Bangalore District Court
M/S Uma Estates & Projects (P) vs M/S Bearys Properties & on 21 April, 2022
1
Com.A.P 39/2021
IN THE COURT OF LXXXVII ADDL.CITY CIVIL &
SESSIONS JUDGE, (EXCLUSIVE DEDICATED
COMMERCIAL COURT)
AT BENGALURU (CCH.88)
THIS THE 21st DAY OF APRIL 2022
PRESENT:
SRI.CHANDRASHEKHAR U., B.Sc., LL.M.,
LXXXVII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.A.P.No. 39/2021
PLAINTIFF: M/s Uma Estates & Projects (P)
Limited,
(Formerly known as M/s Uma
Soumya Estates Pvt. Ltd.,)
A Company incorporated under the
Companies Act, having its registered
Office at: 8-2-703/A/6/B,
Road No.12, Banjara Hills,
Hydrabad-500034
Represented by its Director:
Mr. G. Sridhar Reddy
(Reptd by Mr. AR - Adv)
AND
DEFENDANTS: 1. M/s Bearys Properties &
Development Pvt. Ltd.,
A company incorporated under the
Companies Act, (Erstwhile Bearys
Properties & Development)
At 'Bearys Horizon"
2
Com.A.P 39/2021
No. 21, Woods Street, Bangalore - 25
Represented by its Director -
Mr. Syed Mohamed Beary.
(Reptd by Mr. HNN -Adv)
: 2. Mr. Justice S. Venkataraman,
(Retired Judge, High Court of
Karnataka, Bengaluru)
R/at # 161, Judges Colony,
3rd 'F' Cross, III Stage, II Block,
West of Chord Road,
Bengaluru 560 079.
Date of Institution of the 06.04.2021
suit
Nature of the suit (suit on
pronote, suit for declaration
& Possession, Suit for Arbitration Petition
injunction etc.)
Date of commencement of -
recording of evidence
Date on which judgment
was pronounced 21.04.2022
Total Duration Year/s Month/s Day/s
01 00 15
(CHANDRASHEKHAR U),
LXXXVII Addl.City Civil & Sessions Judge,
(Exclusive dedicated Commercial Court)
Bengaluru.
3
Com.A.P 39/2021
JUDGMENT
The plaintiff has filed the above petition under Section 34 of the Arbitration & Conciliation Act, 1996, (hereinafter called as 'the Act') for setting aside the Arbitration Award, dated 8.1.2021 partially and to allow the claim statement in the matter of disputes between M/s Uma Estates & Projects (P) Ltd., Vs. M/s Bearys Properties & Development Pvt. Ltd., on the file of the sole Arbitrator and to issue direction as this Court may deem fit under the facts and circumstances of the case.
2. It is the case of the plaintiff that being aggrieved by the award, dated 8.1.2021, passed by learned Arbitrator in CMP No. 284/2015, by partially allowing the claim and counter claim. It is stated that on a mere perusal of the impugned award, it is quite clear that the learned Arbitrator has completely misapplied the provisions of law and has not even appreciated any of the documents or facts put forth by the plaintiff before it. The award is opposed to 4 Com.A.P 39/2021 the public policy of India and also against the oral and documentary evidence. There is patent illegality of the applicability of law in impugned award. It is arbitrary, vague, illegal and opposed to settled principles of law and facts. It is further stated that the award demonstrates miscarriage of justice and therefore, it is opposed to public policy and learned Arbitrator has gone to re-write the contract, which is not permissible.
3. It is further stated that the Arbitrator has also proceeded to allow the counter claim relating to CAM charges even though the Arbitrator himself holds many aspects still being incomplete by the developer, which, it has itself directed the defendant to complete. The award on the very face of it, appears to be biased as the learned Arbitrator has chosen to apply different yardsticks to the plaintiff and defendant as regards obligation that are cast in the JDA.
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Com.A.P 39/2021
4. It is further stated that the plaintiff company was the owner of the immovable property more fully described in the schedule and the defendant approached it for development of the land assuring that the land will be developed and will be shared, accordingly, they entered into a registered Joint Development Agreement with the defendant with an understanding that the plaintiff is entitled to 25% of the undivided share and interest in the land and 25% of the total super built-up area and the defendant thereafter, was entitled to remaining 75% of the undivided share and interest in the land and 75% of total super built-up area. After construction of the building as per the plans, the defendant represented to the plaintiff company that the subject building had a total super built up area of 9,23,195 Sq.ft plus 35,000 Sq.ft of the area in the upper basement floor, totaling to 9,58,195 sq.ft together with 505 car parking spaces in the upper basement, 655 car parking spaces in the lower basement and 205 open car parking spaces in the surface level. The 6 Com.A.P 39/2021 developer had been conducting itself in a high-handed and overwhelming manner by virtue of its dominant position as a JDA partner, as against the plaintiff, which had only a 25% share. The defendant delayed in completion of the construction and left some of the work to be done as far as portion of the plaintiffs is concerned and also he is liable to pay the charge regarding remaining super built up area. It is further stated that on 19.9.2012, they entered into a sharing agreement, according to certain terms and conditions pertaining to settlement of accounts, etc., and difference arose between them with respect to allotment of share as per the sharing agreement and the defendant had to rectify the defects relating to non-formation of association of the owner and conveying the common area to the association, walls have not been erected separating the spaces allotted to plaintiff in second and third floor from the common area, abutting the lift and staircases. Flooring and painting in respect of spaces allotted to the plaintiff have not been completed, the joineries, flooring 7 Com.A.P 39/2021 and painting in respect of the allotted spaces and the flooring on the staircases is broken and it has not painted the stairs, the defendant has not completed the washrooms and toilets in the spaces allotted to the plaintiff and the defendant has not completed the wash rooms and toilets in the spaces allotted to the plaintiff including fixtures, flooring and dadoing. Out of the total BESCOM Power requirement of 6400 KVA, the defendant has provided only 2400 KVA. Out of the total back up power requirement of 6600 KVA, defendant has provided only 4650 KVA and has not provided remaining 1950 KVA. As regards air conditioning, the defendant has provided only 2 chillers, each of 600 TR as against the agreed requirement of 2400 TR, the respondent has not provided remaining 2 Chillers of 600 Tons each, the respondent has alienated the whole extent of ground floor in Tower -C to one Gana Yantrika Systems Pvt. Ltd., including common area being the passage leading to the lifts and staircases and also allowed the said common area to be enclosed by the purchaser and 8 Com.A.P 39/2021 thereby violated fire safety norms and lastly, has not put up the signage, particularly the display name of the plaintiff as per the agreed specification.
5. It is further stated that the defendant has purporting to be the plaintiff company's share, including common area of 5,435 sq. ft leading to the lift lobby from the main entrance lobby in Tower B, which is not saleable or leasable in the area of 28,945 sq. ft in the ground floor of Tower -A, allotted to plaintiff. The defendant was bound to restore and compensate the plaintiff by allotment of a saleable area of 5,435 sq. ft super built up area in the project building or compensate the plaintiff in monetary terms.
6. It is further stated that neither party has an "exclusive right of use" the terrace over Tower -C, the respondent has illegally conveyed to Aveo Real Estate Holdings Private Limited exclusive right to use the terrace over Tower- C, by sale deed dated 19.1.2020 itself. 9
Com.A.P 39/2021
7. It is further stated that as per sharing agreement claimant and respondent were entitled to 35000 sqft of the area in the upper basement and 10,000 sq ft sold to Schnieder, the plaintiff and defendant were entitled 25000 Sq. ft in upper basement in the ratio of 25% and 75% and now respondent, clandestinely, converted the said area into car parking and has not allotted its share in super built up space.
