Bangalore District Court
Smt. G.Ramadevi vs Smt. J.P.Lakshmi Devi on 10 August, 2021
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH84]
:Present:
Ravindra Hegde,
M.A., LL.M.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this the 10th day of August 2021
COM.A.P.No.06/2020
Petitioner Smt. G.Ramadevi,
W/o late B.M.Vishwanath,
aged about 63 years,
R/at No.60, Blackberry Valley Crecent,
Caledon, Ontario, Canada17C 3Z9
(By Sri.Bhanu Kumar, Advocate)
// versus //
Respondent Smt. J.P.Lakshmi Devi,
W/o Mr. V.N.Arun Kumar,
aged about 37 years,
R/at No.299, 17th Main Road,
4th 'T' Block, Jayanagar,
Bengaluru560041.
(By Sri.B.M.Arun, Advocate)
Date of Institution of the suit : 13/01/2020
Nature of the suit : Arbitration Suit
Date of commencement of :
recording of the evidence
2
CT 1390_Com.A.P.62020_Judgment .doc
Date on which the Judgment : 10/08/2021
was pronounced.
: Year/s Month/s Day/s
Total duration
01 06 28
JUDGMENT
This petition U/S.34 of the Arbitration & Conciliation Act 1996 is filed by the petitioner, praying to set aside the award passed by the learned Arbitrator in AC No.113/2018 on 23/10/2019 for the dispute between the petitioner and respondent and praying to direct the respondent to handover the legal share of the petitioner in the schedule property and on failure, direct the respondent to restore the possession of land to the petitioner.
2. The petitioner and respondent were the claimant and respondent respectively before the learned Arbitrator.
3. The facts of the case in brief as per the petition is as under:
The petitioner was allotted site bearing No.999B, measuring 1382 sq.ft in Vijaya Bank Employees Housing Cooperative Society Limited layout is situated at Bilekahalli village, Begur Hobli and the petitioner was in possession of the property. On 26/11/2007 petitioner and respondent entered into JDA for development of the property. As per this development agreement, petitioner was to transfer 60% of the undivided share and interest in the land and 60% super built 3 CT 1390_Com.A.P.62020_Judgment .doc up area being the entire ground and the first floors in the building to be constructed and 370 sq.ft space in the basement to the respondent and to retain 40% of the undivided share and interest in the land and 40% in super built up area of the apartment with 950 sq.ft along with 390 sq.ft space in the basement. The entire rights over the terrace area belonging to the petitioner. This agreement which was not registered was providing arbitration clause. On the same day parties have entered into sharing agreement, as per which second floor of 950 sq.ft of the building and 390 sq.ft in the basement and the terrace was given to the petitioner and ground and first floors in the building including 390 sq.ft in the basement were given to the respondent. ****Thereafter on 17/7/2008 parties have entered into registered JDA, in which all the terms and conditions of the previous JDA and even sharing agreement were incorporated. On the same day the claimant executed registered Power of Attorney in favour of the respondent. Since the petitioner and her family had relocated outside India from 2000, she could not personally supervise the development and she relied on representation made by the respondent. The petitioner found out that the respondent has not paid the property tax pertaining to her share leading to huge outstanding encumbrance on the property and the petitioner has paid Rs.4 lakhs towards the property tax and respondent is liable to pay portion of it covered by her share. The petitioner also found that the respondent has blocked the access to the terrace area by 4 CT 1390_Com.A.P.62020_Judgment .doc building a structure around it, even though the entire terrace area belongs to the petitioner. Petitioner came to know about the discrepancies with respect to her share of the property in January 2015 when she was looking for prospective buyers. She has brought this to the notice of the respondent. Since respondent did not allocate the stipulated share to petitioner, as per the JDA, petitioner gave legal notice on 24/11/2017 and requested the respondent to come forward to resolve the dispute by way of arbitration as per clause 13 of the JDA dated 17/7/2008. On account of the illegal encroachments and denial of access to her share of the property, the petitioner was compelled to initiate arbitration. The petitioner approached Hon'ble High Court in CMP 35/2018 and the Hon'ble High Court appointed sole Arbitrator to resolve the dispute between the parties. Before the learned Arbitrator, the petitioner has submitted claim petition seeking different reliefs. Petitioner prayed to direct the respondent to handover share of the petitioner in the schedule property as agreed in JDA of 2008 and to pay damages for unlawful use of petitioner's share with interest, directing the respondent to remove structure and hoardings in the terrace area and the second floor of the building and to restrain the respondent from interfering with the peaceful possession of the petitioner's share and directing the respondent to pay outstanding due of the property tax amounting to Rs.4 lakhs with interest and also seeking compensation of Rs.10 lakhs towards damages for breach of contract and causing mental 5 CT 1390_Com.A.P.62020_Judgment .doc agony and other reliefs. Before the learned Arbitrator the respondent appeared and filed statement of objection. Thereafter issues were framed and evidence was also recorded. The petitioner gave evidence and produced documents. The respondent has not given any evidence and documents were marked for the respondent in the cross examination of PW.1.
