Bangalore District Court
Sri. V. Vidyasagar vs M/S. Space Employees CoOperative on 17 November, 2020
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH84]
:Present:
Sri N.Sunil Kumar Singh, B.Com., LL.B.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this the 17th day of November 2020
COM.A.S.No.72/2015
Plaintiffs 1. Sri. V. Vidyasagar,
aged about 50 years,
S/o late N. Venkataram.
2. Smt. Usha .S,
aged about 48 years,
W/o Sri. V.Vidyasagar.
Both are residing at
Parvathamma Building,
parvathamma Layout,
Thindlu Vidyaranyapura post,
Bengaluru560095.
[By Sri. R.P.N, Advocate]
/v e r s u s/
Defendants: 1. M/s. Space Employees Cooperative
Housing Society Limited,
A society registered under the
Karnataka Cooperative Societies
Act, 1959
Having its registered office at
ISRO Satellite Centre,
Old Airport Road,
Bengaluru560017.
Represented by its President.
[By Sri.A.R, Advocate]
34
CT 1390_Com.A.S.722015_Judgment .doc
2. Mr. Kukkaje Ramakrishna Bhat,
Retired District & Session Judge
and Arbitrator,
No.2, 1st Cross, 1st Main,
Judicial Officers' Layout,
Sanayanagara,
RMV II Stage,
Bengaluru560094.
[Exparte]
Date of Institution of the suit : 10/06/2015
Nature of the suit : Arbitration suit
Date of commencement of :
recording of the evidence
Date on which the Judgment : 17/11/2020
was pronounced.
: Year/s Month/s Day/s
Total duration
05 05 07
JUDGMENT
This suit is filed by the plaintiffs against defendants U/S.34 of the Arbitration & Conciliation Act 1996.
2. The facts in brief of the plaintiffs case is that plaintiffs are carrying on business of land development having necessary experience and financial ability for development of land. The defendant No.1 is registered society with an objective to form residential layout to provide sites to their members. The 1st defendant has advertised in daily newspapers expressing their intention to form residential 34 CT 1390_Com.A.S.722015_Judgment .doc layout with all amenities. Thus on 3/4/2006 the plaintiffs have expressed their intention to assist the 1 st defendant in formation of such layout. After deliberation the 1 st defendant was convinced about capacity and financial position to handle the project and the representative of 1 st defendant society visited the land near Samethanahalli and sought additional details from the plaintiffs vide their letter dated 20/04/2006. Thus plaintiffs have expressed their intention to develop the land for formation of layout at the cost of Rs.390/ per sq.ft and expressed their willingness to provide bank guarantee as per the meeting held between plaintiffs and 1st defendant on 13/05/2006. The representatives of 1st defendant society have requested the plaintiffs to provide details of land for formation of such layout in and around Nelamangala town. The lands available in and around Nelamangala town were shown to the representatives of 1st defendant society by the plaintiffs and plaintiffs have agreed to procure the lands and develop with all amenities for formation of layout at the cost of Rs.375/ per sq.ft in Kulipura village of Nelamangala taluk and Rs.390/ per sq.ft at Maththahalli village, Dasanapura Hobli, Bengaluru North Taluk and quoted the said price vide letter dated 15/05/2006. After due deliberation between plaintiffs and 1st defendant the rate per square feet of the developed land was fixed at Rs.360/ per sq.ft with all infrastructure and amenities and plaintiffs have agreed to form layout at Honnasandra and Maththahalli villages. Accordingly contract was entered into between plaintiffs and 34 CT 1390_Com.A.S.722015_Judgment .doc 1st defendant on 31/05/2006. The plaintiffs have agreed to the terms and conditions stipulated in the agreement and submitted letter to the 1st defendant on 08/06/2006 and both the plaintiffs and 1st defendant have agreed to abide by the conditions stipulated in the agreement. The plaintiffs have furnished bank guarantee of Rs.5,00,00,000/ in favour of 1 st defendant and for formation of such layout on negotiation and procurement of land and payment of advance to the farmers the bank guarantee of Rs.5,00,00,000/ was furnished in favour of 1st defendant by the plaintiffs and received advance consideration.
3. After entering into such agreement plaintiffs have to obtain BMRDA approval, conversion of land and procurement of land for formation of such layout. Further legal opinion was not received for considerable long time and there was delay in acquisition of land for formation of layout. On 24/04/2007 1st defendant has enquired the plaintiffs with regard to the status of project. For which plaintiffs have replied on 4/5/2007 explaining the action taken by them for acquisition of lands as per the agreement. Since the lands to be acquired are falling under Green Belt Area they could not able to develop the said lands. On 5/5/2007 the plaintiffs have brought to the notice of 1 st defendant about the opportunity of acquisition of land at Huskur village, about 250 acres of land at Pattanagere village which was inspected by the representatives of 1st defendant. On 10/05/2007 34 CT 1390_Com.A.S.722015_Judgment .doc 1st defendant realizing the difficulties of plaintiffs in formation of layout agreed to modify the location of project and inspected the land on 24/05/2007 and plaintiffs have furnished documents with regard to acquisition of lands which has to be examined by the legal advisors of 1 st defendant society. It was agreed between plaintiffs and 1 st defendant to relocate the project at K.G.Srinivasapura and Bethathanagere villages of Bengaluru North Taluk and after due deliberation and acceptance by both the parties ultimately decided to form layout at Huskur village and since there was change in location of the project supplementary agreement was entered into between plaintiffs and 1 st defendant on 16/07/2007 with additional conditions as narrated therein.
