Madhya Pradesh High Court
Ram Chandra Patidar vs M/S Suncity Dhoot Colonizers Pvt. Ltd. on 14 January, 2022
Author: Vivek Rusia
Bench: Subodh Abhyankar, Vivek Rusia
Arbitration Appeal No.83/2021 1
High Court of Madhya Pradesh : Bench At Indore
DIVISION BENCH: HON'BLE MR. JUSTICE VIVEK RUSIA &
HON'BLE MR. JUSTICE SUBODH ABHYANKAR
Arbitration Appeal No.83/2021
Appellant - Ram Chandra Patidar
S/o Mansharam Patidar
Age - 45 years
Occupation - Builder and
Civil Contractor
Address - A-49 Vistara Township
By-pass Road, Village-Mayakhedi
District - Indore (M.P.)
versus
Respondent(s)- 1. M/s Suncity Dhoot Colonizers Pvt. Ltd.
Registered Office - L.F.F. - 20
Vasant Square, Plot-A Sector-B
Pocket-V, Community Centre,
Vasantkunj, New Delhi - 110007
Corporate Office - Suncity Business
Tower, 2nd Floor, Golf Course Road
Sector 54, Gurugram, Haryana
Branch and Project Office - Vistara
Township, Gram Mayakhedi,
Near DPS School, Bypass Road
District - Indore (M.P.)
Through Managing Director
2. Managing Director
M/s Suncity Dhoot Colonizers Pvt. Ltd.
Vistara Township, Gram Mayakhedi
DPS School, Bypass Road
District - Indore (M.P.)
Indore, dated 14.01.2022
Heard through Video Conferencing.
Shri Yogesh Kumar Mittal, learned counsel for the
appellant.
Shri Anurag Chandra Goel, learned counsel for the
respondents.
In view of the orders dated 09.12.2021 and
15.12.2021, this AA is heard finally
ORDER
The appellant has filed the present arbitration appeal Arbitration Appeal No.83/2021 2 under Section 37 of the Arbitration and Conciliation Act, 1996 r/w section 13 of the Commercial Court Act, 2018 against the order dated 23.10.2021, whereby the Commercial Court, Indore has rejected the application filed under Section 9 of the Arbitration and Conciliation Act, 1996.
02. The facts of the case in short for disposal of this appeal are as under:-
2.1 The appellant is a Builder and Civil Contractor.
Respondent No.1 is a company registered under the provision of the Companies Act, 1956 and engaged in the business of Real Estate. Respondent No.1, being the owner of land bearing Khasra No.2/1/1, 24/1, 24/2/1, 24/2/2, 24/2/3, 24/3/4, 24/3/2, 25, 26/1, 26/2 and 27/2 situated at A.B. By-Pass Road, Village - Mayakhedi, Indore has launched a residential township project under the name of 'VISTARA'. An MOU dated 01.12.2017 was executed between the appellant and respondent No.1 for the sale of 11 residential plots within the period of 24 months. By way of MOU, the appellant being a 'Proposer' undertook to avail the bookings of sale of a specific total of 11 residential plots as described in condition No.6 of the MOU within a period of 24 months subject to the condition mentioned in condition No.7. As per condition No.7 out of the total 11 plots, the respondents / Company shall a allot first plot in favour of the appellant at the rate of Rs.1,750/- per sq. ft. of the salable area. After receiving the total sale consideration, the Company shall execute a registered sale deed in the name of the appellant or the name of nominee/assignee by him.