4. Subsequent to filing of the claim petition, the petitioner obtained copy of sanction plan from BBMP on 17/1/2019 and by filing application produced the same before the learned Arbitrator and the same is marked as Ex.P.30. In the sanction plan there was no basement provided. However, in the construction there was basement. As per the JDA executed between the parties, the respondent was required to develop the property after taking prior approval from the competent authority i.e. BBMP and in accordance with the sanction plan of BBMP. After obtaining copy of sanction plan, the petitioner came to know that the construction is against the sanction plan. Therefore, claimant by filing application got amended the claim petition. Thereafter on the application filed by the petitioner, a Court Commissioner was appointed to make spot inspection and to find out whether measurement of the share of the parties is the same as measurement agreed upon in the JDA dated 17/7/2018 and to report as to whether the schedule premises is constructed in accordance with the approved sanction plan 6 CT 1390_Com.A.P.62020_Judgment .doc of BBMP. The Court Commissioner visited the spot and has submitted the Commissioner Report and has noted that the construction is not as per sanction plan and there is deviation of nearly 30%. The Court Commissioner was also examined before the learned Arbitrator and was cross examined. Thereafter, the learned Arbitrator has passed the impugned award. In the award the prayer of the petitioner to direct the respondent to handover share of the petitioner in the schedule property and directing the respondent to pay damages for unlawful use of the petitioner's share and interest thereon and directing the respondent to remove structure and hoardings in the terrace area and second floor of the building and directing the respondent to pay Rs.10 lakhs towards damages for breach of contract and causing mental agony are rejected. The learned Arbitrator has directed the respondent to construct further flight of staircase to enable the petitioner to reach and utilize terrace within 3 months from the date of award, failing which permitting the petitioner to construct the same at her cost and to recover the same from the respondent. The respondent is also directed to pay Rs.2,44,000/ with interest @12% per annum to the petitioner from the date of petition till payment of entire amount and directed the parties to bear their own costs.
5. Being aggrieved by this award of the learned Arbitrator, the claimant who is the petitioner in this case has filed the present petition under Section 34 of the Arbitration 7 CT 1390_Com.A.P.62020_Judgment .doc & Conciliation Act and prayed to set aside the award on various grounds. The petitioner has contended that the Arbitral Tribunal has committed illegality in passing the impugned orders in complete violation of the principles of natural justice and the conduct and the haste occasioned by the Arbitral Tribunal suggests misconduct on part of the Arbitral Tribunal and the award is in violation of public policy and the tribunal has exceeded its jurisdiction. It is contended that the learned Arbitrator has failed to appreciate the terms of the JDA requiring respondent to construct the apartment after obtaining license for construction as per sanction plan of BBMP and has failed to notice that the respondent without obtaining license i.e. commencement certificate constructed the building in violation and deviation of the sanction plan, rendering the property as an illegal and bad property which cannot be alienated or sold by the petitioner. It is also contended that the learned Arbitrator has failed to appreciate that the respondent has not approached the court with clean hands and is guilty of suppression of vital material facts and has not stated that the building was not constructed as per the sanction plan and he has concealed from the petitioner about construction against the sanction plan, which is an act of misrepresentation and fraud on the part of the respondent and the fraud vitiates everything. It is also contended that the learned Arbitrator has failed to appreciate that the Commissioner inspected the construction site and has reported that the construction done is in utter violation of the 8 CT 1390_Com.A.P.62020_Judgment .doc sanction plan and that construction need to be regularized by the respondent as per relevant provisions of the BBMP after paying prescribed fee and getting modified sanction plan. It is also contended that the learned Arbitrator has failed to appreciate that in the sanction plan it was clearly mentioned that laying of foundation concrete and column should commence only after obtaining commencement certificate from the BBMP and BBMP has informed that commencement certificate is not issued and therefore the construction is illegal. It is contended that the learned Arbitrator has failed to appreciate that the evidence of the Court Commissioner showing that the construction is completely against the sanction plan is not appreciated by the learned Arbitrator. It is contended that the learned Arbitrator has also failed to appreciate that the deviation from the sanction plan is more than 30% and deviation of only about 5% would be regularized and therefore, there is not even chance of regularizing of the construction made by deviating from the sanction plan. It is contended that the learned Arbitrator has failed to appreciate that inspite of order obtained from the court in Arbitration Application on 6/8/2009, respondent continued with putting structure, sign boards, hoardings etc in terrace which is contempt. It is also contended that an application was filed seeking adjournment for extension of time, so that the respondent