4. After execution of supplementary agreement between plaintiffs and 1st defendant, plaintiffs went ahead for procurement of land as per the discussion at Bethathanagere and K.G.Srinivasapura and invested huge sum of money for acquisition of lands in various survey numbers and 100 acres of land was to be acquired in phased manner by plaintiffs for formation of such layout. On 16/06/2007 plaintiffs have furnished sketch with regard to formation of layout to the 1 st defendant society and requested to respond to the said sketch. But 1st defendant have not replied to the letter dated 11/06/2007 sent by plaintiffs and not granted legal clearance for acquisition of such lands. The delay of the 1 st defendant 34 CT 1390_Com.A.S.722015_Judgment .doc has caused inconvenience to the plaintiffs in completing the project. The plaintiffs have negotiated with the farmers for acquisition of lands and paid advance consideration. After one month the 1st defendant has sought for additional documents from the plaintiffs which was furnished. The 1 st defendant caused delay in payment for acquisition of lands and not furnished legal opinion for acquisition of lands. Thus plaintiffs have approached 1st defendant and conveined meeting on many occasions till 9/8/2007. Since there was no response by the 1st defendant, the plaintiffs have sent letter on 6/9/2007 requesting to furnish legal opinion with regard to acquisition of lands and finally plaintiffs got registered sale deeds with regard to the lands in Sy.Nos.153, 47/1 and 47/2 for formation of layout and the plaintiffs have invested more than Rs.4,00,00,000/ for the said project and plaintiffs have requested the 1st defendant to pay Rs.30,69,673/ towards registration charges of the lands acquired. Anyhow the plaintiffs have acquired property worth Rs.12,00,00,000/ by incurring their personal amount and wrote letter to the 1st defendant on 14/12/2007 and again plaintiffs have acquired lands in some other survey numbers of K.G.Srinivasapura and Bethathanagere villages and paid consideration to the farmers and since there was no response with regard to release of amount by the 1 st defendant, plaintiffs went ahead with regard to development of lands acquired by digging borewell for providing water facility to the project. The 1st defendant is liable to pay amount spent 34 CT 1390_Com.A.S.722015_Judgment .doc by plaintiffs for formation of layout as per the terms of agreement. Despite of several meetings held between plaintiffs and 1st defendant, 1st defendant not paid amount to the plaintiffs for development of lands and formation of layout in terms of the agreement. Thus the plaintiffs were forced to file proceeding in City Civil Court, Bengaluru in A.A.No.178/2008 to prevent the 1 st defendant from invoking bank guarantee. Despite of the court order restraining 1 st defendant from invoking bank guarantee, the 1st defendant have encashed and invoked bank guarantee by placing the plaintiffs to the financial hardship and not complied to the terms of the agreement.
5. The 1st defendant has filed A.A.No.506/2008 against the plaintiffs and terminated the agreement unilaterally which is illegal. There was breach of conditions of the contract by 1st defendant by not complying to the terms and conditions stipulated therein and there was delay in making payment for development of lands to the plaintiffs. Since there is unilateral termination of agreement by the 1 st defendant, plaintiffs are entitle for damages of Rs.10,00,00,000/ in terms of the agreement. Since there was dispute between plaintiffs and 1st defendant, the plaintiffs have invoked arbitral clause and sole Arbitrator was appointed with consent of both the sides and plaintiffs and 1st defendant have putforth their claim before the sole Arbitrator and after adducing evidence by both the sides sole Arbitrator has 34 CT 1390_Com.A.S.722015_Judgment .doc passed award on 11/3/2015 in Arbitration Case No.02/2009. As per the award passed by sole Arbitrator, the claim of plaintiffs herein was rejected and counter claim of 1 st defendant herein was partly allowed and directed the plaintiffs herein to pay sum of Rs.7,07,84,509/ along with interest @ 12% per annum to the 1st defendant.
6. Thus aggrieved by the said Arbitration Award of the sole Arbitrator, plaintiffs have filed present suit as provided U/S.34 of Arbitration & Conciliation Act on various grounds. Some of the main grounds are the award passed by the sole Arbitrator is contrary to the substantive provisions of law as provided under Arbitration & Conciliation Act 1996. The terms of contract entered into between plaintiffs and 1 st defendant is not considered by the sole Arbitrator while passing award. The award passed by the sole Arbitrator is liable to be set aside U/S.34(2)(a)(iv) of Arbitration & Conciliation Act 1996, since the award passed by the sole Arbitrator is opposed to the public policy. The Arbitral Award has to be set aside since the Arbitrator has decided the mortgage claim which is not capable of settlement in the arbitral proceeding. The award passed by the sole Arbitrator U/S.19 of Arbitration & Conciliation Act is not binding under the Indian Evidence Act. It is evident from the finding of Arbitrator that based on Section 91 to 93 of Evidence Act the finding have been given in deciding the matter between parties to the proceeding. The learned Arbitrator has failed to 34 CT 1390_Com.A.S.722015_Judgment .doc note the position of law as per the contract act. The learned Arbitrator has not appreciated oral evidence and documents of both the sides in the right prospective and committed material irregularity in passing such award and the award find patent irregularity in passing impugned award. The learned Arbitrator failed to note the breach of contract by the 1st defendant by not complying to the terms of contract. The award passed by the learned Arbitrator for refund of amount and penalty with interest is not sustainable. The learned Arbitrator has totally ignored the provisions and the conditions as provided under the agreement which are not complied by the 1st defendant herein. The award passed by the sole Arbitrator is opposed to the public policy and perverse and also contrary to the express terms and conditions stipulated in the contract of agreement. The rejection of claims of plaintiffs is opposed to the public policy and also to the terms and conditions stipulated in the contract agreement. Thus award passed by the sole Arbitrator is erroneous and illegal and contrary to the law and facts of the case on hand and it is liable to be set aside. Hence it is prayed to decree the suit as prayed for.