8. It is further stated the defendant has constructed area in the first floor of the Tower- B, apart from 1625 sqft allotted to the share and has not disclosed this fact to the plaintiff. The defendant has also constructed huddle room in the first floor of Tower- B. The claimant is entitled to 25% of the share in the additional area and in the huddle room.
9. It is further stated that the defendant has not been transparent about its action as holder of GPOA from the plaintiff and has failed to disclose the plaintiff rectification 10 Com.A.P 39/2021 information sought by it. As admittedly the defendant has sold the entire extent of the building which had fallen to its share, the GPOA has ripen for revocation. The 1 st defendant, by misusing the GPOA given by the plaintiff, has illegally transferred the common area comprising in the ground floor of Tower- B to M/s Ganayanthrika Private Limited. Subsequently, the respondent purporting to act under the POA, has executed document dated 22.1.2016 in respect of common area.
10. On account of the act of commission and omission of the defendant, the marketability of the plaintiff share and its valuation have been considerably affected causing loss to the plaintiff as the plaintiff's share of 81,395 sq.ft is left untenanted. The loss in this regard works out Rs.17,15,16,904/-. The loss suffered by the plaintiff on account of allotment of 5,435 sq. ft of unsalable and un-leasable space to the plaintiff comes to Rs.97,56,912/- and has prayed for certain relief before learned Arbitrator.
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Com.A.P 39/2021
11. learned Arbitrator after receiving the objection statement and counter claim and after recording evidence, has passed impugned award and said award is being challenged on the grounds that;
12. The impugned award has been passed contrary to law or on facts of the case and as such it is liable to be set aside. The Tribunal has erred in assuming the definition of the word "out fitting" as shown in clause 5.1 of the JDA and failed to appreciate that it was a duty cast on the developer to erect partition walls between each floor and common lift area as well as joineries, flooring, and painting in respect of spaces allotted to the plaintiff. The findings of the learned Tribunal regarding washrooms and painting and flooring etc., is incorrect and not sustainable. The observation of the Arbitral Tribunal regarding the common area is incorrect and not sustainable. The Tribunal has grossly erred in not noticing that the plaintiff has been allotted necessary area which is common area over which all others have right, in the guise of selling its share. The 12 Com.A.P 39/2021 observation regarding terrace area allotted to the plaintiff is also incorrect and it has failed to hold that the claimant is entitled to 25% of the terrace area and also car parking area to the plaintiff. The observation regarding huddle rooms is also incorrect and against the documents. The Arbitrator has erred in reducing compensation to the plaintiff regarding its share in excess of 1625 sq ft in the first floor of the schedule building. The observation regarding additional land sold by the defendant is also incorrect and against the document. The Tribunal has erred in not declaring that the GPA executed by claimant in favour of respondent stands terminated. In view of the respondent having sold away all the spaces allotted to it, the observation regarding termination of Power of Attorney is also incorrect.
13. The observation regarding loss of rental to the plaintiff due to the breaches committed by the defendant is incorrect. The Tribunal fundamentally erred in not appreciating the losses suffered by the plaintiff on account 13 Com.A.P 39/2021 of all breaches. The observation regarding club facility is also incorrect and untenable. The direction given by the Tribunal to build club house as it was not mentioned is incorrect and it is against the terms of the reference. The observation regarding payment of CAM charges is also incorrect and against clauses of JDA. Further, the objection regarding power and air conditioning infrastructure, the tribunal has indubitably come to the conclusion about short fall of the power and air conditioning infrastructure provided by the defendant has remarkably provisions to ignore this short fall, and directed to pay CAM charges etc., though it would arise only upon completion of the building fit for occupation with all amenities, has been complied with etc., while dealing with the said issue. The claim allowed by the tribunal is very meager and not sustainable and the award is against the public policy of India and it is patently illegal. Accordingly, it has prayed for allowing the petition.
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Com.A.P 39/2021
14. The respondent No.1 has filed the objection statement stating that the petition is completely abrupt of any merits whatsoever whether factual or legal and the same is not maintainable. It is further stated that the statement of objection filed before learned Arbitrator may also be looked into.
15. Regarding para No.2, it has denied para No.2 and regarding para No.3 to 24, it is contended that those paras are pertaining to the claim statement made before Arbitral Tribunal and it has been properly responded by the respondent in their objection statement before the Arbitral Tribunal. Regarding para No.26, it is stated that Arbitral Tribunal has partly allowed the claim and counter claim and to the extent of allowing the counter claim, it has no any denial and as far as other aspect is concerned, it has been denied in toto. Regarding para No. 27, it is contended that it has been totally denied by the defendant. Regarding issue No.1 at paragraphs No. 28 to 35, has been denied by the defendant No.1 stating that the plaintiff has challenged 15 Com.A.P 39/2021 the findings of the learned Arbitrator in respect of instant issue No.1 is not correct and learned Arbitrator has rightly held the same. Regarding issue No.2, particularly para No. 36 to 44, it is stated that the award clearly goes to show that the learned Arbitrator has considered all the relevant terms of JDA and other agreements executed by the parties and there is nothing to interfere. The allegation of bias against the learned Arbitrator is not correct and it is not properly substantiated and learned Arbitrator has passed the order by considering all the material placed before him including evidence. Regarding issue relating to repairing of flooring and staircase and painting staircase walls etc., are concerned, it has been denied by the respondent No.1 and learned Arbitrator has given proper reason for the same. Regarding paragraphs 46 and 47 relating to non-completion of the water proof has been denied and it is stated that the plaintiff is trying to and attempting to assuage Hon'ble Court into re-appreciating oral and documentary evidence, which is not permissible. 16
Com.A.P 39/2021 Learned Arbitrator has given reasonable attention to all the aspects and therefore, there is no question for interference.
16. Regarding removal of enclosure as stated in para Nos. 48 to 50, it is contended by the defendant No.1 that this Court cannot look into averments made by the plaintiff therein and observation regarding common area, etc., is correct and nothing to interfere and issue No. 3 and 4 relating to ground floor of Tower A is concerned, the same has been denied in respect of para Nos. 51 to 56. Regarding para Nos. 57 to 60, the defendant No.1 has completely denied the allegation made therein.
17. Regarding para No. 61 to 64 regarding allotment of 6260 sq.ft of non-car parking space is concerned, the same has been denied and there is nothing to interfere with the observation made by the learned Arbitrator. Regarding para Nos. 66 to 69 are concerned, 1 st defendant has denied the same which relates to huddle room. Regarding para Nos. 70 and 71, 1st defendant has denied in toto which 17 Com.A.P 39/2021 deals with compensation sought for additional construction in Tower B of first floor. Regarding GPA, the 1 st defendant has denied the contention in para Nos. 72 to 76 in toto and there is nothing to interfere with the observation made by learned Arbitrator. Regarding payment of damages etc., is concerned, the same has been denied by the 1 st defendant. The 1st defendant has denied para Nos. 77 to 86 and contended that learned Arbitrator has given reasonable attention, and conclusion by learned Arbitrator is correct and this Court cannot appreciate or re-appreciate the same. Accordingly, it has prayed for dismissal of the petition.