Arbitration Appeal No.83/2021 3Thereafter, the appellant shall construct a model house on the said plot in accordance with the sanctioned plan within a period of 8 months from the date of allotment of the first plot. As per condition No.2, the total payment of duration for payment of total sale consideration will be 45 days from the date of booking of each plot. As per condition No.7.4, the parties have agreed that on or before completion of about stated eight months from the date of MOU, the respondents/ Company shall further allot two more plots in favour of appellant at the rate of Rs.1,750/- of the salable area and after receiving the total sale consideration, the sale deeds shall be executed in the name of the appellant or the name of the nominee. As per Clause 7(5), the appellant has agreed that after the expiry of eight months from the date of execution of MOU, the Company at the request of proposer i.e. the appellant shall further allot remaining / balance plots (11 plots) at 10% discount on the prevailing rate of the Company. As per condition No.7.6, it was also mutually agreed between the parties that after the expiry of 8 months from the date of execution of an MOU, the proposer/ the appellant shall deposit a booking amount of Rs.2,00,000/- against each plot which is remaining in the term of the MOU. As per condition No.7.7(i), in case, the proposer will book less than five plots out of 11 plots then the Company shall have the right to forfeit the deposited amount mentioned in Clause 7(5).
2.2. As per the MOU, respondent No.1 had executed a sale deed dated 11.08.2018 in respect of Plot No.A-117 in the name of Devdas Patidar i.e. assignee of the appellant.
Arbitration Appeal No.83/2021 4According to the appellant, after execution of the MOU, the respondent / Company partly complied with the condition of the MOU by executing a registered sale deed of i.e. Plot Nos.A-117 and A-122 after getting full and final consideration within the prescribed time of eight months. Thereafter, he made several requests for execution of the sale deed in respect of the third plot i.e. Plot No.A-118 for which he had already deposited a booking amount of Rs.5,00,000/- through cheque No.205807 dated 23.07.2018 as margin money but no sale deed has been executed by the respondent No.1. The appellant sent a letter dated 28.08.2018 to respondent No.1 along with a cheque of the balance amount to the tune of Rs.31,53,531/- and a cheque of Rs.52,766/- for other charges. Thereafter, he visited the office of respondent No.1 and met Mr Prasad for the execution of the sale deed of Plot No. A-118. The appellant also requested respondent No.1 by sending emails dated 26.06.2018 and 04.07.2018 that he is ready and willing to pay the entire booking amount for the rest eight plots as per condition No.7 of the MOU. According to the appellant, instead of complying with the terms and conditions of the MOU, respondent No.1 has sent a backdated letter dated 17.08.2018 stating the cancellation of MOU. The appellant has alleged that in violation of MOU, respondent No.1 is trying to transfer and alienate the remaining nine plots in favour of third persons on enhanced rate against the interest and right of the appellant over those 11 plots. In the aforesaid facts and circumstances, the appellant approached the Commercial Court by filing an application under Section Arbitration Appeal No.83/2021 5 9 of Arbitration and Conciliation Act seeking a temporary injunction against respondent No.1 for selling the remaining 9 plots mentioned in condition No.6 of the MOU. 2.3. The aforesaid application was opposed by respondent No.1 by stating that from the very inception after execution of the MOU, the appellant has breached the condition by constructing two villas on Plot No.A-117 and selling to different people by obtaining one building permission. He did not complete the model house within the period of 8 months. The respondents have terminated the MOU dated 17.08.2018 and sold the Plot Nos.A-118, A-119, A-120, A-121, A-123, A-124, A-125, A-126 and A-127. The appellant himself is residing in the said township and he was aware of all these transactions but never raised any objection till 12.08.2020. It is further submitted that all the plots have been sold and for the remaining two plots agreement to sale has been executed with two different persons. The respondents tried to return the amount of Rs.5,00,000/- at the time of termination of the MOU but he did accept and again on 25.10.2021, the appellant has refused to accept. The details of the sale of aforesaid plots i.e. Plots No. A-118, A-119, A-120, A-121, A-123, A-124, A-125, A-126 and A- 127 are mentioned in the reply filed before this Court with the details of the date of sale deed. After hearing the learned counsel for the parties vide order dated 23.10.2021, the learned Commercial Court has dismissed the application for temporary injunction. Hence, the present appeal is before this Court.