7. The brief averments of statement of objections filed by 1st defendant is that the present suit filed U/S.34 of Arbitration & Conciliation Act to set aside the award passed by the sole Arbitrator in AC No.2/2009 dated 11/3/2015 is not maintainable and it is liable to be dismissed. The present 34 CT 1390_Com.A.S.722015_Judgment .doc suit is not filed in accordance with Hon'ble High Court of Karnataka Arbitration (Proceedings before the Courts), Rule 2001. Hence absolutely there is no cause of action to file the present suit U/S.34 of Arbitration & Conciliation Act and it is deserves to be dismissed. The Arbitral Award passed by the sole Arbitrator is well reasoned order which cannot be set aside as claimed by the plaintiffs. Plaintiffs having realized that Arbitral Award suffers no such infirmities as provided U/S.34 of the Act has filed the present suit which is not maintainable. It is denied that the Arbitral Award is contrary to the substantive provisions of law and it is also denied that Arbitral Award has to be set aside as provided U/S.34(2)(a)(iv) of the Act. There is no such grounds mentioned in the present suit so as to enable this court to set aside the Arbitral Award. On going through the evidence and documents of both the sides the Arbitrator has disposed off the matter on merits and decided the matter in issue between parties to the suit in accordance with law. Hence the Arbitral Award cannot be set aside as claimed by plaintiffs.
8. Learned Arbitrator considering the facts of the case given finding on the basis of evidence adduced by both the sides relying upon the substantive law which is applicable to the facts of the case. The learned Arbitrator has declined to pass order of attachment of lands as prayed by the plaintiffs herein and considering the circumstances of the case rightly rejected the claim of plaintiffs which is sustainable. The learned 34 CT 1390_Com.A.S.722015_Judgment .doc Arbitrator has decided the matter in issue between parties to the suit relying upon the evidence adduced by both the parties to the suit and determined rules and procedures to be followed and rightly held that plaintiffs are not entitle for any reliefs. It is also denied that the Arbitrator has failed to refer some of the commentaries produced on behalf of the plaintiffs in deciding the matter in issue between parties to the suit. The finding of the sole Arbitrator that agreement are void for uncertainty is tenable and the said finding is sustainable. On applying the substantive law which is in time being in force, the finding of the sole Arbitrator to refund the amount to the 1st defendant by the plaintiffs is not contrary to the law and facts of the case on hand. The Arbitrator has relied upon Section 65 of the Indian Contract Act to direct the 1 st defendant herein to refund the amount to the plaintiffs is not opposed to the principles of law and documents discovered as void is sustainable. The award of learned Arbitrator discloses there is patent irregularity in holding the agreement executed between parties as void for uncertainty is not true. On going through the Arbitral Award the reasons assigned in disposing of the matter on merits cannot be questioned and plaintiffs have not made out sufficient grounds to challenge the award U/S.34 of Arbitration & Conciliation Act. Since the Arbitral Award is not opposed to the public policy or exceeding the limits of sole Arbitrator, the Arbitral Award cannot be considered as opposed to the public policy as provided U/S.34 of Arbitration & Conciliation Act. It is also contended 34 CT 1390_Com.A.S.722015_Judgment .doc that plaintiffs have not made out sufficient grounds to set aside the Arbitral Award when the sole Arbitrator has considered legal aspects and rejected all the claims of plaintiffs herein. Thus plaintiffs are not entitle for the reliefs as claimed in the present suit and suit of the plaintiffs is deserves to be dismissed.
9. Heard arguments of both the sides and perused the written arguments submitted on behalf of plaintiffs and defendant No.1.
10. The points that arise for consideration are:
1. Whether the plaintiffs made out sufficient grounds to set aside the Arbitral Award passed by the sole Arbitrator in AC No.02/2009 dated 11/03/2015 U/S.34 of Arbitration & Conciliation Act 1996?
2. What order?
11. My finding to the above points are as follows:
POINT No.1 : Negative.