18. The plaintiff has filed rejoinder to the statement of objection filed by the defendant stating that they are false and misleading and the defendant is not entitled for any counter claim as claimed in the objection statement and it has denied that the issue relating to formation of owners' association is not arbitrable and the terms in JDA especially clause No. 11.2 is unambiguous, there was no 18 Com.A.P 39/2021 room for learned Arbitrator to presume otherwise. When the registered JDA makes it duty bound on the defendant to form such Association, there was no room for any other interpretation by the learned Arbitrator. Further, clause No.9.4 of JDA is clear that the developer was incumbent in forming an owners' association for the proposed multistoried commercial building. It has denied para Nos. 12 and 13 of objection statement stating that the learned arbitrator has duly considered the terms of JDA and agreement etc. It is clear from clause No.5.1 that the entire responsibility of out fittings of the common area and individual units therein was on the defendant and it has denied other allegation made in the plaint and contended that the defendant is not entitled to any counter claim as urged before learned Arbitrator. It has denied that the plaintiff is challenging the appreciation of evidence on record, which is not permissible. All other aspects have already been stated in the plaint, and therefore, it is not necessary to repeat once again regarding CAM charges, 19 Com.A.P 39/2021 BWSSB, power supply and other aspects as contended in the plaint.
19. Heard learned counsel for the plaintiff and 1 st defendant.
20. Now, the points that arise for my consideration are:-
1. Whether the plaintiff proves that the arbitral award dated 8.1.2021, passed by learned Arbitrator is against the terms of the JDA and it is opposed to public policy and patently illegal, as such it is liable to be set aside?
2. What Order?
21. My findings on the above Points are as under:
Point No.1 :- In the negative.
Point No.2 :- As per the final Order for the following reasons.
REASONS
22. POINT No.1 : Learned counsel for the plaintiff would argue that he has challenged the award in respect 20 Com.A.P 39/2021 of the claim rejected by learned Arbitrator and also allowing the counter claim and according to him, the learned Arbitrator has completely misapplied the provisions of law and even not appreciated any of the documents or fact put forth by plaintiff before him. The award is opposed to public policy of India. The entire claim and counter claim relating to the dispute and infact, learned Arbitrator ought to have taken into account the oral and documentary evidence, made reference to the cross-examination and answer elicited therein in detail. Learned Arbitrator has mechanically drawn inference without looking into any of the documents and it is arbitrary, vague and illegal and opposed to settled principle of law and facts admitted by the parties.
23. He would further argue that the Arbitrator has casually proceeded to allow the counter claim regarding CAM charges, even though the arbitrator himself holds many aspects still are incomplete by the developer, which it has itself directed the defendant to complete and on the 21 Com.A.P 39/2021 face of it appears to be biased. Learned Arbitrator has chosen to apply different yardsticks to the plaintiff and defendant as regards obligation that arise in the JDA. He refers to claim statement, wherein, he has sought for direction to defendant to complete the incomplete work as mentioned therein. As far as the defendant to pay to the claimant an amount of Rs.18,49,26,816/- as liquidated damages along with interest 18% per annum and also for allocation of additional area which was to be given to the claimant by the defendant.
24. Regarding issue No.1, he would argue that the Hon'ble Tribunal erred in holding that the defendant is not duty bound to form an association, when infact, the defendant is duty bound by law to form an association upon completion of development and sale of the schedule units. Infact, law mandates that in the absence of local law, the builder has to form association, which has been overlooked by the Tribunal and it is incorrect. Reason regarding non-formation of association is absurd and 22 Com.A.P 39/2021 learned Arbitrator is required to form all remedial action, if the same is the statutory obligation cast on the developer. Learned Arbitrator could not have absolved from its observation to pass direction as regards duties that are mandatory on the part of the developer. Though clause No.11.2 of JDA provides that on completion of the project, the original title deeds pertaining to the schedule property shall be delivered to the owner's association formed for the proposed multi storied commercial building to be constructed on the schedule property free from all encumbrance, charges by the developer. If that is the case, the observation of learned arbitrator is highly incorrect and unwarranted. Further, the Tribunal has cited clause No.9.4 of the JDA at Ex.P1, which provides for handing over CAM and other charges to the owners' association at the time that the management and maintenance is handed over to the association. Further, the Tribunal did not even take into consideration the fact that the defendant itself had inserted the clause to the sale 23 Com.A.P 39/2021 deed, executed by it in favour of its purchaser over the share of the 75% of the property, whereby, make it obligatory for all the defendants/ purchasers to become members of owners' association. The clause No. 9.4 states that the purchaser shall become the member of the association of unit owners that may be formed in respect of all the blocks, tower or building built in schedule 'A' property, including a main object of formation of association shall be over all administration of schedule 'A' property and respective blocks/ towers.
25. He would further argue that the Tribunal erred in not directing the defendant to form an association, as it would lead to situation, wherein, it would give the defendant a perpetual control over the property without any ownership of the single sq. ft of built up area in the building. The Tribunal did not even notice that the defendant did not rebut in its reply notice at Ex.C12, the fact raised by the plaintiff in Ex.C11 regarding formation of owners association. The non-formation of owners 24 Com.A.P 39/2021 association is one of the main issues arising in the subject building and one such issue being involved in Firmenich. The fact that the defendant has usurped all the owners powers and prohibited the petitioners/Firmenich from carrying out interior works which has lead to termination and consequential withdrawal from the lease with the plaintiff. Subsequently, the defendant's sister holding, has leased its premises to the very same Firmenich. These aspects have not been appreciated by the Tribunal.
26. The Tribunal has not considered high handedness of the defendant with regard to formation of owners association, etc. Further, learned Arbitrator has not at all appreciated the law of the land in the right manner by seeking permission to form an association, it is a right in person, which provides from the JDA executed between the parties, it was a statutory obligation, which creates an obligation under the JDA to form such association especially when material on record is shown. When the Tribunal itself holds that Ex.C48 contemplated for such 25 Com.A.P 39/2021 association to be formed, it was not right in holding that the defendant was not under any obligation to form the owners' association. It was obviously not done as even after the sale of its entire portion, the defendant wanted to retain control of the property, which is highly incorrect. The observation of Learned Arbitrator that it was not obligation on the part of the defendant to form an association is incorrect, against clause No.9.4 of JDA. The contention that the issue relating to formation of association which amounts to violation of local law and barred for arbitration, etc., is not proper in view of the decision of the Apex Court in Booz Alen and Hamilton Vs. SBI Home Finance Limited and others, reported in 2011 SC 416 and Section 10 and 11 of Karnataka Ownership flats (Regulation of construction, sale management and transfers) Act 1972, which states that it is a statutory obligation of the developer to form an owners' association in its capacity as a developer of the subject property and to convey its title and hand over the original documents to the association, 26 Com.A.P 39/2021 the violation of the provisions is also a criminal offence. Further, the Bombay High Court in the case of Mayfair Housing Pvt. Ltd., Vs. State of Maharashtra, J-WP 2834 of 2018, dated 3.5.2019, has not at all considered by the tribunal while passing impugned award. Therefore, it is patently illegal.
27. The Arbitral Tribunal has distanced itself from directing the defendant to comply with statutory provision to form the owners association, observing that it is a violation of statute and not a matter of contract, which is highly incorrect.
28. He would further argue that the defendant has obviously retained the control over building and it has to answer to the amount collected regarding common area maintenance charges, electricity charges, backup electricity charges, air conditioning, and water supply charges.