03. We have heard learned counsel for the parties at Arbitration Appeal No.83/2021 6 length and perused the record.
04. For the purpose of a temporary injunction, the plaintiff is required to establish a prima facie case, the balance of convenience and irreparable loss. An MOU dated 01.12.2017 was executed between the appellant and respondents in which the appellant undertook to avail the booking for sale of 11 residential plots mentioned in para - 6 within a period of 24 months. Within eight months, he was required to purchase one plot and construct a model house at the rate of Rs.1,750/- per sq. ft. It was further agreed between them that with the period of eight months from the date of execution of MOU / allotment of the first plot on his request, respondent No.1 shall allot two more plots at the rate of Rs.1,750/- per sq. ft. and after eight months, the appellant himself agreed that the Company at his request shall further allot remaining / balance plots at 10% discount of a prevailing rate of the Company at that relevant point of time, therefore, as per MOU, the appellant was only entitled to purchase the three plots at the rate of Rs.1,750/- per sq. ft. that too within a period of eight months from the date of execution of the sale deed. The appellant has purchased only one plot within eight months and now today his claim is for the remaining two plots at the rate of Rs.1,750/- per sq. ft. and that rate was available only up to eight months from the date of execution. Whether the appellant was ready to purchase those two plots within the period of eight months by submitting a cheque or sending a notice is a matter of evidence. The trial Court while rejecting the application has observed that the appellant did not approach the Court Arbitration Appeal No.83/2021 7 promptly immediately after the cancellation of MOU or receipt of information about the cancellation of the agreement dated 17.08.2018. According to the appellant, he came to know about the cancellation of the agreement while visiting the office of respondent No.1 in the month of December 2019. Even then he approached the Civil Court by way of an application under Section 9 of the Arbitration and Conciliation Act, 1996 on 12.08.2021. The Supreme Court of India in the case of Firm Ashok Traders v/s Gurumukh Das Saluja reported in (2004) 3 SCC 155 has held as under:-
"18. Under the A&C Act, 1996, unlike the predecessor Act of 1940, the Arbitral Tribunal is empowered by Section 17 of the Act to make orders amounting to interim measures. The need for Section 9, in spite of Section 17 having been enacted, is that Section 17 would operate only during the existence of the Arbitral Tribunal and its being functional. During that period, the power conferred on the Arbitral Tribunal under Section 17 and the power conferred on the court under Section 9 may overlap to some extent but so far as the period pre- and post- the arbitral proceedings is concerned, the party requiring an interim measure of protection shall have to approach only the court. The party having succeeded in securing an interim measure of protection before arbitral proceedings cannot afford to sit and sleep over the relief, conveniently forgetting the "proximately contemplated" or "manifestly intended" arbitral proceedings itself. If arbitral proceedings are not commenced within a reasonable time of an order under Section 9, the relationship between the order under Section 9 and the arbitral proceedings would stand snapped and the relief allowed to the party shall cease to be an order made "before" i.e. in contemplation of arbitral proceedings. The court, approached by a party with an application under Section 9, is justified in asking the party and being told how and when the party approaching the court proposes to commence the arbitral proceedings. Rather, the scheme in which Section 9 is placed Arbitration Appeal No.83/2021 8 obligates the court to do so. The court may also while passing an order under Section 9 put the party on terms and may recall the order if the party commits breach of the terms.
05. The appellant did not invest anything in the project and only an MOU was executed with respondents in respect of availing the bookings in respect of seven plots. The appellant has approached this Court by way of an application under Section 11(6) of the Arbitration and Conciliation Act seeking the appointment of an arbitrator. If the appellant succeeds in the arbitration proceeding, he may get a money decree but till then the respondents cannot be restrained from selling the plots which may cause huge loss to them in terms of escalation of money and enhancement of stamp duty. The arbitrator shall examine whether the action of the respondents in terminating the contract was justified or not and whether there was a violation of terms and conditions by the appellant all these are the matter of evidence and trial. As of today, the balance of convenience, irreparable loss and prima facie case are in favour of respondent No.1. The Commercial Court has not committed any error of law while rejecting the application. We do not find any ground to interfere with the order passed by the Commercial Court.
Hence, the present Arbitration Appeal stands dismissed.
(VIVEK RUSIA) (SUBODH ABHYANKAR)
JUDGE JUDGE
Ravi
Digitally signed by RAVI PRAKASH
Date: 2022.01.19 17:45:03 +05'30'