POINT No.2 : As per final order for the following:
REASONS
12. POINT No.1 : The case of plaintiff is that plaintiffs are carrying on business of land development having necessary experience and financial ability for development of land. The defendant No.1 is registered society with an 34 CT 1390_Com.A.S.722015_Judgment .doc objective to form residential layout to provide sites to their members. The 1st defendant has advertised in daily newspapers expressing their intention to form residential layout with all amenities. Thus on 3/4/2006 the plaintiffs have expressed their intention to assist the 1 st defendant in formation of such layout. After deliberation the 1 st defendant was convinced about capacity and financial position to handle the project and the representative of 1 st defendant society visited the land near Samethanahalli and sought additional details from the plaintiffs vide their letter dated 20/04/2006. Thus plaintiffs have expressed their intention to develop the land for formation of layout at the cost of Rs.390/ per sq.ft and expressed their willingness to provide bank guarantee as per the meeting held between plaintiffs and 1st defendant on 13/05/2006. The representatives of 1st defendant society have requested the plaintiffs to provide details of land for formation of such layout in and around Nelamangala town. The lands available in and around Nelamangala town were shown to the representatives of 1st defendant society by the plaintiffs and plaintiffs have agreed to procure the lands and develop with all amenities for formation of layout at the cost of Rs.375/ per sq.ft in Kulipura village of Nelamangala taluk and Rs.390/ per sq.ft at Maththahalli village, Dasanapura Hobli, Bengaluru North Taluk and quoted the said price vide letter dated 15/05/2006. After due deliberation between plaintiffs and 1st defendant the rate per square feet of the developed land was fixed at Rs.360/ per sq.ft with all 34 CT 1390_Com.A.S.722015_Judgment .doc infrastructure and amenities and plaintiffs have agreed to form layout at Honnasandra and Maththahalli villages. Accordingly contract was entered into between plaintiffs and 1st defendant on 31/05/2006. The plaintiffs have agreed to the terms and conditions stipulated in the agreement and submitted letter to the 1st defendant on 08/06/2006 and both the plaintiffs and 1st defendant have agreed to abide by the conditions stipulated in the agreement. The plaintiffs have furnished bank guarantee of Rs.5,00,00,000/ in favour of 1 st defendant and for formation of such layout on negotiation and procurement of land and payment of advance to the farmers the bank guarantee of Rs.5,00,00,000/ was furnished in favour of 1st defendant by the plaintiffs and received advance consideration.
13. After entering into such agreement plaintiffs have to obtain BMRDA approval, conversion of land and procurement of land for formation of such layout. Further legal opinion was not received for considerable long time and there was delay in acquisition of land for formation of layout. On 24/04/2007 1st defendant has enquired the plaintiffs with regard to the status of project. For which plaintiffs have replied on 4/5/2007 explaining the action taken by them for acquisition of lands as per the agreement. Since the lands to be acquired are falling under Green Belt Area they could not able to develop the said lands. On 5/5/2007 the plaintiffs have brought to the notice of 1 st defendant about the 34 CT 1390_Com.A.S.722015_Judgment .doc opportunity of acquisition of land at Huskur village, about 250 acres of land at Pattanagere village which was inspected by the representatives of 1st defendant. On 10/05/2007 1st defendant realizing the difficulties of plaintiffs in formation of layout agreed to modify the location of project and inspected the land on 24/05/2007 and plaintiffs have furnished documents with regard to acquisition of lands which has to be examined by the legal advisors of 1 st defendant society. It was agreed between plaintiffs and 1st defendant to relocate the project at K.G.Srinivasapura and Bethathanagere villages of Bengaluru North Taluk and after due deliberation and acceptance by both the parties ultimately decided to form layout at Huskur village and since there was change in location of the project supplementary agreement was entered into between plaintiffs and 1st defendant on 16/07/2007 with additional conditions as narrated therein.
14. After execution of supplementary agreement between plaintiffs and 1st defendant, plaintiffs went ahead for procurement of land as per the discussion at Bethathanagere and K.G.Srinivasapura and invested huge sum of money for acquisition of lands in various survey numbers and 100 acres of land was to be acquired in phased manner by plaintiffs for formation of such layout. On 16/06/2007 plaintiffs have furnished sketch with regard to formation of layout to the 1st defendant society and requested to respond to the said sketch. But 1st defendant have not replied to the letter 34 CT 1390_Com.A.S.722015_Judgment .doc dated 11/06/2007 sent by plaintiffs and not granted legal clearance for acquisition of such lands. The delay of the 1 st defendant has caused inconvenience to the plaintiffs in completing the project. The plaintiffs have negotiated with the farmers for acquisition of lands and paid advance consideration. After one month the 1 st defendant has sought for additional documents from the plaintiffs which was furnished. The 1st defendant caused delay in payment for acquisition of lands and not furnished legal opinion for acquisition of lands. Thus plaintiffs have approached 1 st defendant and conveined meeting on many occasions till 9/8/2007. Since there was no response by the 1 st defendant, the plaintiffs have sent letter on 6/9/2007 requesting to furnish legal opinion with regard to acquisition of lands and finally plaintiffs got registered sale deeds with regard to the lands in Sy.Nos.153, 47/1 and 47/2 for formation of layout and the plaintiffs have invested more than Rs.4,00,00,000/ for the said project and plaintiffs have requested the 1 st defendant to pay Rs.30,69,673/ towards registration charges of the lands acquired. Anyhow the plaintiffs have acquired property worth Rs.12,00,00,000/ by incurring their personal amount and wrote letter to the 1st defendant on 14/12/2007 and again plaintiffs have acquired lands in some other survey numbers of K.G.Srinivasapura and Bethathanagere villages and paid consideration to the farmers and since there was no response with regard to release of amount by the 1 st defendant, plaintiffs went ahead with regard to development 34 CT 1390_Com.A.S.722015_Judgment .doc of lands acquired by digging borewell for providing water facility to the project. The 1 st defendant is liable to pay amount spent by plaintiffs for formation of layout as per the terms of agreement. Despite of several meetings held between plaintiffs and 1st defendant, 1st defendant not paid amount to the plaintiffs for development of lands and formation of layout in terms of the agreement. Thus the plaintiffs were forced to file proceeding in City Civil Court, Bengaluru in A.A.No.178/2008 to prevent the 1 st defendant from invoking bank guarantee. Despite of the court order restraining 1 st defendant from invoking bank guarantee, the 1st defendant have encashed and invoked bank guarantee by placing the plaintiffs to the financial hardship and not complied to the terms of the agreement.