29. The learned Arbitrator has re-written the agreement between the parties in as much as not 27 Com.A.P 39/2021 considering these clauses in the literal manner. When the words of the contract are so unambiguous, learned arbitrator could not have interpreted the same in any manner he has desired. Therefore, ignoring of these clauses, which are a vital part of evidence in arriving at its decision, would be perverse and therefore, the award is liable to be set aside. Further, this ignorance of vital evidence by not considering the words in the clauses as they mean literally, goes to the root of the matter and which are in conflict with the basic notions of morality and justice. Since, non-appreciation of this vital evidence goes to the root of the matter and should be set aside on the grounds of patent illegality appearing on the face of the award and in the said regard, he would refer to the decision in the case of Associate Builders Vs. Delhi Development Authority reported in (2015) 3 SCC 49. Regarding issue No.2 relating to outfitting as found in clause 5.1 of JDA, the learned Arbitrator has failed to appreciate the same and duty was cast upon the developer to erect the partition wall 28 Com.A.P 39/2021 between each floor and common lift area as well as joineries, flooring, and painting in respect of spaces allotted to the plaintiff. Infact, a plain reading of clause No.5.1 of the JDA, would indicate that what was contemplated or rather the understanding between the party at the time of JDA and both outfitting of the common area and that of the individual units were to be of the same specification. Learned Arbitrator has misunderstood the word 'outfitting' as refereed in clause No.5.1 of JDA. The observation of learned Arbitrator that the plaintiff did not put forward his grievance regarding partition wall, flooring, and joineries at the earliest point of time is incorrect and Tribunal has lost sight of paragraphs Nos. 50.8 and 50.10 of the claim statement and building was still incomplete in many aspects.
30. He would further argue that the claimant had submitted photographs on 7.10.2020 along with a Memo which were taken on record, which would amply show the condition of the tower, without separation of wall being 29 Com.A.P 39/2021 provided. Learned Arbitrator has not taken note of the photographs, depicting the situation of building allotted to the share of the plaintiff. Learned Arbitrator by picking and choosing some evidence, has re-written the award which is against the norms. Regarding counter claim, he would submit that there was no demand prior to filing of the claim statement before the learned Arbitrator. The question of counter claim would arise only, if the building is completed as per the terms of JDA and sharing agreement. Infact, after completion of the building only, he has to deliver all the documents to the association to be formed under the terms of the JDA, which goes to show that the defendant No.1 wants to have entire control over the building, though they were let off and sold out. Regarding formation of the recreation club, etc., learned Arbitrator has re-written the contract, which is not vested in it and it is against the terms of the contract. While selling the property to the others, it has also included common area, in which plaintiff has got 25% of the share 30 Com.A.P 39/2021 and the observation of the learned Arbitrator regarding sharing is also incorrect and it is beyond the scope of reference. Further, learned Arbitrator erred in not coming to conclusion that the fundamental policy of law is that every owner of a constructed unit should be entitled to possess and enjoy the unit owned by him without hindrance or disturbance from others who use the common area adjacent to the unit owned by him. The terminology "out fitting" as used in JDA clearly indicate that such unit "have to be out fitted" meaning that " the units must be equipped sought to be possessed and enjoyed absolutely in a secured manner". This would be possible only when there is erection of separation wall and putting up of joineries.
31. He would further argue that learned Arbitrator while dealing with issue of flooring and painting, though it was drawn to his attention, regarding admission of RW1 during the cross-examination, the same has not been considered by learned Arbitrator. The view taken by the 31 Com.A.P 39/2021 learned Arbitrator, regarding walls, sharing etc., formation of owners association, should superseded by SSA and Sharing Agreement. Though learned Arbitrator has taken note of admission of RW1, the answer given to the issue relating to coding and painting is incorrect and grant of award to the extent of 25% of the share in excess of the area occupied by the first defendant and as far as huddle rooms are concerned that it is held that the plaintiff/ claimant is entitled to 25% of interest. Tribunal has not considered the relevant document regarding painting and flooring, etc. Further, learned Arbitrator has wrongly interpreted the word 'outfitting' would have there been any evidence led by the defendant No.1. So, when the award is against the evidence, both oral or documentary, then, it amounts to opposed public policy. Further, the photographs produced before the Arbitral Tribunal have not been taken note of by the learned Arbitrator while dealing with issue regarding painting and flooring. 32
Com.A.P 39/2021
32. Regarding sale of common area by the defendant No.1 is concerned, learned counsel for the plaintiff would argue that the defendant has obstructed to fire exhaustion and common lobby and the Tribunal has completely misread the right of the parties in this regard. Though, the JDA and SSA fundamentally determine the rights of the parties, the observation of learned Arbitrator regarding the same is incorrect and not justifiable one.
33. Regarding illegal alienation of portion of common property to M/s Ganayantrika System Private Limited is concerned and observation to that effect that they are not arbitrable etc., is not correct. There is no mention in the JDA about the fact that, the super built up area also includes common area which is the main reason for rejecting the claim of the plaintiff herein by the Arbitral Tribunal.
34. He would further argue that the boundaries at Ex.C 52 and C27 annexure 'Y' would show that what was 33 Com.A.P 39/2021 allotted included the common areas on that floor, which allotment is not permissible in law. Regarding the terrace area, as per clause No.1 of the JDA, the plaintiff is also entitled to 25% of the terrace area, though it was sold out, subsequently during the pendency of Arbitration proceeding, it has been re-conveyed. The non- consideration of the admission of the opposite party, itself is a patent illegality committed by Arbitral Tribunal and therefore, the award is liable to be set aside.
35. Regarding additional area of 6,250 sq.ft to be allotted to the plaintiff in the upper basement, the Tribunal erred in coming to the conclusion, that the said area identified by the defendant as additional car parking as allowed by the defendant is to form a share of the plaintiff and not the built up area. Learned Arbitrator has completely overlooked the fact that the defendant unilaterally converted the area to car parking area which in fact allotted to claimant/plaintiff.
34
Com.A.P 39/2021
36. In Ex.C2 sharing agreement, it is very clear that 35,000 sq.ft of built up area was available in the upper basement to be admittedly divided between the parties. The Tribunal has not taken into consideration of unilateral allotment of the additional car parking and therefore, the award is not sustainable.
37. Regarding wash room, it is contended by the defendant that the dadoing of wash room, toilet and fitment of Commodes was not done because of the threat of removal of the same or causing damage and it was contended by the defendant that everything is kept ready and as soon as the tenant comes to the portion of the plaintiff share, that will be completed.
38. Learned Arbitrator has in all, ignored the evidence both oral and documentary and terms of the contract so as to favour the defendant. Further, regarding compensation reason assigned is also not correct.
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39. Regarding sale of the property by the defendant to the extent of 75% of his share and the observation that the Power of Attorney still subsists till completion of the obligation cast on the defendant to complete the construction as well as sale and therefore, it was observed by the Arbitral Tribunal that the defendant has got every right to use the Power of Attorney till completion of the obligation under JDA. Learned Arbitrator erred in not accepting clause No. 12.2 of JDA and Ex. C1, which is unambiguous in nature. Learned Arbitrator has erred in not holding that as soon as construction is completed and sold out, the GPA given by the plaintiff comes to an end.
40. Regarding club facility, when the version of JDA is clear and unambiguous in as much as club facility clearly mentioned in Annexure II of the JDA, Learned Arbitrator could not have taken any other interpretation in this regard.