may take steps to regularize the construction by the BBMP, but it was rejected by the learned Arbitrator. It is also contended that the learned Arbitrator 9 CT 1390_Com.A.P.62020_Judgment .doc has failed to appreciate that the sharing agreement on the basis of which the cross examination of PW.1 was done is only a sketch map without any authentication by competent authority and relying on this sharing agreement by the learned Arbitrator is not correct. It is also contended that the ground of estoppel/waiver taken by the respondent is also wholly misconceived and the learned Arbitrator has failed to note that there is no estoppel against the statute and as per the building bye laws which is having statutory force construction is to be made as per sanction plan and if the contention of respondent is allowed it will amount to perpetuating illegality. It is also contended that the learned Arbitrator has failed to appreciate that as on date the construction in question is wholly illegal and it cannot be clothed with legal sanctity till violation are correct and there can be no allocation of respective shares and issue of an illegal property cannot be adjudicated upon and shares cannot be allocated dehors, the statutory provisions. It is contended that the learned Arbitrator has failed to note that if the respondent has failed to get the property regularize, the petitioner is entitled to restoration of land with exemplary damages at the market rate. It is stated that the finding given by the learned Arbitrator is wholly perverse and contrary to the material records i.e. sanction plan. It is stated that the respondent while signing the JDA on 17/7/2008 was knowing that sanction plan dated 4/4/2008 was obtained, but he did not amend the clause of the said JDA by deleting 10 CT 1390_Com.A.P.62020_Judgment .doc provision of basement and providing for ground floor with parking by misrepresenting and playing fraud upon the petitioner. It is stated that the finding of the learned Arbitrator that inspite of knowing the sanction plan dated 4/4/2008 petitioner gave consent and executed the registered JDA on 17/7/2008 which is in violation of the sanction plan is totally perverse. It is contended that the learned Arbitrator has failed to appreciate that the signature of the petitioner is not found in sanction plan and petitioner was not aware of the same. Petitioner contended that the observation of the learned Arbitrator that sharing agreement on 26/11/2007 is a concluded contract and now the petitioner cannot complain that the building was constructed in contravention of the sanction plan, as, sanction plan is subsequent to the sharing agreement and sharing agreement looses its legal sanctity to the extent it contravenes the sanction plan. It is contended that the finding of the learned arbitrator that principle of estoppel operates against petitioner is against the public policy of India as mentioned in Section 34(2)(b)(i) & (ii) of the Arbitration & Conciliation Act, as there would be no estoppel against statute. It is also contended that the observation of the learned Arbitrator that by taking possession of her share, petitioner disentitled herself from claiming the relief is wholly perverse, because once the construction is in flagrant violation of the sanction plan, merely taking possession of the share by the petitioner in bonafide belief that the construction was in accordance with sanction plan cannot deprive the 11 CT 1390_Com.A.P.62020_Judgment .doc petitioner from her claims. It is stated that the entire order is illegal being arbitrary and discriminatory and suggests misconduct on part of the Arbitral Tribunal. It is also stated that in view of these factual and legal grounds the impugned award is a nullity and void in the eye of law having no legal sanctity and incapable of implementation. On all these grounds the arbitration award is prayed to be set aside.
6. The respondent appeared through counsel, but has not filed any statement of objection. Arbitration records are secured.
7. Now the points that arise for consideration of this court are:
1) Whether the petitioner has made out any ground to set aside the arbitral award in AC No. 113/2018, passed in the dispute between the petitioner and respondent on 23/10/2019, under Section 34 of the Arbitration & Conciliation Act?
2) What order?
8. Heard Arguments of both counsels through Video conference. Sri Bhanu Kumar learned counsel, assisted by Sri Bharat Kumar Advocate addressed arguments for petitioner. Sri B. M. Arun learned counsel addressed arguments for the Respondent. Counsel for petitioner filed written arguments also. Perused the records.
9. My answer to the above points are :
POINT No.1 : In the Negative.
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POINT No.2 : As per final order for the following:
REASONS
10. POINT No.1 : Present petition is filed challenging the award passed by the learned Arbitrator in AC No.113/2018 on 23/10/2019. By this award the learned Arbitrator had rejected some of the prayer of the petitioner and had also granted certain reliefs and directed Respondent to pay Rs.2,44,000/ with interest towards the property tax and also directed the respondent to construct further flight of staircase within 3 months. These two reliefs granted by the learned Arbitrator are in favour of the petitioner. The other reliefs like handing over of the share of the petitioner in terms of JDA, awarding of damages etc are rejected by the learned Arbitrator. However, in the present petition, petitioner is not challenging portion of the award, but is contending that entire award is bad in law and is opposed to public policy and is liable to be set aside. The respondent has not filed any statement of objection.