15. The 1st defendant has filed A.A.No.506/2008 against the plaintiffs and terminated the agreement unilaterally which is illegal. There was breach of conditions of the contract by 1st defendant by not complying to the terms and conditions stipulated therein and there was delay in making payment for development of lands to the plaintiffs. Since there is unilateral termination of agreement by the 1 st defendant, plaintiffs are entitle for damages of Rs.10,00,00,000/ in terms of the agreement. Since there was dispute between plaintiffs and 1st defendant, the plaintiffs have invoked arbitral clause and sole Arbitrator was appointed with consent of both the sides and plaintiffs and 1st defendant have 34 CT 1390_Com.A.S.722015_Judgment .doc putforth their claim before the sole Arbitrator and after adducing evidence by both the sides sole Arbitrator has passed award on 11/3/2015 in Arbitration Case No.02/2009. As per the award passed by sole Arbitrator, the claim of plaintiffs herein was rejected and counter claim of 1 st defendant herein was partly allowed and directed the plaintiffs herein to pay sum of Rs.7,07,84,509/ along with interest @ 12% per annum. Aggrieved by the said Arbitral Award, present suit is filed by plaintiffs claiming that Arbitral Award is opposed to public policy as provided U/S.34 of Arbitration & Conciliation Act.
16. On going through the award passed by the sole Arbitrator and on hearing both the sides and on going through the evidence and documents produced, it is not in dispute that plaintiffs and 1st defendant have entered into agreement of procuring lands for formation of layout by 1 st defendant for allotment of sites to their members. It is also not in dispute that as per the agreement for procurement of lands by the plaintiffs, 1st defendant have paid sum of Rs.12,07,84,509/ on various dates and in pursuance of the supplemental agreement plaintiffs have acquired certain lands for formation of layout. But as per the terms of agreement, plaintiffs herein could not able to execute the contract of the 1st defendant and 1st defendant claimed damages of Rs.10,00,00,000/ for not concluded the contract by plaintiffs. Since there was dispute between both the 34 CT 1390_Com.A.S.722015_Judgment .doc plaintiffs and 1st defendant herein they have opted to resolve the dispute before the sole Arbitrator and both have putforth their claims before the sole Arbitrator and after adducing evidence by both the sides, sole Arbitrator has adjudicated the matter in AC No.02/2009 on 11/03/2015 and rejected the claim of plaintiffs herein and partially allowed the claim of 1st defendant herein and directed the plaintiffs herein to pay sum of Rs.7,07,84,509/ along with interest @ 12% per annum.
17. Aggrieved by the said Arbitral Award the plaintiffs have preferred present suit alleging that the Arbitral Award is opposed to the public policy as provided U/S.34 of Arbitration & Conciliation Act and also among other grounds which they have taken in the present suit. One of the main ground which the plaintiffs have submitted before this court is as per the terms of the agreement is "time was essence of the contract." But Arbitrator has not appreciated the same while passing Arbitral Award. But while arguing the learned counsel for 1st defendant herein has submitted that the sole Arbitrator has discussed the said matter in the Arbitral Award wherein the sole Arbitrator has specifically held that " it was not the case of 1st defendant herein that the contract time was essence of the contract." Hence the time was stipulated in the contract which is required to be strictly adhered by both the parties to the suit. Admittedly contract 34 CT 1390_Com.A.S.722015_Judgment .doc which was agreed between parties to the suit was expected to be performed within reasonable time from commencement of such contract. It was also held by learned Arbitrator that "it is well settled principles of law that in any contract surrounding by the rights or alienation of immovable properties time is not the essence of contact." Admittedly the 1st defendant herein also not canvassed before the sole Arbitrator that "time was essence of the contract." In this regard the decision relied upon by the plaintiffs herein before the sole Arbitrator in (2004) 8 SCC 689 which is the case of Smt. Swamam Ramachandran and another v/s Aravacode Chakungal Jayapalan was discussed and given a finding with regard to the essence of contract which was existed between parties in the present suit. Hence the contention taken by plaintiffs herein "time was not essence of the contract" and it was not appreciated by the sole Arbitrator cannot be taken into consideration. The learned Arbitrator also relied upon decision reported in (1993) 1 SCC 519 which is the case of Chand Rani v/s Kamal Rani wherein it was held that "in case of sale of immovable property there is no presumption as to time is the essence of contract and even if it is not the essence of contract court may infer that it is to be performed in reasonable time if the conditions are evident." The legal aspects with regard to time was not the essence of the contract was elaborately 34 CT 1390_Com.A.S.722015_Judgment .doc discussed by the sole Arbitrator and passed reasonable award which cannot be held as opposed to the public policy or contrary to the agreement alleged to have been executed between plaintiffs and 1st defendant.