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Com.A.P 39/2021
41. Regarding BESCOM power, he would argue that the defendant has not provided sufficient backup by providing agreed chillers and KVA and instead of that there is a short fall of 2,440 KVA, besides one Chiller of 600 tons. So, when the construction is not completed, then, how the counter claim can be allowed, which is a question, for which he would argue that the observation of learned Arbitrator that mere occupation of the building is not sufficient to treat it that the building is completed in all respect and amenities.
42. When clause No. 9 of the supplement agreement would clearly show that for CAM to be triggered the pre requisite has to be complied by the defendant. The vital evidence is given a go bye and not considered at all by the Arbitrator which goes to the root of the matter.
43. Learned counsel for the plaintiff would cite the decision in the case of Indian Oil Corporation Ltd., Vs. M/s Shree Ganesh Petroleum Rajgurunagar reported in 37 Com.A.P 39/2021 2022 LiveLaw (SC) 121, through its Proprietor Mr. Laxman Dagdu Thite to the effect that when Arbitral Tribunal fails to act in terms of the contract, then, such award would become patently illegal.
44. He would cite another decision in the case of PSA SICAL Terminals Pvt. Ltd., Vs. The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and others, reported in Civil Appeal Nos. 3699-2700/2018, wherein, it is held at para No. 83 by referring to the decision of Apex Court in Ssangyong Engineering and Construction Company Limited, Vs. National Highways Authority of India reported in (2019) 15 SCC 131, that the fundamental principle of justice has been breached, namely, that an unilateral addition or alteration of the contract has been foisted upon an un-willing party, it is nothing but, re-writing of the contract. In the very same Judgment, it is further held in para No.85 that the role of the Arbitrator is to arbitrate within the terms of the contract, he has no power apart from one the parties have 38 Com.A.P 39/2021 given under a contract. He has traversed beyond the contract, he would be acting without jurisdiction. Ofcourse, there is no dispute about these facts, as the Arbitrator is the creature of a contract by the parties.
45. The last decision is in the case of Vivek Jain Vs. Union of India and another reported in 2008 SCC OnLine Delhi 263, wherein, High Court of Delhi has held at para No.6 that:
6. "A perusal of award would show that the Arbitrator has passed the award without reference to the contract entered into between the parties. It is an undisputed fact that the claimant first got the contract by filing tenders for sale of the 'B' Raj Ghat Power Plant but failed to deposit the sale price and the contract was cancelled and the security amount was forfeited. The claimant had not challenged the cancellation of that contract or the forfeiture of the security amount. The forfeiture of security amount was done in accordance with the terms of the contract. Clause 6 of the tendered documents provides 'should the tenderer fail to observe and comply with the foregoing stipulation, the amount deposited as a security for the performance of the fo0regoign stipulation shall be forfeited to the Government. Despite this specific clause of forfeiture of security and despite the fact that cancellation of the 2nd contract was also upheld right up to the Supreme Court, because of non performance of its part by the claimant, the arbitrator ignored the 39 Com.A.P 39/2021 contract and allowed claim Nos. 2 and 3 of refund of security deposit of both contracts to the claimant. It is settled law that not only the parties to the contract but even the Arbitrator, who is given responsibility of only the parties to the contract but even the Arbitrator, who is given responsibility of deciding the disputes between the parties, is bound by the contract and Arbitrator has to decide the dispute only in accordance with the contract between the parties.
The Arbitrator cannot rewrite the contract between the parties and cannot create a new contract between the parties. He has to apply the terms and conditions of the contract as were agreed between the parties. If the arbitrator gives an award ignoring the terms and conditions of the contract and travelled beyond the terms and conditions of the contract, the award is liable to be set aside and this conduct of the arbitrator amounts to misconduct". "
46. Per contra, learned counsel for the first defendant would argue that the ground urged by the plaintiff regarding appreciation of evidence by learned Arbitrator, interpretation of the terms of the contract and non- considering an interference, etc., cannot be considered and they are not the grounds which fall under Section 34 of the Act. In the said regard, he would cite the decision in the case of Associate Builders Vs. Delhi Development Authority reported in (2015) 3 SCC 49 and the decision 40 Com.A.P 39/2021 in the case of PSA SICAL Terminals Pvt. Ltd., Vs. The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and others, reported in AIR 2021 SC 4661, and therefore, those grounds cannot be considered as this Court cannot act as Appellate Court to re-appreciate the evidence both oral and documentary.
47. Regarding issue No.1, he would argue that learned Arbitrator has properly interpreted the terms of the JDA at Ex.C1, and the contrary stand taken by the plaintiff does not fall within the purview of Section 34 and it is not a ground. The learned Arbitrator has not given clear findings regarding each and every aspect and one cannot expect the Arbitrator to answer each and every document and the contents of the document so as to arrive at a conclusion regarding claim and counter claim made by the parties. The observation of the learned Arbitrator that the formation of association, which is required under local law, is not arbitrable and there was no reference except by claim and this Court cannot substitute its view in the view 41 Com.A.P 39/2021 expressed by the learned Arbitrator. Since, there is no obligation on the part of the defendant No.1 to form such association.
48. In the said regard, he would cite the decision in the case of Booz Alen and Hemlton Vs. SBI Homes Pvt. Ltd., reported in 2011 SCC 416.
49. As far as Issue No.2 is concerned, which relates to interpretation of the terms of JDA, he would argue that the same is not permissible under Section 34 of the Act. Similarly, the question relating to non-consideration of photographs produced by the petitioner, he would argue that the claim suffers from vagueness and the plaintiff has failed to set up any tenable grounds of challenge under Section 34. Similarly, the observation made by learned Arbitrator about Ex.C1 and C4, etc., is also not a ground under Section 34.
50. Regarding compensation sought for area allotted in ground floor of Tower -A, he would argue that Ex.C1 42 Com.A.P 39/2021 contract stipulates that entire super built up area of the building in question have to be divided in the ratio of 25%:75% between the plaintiff and defendant No.1 and plaintiff having taken 25% of the portion including entire ground floor of Tower -A, now cannot contend that the work is incomplete, etc.
51. Regarding issue No.4, he would argue that the relief claimed by the plaintiff is one for mere declaration without seeking consequential relief, which is not permissible.
52. Regarding issue No.5 which relates to allotment of 6250 sq.ft of non-car parking area, in the upper basement, he would argue that as per Ex.C3 sharing agreement both parties have been allotted super built up area of 35000 sq. ft in the upper basement and there cannot be any other opinion regarding this aspect.
53. Regarding issue No.6, relates to huddle room, he would argue that the petitioner has attempted to confuse 43 Com.A.P 39/2021 the common area with common amenities. The learned Arbitrator has drawn proper and necessary inference based upon the document and same cannot be interfered by this Court.
54. Regarding issue No.7, which relates to compensation, the observation of learned Arbitrator is just and proper and same cannot be interpreted with and regarding cancellation of GPA, he would argue that still a portion of land is to be alienated. Therefore, till, then, the learned Arbitrator has kept the GPA in force and it would be terminated as soon as entire sale is done or construction is done.
55. Similarly, regarding issue No.10 club facility, etc., the learned Arbitrator has given clear findings. As far as issue relating to counter claim and common area management, the learned Arbitrator has referred the evidence and having held in favour of the defendant and the decision in the case of MMTC Ltd., Vs. Vedanta 44 Com.A.P 39/2021 Limited, as excerpted in PSA SICAL Terminals Pvt. Ltd., Vs. The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and others and it is within the jurisdiction of the Arbitrator. The plaintiff is bound to pay the common area maintenance charge and it has withheld charges payable to the defendant.
