arbitral proceedings.
11. In Para 31 it is held that, this being the settled legal position, it requires to be noted that it is not at all the case of the respondents that the originals of Ex.P3 to P7 are inadmissible in evidence. Clause (a) of the Illustration to Sec.63 of the Evidence Act reads as under:
(a) The photograph of an original is secondary evidence of its contents, though the two have not been compared, if it is proved that the thing photographed was the original.18
Com.AP.No.39/2023
12. In view of the above illustration the claimant is required to prove that Exs.P3 to P7 were photographed from the originals. Pw1 in his examination in chief deposed that "Ex.P3 is the Xerox copy of the MOU dated 12.08.2011 between the claimant and Sri.Krishnappa Naidu, Sri.K.V.Madhe Gowda and Sri.Ramanna Reddy". "Ex.P4 is the xerox copy of the Agreement of sale dated 14.12.2011 entered into between Sri.Rajappa and 3 other and claimant company". "Ex.P6 is the Xerox copy of the agreement of sale dated 12.01.2012 entered into between Sri.Guramma and 3 others and the claimant company". "Ex.P7 is a Xerox copy of the MOU dated 10.01.2013 between the claimant company and Sri.Madhe Gowada and another". During cross examination, a suggestion was made to Pw1 that Ex.P3 to P7 are concocted documents, but the same was denied. In entire cross examination of Pw1, there is not even a single whisper as to the fact that Ex.P3 to P7 are not the photograph of the originals.
13. In para 32, the learned arbitrator held that the respondents in their objection to claim petition neither denied the execution of the documents at Exs.P3 to P7 or the contents of the same. On the other hand, they categorically admit the execution of Ex.P3 in paras 3 and 14. The statement of objections of respondent No.1 and 2 makes it clear that the respondent No.1 and 2 categorically admit the execution of the 19 Com.AP.No.39/2023 documents at Ex.P3 to P7 and the contents of the same. In para 41, the learned arbitrator held that in view of the admission of the respondents with respect to the documents at Exs.P3 to P7 in their statement of objection, he can safely rely upon the documents at Ex.P3 to P7 especially when the same was relied upon by the claimant and the same has not been denied by respondents. Therefore, assuming that the said Sec.63 and 65 of the Evidence Act are applicable to an arbitral proceedings, even then the non production of the originals of Ex.P3 to P7 cannot be the basis to arrive at a conclusion that the claimants have not proved the execution of the documents at Ex.P3 to P7 or the contents of the same. Accordingly, he find it difficult to agree with the submission of the learned counsel for the respondents that the failure on the part of the claimant in production of the originals of Ex.P3 to P7 the claim petition is not maintainable and that the claimant has not proved the execution of the documents at Ex.P3 to P7 and the contents of the same.
14. Sec.19 of the Arbitration and Conciliation Act reads as under:Sec. 19 - Determination of rules of procedure (1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
20Com.AP.No.39/2023 (2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.
(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate. (4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
15. The claim petition regarding the agreement to sell without possession dated 14.12.2011 and 12.01.2012 and MOU dated 10.01.2013. Since the Respondent No.1 and 2 admitted the execution of documents at Ex.P.3 to Ex.P7. So, the ground taken by the Petitioner in the absence of the original document claim petition is not maintainable is not acceptable. Further, Civil procedure code and Indian Evidence Act strictly not applicable to arbitration proceedings. Under these circumstance, the findings given by the learned arbitrator is legal and does not required any interference.
16. The Petitioner has taken a another ground to challenged the award that in view of the death of Late Sri.K.V. Madhegowda, the claim petition is not maintainable as against the legal representative i.e., the Petitioner No.1 and 2 herein, since they were not parties to the alleged agreement and the MOU, based on which the claim petition was filed. The Respondents 1(a) and 1(b) (the petitioner No.1 and 2 herein) 21 Com.AP.No.39/2023 are the Legal representative, viz., wife and son of deceased Sri. Madhegowada. The legal representative of the deceased Sri. Madhegowada are totally un-aware of the claims made in the claim petition and hence the claim petition was not maintainable against them. But the sole arbitrator has ignored this aspect. The correct position of law is that the GPA ends with the death of the GPA Holder. Hence the GPA of the deceased Respondent No.1 Sri K.V. Madhegowda ended with his death, Therefore the LRs of the deceased Sri. Madhegowda have no contractual obligation.