11. The jurisdiction of the court to set aside an arbitral award is limited to the ground set out in Section 34 of the Arbitration & Conciliation Act 1996. Even if a contrary view based on the facts before the Arbitral Tribunal is possible, in the absence of any compelling reasons, court cannot interfere with the view taken by the learned Arbitral Tribunal, as if, it is sitting in appeal over the award of the Tribunal. Grounds on which the award of the Tribunal can be 13 CT 1390_Com.A.P.62020_Judgment .doc set aside by this court is clearly mentioned in Section 34(2) and 34(2A) of the Arbitration & Conciliation Act and these grounds are also elaborated by the Hon'ble Supreme Court in various decisions including Associate Builders v/s Delhi Development Authority. Since any of the grounds mentioned in Section 34(2)(a) and 34(2)(b)(i) of the Act are not urged, challenge to the present award of the Arbitral Tribunal would be under Section 34(2)(b)(ii) and 34(2A) of the Act. Award could be set aside if it is against public policy of India or is patently illegal. Under the head of Public Policy of India, Fundamental Policy of Indian Law, Interest of India, justice or morality are included. It is also well established principle that the court sitting U/S.34 of the Act is not supposed to go for reappreciation of evidence or impose its view as against the view of learned Arbitral Tribunal and the power of the court is only to set aside the award, if it is coming under one of the grounds mentioned in the said section. In the presence of these basic principles, grounds urged by the petitioner and the award of the learned Arbitral Tribunal are to be looked into.
12. The learned counsel for the petitioner has vehemently argued that the award of the learned Arbitrator is against the basic notion of morality or justice and is perverse and is against the public policy and the learned Arbitrator has failed to note that the respondent has committed fraud on the petitioner. The learned counsel has also submitted 14 CT 1390_Com.A.P.62020_Judgment .doc that as per the agreement entered into between the parties, respondent was required to obtain sanction plan and was to make construction only as per the sanction plan and unauthorized and illegal construction by the respondent was not acceptable to the petitioner and the petitioner who was out of India from the year 2000 was not aware that the construction made by the respondent is in violation of the sanction plan. The learned counsel has also argued that commencement certificate was not obtained by the respondent, which is mandatory as per JDA and also sanction plan and these aspects are not properly considered by the learned Arbitrator. The learned counsel has also argued that the construction should be as per the building byelaws and provisions of KMC Act and for of the construction in violation of the building byelaws even the building may be demolished by the authorities and there is no estoppel against the statute. It is argued that these vital aspects are not properly appreciated by the learned Arbitrator and it has resulted in an award, which is against the basic notion of morality and justice. The learned counsel has also argued that even Commissioner's Report show that the construction is against the sanction plan and the deviation is more than 60% and even the construction cannot be regularized by paying any penalty as per byelaw. The learned counsel has also argued that Ex.R.2 to R.5 which is part of sharing agreement dated 26/11/2007 is a document executed prior to sanction plan on 4/4/2008 and the sharing 15 CT 1390_Com.A.P.62020_Judgment .doc agreement which is against the sanction plan has no legal sanctity, but the learned Arbitrator has relied on the sharing agreement and held that the claimant had agreed to take particular portion though construction is against the sanction plan. The learned counsel has also argued that Respondent has committed fraud on the petitioner and when there is an element of fraud arbitrator cannot decide such dispute. On all these grounds, the learned counsel has prayed to set aside the arbitral award.
13. On the other side, the learned counsel for the respondent has argued that as mentioned in clause 3 of Ex.P.1JDA, sanction plan was already obtained and Ex.P.30 show that sanction plan was obtained on 4/4/2008 and Ex.P.1 is dated 17/7/2008 and while entering into JDA both the petitioner and respondent were aware and have seen the sanction plan and still they have entered into such development agreement and as such the petitioner cannot now put the entire blame on the respondent and Petitioner is estopped from contending against Ex.P.1 now and this is properly considered by the learned Arbitrator. It is also argued that as admitted by the petitioner, possession of the constructed building was taken in 2009 and petitioner had rented her portion to the tenants and now after nearly 10 years the petitioner has made a false claim by initiating arbitration and the same was rightly rejected. The learned counsel has also referred to the evidence and even answers 16 CT 1390_Com.A.P.62020_Judgment .doc given to the questionnaire put to the PW.1 which is even shown in the Arbitral Award. Learned counsel has also argued that the construction of the building is with consent of the petitioner and the same is considered by the learned Arbitrator. It is also argued that the decision on facts cannot be challenged and the award is well considered award. The learned counsel has also argued that though the respondent has not lead any evidence, as entire burden is on the petitioner this do not affect the merits of the case. The learned counsel has also argued that scope of interference by the court in the award is very limited and there are no ground to interfere with the award passed by the learned Arbitrator.
