1. Rajesh Kumar Gambhir S/O Late Shri ... vs 1. Gurpreet Singh Anand S/O Late Shri ... on 31 August, 2022

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Delhi High Court - Orders

1. Rajesh Kumar Gambhir S/O Late Shri ... vs 1. Gurpreet Singh Anand S/O Late Shri ... on 31 August, 2022

1. The present petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "A&C Act, 1996") read with Section 151 of the Code of Civil Procedure, 1908 on behalf of the petitioners seeking an ad interim ex parte order restraining the respondent Nos.1 and 2, including their employees, partners, agents, affiliates or anyone under their authority or claiming through them from causing any alienation, selling, creation of third party interest with respect to the first floor of the Property bearing No. D-99, Pushpanjali Enclave, Pitampura, Delhi-110034 till the constitution of the Arbitral Tribunal to adjudicate the disputes between the parties.

2. Facts in brief as narrated in the petition, are that Late Shri R.L. Gambhir was the owner of Property bearing No. D-99, Pushpanjali Enclave, Pitampura, Delhi-110034 (hereinafter referred to as the "subject property"). Late Shri R.L. Gambhir died on 21st June, 2013. He was survived by his son, namely, Mr. Rajesh Kumar Gambhir (petitioner No.1), Smt. Shashi Gambhir (petitioner No.2), who is the wife of brother of petitioner No. 1 and Smt. Anita Gambhir (petitioner No.3), who is the wife of petitioner No.1-Rajesh Kumar Gambhir.

2. The respondent Nos. 1 and 2 are the Builders-cum-Developers of real estate properties. Late Shri R.L. Gambhir, the petitioners and respondent Nos. 1 and 2 entered into a Collaboration-cum-Redevelopment Agreement dated 13th August, 2012, wherein it was agreed that the existing Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 2 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38 structure would be demolished and redeveloped into a building with four floors. Various terms were agreed in the Collaboration Agreement dated 13th August, 2012 and the physical possession of the subject property was handed over to the respondent Nos.1 and 2 for commencing the redevelopment work. The existing structure was demolished by the respondent Nos. 1 and 2. Late Shri R.L. Gambhir died on 21st June, 2013 and the property was bequeathed by him in favour of the petitioner Nos. 1 and 2 and respondent No. 3 in terms of the unregistered Will and Testament dated 17th May, 2010. The petitioner Nos. 1 and 2 and the respondent No. 3 (sister of petitioner No.1) are the joint and absolute owners of the subject property.

3. It is asserted that the respondent Nos.1 and 2 stopped the redevelopment work of the subject property on the demise of Late Shri R.L. Gambhir.

4. A fresh Collaboration Agreement dated 09th December, 2014 was entered into between the legal heirs of Late Shri R.L. Gambhir, who are the petitioner Nos. 1 and 2, and the respondent Nos. 1 and 2 for the redevelopment of the subject property.

5. Clause 25 of the Collaboration Agreement dated 09th December, 2014 provided for the resolution of disputes through Arbitration which reads as under:

"25. That in the event of any Party being in breach of its obligation to complete their obligation(s) with regard to this Agreement, the parties hereto shall make all efforts to resolve the same in consultation with each other, however in the event, the same cannot be resolved by mutual efforts, the dispute shall be referred to the arbitration of the Sole Arbitrator be appointed by both the parties. The Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 3 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38 arbitration proceeding shall be conducted at Delhi in English language and in accordance with the Arbitration and Conciliation Act, 1996 or any modified legislation time being in force. In case, the decision is not acceptable to any Party, then both the Parties have the right to move to the Hon'ble Court of Delhi".

6. It is submitted that the respondent Nos. 1 and 2 have failed to strictly comply with their obligations under the Collaboration Agreement dated 09th December, 2014 and the Agreement to Sell dated 21st March, 2016 entered into between the parties. The respondent Nos. 1 and 2 have also failed to perform their obligations of completing the construction and handing over the entire project on or before 08th December, 2015. As they have failed to fulfil their obligation of handing over the possession of the finished first floor of the subject property to the petitioners. The respondent Nos. 1 and 2 have unauthorizedly and illegally tried to establish their claim over the first floor by making one Rajinder Singh reside on the first floor. Owing to such failure of the respondent Nos. 1 and 2 to hand over the possession of the first floor, the petitioner No. 1 was constrained to file suit bearing No. CS No. 1005/2017 before the Additional District Judge, Rohini Courts, Delhi seeking partition of the subject property amongst the legal heirs of Late Shri R.L. Gambhir which is pending adjudication.