17. The learned counsel for the petitioner has argued that the correct position of law is that the GPA ends with the death of the GPA Holder. Hence the GPA of the deceased Respondent No.1 Sri K.V. Madhegowda ended with his death. Therefore the LRs of the deceased Sri. Madhegowda have no contractual obligation.
18. Perused the Memorandum of Understanding at Ex.P.3 it shows that M/s Intex Developers Private Limited i.e., Respondent No.1 and Petitioner No.3, T.K. Krishnappa Naidu, K.V. Madhe Gowda and P.V. Ramana Reddy entered into memorandum of understanding, it is also reveals that the 2 nd party has represented it owns of 98 acres of converted land in the schedule property and it shall entered into agreement 22 Com.AP.No.39/2023 purchase balance of 102 acres of the lands with various land owners mentioned in the schedule. The 2nd party shall acquire the lands in their name, get the same converted and transfer the said converted lands to the 1st party in accordance with the terms and conditions agreed upon between the parties. The lands to be so acquired by the 2nd party are more particularly described in the schedule property. In schedule property it is mentioned that (For the purpose of clarity the names of the current land owners from whom the second party will get the land papers is mentioned herein. The second party shall get the registration done in favour of the first party after fully satisfying the first party of the identity of each owner through either the ration card or voters id card. The lands detailed herein are of the 200 acres of land proposed to be procured).
19. Ex.P.4 the Agreement of sale dated 14.12.2011 discloses that this agreement entered between Rajappa, Yellappa, Muniraju and Muniyappa represented by their GPA holder and executed agreement of sale of possession in favour of Intex Developers Private Limited. Ex.P.6 Agreement of sale(without possession) discloses that Smt. Guramma, Smt, Muniyamma, Smt, Saroja and Sri. Balappa alis Muniyappa represented by their GPA holder Sri. K.V. Madhegowda executed the agreement of sale in favour of Intex Developers Private limited i.e., present respondent. Ex.P.7 Memorandum of understanding dated 23 Com.AP.No.39/2023 10.01.2013 discloses that the Intex Developers Private Limited and K.V. Madhegowda and P.V. Ramanna Reddy and both persons mentioned jointly referred to as the second party or sellers and also discloses that he has sought the second party to acquire the lands for it. The second party shall acquire the lands on behalf of the first party. The lands so acquired by the second party on behalf of the first party are more particularly and it also discloses that the first party agreed to pay 2 crores as advance amount of this MOU to the second party and as so far paid a sum of Rs. 1 crore as advance vide DD. Second party hereby acknowledges having received the amount and continues to keep the same in the form of deposit amount till the completion of the procurement of the 54 crore.
20. On perusal of the claim petition it discloses that the claim of the claimant is refund security advance amount of Rs. 1 crore and interest at 18% from 12.11.2012 till the date of filing of the claim.
21. In the objection statement the Respondents have stated that they have registered 5 acres of land, which is now worth more than Rs. 2,75,00,000/- under the agreements in favour of the claimant, for an advance amount of just RS. 1,00,00,000/-.
24Com.AP.No.39/2023
22. In issue No.5 and Para No. 61 the learned arbitrator has discussed that "the learned counsel for the respondent that the LRs of the respondent No.1 have no contractual obligation. In this regard, it requires to be noted that the deceased respondent Sri.K.V Madhe Gowda is one of the party of the parties of the second part of the MOU dated 10.01.2013 at Ex.P.7. Arbitration also referred Section 40 (1) of the Arbitration and Conciliation Act, 1996. It reads as under:
40. Arbitration agreement not to be discharged by death thereto (1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the deceased or as respects any other party, but shall in such event be enforceable by or against the legal representative of the deceased.
23. The Hon'ble Supreme court in the case of Ravi Prakesh Gowl and Chandra Prakesh Goel (2008) 13 SCC 667 held as understanding:
"20. The definition of 'legal representative' became necessary because such representatives are bound by and also entitled to enforce an arbitration agreement. Section 40 clearly says that an arbitration agreement is not discharged by the death of a party. The agreement remains enforceable by or against the legal representatives of the deceased. In our opinion, a person who has the right to represent the estate of deceased person occupies the status of a legal 25 Com.AP.No.39/2023 person. Section 35 of the 1996 Act which imparts the touch of finality to an arbitral award says that the award shall have binding effect on the "parties and persons claiming under them". Persons claiming under the rights of a deceased person are the personal representative of the deceased party and they have the right to enforce the award and are also bound by it. The arbitration agreement is enforceable by or against the legal representative of a deceased party provided the right to sue in respect of the cause of action survives."