14. On looking to the contention of the parties and the award, the admitted facts are that the petitioner is the owner of the schedule property and the petitioner and respondent had entered into unregistered JDA on 26/11/2007 and on the same day the sharing agreement was also entered into between them. It is also not in dispute that as per the said JDA and sharing agreement, 60% of the undivided share and super built up area belong to respondent/developer and 40% belong to petitioner/owner. In the JDA and sharing agreement how the construction should come up is also appearing i.e. the basement and three floors and the parking is agreed to be provided in the basement. Though this JDA dated 26/11/2007 is not produced as Exhibit before learned Arbitrator, contentions of the parties show such conditions 17 CT 1390_Com.A.P.62020_Judgment .doc existing in the JDA and the sharing agreement also provides for it. The sharing agreement and drawing annexed to it are marked as Ex.R.1 to 5 by confronting to PW.1. Ex.R1, show that the owner i.e. the petitioner is to be allotted entire second floor in the building to be constructed including 390 sq.ft in the basement and builder/respondent is to be allotted entire ground and first floor in the building to be constructed including 370 sq.ft in the basement. Ex.R.2 to R.5 show drawings and measurements of these portions. As per Ex.R.1, the construction is of basement, ground floor, first floor and second floor and in the basement there would be parking, ground and first floor goes to the respondent and second floor goes to the owner and even petitioner is said to be entitle for terrace. With this understanding the JDA and sharing agreement were executed between the parties on 24/11/2007. After the JDA which was unregistered, admittedly, another registered JDA was executed on 17/7/2008 as per Ex.P.1. Along with this, GPA also executed by the petitioner in favour of the respondent as per Ex.P.2. It is stated by the petitioner that Ex.P.1 contains same terms as appearing in JDA dated 26/11/2007.
15. On looking to this JDAEx.P.1, it is in normal format and contains usual recitals as generally found in all JDA's. However, the learned counsel for the respondent is relying on clause 3 which reads as under:
" The Second Party/Builder has obtained sanction plan for construction of residential apartment 18 CT 1390_Com.A.P.62020_Judgment .doc building from the Bruhat Bengaluru Mahanagara Palike. The responsibility and expenses for preparing and obtaining necessary licenses and sanctioned plan has been borne by the second party/ builder."
16. This clause is special clause, as it means that sanction plan is obtained before executing of Ex.P.1. Though in other parts of the agreement which is, incorporation of standard format, it is appearing that the parties shall execute sharing agreement and the developer shall obtain required license, sanction plan etc, this clause 3 clearly states that the sanction plan is already obtained and the expenses are borne by the respondent. It is not the case of the petitioner that without knowing the terms of the JDA, she has put her signature to the JDA. Ex.P.30 is the sanction plan. This document, according to the petitioner came to her knowledge very recently after filing of the claim petition before the learned Arbitrator and thereafter she has obtained the same by making application to the BBMP under RTI and has even amended the claim petition after coming to know that the entire construction which has come up in the schedule property is illegal construction and is against the sanction plan. Ex.P.30 sanction plan show that this sanction plan is obtained on 4/4/2008. As rightly submitted by the learned senior counsel for the petitioner, the owner's signature is not appearing in the sanction plan and the place is kept blank. However, the signature of the respondent is appearing as 19 CT 1390_Com.A.P.62020_Judgment .doc Power of Attorney Holder. This sanction plan for construction of a residential building, do not contain any basement, but provides for ground floor, first floor and second floor. Ex.R.1 sharing agreement provides for sharing between the parties in the building having basement, ground, first and second floors. Entire basement appearing in Ex.R.1 and Ex.P.1, is missing in Ex.P.30. In Ex.P.1, it is clearly mentioned in clause 1.1 that entire second floor in the building to be constructed in the 'A' schedule property and 390 sq.ft space in the basement will fall to the share of the owner and entire ground floor and first floor with 370 sq.ft space in the basement shall go to the respondent/developer. Therefore, this Ex.P.1 JDA contains clause similar to sharing agreement Ex.R.1. However as on the date of executing Ex.P.1, the sanction plan was already obtained as per Ex.P.30 for ground, first and second floor and there was no sanction for basement at all.