56. Learned Arbitrator has not re-written the terms of the contract, but, carefully read, understood and interpreted the terms thereof, on the basis of the evidence led by the parties and since there is no scope for interference the petition filed by the plaintiff has to be dismissed with costs.
57. With this background, let me go through the award and also the issues dealt by the learned Arbitrator, The point No.1 relates to formation of association for the benefit of all the owners, who purchased the flats or portion of the building under various sale deeds. Learned Arbitrator has referred to the clause No.11.2 and 9.4 of Joint Development Agreement as well as Ex.C48 sale deed 45 Com.A.P 39/2021 executed by the respondent in favour of AVEO to establish that the respondent is under contractual obligation to form owners' association. There is no dispute that the above clauses obligate the respondent to form an association which is statutory requirement and handing over of the relevant title deeds to the association, so that all the inmates would come under the said association and will have to deal with the said association in the matter of administration and other activities to be carried out in the said apartment. The clause No.11.2 reads as "On completion of the project, the original title deeds pertaining to the schedule property shall be delivered to the owners' association formed for the proposed multi-storied commercial building to be constructed on the schedule property free from all encumbrances and charges by the developer". The clause No. 9.4 reads as "The said charges may be collected either on an annual or life time basis and shall be handed over to the owners' association at the time of management and maintenance of the proposed multi- 46
Com.A.P 39/2021 storied commercial building and schedule property is handed over to such association". So, learned Arbitrator by referring to the above two clauses would opine that no doubt, those clauses obligate the respondent to form an association, which is statutory obligation and if it is not done, then, developer/respondent is liable for criminal prosecution under the Act and therefore, when that being the case, whether it has been violated or not is the realm of affairs of the authority to take decision, on such obligations and therefore, the Tribunal cannot opine about it and venture into the factual investigation and decide whether the relief sought for can be granted. Therefore, the observation made by learned Arbitrator, according to me, is correct as, if there is any observation regarding violation of the clause 11.2 and 9.4 of Joint Development Agreement, then, it would affect its right before competent authority, which is there to take action for non-formation of association and the owners have got right to approach the authority to take suitable action against the 47 Com.A.P 39/2021 developer/respondent. Therefore, the observation of learned Arbitrator regarding the same cannot be found fault with. The contention of the petitioner that, learned Arbitrator has re-written the agreement, which is against Section 34 cannot be accepted for the reason that he has expressed his opinion as to whether Arbitrator can opine about it on the available material, when there is a competent authority to take action against the developer for not forming the association as contained in Joint Development Agreement. Therefore, the argument to that effect cannot be considered.
58. As far as point No.2 is concerned, which relates to erection of walls separating the spaces allotted to the claimant in 2nd and 7th floors and the common areas abutting the lifts and staircase, failure to complete joineries, flooring and painting in respect of spaces allotted to claimant rendering those spaces unfit for occupation. In this regard, learned Arbitrator observes in the award that JDA or SA or SSA does not expressly stipulate that any 48 Com.A.P 39/2021 partition wall separating the common areas and the areas exclusively allotted to the party should be put up. However, the learned counsel for the plaintiff mainly relies upon clause No.5.1 of Joint Development Agreement which reads that "the entire cost of construction of the proposed multi-storied commercial building to be constructed on the schedule property and the outfitting of common areas and the individual units therein, shall be borne by the developer and the landowner shall not be required to contribute any amount towards the costs and expenses of the said construction and outfitting". So, the main dispute as to whether the word "outfitting" mentioned in clause No.5.1 of Ex.C1 Joint Development Agreement would include partition walls, for which, learned Arbitrator refers to dictionary meaning of 'outfitting', which means, providing with the equipment" and it is categorically held by learned Arbitrator that it does not include the erection of partition wall as contended by the petitioner in the claim petition as well as in the present suit. He refers to the power back up 49 Com.A.P 39/2021 and providing of chillers, joineries, etc., they do come within the meaning of 'outfitting' as observed by the learned Arbitrator, but, learned Arbitrator has not considered the case of the petitioner that even partition walls do come within the meaning of the word 'outfitting' and clause No.6.2 and 6.3 of Joint Development Agreement have been relied upon by the claimant/plaintiff to claim such relief.
59. It is further observed by the learned Arbitrator that it is not the case of the petitioner that any such partition wall for separating the common areas from the exclusive area of the claimant or respondent has been put up anywhere else in that building and learned Arbitrator taken into account, the area sold out by the petitioner, after taking possession of the same.
60. Learned Arbitrator specifically refers to the Ex.C73, mail sent by the plaintiff to finish the remaining work and the said email is silent about erection of partition wall and therefore, learned Arbitrator opines that the word 'outfitting' does not include erection of partition wall and 50 Com.A.P 39/2021 the claim of the petitioner was rejected and I do not find any mistake in the award.
61. Regarding non-completion of joineries work, the defendant disputes this claim and asserts that the joineries have been completed. The defendant has also examined RW3, who claims to have inspected the building and submitted the report, which goes to show that the joineries have been completed and Ex. C73 and C11 is silent about joineries.
62. Regarding non-completion of flooring and painting, the stand taken by the learned Arbitrator refers to the Annexure II to Joint Development Agreement and he refers to the statement of defence at para No. 46 (b) of the respondent regarding completion of the work and the annexure shows that flooring pertains to common area must be with marble, granite or vitrified tiles and other area it is cement flooring and same has been provided and in the sale deed in favour of Ganayantrika Systems Private Limited also shows that the flooring is of cement and 51 Com.A.P 39/2021 therefore, when common area was required to be provided with flooring of marble/granite/vitrified tiles, the same cannot be applicable to the other areas as annexure is silent. Learned Arbitrator also refers to Ex.C65 about specification shown as "warm shell" and according to petitioner, the flooring shall be provided with the tiles at least.
63. The petitioner relies upon Ex.C65 i.e., Letter of Intent, wherein, the specification of building is shown as a warm shell and RW1 admits the suggestion in cross- examination that the specification of building as granite flooring. Further, he has stated that it has been painted and air conditioned So, with the background of the contention taken by the parties, learned Arbitrator did not incline to rely upon Ex. C65 to come to the conclusion that flooring must be of tiles and even Joint Development Agreement, also does not speak about nature of flooring. 52
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64. Regarding painting, it is stated that the painting has not been done and respondent is ready to do it, carryout, the painting as agreed, but, according to petitioner, even after passing of the award, respondent has not even carried out the painting work. So, in view of the above fact, I do not find fault with observation of learned Arbitrator regarding outfitting, flooring, separation walls, etc.
65. Regarding broken tiles over the staircase, etc., learned Arbitrator has stated that no direction can be given and only thing is that the defendant was obliged to provide granite flooring to the lift area and if there is no any damage, same cannot be considered and report of RW1 Surveyor shows that the construction was in good condition. Therefore, based upon that, the claim came to be rejected regarding broken tiles etc. Therefore, I cannot find fault with the said observation.
66. Regarding default in para No. 9 read with 1.2 (a) relating to non-completion of wash rooms, toilets with 53 Com.A.P 39/2021 fittings etc., it is contended that the bath the room fittings are not provided by the respondent and there was no dadoing flooring, etc., but, the documents speak that the dadoing and flooring is completed and only thing that was left was fitment of commodes and basin, wash basin, which werre kept in the store room of the defendant to avoid theft of the same and it is ready to fix them at the risk of the plaintiff, as there is likelihood of damage to the fixture and fitments. When the defendant admits that he has completed dadoing and flooring of the wash rooms and left only fixing of commodes etc., I think there should be direction to do that. However, learned Arbitrator on the assurance of the respondent has answered stating that the construction is complete and what is left is only fixtures and fitment to be done and it is only because of valid reason and the respondent is ready to put up the same whenever the said portion is let out to the tenants.