18. It is also one of the ground of the plaintiffs herein that delay caused in completing the project is because of the 1st defendant herein. But same was not attributed against 1 st defendant by the sole Arbitrator and not considered the said aspect while passing such award. But while arguing the learned counsel for 1st defendant herein has submitted that while passing award sole Arbitrator has discussed in the said aspect and clearly held that there was inordinate delay in procurement of land by the plaintiffs herein for formation of layout. For which the contract was terminated and despite of payments made by 1st defendant herein in the regular intervals for procurement of lands as required in terms of the contract. Admittedly plaintiffs herein have failed to procure the lands. It is also held by sole Arbitrator that there was delay of 168 days in procuring legal clearance which cannot be attributable against 1st defendant herein and the time taken for obtaining opinion with regard to title of the property to be acquired by plaintiffs cannot be considered as delay caused by 1st defendant in furnishing legal opinion for acquisition of land. It was also held that even considering that the 1st defendant has taken time more than the reasonable time in procuring legal clearance cannot be 34 CT 1390_Com.A.S.722015_Judgment .doc equated to the achievement made by plaintiffs in procuring the lands for a period of one year. It is also observed by the sole Arbitrator that acquiring of lands of 20 acres it has taken one year time by the plaintiffs and there was balance of 80 acres to be acquired by the plaintiffs and due to inordinate delay in acquisition of land contract was terminated by the 1 st defendant. The delay aspect in completing the project is because of the plaintiffs which was held by the sole Arbitrator and not attributed against the 1st defendant herein. Even though it is contended by the plaintiffs herein that the delay caused in completing the project has to be attributed against 1st defendant and same was not considered by the sole Arbitrator cannot be considered as opposed to the public policy or exceeding the limits of sole Arbitrator in giving such finding.
19. It is further argued by learned counsel for 1 st defendant that the contract is void since there was no schedule mentioned to the main agreement which was marked as Ex.P.7 and there was no schedule mentioned to supplemental agreement as Ex.P.30. Since both the agreement and supplemental agreement as per Ex.P.7 and Ex.P.30 are not annexed with the schedule of the property which was proposed to be acquired by plaintiffs for formation of layout the said agreements are void and opposed to the provisions of Section 29 of Indian Contract Act. The said aspect was elaborately discussed by the sole Arbitrator and 34 CT 1390_Com.A.S.722015_Judgment .doc given valid finding and contention taken by the plaintiffs herein that contract is void for uncertainty and the said uncertainty could have been made certain which is not interpreted by sole Arbitrator in his finding cannot be taken into consideration. The contract is void and arbitration clause also does not survive and the contract between plaintiffs and 1st defendant as per Ex.P.7 and Ex.P.30 is not void for uncertainty and the said uncertainty could have been made certain by the finding of the sole Arbitrator cannot be taken into consideration. Since the sole Arbitrator has discussed with regard to Ex.P.7 and Ex.P.30 elaborately and given valid finding and held that due to non performance of contract by the plaintiffs the said contract was terminated by the 1st defendant and 1st defendant are entitled to recover the amount paid to plaintiffs along with interest which cannot be held as opposed to the public policy as provided U/S.34 of Arbitration & Conciliation Act.
20. It is also another ground of plaintiffs herein that the sole Arbitrator has held that the contract is void since schedule is not mentioned to the agreements Ex.P.7 and Ex.P.30 and the said finding of sole Arbitrator is opposed to the contractual obligation which was existed between plaintiffs and 1st defendant and with regard to the said aspect the learned Arbitrator has discussed elaborately and held that at the time of providing Ex.P.7 and Ex.P.30 legal assistance was taken by the plaintiffs and parties to the said agreement 34 CT 1390_Com.A.S.722015_Judgment .doc would have attached annexure to those agreements providing all particulars of lands offered for developers who are the plaintiffs herein for formation of layout and particulars of land to be acquired would have been furnished in the schedule to the agreements. Since they have failed to produce particulars of lands with the description of survey numbers village and extent of land to be acquired, it was held by learned Arbitrator that Ex.P.7 and E.P.30 are contrary to Section 92 and 93 of Indian Evidence Act and held that Ex.P.7 and Ex.P.30 are void for uncertainty due to non availability of particulars of land which has to be acquired and learned Arbitrator has rightly held that the agreements alleged to have been executed by plaintiffs and 1 st defendant as per Ex.P.7 and Ex.P.30 are void which cannot be considered as opposed to the public policy or contrary to the contractual obligation which was existed between parties to the present suit. It is also argued by learned counsel for plaintiffs herein that the sole Arbitrator has not considered the sketch which was handed over to the 1 st defendant herein with regard to acquisition of land for formation of layout. But the sole Arbitrator has elaborately discussed with regard to the said aspect and held that plaintiffs herein cannot be permitted to substitute the schedule in the agreement at the later stage when they have not able to furnish particulars of schedule to the agreement which is binding on both the parties. It is also held that at the time of execution of agreement and supplemental agreement the particulars of 34 CT 1390_Com.A.S.722015_Judgment .doc lands about 100 acres was not available with the plaintiffs and the schedule to the agreement was not mentioned. Thus it was held that the contract is void because of non furnishing of schedule to the agreements. These aspects have been elaborately discussed by the sole Arbitrator and given valid finding in deciding the matter in dispute between parties which cannot be held as opposed to the public policy or arbitrary as claimed by plaintiffs. It is also ground of the plaintiffs herein that the sole Arbitrator should have been given effect to the agreement and supplemental agreement rather than holding that the contract is void. These aspects have been elaborately discussed by the sole Arbitrator and given valid finding while passing award.