17. The petitioner has contended that the petitioner had not seen the sanction plan and was not aware of it and believed that the respondent, who is even the relative of the petitioner, will make construction as per law by obtaining commencement certificate and in terms of sanction plan. However, the JDA itself is against the sanction plan as it contains basement, ground, first and second floors as against sanction plan, which do not contain basement. Sanction plan was obtained on 4/4/2008 and registered JDA was executed 20 CT 1390_Com.A.P.62020_Judgment .doc on 17/11/2008 and in this JDA, there is reference to sanction plan being already obtained, in clause 3.
18. Even while filing the claim petition before the learned Arbitrator, the claim of the petitioner was not against any illegal construction, her claim was regarding giving her proper share in the building and allegation about the respondent encroaching the terrace floor and keeping hoardings and not providing steps and block the terrace etc and also non payment of property tax. During pendency of the petition before the learned Arbitrator by producing Ex.P.30, the petitioner has amended the claim petition and contended that at the time of filing the claim petition, she was not aware that the construction made by the respondent is against the sanction plan. However, as stated above Ex.P.1 and Ex.R.1 show as to how the parties have agreed for making construction and to share the constructed portion among themselves. It is nowhere contended by the petitioner that without knowing the contents of Ex.P.1 she has participated in execution of Ex.P.1. The parties have signed and executed Ex.P.1 by knowing the contents. Since, Ex.P.1 contains clause 3 about sanction plan already obtained, petitioner now cannot contend that she came to know about the sanction plan only recently after filing of claim petition before the learned Arbitrator. Apart from this, Ex.P.2, GPA executed by the petitioner to the respondent is on 17/11/2008. If the GPA dated 17/11/2008 is the only GPA 21 CT 1390_Com.A.P.62020_Judgment .doc executed by the petitioner to the respondent, how the Respondent could approach the BBMP for obtaining sanction plan dated 4/4/2018, is also not stated by the petitioner. As rightly shown by the learned counsel for the petitioner Ex.P.30 do not contain signature of petitioner, but contains signature of respondent as power of attorney holder. It is not the case of the petitioner that the sanction plan is illegal or is illegally obtained. Petitioner do not dispute this sanction plan. This makes it clear that respondent was having GPA of petitioner even before 4/4/2018, but petitioner do not refer to the same. Hence, only because signatures of the petitioner is not appearing in Ex.P.30, it cannot be held that the petitioner was not aware of the sanction plan till recently. In view of specific clause 3 in Ex.P.1 and as the petitioner is the owner and sanction plan could be obtained only by petitioner or person authorized by her, petitioner cannot now contend that she came to know about sanction plan of 2008 only in 2019.
19. Inspite of the sanction plan being obtained for ground, first and second floor, the parties have entered into JDA for construction of the building containing even basement and provided for sharing of the basement and other part of the construction, between them in the ratio of 40:60%. Though as rightly argued by the learned counsel for the petitioner, Ex.R.1 executed before Ex.P.30 cannot be seen as, irrespective of whatever sharing agreement entered between the parties, it is the authority which sanctions plan for 22 CT 1390_Com.A.P.62020_Judgment .doc construction and the construction should proceed as per the said plan and based on the sanction plan, further sharing agreement could be executed in normal course. However, in the present case, after sharing agreement, sanction plan was obtained on 4/4/2008 and thereafter, registered JDA was executed in which the contents of sharing agreement is shown as it is and thereby the parties have decided to proceed with the construction by having a basement, ground, first and second floor which was not even sanctioned by the competent authority. Therefore, Ex.P.1 show that the parties have decided to proceed against the sanction plan and proceeded with the construction and shared the construction made in violation of sanction plan. As such the petitioner cannot now contend that she is not party to the illegal construction and she would not be liable for the consequences thereof.
20. Since there is no evidence placed before the learned Arbitrator to show that without the knowledge of the petitioner, respondent has made construction in violation of the sanction plan, the learned Arbitrator has rightly held that the petitioner was aware and inspite of knowledge. has agreed for such construction and now she cannot blame the respondent. In view of the discussion made above, this finding of the learned Arbitrator cannot be held to be illegal or against the basic principles of morality or justice.