67. Next coming to the aspect of providing BESCOM power, etc., though, it is contended that the sufficient load 54 Com.A.P 39/2021 of power supply was not provided and sufficient chillers were not provided for air-conditioning etc., the same has been discussed by the arbitrator in para No.6.30 onwards.
68. Regarding default in para 9(e) and (f) r/w point No.2(b) and (c) relating power supply, it is contended that the respondent has not provided sufficient power supply as agreed i.e, about 6400 KVA of BESCOM power and backup power of 6600 KVA and 4 chillers each of 600 TR and in the said regard, the respondent has contended that it is only an estimate and he has installed transformers of 5500 KVA and backup power of 6600 KVA, etc. Learned Arbitrator has considered this in para No. 6.33 and regarding whether the respondent is obligated to procure and commission of the quantities of BESCOM power and chillers shown in the SSA or whether those quantities are only an estimate, etc., as contended. In the said regard, he refers to the clause Nos. 4 to 8 of SSA which provide for supply of BESCOM power to the schedule commercial 55 Com.A.P 39/2021 building and after referring to the same, it is stated that the respondent has undertaken to secure those quantities and learned Arbitrator refers to clause No.7, which expressly stipulates that the claimant would have 25% of interest in those quantities of BESCOM back up power and chillers and it is sufficient, if the request is made within 3 months by the respondent and it is found by learned Arbitrator that the respondent is bound to provide the backup power supply and chillers as agreed and demand under Ex.C10 reply and there is direction to that effect. Therefore, the contention of defendant regarding this relief cannot be accepted as it is well considered order and it cannot be interfered by this Court along with the evidence and given finding including the findings relating to chillers and balance power supply to the tune of 2440 KVA.
69. The main concern of the plaintiff is that, the defendant has sold the ground floor of Tower C including common area of the lobby and passage to stair case illegally and allowed the purchaser to encroach the common area 56 Com.A.P 39/2021 and the plaintiff has sought for removal of encroachment. Learned Arbitrator has stated in para No. 6.48 that the dispute regarding sale of common area is not within the ambit of JDA or SSA or SA and it is held that it is not arbitrable and the person, who is in possession of that area is not a party before the arbitrator. Accordingly, the claim came to be rejected and I cannot find any mistake in the said order.
70. Regarding signage and logos, etc., is already included in the award.
71. Coming to the point No.3 and 3(a), which deals with fraudulent sale of 5430 sq. ft of common area and the liability of the respondent to compensate the same and 3(a) deals with the rental loss sustained by the plaintiff on account of allotment of common area, which is left and agreed and because of that the petitioner lost 5,430 sq.ft and which is being calculated on the basis of the rent that would have fetched, if the said area has been let out. Learned Arbitrator has considered the same in para No. 7.1 57 Com.A.P 39/2021 and 7.2 and refers to clause No.6.1 of JDA, which reads that "the undivided shares of the schedule property and the total super built up area of the proposed multi-storied commercial building which includes all covered areas, salable areas, parking spaces/basements terrace and open spaces of the proposed multi-storied commercial building, which is to be constructed on the schedule property shall be shared as follows:
"25% of the total super built up area including all covered areas, salable areas/ floor spaces, parking spaces, basements, terrace and open spaces of the proposed multi-storied commercial building with proportion of car parking space in the two basement and surface parking along with an undivided 25% share of the schedule property shall be allotted to the landowner".
72. Learned Arbitrator has come to the conclusion that the agreement does not conflict about sharing of super built up area, after excluding extent of common area and the said observation of the arbitrator is strongly objected to by the plaintiff stating that common area is meant for use of all, who goes to the respective constructed portion and 58 Com.A.P 39/2021 therefore, it cannot be included in anybody's share, but, the award reveals that even the 75% of the portion of the developer also includes common area and RW1 has asserted the same in his evidence and the observation of learned Arbitrator cannot be found fault with.
73. Regarding point No.4, which deals with claimant declaration that he is entitled to 25% of terrace area in Tower A, B and C, but the respondent admits the right of the petitioner in respect of 25% of Tower A, B and C, but, the arbitrator has not considered the same on the ground that the terrace area cannot be divided, but, the petitioner will have 25% of right over the terrace area and without seeking consequential relief, the relief of declaration cannot be granted. This was strongly objected to by the petitioner on the ground that the respondent admits, then, there is no impediment to grant such relief and dismissal of the relief is patently illegal, but, when we go through the reason assigned by the learned Arbitrator, no doubt it is stated that he has sought for declaration and it is borne out from 59 Com.A.P 39/2021 the documents that he is entitled to the same and there is no dispute about it, but, how to divide the said property without there being boundaries, that is difficult. Therefore, the reason assigned by the learned Arbitrator is proper and cannot be found fault with.
74. Point No.5 deals with allotment of 6,250 sq. ft of non-built up area in the upper basement and learned Arbitrator has referred to leasing out of 10,000 sq.ft to M/s Schneider by both the claimant and respondent in the ratio of 25:75% and the claimant is entitled to balance of 8,750 sq. ft (-) 2,000 sq.ft and it became 6250 sq. ft in the built up area of the upper basement.
75. Learned Arbitrator has referred to clause No. 4.1 and 4.2 of JDA, which deals with two basements meant only for car parking and services. Ex.R 20(e) the sanctioned plan permits use of the basements only for car parking and services and Letter of Intent given by the respondent to M/s Schneider, who agreed to take on lease all the floors in Tower C and Ex.C65 LOA states that "Lab 60 Com.A.P 39/2021 area: (i) 35000 sq.ft of upper basement floor; (ii) developer agreed to provide suitable indemnity in the lease deed to protect lessee from all kind of risks, as the upper basement floor is approved by the authority for parking and services only". So, after referring the said Ex. C65, it is shown that 35,000 sq.ft of the super built up area in the SA without sharing that area. However, M/s Schneider taken lease only of 10,000 sq. ft as it could not get permission to utilise 35,000 sq.ft in the upper basement. So, the remaining 25,000 sq. ft should be used only for the purpose of car parking as per BBMP regulations. So, the reason assigned by the learned Arbitrator is correct as there is no built up area in the upper basement in the sharing agreement, has made only on the basis of sharing agreement and therefore, answered point No.1 in the negative and there cannot be any other view in this regard. Therefore, the contention that the Arbitrator has re-written the contract cannot be accepted.
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76. Regarding point No.6, deals with huddle room and the petitioner has claimed right over the same and learned Arbitrator has referred to clause No. 6.1 of JDA, which indicates that for the purpose of sharing, the super built up area includes all covered areas/salable areas/parking spaces, basement, terrace and open spaces of proposed multi-storied commercial building. However, the claim of the petitioner in the huddle room as per clause No. 6.1 came to be negatived. The reason assigned by the learned Arbitrator that at the time of sharing agreement and taking possession, the huddle rooms are not in existence and they were constructed by raising partition wall for the purpose of conference or meeting for the use of all occupants and therefore, there cannot be unilateral claim by the petitioner in the said area. Learned Arbitrator has referred to para No.14 of the claim statement and also the evidence and document and learned Arbitrator relies the evidence of RW1 during the cross-examination and fact that there is no any whisper about including of that area, 62 Com.A.P 39/2021 at the time of sharing agreement and even if the mail sent by the petitioner at Ex.P75 is silent regarding huddle room, so one thing is clear that they came into existence after construction and handing over and now the petitioner cannot claim it and the observation of the learned Arbitrator is just and proper.