21. It is also one of the ground of the plaintiffs in the present suit that the restriction was only for the 1 st defendant and no restriction can be attributed against the plaintiffs herein. In this regard the learned Arbitrator has discussed elaborately and stated that for procurement of land by the plaintiffs, 1st defendant herein has paid Rs.12,07,84,509/ which does not stand to the benefit of the 1st defendant herein and in accordance with the sale deeds executed in favour of plaintiffs herein with respect to 12 acres land the plaintiffs herein have remained as lawful owners and the suit property is not devolved upon the 1st defendant herein. Even though suit properties are mortgaged in favour of 1 st defendant herein by plaintiffs through deposit of title deeds. Ownership of 34 CT 1390_Com.A.S.722015_Judgment .doc those lands vests with plaintiffs. It is also reiterated by the sole Arbitrator that the land which was acquired by the plaintiffs herein in the later part of 2007 or earlier to 2008 will stand to the benefit of plaintiffs only and by holding such lands plaintiffs herein will not be put under loss and continuous possession of the said land which was purchased in their names on behalf of the 1st defendant herein. It is also held that the escalation of prices of said lands between 6 to 7 years of procurement will be benefited to the plaintiffs alone. Thus it is held by the sole Arbitrator that the amount of Rs.12,07,84,509/ which is received by the plaintiffs has to be paid to the 1st defendant by deducting amount of Rs.5,00,00,000/ which was deposited in Vijaya Bank as per bank guarantee executed in favour of 1 st defendant by the plaintiffs and remaining amount of Rs.7,07,84,509/ which is ordered to be paid along with interest @ 12% per annum to the 1st defendant by the plaintiffs cannot be considered as opposed to the public policy or exceeding the limits of sole Arbitrator in deciding the matter in issue between both the parties to the suit.
22. It is also the ground of plaintiffs in the present suit to set aside the Arbitral Award that the calculation made with regard to acquisition of land should have been to the entire extent of land and not just for 55% which is the finding given by the sole Arbitrator in the award. In this regard the sole Arbitrator has discussed elaborately and given finding while 34 CT 1390_Com.A.S.722015_Judgment .doc discussing issue No.2 and payment schedule consisting of clause that the usable area shall be 23958 sq.ft calculated @55% per acre and the said calculation shall be based on usable area that is now not required for consideration, since the plaintiffs could not able to execute the contract as per the terms of agreement and supplemental agreement executed between them and the contract was terminated and there is finding of the sole Arbitrator that the lands acquired under various sale deeds in the name of plaintiffs enures the benefit of plaintiffs alone even though they have been mortgaged in favour of 1st defendant herein. Thus the plaintiffs can get the benefit of escalation of prices of those lands which was purchased between 6 to 7 years. Thus it was ordered to refund the entire amount which was received by the plaintiffs from the 1st defendant, since the contract was terminated which cannot be held as exceeding the limits of Arbitrator or contrary to the provisions of the agreement which was existed between parties to the suit. It is argued by learned counsel for plaintiffs that the agreement which was executed between parties to the suit is opposed to Section 79(A) & (B) of Land Reforms Act. But admittedly the land acquired under various sale deeds by the plaintiffs were registered in their names and the properties were mortgaged in the name of 1 st defendant as security by executing the mortgage deed by deposit of title deeds. As per the finding of the learned Arbitrator the delay in procuring the lands was attributed against plaintiffs herein and even though time was the essence of the contract 34 CT 1390_Com.A.S.722015_Judgment .doc plaintiffs have not performed their obligation under the contract within the time stipulated. Hence the contract was terminated in accordance with law and as per the finding of the Arbitrator the amount received by 1st defendant in sum of Rs.12,07,84,509/ has to be returned by plaintiffs to the 1 st defendant by deducting Rs.5,00,00,000/ which was forfeited under the bank guarantee along with interest from the date of award till realization. Whether the deposit of title deeds by the plaintiffs with the 1st defendant amounts to mortgage and it is opposed to the provisions of law was elaborately discussed by the learned Arbitrator and given valid finding. Hence the Arbitral Award cannot be held as opposed to the public policy or exceeding the limits of sole Arbitrator.
23. On going through the Arbitral Award passed by the sole Arbitrator it is pertinent to note that after concluding evidence of both the sides the sole Arbitrator has considered the claim of 1st defendant and rejected the claim of plaintiffs herein. It is admitted fact that the Arbitral Award can be set aside only on the ground specified U/S.34 of Arbitration & Conciliation Act and this court cannot examine the legality of award passed by the sole Arbitrator by going through the evidence and documents produced by the plaintiffs and 1 st defendant herein before the sole Arbitrator. If the finding given by the sole Arbitrator is opposed to the public policy or exceeding the limits of Arbitrator while passing such award as provided U/S.34 of Arbitration & Conciliation Act then only 34 CT 1390_Com.A.S.722015_Judgment .doc this court can set aside the same. On perusal of Arbitral Award there is no such patent irregularity or opposed to the justice or morality and award passed is unfair or unreasonable as contended by the plaintiffs.