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21. Apart from this, as admitted by the petitioner in the claim petition and also in her evidence, she has taken possession of the building in 2009. The petitioner has admitted that she had given her portion in the second floor on rent to the tenant. Even an agreement with the tenant is produced as Ex.P.27 by the petitioner. Even in her evidence given before the learned Arbitrator, the petitioner has admitted that she has given the premises on rent. Therefore, the petitioner is in possession of the second floor and the portion of the basement in the building constructed in violation of sanction plan and constructed as mentioned in the JDA and the sharing agreement. After about 10 years, petitioner is disputing the construction itself on the ground that it is in violation of the sanction plan. Since construction is as per JDA, though not as per sanction plan, petitioner cannot dispute this construction, that too after 10 years. Before the learned Arbitrator, the petitioner had contended that as the construction made by the respondent is against the sanction plan and against the byelaws of the BBMP and even against the provisions of Karnataka Municipal Corporations Act, the petitioner not taking action from 2009 till 2019 will not come in the way of petitioner taking action now, as there is no estoppel against statute. It is argued by the learned counsel for the petitioner that finding of the learned Arbitrator about estoppel and waiver against the petitioner is not proper.
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22. The Court Commissioner was appointed and he has also noted the measurement and found that the construction is against the approved sanction plan and found that it is more than 30% and has opined that normally deviation upto 5% only would be regularized. On this basis, it is argued that when deviation is such that it may not be even regularized as per the law by the BBMP, the petitioner cannot be made to suffer the consequences of construction made by the respondent in violation of the sanction plan. Even for this the learned Arbitrator has held in the award that as the petitioner was aware of the sanction plan obtained and still JDA was entered for making construction, not in agreement with the sanction plan, then the respondent cannot agitate the said point. Even in the answers given to the questionnaire given by the respondent, the petitioner has stated that she did not raise any objection at the time of construction with bonafide impression that the construction of the building is being done in accordance with the sanction plan. Even PW.1 has admitted that as the construction was as per the drawing given in Ex.R.2 to Ex.R.5 she had no objection. PW.1 has admitted that till filing claim petition on 17/11/2018, petitioner has not raised any objection regarding construction of the building not being in accordance with sanction plan. All these admissions given effect to by the learned Arbitrator in the award. On this basis the learned Arbitrator has held that the petitioner has agreed and has joined hands with the respondent for construction of the building in violation of the 25 CT 1390_Com.A.P.62020_Judgment .doc sanction plan and byelaw and the building is constructed and she has occupied the same and has given it on rent to the tenants. Her conduct of agreeing for construction of the building as per Ex.R.2 to Ex.R.5 and taking possession of her share in the year 2009 and not raising objection till 2017 could show that she had waived her right and is estopped from enforcing the particular clause requiring respondent to construct the building in accordance with sanction plan.
23. The learned counsel for the petitioner has relied on a decision reported in (2007) 4 SCC 697 (Food Corporation of India v/s Chandu Construction and another) in which in para 13 by referring to the decision in Continental Construction Company Limited, wherein it was held that "the arbitrator cannot ignore the law or mis apply it in oder to do what he thinks is just and reasonable and the arbitrator is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he do not, he can be set right by the court provided his error appears on the face of the award". In another decision reported in (2010) 11 SCC 159 (Maharshi Dayanad University v/s Surjeet Kaur) the Hon'ble Supreme Court on a different facts has held that no court has competent to issue direction contrary to law nor any direction to a party to act in contravention of statutory provision and respondent 26 CT 1390_Com.A.P.62020_Judgment .doc cannot plead estoppel either by conduct or against statute so as to gain any advantage.
24. By relying on these decisions, it is argued that when the construction is against the statute there is no estoppel against statute and petitioner cannot be blamed and the petitioner's case cannot be thrown out on the ground of estoppel or waiver and the illegal construction which is made by the respondent cannot be accepted. On looking to the award, the learned Arbitrator has considered and found that, the petitioner and respondent have together agreed and proceeded for joint development and the petitioner knowing that the construction is against sanction plan has entered into JDA for construction in violation of sanction plan and then taken possession in 2009 and kept silent for about 10 years and now she cannot take such contention regarding illegal construction. The learned Arbitrator has also held that, for taking action against illegal construction by BBMP, there would be no estoppel as there is no estoppel against the statute, but same rule do not apply to the petitioner, who is party to JDA. On looking to entire facts and circumstances of the case, this finding of the learned Arbitrator cannot be held to be against the basic principles of public policy of India or patently illegal.
25. Even on issue No.2 the learned Arbitrator has held that the evidence of the Court Commissioner show that by and large, the building is appearing as planned in Ex.R.2 to 27 CT 1390_Com.A.P.62020_Judgment .doc Ex.R.5 and share of the petitioner is as appearing in Ex.R.2 and 5 and second floor is in possession of the tenant of the petitioner. Learned Arbitrator has held that there is nothing to show that extent of portion in the basement and second floor is not according to the terms agreed between the parties. The learned Arbitrator by considering that the terrace which belong to the petitioner as per their agreement was not provided with staircase has held that the respondent is to be directed to provide the same. Even regarding the payment of property tax share of the respondent is directed to be paid by considering the contention of the petitioner that she has spent Rs.4 lakhs for the property tax. Since the construction was found to be as per the JDA entered into between the parties and petitioner was given possession in 2009 and has enjoyed the same till filing of the arbitration petition after about 89 years, the learned Arbitrator has held that there is no breach of terms of the contract and as such, awarding of damages do not arise. It is held that the petitioner has failed to prove that there is breach of contract and respondent has violated the terms of Ex.P.1 and petitioner is held to be not entitle for damages and even interest thereon.