7. It is further asserted that the Agreement to Sell dated 21st March, 2016 is inherently linked and intertwined with the Collaboration Agreement dated 13th August, 2012 and 09th December, 2014 and the performance of one is not possible without the performance of the other. There is a clear overlap in these Agreements inasmuch as the parties are same and the subject property also remains the same. The disputes have arisen in respect Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 4 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38 of the Collaboration Agreement. The petitioner Nos. 1 and 3 in an endeavour to resolve the issues, had visited the office of the respondent No.1 on 07th July, 2017, but the respondent No. 1 refused to remove Mr. Rajinder Singh from the first floor on the pretext that he wanted to make sure that respondent No. 3 and the petitioner No. 2 suffer.

9. The petitioners were thus constrained to issue Legal Notice dated 23rd November, 2021 invoking Arbitration Clause in terms of Clause 25 of the Collaboration Agreement dated 09th December, 2014. The respondents failed to give consent for appointment of an Arbitrator. Hence, the present petition has been filed.

10. Learned counsel on behalf of the respondents has argued that the disputes raised in the present petition pertain to the Collaboration Agreement 09th December, 2014 according to which the possession had to be given till December, 2015. The claim of the petitioners is, therefore, patently barred by limitation. The reliance has been placed on Vidya Drolia vs. Durga Trading Corporation (2021) 2 SCC 1, wherein the Hon'ble Supreme Court categorically held that the Court should not ordinarily accept claim ex-facie time barred. It has been held that the Court must undertake a primary first review to weed out "manifestly ex facie non-existent and invalid arbitration agreements, or non-arbitrable disputes." The prima facie review at the reference stage is to cut the deadwood, where dismissal is barefaced and pellucid, and when on the facts and law, the litigation must stop at the first stage. Only when the Court is certain that no valid arbitration agreement exists, or that the subject matter is not arbitral, that reference may be refused.

11. Submissions heard.

Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 5 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38

12. Admittedly, the parties had entered into Collaboration Agreement dated 09th December, 2014, wherein the parties had agreed for reconstruction of the Suit property after demolition of the existing structure and redevelopment into four floors. According to the Settlement, the petitioners were to execute a Sale Deed in respect of the second floor in favour of the respondent Nos.1 and 2. The Sale Deed in respect of first floor was to be executed in favour of the respondent No. 3. As per the Collaboration Agreement, the upper ground was to go in favour of the petitioner No. 1, third floor to petitioner No. 2 and first floor to respondent No. 3.

13. Admittedly, the Sale Deed has not been executed by the petitioners in favour of the respondent Nos. 1 and 2 in respect of second floor, while the respondents have also failed to execute the Sale Deed in respect of first floor in favour of the respondent No. 3. It has been submitted that handing over of the possession to the respective parties and corresponding execution of Sale Deed is dependent upon the parties shifting to their respective floors. Since, the upper ground floor is not being handed over to the petitioners, they are unable to shift out of second floor and consequently, the respondent No.1, who is in possession of first floor, is unable to shift to the second floor for which they had entered into an Agreement to Sell. The parties are not able to get into the possession of the respective floors and consequently, the sale deeds are not being executed. On account of these disputes, the Arbitrator has already been appointed, but considering inter-connected disputes arising out of the same Collaboration Agreement, it is imperative that the subject property is protected till the disputes are resolved.

14. The main argument addressed on behalf of the respondents was that Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 6 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38 the Collaboration Agreement was to be concluded till 2016, while the present petition has been filed only in 2022 and is barred by limitation. As has been rightly submitted on behalf of the petitioners, the Collaboration Agreement has still not been concluded insomuch so obligations arising out of the Agreement of execution of Sale Deeds and handing over the possession has still not happened. Moreover, whether the claim is barred by limitation involves mixed question of fact and law for which the parties are at liberty to agitate the same during adjudication of Claim before the Arbitrator.

15. Considering inter se disputes arising out of the Collaboration Agreement and also the admissions made by the parties about their respective ownerships pursuant to the Agreement to Sell executed between the parties and the right of petitioners to get their respective floors in terms of the Collaboration Agreement, it is in the interest of justice to protect the subject property. Hence, the respondents are restrained from creating any third-party interest in respect of any portion of the Suit property till three months after the appointment of the Arbitrator, or till the filing of application under Section 17 of the A&C Act, 1996, whichever is earlier.

16. The petition is accordingly allowed in the above terms.

NEENA BANSAL KRISHNA, J AUGUST 31, 2022 S.Sharma Signature Not Verified Digitally Signed O.M.P. (I) (COMM.) 81/2022 Page 7 of 7 By:SAHIL SHARMA Signing Date:12.10.2022 15:06:38

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Delhi High Court - Orders