In view of the aforesaid Section 40 (1) and the Judgment of the Hon'ble Supreme Court in Ravi Prakash Goel, the contention of the learned counsel for the respondents that there is not contractual obligation on the part of the LRs of the responded No.1 is rejected. Therefore, findings of the learned arbitrator is not found with any fault. The above said findings are well reasoned and not appears the any contravention of substantive law of India. So, the above findings are not an arbitrary and perverse.
24. The Petitioner has challenged the another ground that the alleged payment dated is 03.08.2011 and the Civil Miscellaneous petition filed before the Hon'ble High Court in the year 2015, as such the claim is badly barred by limitation. Hence the claim of the claimant itself was barred by limitation and therefore the claim petition of the claimant ought to have been dismissed on this ground alone.
26Com.AP.No.39/2023
25. The learned counsel for the respondent argued that the claim petition filed by the Respondent No.1 herein was not barred by limitation in light of the continuing cause of action by the default of the petitioner, acknowledgment of debt that extended limitation amongst other things like continuous cause of action. Hence there was sufficient reasons to consider the claim of the Respondent No.1 as not being barred by limitation.
26. The learned arbitrator has discussed that in para NO. 46 of the award is that the claimant referred to clause No. 9 of the MOU dated 10.01.2013 at Ex.P.17. The Respondent No.1 and 2 categorically admit the execution of the said MOU dated 12.08.2011 at Ex.P.3. Further, they also admit the execution of the MOU, two agreements to sell dated 14.12.2011 and 12.01.2012 which are at Ex.P.4,5 and ExP.6 and MOU dated 10.01.2013 at Ex.P.7 respectively. The Respondents instead of complying with the demand made therein sent their reply to the same respectively dated 28.07.2014 and 31.07.2014. The reply of the respondents dated 28.07.2014 and the reply of the respondent No.2 Sri. V.Ramanna Reddy is available at Ex.P.9 and Ex.P.10 respectively. The deceased respondent namely Madhe Gowda in his reply dated 28.07.2014 at Ex.P.9 stated that already there exist a permission to sell the lands and the same was handed over to the advocate of the claimant, whereas, the respondent No.2 in his reply dated 30.07.2014 at Ex.P.10 did 27 Com.AP.No.39/2023 not whisper anything about the demand made in the letter dated 15.07.2014 at Ex.P.8.
27. The learned arbitrator has discussed that the execution of Ex.P.7 is not disputed. The receipt of a sum of Rs. 1 crore as advance amount is also not disputed by the Respondents. In view of the fact that the receipt of Rs. 1 crore is acknowledged by the Respondent 1 and 2 under Ex.P.7, it cannot be said that Ex.P.7 supplants Ex.P.3. It is clear that there is no dispute with respect to the payment of said sum of Rs. 1 crore by the claimant to the respondents. It is also admitted fact the since there was an arbitration clause in MOU, respondent issued a legal notice dated 09.06.2015 suggesting to appoint a sole arbitrator which the petitioner disagreed to. With no other option, the Respondent No.1 filed CMP No. 219/2015 before the Hon'ble High court of Karnataka, whereby Sri. M. Nagarajn, Ex. Member of Central Administrative tribunal, was appointed as sole arbitrator vide., Order dated 25.01.2019. The respondent No.1 therein filed the claim petition which was numbered as A.C. 32/2019. Hence, the claim petition is not barred by limitation.
28. It is well established that under no circumstance can any court interfere with an arbitral award on the ground that justice has not been done, for that would be entering into the merits of 28 Com.AP.No.39/2023 the dispute, which is not permissible under Sec.34 of the Act. Having regard to the same and in view of the forgoing discussion, the the point for consideration is answered in the negative holding that the claimant has failed to make out grounds U/s 34 of the Act for setting aside the impugned award as prayed. Therefore, I answer this Point in the "Negative".
29. Point No. 2 :- Therefore, I proceed to pass the following Order.
ORDER The Petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, is dismissed.
The Office is directed to send copy of this judgment to both parties to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 23rd day of January, 2024).
(SUMANGALA S. BASAVANNOR), C/c LXXXIV Addl. City Civil & Sessions Judge, Bengaluru.