26. Though petitioner contended that the respondent has committed fraud on the petitioner, by making construction in violation of sanction plan without knowledge of the petitioner, same is not established. Learned counsel for petitioner has argued that when there is an element of 28 CT 1390_Com.A.P.62020_Judgment .doc fraud, arbitrator cannot decide such dispute and has relied on the decision reported in (2016) 10 SCC 386 (A Ayyasamy Vs A Paramasivam and others) on this aspect. On going through the decision, same is not helpful to the petitioner in the present case. Petitioner has not challenged the jurisdiction of the learned arbitrator to decide the dispute raised by the petitioner, before. Even after producing Ex.P.30 before the learned arbitrator, the petitioner has not taken any such stand of disputing jurisdiction of learned arbitrator. Even otherwise, as allegation of fraud taken belatedly is not established, the award cannot be challenged on the ground of Arbitrator not having jurisdiction to decide the dispute.
27. On considering this entire award, though many points are raised by the petitioner to challenge this award, none of these points are established. No doubt the construction that is made in the property of the petitioner is found to be in violation of the sanction plan Ex.P.30. Subsequent to that Ex.P.30 parties have entered into JDA and have agreed for certain terms and sharing of the constructed portion. As per the evidence of the Court Commissioner and even the evidence of PW.1, the share which was to be given to the petitioner in the constructed portion has been given and petitioner is in possession of second floor and also portion of the parking area in the basement. Though there are allegation about keeping of hoardings on the terrace etc the report of the Commissioner 29 CT 1390_Com.A.P.62020_Judgment .doc show there was no staircase to the terrace which is directed to be set right. Though the construction is against the sanction plan, but it is almost as per the agreement between the parties. As such there is no breach of contract. Though the construction is against the byelaw, against the sanction plan and cannot be even regularized as opined by the Court Commissioner, as the parties have agreed for such construction the other party cannot put blame on one party for such construction. Apart from this, as the construction was over in 200809 and the petitioner has taken possession in 2009 and she has paid property taxes to this property and even enjoyed the property by renting it to the tenants, petitioner cannot now after about 10 years raise the dispute that the construction is illegal and is against the sanction plan. Though the construction is against the sanction plan, it is in terms of the agreement between the parties. Therefore, the other party cannot dispute the same and cannot take undue advantage of the illegality of the construction or by finding that the construction is against the statute. These points are all considered by the learned Arbitrator. Though serious allegations of bias are also made on the basis of not giving of adjournment and posting vase for cross examination of the Court Commissioner etc, on looking to the entire award, the award passed by the learned Arbitrator is by considering the evidence placed before it and also by considering the terms of contract entered by the parties. Arbitrator who is the creation of the agreement between the 30 CT 1390_Com.A.P.62020_Judgment .doc parties cannot go beyond the contract. Since the dispute raised by the petitioner initially was regarding the compliance of the terms of the JDA and it was found that there is no such breach of contract as contended, the learned Arbitrator has given finding on the said claim against the petitioner. As regards the illegal construction it was beyond the scope of the arbitration, as it is the statutory authority which have to take appropriate steps. However, as the petitioner has failed to show that petitioner was not aware of the sanction plan earlier and has came to know only in 2019, the learned Arbitrator has rightly held that the petitioner, after so many years, is estopped from contending that construction is illegal.
28. On looking to all these aspects, there are no ground to hold that the arbitration award is against the public policy of India or is against the fundamental principles of Indian law or is against justice or morality or is patently illegal as contended by the petitioner. Therefore there are no ground to interfere with the award passed by the learned Arbitrator. Hence point No.1 is answered in the negative.
29. POINT No.2 : For the discussion made on above point, following order is passed:
ORDER This petition filed U/S.34 of the Arbitration & Conciliation Act 1996 to set 31 CT 1390_Com.A.P.62020_Judgment .doc aside award of the learned Arbitrator in AC No.113/2018 dated 23/10/2019, is dismissed with costs.
[Dictated to the Judgment Writer; transcript thereof corrected, signed and then pronounced by me, in the Open Court on this the 10th day of August 2021] [Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.
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