24. While arguing learned counsel for plaintiffs has relied upon decisions reported in AIR 1953 SC 182 which is the case of Gaya Electric Company Limited v/s State of Bihar, (2000) 7 SCC 764 which is the case of E. Venkatakrishna v/s Indian Oil Corporation and another, (2014) 2 AIR Bompay R 196 which is the case of Mulheim Pipecoatings GmbH v/s Welspun Fintrade Limited and another. Learned counsel for 1st defendant also relied upon decisions reported in (2009) 1 AIR Kant R 29 which is the case of Fiza Developers & InterTrade Private Limited v/s AMCI (India) Private Limited, (2006) 11 SCC 181 which is the case of Mcdermott International Inc. v/s Burn Standard Co. Ltd. and others, (2011) 1 SCC 594 which is the case of P.R.Shah Shares and Stock Brokers Pvt. Ltd. v/s B.H.H Securities Private Limited and others, (2009) 10 SCC 259 which is the case of SOM Datt Builders Limited v/s State of Kerala, (2004) 5 SCC 109 which is the case of Bharat Coking Coal Limited v/s L.K.Ahuja, (2011) 5 SCC 758 which is the case of J.G.Engineers Private Limited v/s Union of India and another, 34 CT 1390_Com.A.S.722015_Judgment .doc (2015) 3 SCC 49 which is the case of Associate Builders v/s Delhi Development Authority, (2015) 1 AIR Kant R 710 which is the case of BWSSB v/s C.N.Krishnamurthy, 2019 SCC Online SC 1656 which is the case of Dyna Technologies Pvt. Ltd v/s Crompton Greave Limited, (2002) 4 Kant LJ 1 which is the case of Lexicon Finance Limited v/s Union of India, (2007) 6 Kant LJ 564 which is the case of Compact Griha Nirman v/s Kusum Alloys Limited and others, (2007) 5 SCC 692 which is the case of National Agricultural Coop. Marketing Federation India Ltd v/s Gains Trading Limited, (1974) 2 SCC 533 which is the case of Kuju Collieries Limited v/s Jharkhand Mines Limited and others, (2008) 5 SCC 58 which is the case of Vimlsh Kumari Kulshrestha v/s Sambhajirao and another. I have gone through the principles laid down in the said decisions which are not applicable to the present facts and circumstances of this case. The Arbitrator has considered the evidence of both the sides in the right prospective and passed an award which cannot be held as erroneous as contended by the plaintiffs.
25. It is also argued by learned counsel for plaintiffs that the Arbitral Award passed shall be final as contemplated under Arbitration & Conciliation Act. But the present award passed by sole Arbitrator is preliminary in nature which 34 CT 1390_Com.A.S.722015_Judgment .doc cannot be held as final adjudication of the dispute between parties to the proceeding. But on perusal of the Arbitral Award the sole Arbitrator has considered the evidence of both the sides and on going through the documents produced suitable award was passed in accordance with law which cannot be considered as preliminary in nature as contended by learned counsel for plaintiffs. It is admitted fact that the Arbitral Award can be set aside only on the grounds specified U/S.34 of Arbitration & Conciliation Act and this court cannot examine legality of award passed by sole Arbitrator by going through the evidence and documents produced before the sole Arbitrator by plaintiffs and defendant No.1. If the finding given by sole Arbitrator is opposed to the public policy or exceeding the limits of Arbitrator while passing such award as provided U/S.34 of Arbitration & Conciliation Act, then only this court can set aside the same. On perusal of Arbitral Award there is no such patent irregularity or opposed to the justice or morality and award passed is unfair or unreasonable as contended by the plaintiffs.
26. In view of the above said discussions, I am of the opinion that the plaintiffs have not at all made out any cogent case that the impugned Arbitral Award is opposed to the public policy and Arbitrator has exceeded his limits in passing such award. Further the plaintiff has not at all made out any cogent grounds to set aside the Arbitral Award and no grounds made out to show that the learned Arbitrator is 34 CT 1390_Com.A.S.722015_Judgment .doc perverse, unfair and unreasonable in passing such award. The plaintiffs have utterly failed to prove and establish that award passed by the sole Arbitrator falls within any of the provisions prescribed U/S.34 of Arbitration & Conciliation Act 1996. On the other hand in arguments of plaintiffs side and materials placed before this court it clearly discloses that the 1st defendant are not entitled for the counter claim which they putforth before the sole Arbitrator. Thus the present suit is deserves to be dismissed. Accordingly, I hold point No.1 as negative.
27. POINT No.2 : In view of my discussion on point No.1 above, I proceed to pass following:
ORDER The suit filed by the plaintiffs U/S.34 of Arbitration & Conciliation Act 1996 is hereby dismissed.
In view of the circumstances of this case, the parties are directed to bear their own costs.
Draw decree accordingly.
[Dictated to the Judgment Writer; transcript thereof corrected, initialed and then pronounced by me, in the Open Court on this the 17th day of November 2020] [N. Sunil Kumar Singh] LXXXIII Additional City Civil Judge.
BENGALURU.