77. Regarding point No. 7, it is very clearly stated in the award that the respondent was entitled for 1,625 sq ft in the first floor of Tower- B, but, he has constructed in the first floor of Tower- B more than that by calculating the excess area and the rate fixed on the basis of the admission given by the RW1 to question No.99, that the compensation has been fixed at Rs.6,60,000/- on the basis of Rs.4,000/- per sq.ft for the remaining area of 1,625 sq ft which is in occupation of the respondent on the basis of prevailing rate.
78. The main grievance of the petitioner is that the said compensation has to be based on the prevailing rate 63 Com.A.P 39/2021 and not at the time when Ex.P2 came into existence in the said reason was not accepted by the learned arbitrator and I cannot find fault with.
79. Regarding point No.8 which relates to declaration regarding GPA executed by the plaintiff in favour of the defendant stands terminated in view of the defendant having sold all the units allotted to it. The learned Arbitrator has culled out the very clause found in 12.2 of JDA, which states that as soon as all the units are sold out by the respondent, the GPA comes to an end, but, he has opined that the respondent has not sold out 75% of the terrace area, which it has retained, though it has sold entire units and certain permission is to be obtained from the authority for that the GPA is required and therefore, by holding that though JDA provides for execution of GPA even if all units sold by respondents which comes to its share, it does not mean that it cannot sell the terrace area. According to learned counsel for the plaintiff, the 1st defendant has sold all the units, where is the question of 64 Com.A.P 39/2021 retaining terrace. This argument cannot be accepted for the reason that those purchaser who have purchased their units, might not have claimed balance terrace area and therefore, there is every chance of selling the terrace area to the extent of 75%, therefore, the observation of the learned arbitrator to that effect, cannot be found fault with. This Court cannot substitute its view in the place of view expressed by the arbitrator. Learned arbitrator has given anxious regarding the same in the final order, I cannot find any mistake in the said award.
80. Point No.10, relates to loss of rent suffered by the plaintiff due to the acts and omissions of the defendant regarding default committed in the matter failure to carryout internal painting and to secure the agreed quantity of BESCOM power and to install one more chiller etc., it is observed that under Section 73 of the Contract Act, the claimant can claim loss, which arises directly on account of the breach committed by the respondent. The loss of rentals would not be a loss contemplated under 65 Com.A.P 39/2021 Section 73. Even, if such loss can be claimed, the claimant has to prove that they could not secure tenants only due to the defaults committed by respondent and the evidence placed before the Arbitral Tribunal held to be insufficient. Accordingly, the said point came to be answered in the negative and there cannot be any second view in the said regard.
81. Regarding club facility, though it is argued that as per the JDA the defendant is bound to provide club facility, but, it is contended that he has agreed to provide the same in the larger development contemplated by the defendant and not in the Tower-C, etc., and all the facility provided for clubhouse, large recreational club with multi gym and indoor games, etc., and learned Arbitrator by referring to Ex.C 48 the sale deed dated 19.12.2012 executed by the claimant and respondent in favour of M/s AVEO and Ex.C5 the licence agreement in favour of M/s L'Oreal, particularly, clause No. 7.2 held that they intend to be provided in the larger development contemplated by the respondent and 66 Com.A.P 39/2021 though, it is argued that the respondent has not developed the project and that there is no chance of providing same larger development as contemplated by the respondent, etc., cannot be substituted by any other view by this Court, as the scope is very limited.
82. Regarding point Nos. 11, 12 and 12(a), which deal with counter claim made by the respondent and it is argued that the respondent is not entitled to counter claim, the allowing the counter claim on the basis of CAM charges etc., is not correct as there was no demand by giving reply notice by the 1st defendant and therefore, for the first time the counter claims were made only to defeat the right of the Plaintiff. The 1st defendant has claimed counter claim i.e., balance amount of Rs.69,03,500/- as far as CAM and minimum demand charges from 26.09.2012 on the ground that the building was completed in all respects fit for occupation with all amenities in 2012 itself. In the counter claim it has claimed Rs. 8,56,06,048/- and the amount was restricted to Rs.4,21,40,655/-. Learned Arbitrator by 67 Com.A.P 39/2021 referring to clause 10.1 of GCC, has come to the conclusion that the building is completed though certain fitments were left in the washroom, has come to the conclusion that the respondent is entitled to the amount which was agreed to be paid by the plaintiff as per clause No.10 (ii) of SSA and by referring to clause No.9 of SSA, the respondent was also entitled to claim minimum charges and based upon all these observation and fact that the petitioner has taken already the possession of his share and let out some of the portion to lessees/ tenants and fact that the tenants are paying CAM charges etc., come to the ultimate conclusion that the 1st defendant is entitled to CAM charges of Rs.69,03,500/- by answering point No.11 in the affirmative and allow the 1st defendant to claim CAM and minimum demand charges and partly allowed the counter claim. The reason given by learned Arbitrator is based upon the documents and the evidence given by the party and particularly clauses mentioned in 6.2 and 10 of JDA. He has also referred to clause No. 9.4 of JDA and clause No.9 68 Com.A.P 39/2021 of SSA and Ex.C75 and therefore, it cannot be held that it is based upon the whims and fancy of learned Arbitrator. Learned Arbitrator by referring all these documents by interpreting the documents in proper way, which cannot be found fault with by this Court, and this Court cannot substitute its view in the place of view expressed by the learned Arbitrator. So, when we go through the contention taken by the plaintiff and defendant with reference to their documents and the award, one thing is clear that the learned Arbitrator has given anxious attention to each and every aspect and allowed the counter claim and also allowed the claim partly, which cannot be found fault with.
83. Now, coming to the aspect of setting aside the award is concerned, the award can be set aside only when it is against public policy of India and against the terms of the contract or patently illegal. When this Court cannot interpret the terms of the contract other than one expressed by the Arbitrator as scope under Section 34 is very limited and there may be chances of interpreting in a 69 Com.A.P 39/2021 different way or view in different meaning to the word employed in the terms of the contract, but, it is the opinion of arbitrator based on contract, bound by the terms of the contract as held in the decisions quoted by the learned counsel for the plaintiff himself and when we read the dictum of law laid down in the decisions cited by the learned counsel for the plaintiff, though it is clear that the award is against the terms of the contract, amounts to patent illegality or that non-consideration of law laid down by the Apex Court or substantive law amounts to patent illegality etc., the same cannot be made applicable in the present case as the learned Arbitrator has taken each and every aspect and it can be seen that he has understood the scope of Arbitration with reference to JDA, SA and SSA. So, in view of the above facts, I do not find any merits in the contention raised by the plaintiff. Hence, I answer point No.1 in the Negative.
84. Point No.2: For the above said reasons, I proceed to pass the following.
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Com.A.P 39/2021 ORDER The petition filed by the plaintiff under Section 34 of the Arbitration & Conciliation Act, 1996, is hereby dismissed. No costs.
(Dictated to the Stenographer, typed by him, corrected and then pronounced by me in open Court on this the 21st day of April, 2022).
(CHANDRASHEKHAR U), LXXXVII Addl.City Civil & Sessions Judge, (Exclusive dedicated commercial Court) Bengaluru.
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