Kerala High Court
M/S. Dlf Home Developers Ltd vs Samuel V Thomas on 31 May, 2021
Bench: C.T.Ravikumar, K.Haripal
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 23 OF 2020
AGAINST THE ORDER DATED 22.1.2020 IN O.P.(ARB)NO.287/2018 OF
THE COURT OF ADDITIONAL DISTRICT JUDGE-VII, ERNAKULAM.
APPELLANT/PETITIONER:
M/S.DLF HOME DEVELOPERS LTD.
0
HAVING ITS REGISTERED OFFICE AT 9TH FLOOR, DLF
CENTRE, SANSAD MARG, NEW DELHI - 110 001 AND
HAVING ITS REGIONAL OFFICE OPP. DOORDARSHAN KENDRA
SEAPORT AIRPORT ROAD, KAKKANAD, COCHIN - 682 030
REPRESENTED BY ITS AUTHORISED SIGNATORY
MR.SAYED EBRAHIM.
BY ADV M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
RESPONDENT/RESPONDENT:
MARTIN GEORGE
0
HO 5/818, RAJA NAGAR, POYAMPALAYAM, P.N.ROAD,
TRIPUR, TAMIL NADU - 641 603.
BY ADV SRI.PEEYUS A.KOTTAM
THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON
31.05.2021, ALONG WITH Arb.A.26/2020 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 26 OF 2020
AGAINST THE ORDER DATED 16.1.2020 IN O.P.(ARB)NO.264/2018 OF
THE COURT OF THE II ADDITIONAL DISTRICT JUDGE,ERNAKULAM,
APPELLANT/PETITIONER:
M/S DLF HOME DEVELOPERS LTD.
0
HAVING ITS REGISTERED OFFICE AT 9TH FLOOR
DLF CENTRE, SANSAD MARG, NEW DELHI- 110001 AND
HAVING ITS REGIONAL OFFICE OPP. DOORDARSHAN KENDRA
SEAPORT AIRPORT ROAD, KAKKANAD, COCHIN- 682030
REPRESENTED BY ITS AUTHORISED SIGNATORY,
MR.SAYED EBRAHIM.
BY ADVS.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
RESPONDENT/RESPONDENT:
ACHUTHAN SUNDARESWARAN
0
AGE NOT KNOWN TO THE APPELLANT S/O.KANDAN KANIYATH
ACHUTHAN, SUNDER VILLA, 20/598 PULICODE,
MUTTIKULANGARA P.O., PALAKKAD- 678594
BY ADV SRI.PEEYUS A.KOTTAM
THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON
31.05.2021, ALONG WITH Arb.A.23/2020 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 31 OF 2020
AGAINST THE ORDER DATED 16.1.2020 IN O.P.(ARB)263/2018 OF
THE COURT OF II ADDITIONAL DISTRICT JUDGE,ERNAKULAM,
APPELLANT/PETITIONER:
M/S DLF HOME DEVELOPERS LTD. HAVING ITS REGISTERED
0
OFFICE AT 9TH FLOOR DLF CENTRE, SANSAD MARG,
NEW DELHI-110 001, AND HAVING ITS REGIONAL OFFICE
OPP. DOORDARSHAN KENDRA SEAPORT AIRPORT ROAD,
KAKKANAD, COCHIN-682 030, REPRESENTED BY ITS
AUTHORISED SIGNATORY MR.SAYED EBRAHIM.
BY ADVS.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
RESPONDENT/RESPONDENT:
ACHUTHAN SUNDARESWARAN,
0
S/O.KANDAN KANIYATH ACHUTHAN, SUNDER VILLA,
20/598,PULICODE, MUTTIKULANGARA P.O.,
PALAKKAD-678 594
BY ADVS.SRI.PEEYUS A.KOTTAM
SHRI.HRITHWIK D. NAMBOOTHIRI
THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON
31.05.2021, ALONG WITH Arb.A.23/2020 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 4
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 6 OF 2021
AGAINST THE ORDER IN O.P.(ARB)273/2018 DATED 20.12.2019
OF THE COURT OF ADDITIONAL DISTRICT JUDGE - VII, ERNAKULAM,
APPELLANT/PETITIONER:
M/S. DLF HOME DEVELOPERS LTD.HAVING ITS REGISTERED
0
OFFICE AT 9TH FLOOR, DLF CENTRE, SANSAD MARG,
NEW DELHI-110 001, AND HAVINF ITS REGIONAL OFFICE
OPP.DOORDARSHAN KENDRA, SEAPORT AIRPORT ROAD,
KAKKANAD, COCHIN-682 030, REPRESENTED BY ITS
AUTHORISED SIGNATORY, MR.SAYED EBRAHIM
BY ADVS.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
SHRI.DOMINIC ANTONY
RESPONDENT/RESPONDENT:
SAMUEL V THOMAS, S/O.V.CHERIYAN THOMAS,
0
VADAKKATHARA HOUSE, ETTICHUVADU P.O., RANNI,
PATHANAMTHITTA-689 672.
BY ADVS.SRI.SAIBY JOSE KIDANGOOR (CAVEATOR)
SRI.SAIBY JOSE KIDANGOOR
SRI.BENNY ANTONY PAREL
THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON
31.05.2021, ALONG WITH Arb.A.23/2020 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 5
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 7 OF 2021
AGAINST THE ORDER DATED 20.12.2019 IN O.P(ARB)254/2018 OF
THE COURT OF ADDITIONAL DISTRICT JUDGE - VII, ERNAKULAM,
APPELLANT/PETITIONER:
M/S.DLF HOME DEVELOPERS LTD.
0
HAVING ITS REGISTERED OFFICE AT 9TH FLOOR,
DLF CENTRE, SANSAD MARG, NEW DELHI-110001 AND
HAVING ITS REGIONAL OFFICE OPP. DOORDARSHAN
KENDRA, SEAPORT AIRPORT ROAD, KAKKANAD, COCHIN-
682030, REPRESENTED BY ITS AUTHORISED SIGNATORY,
MR.SAYED EBRAHIM.
BY ADVS.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
SHRI.DOMINIC ANTONY
RESPONDENT/RESPONDENT:
TONO THOMAS, S/O. THOMAS MATHEW, 12A, EXPRESS
0
ESTATE, KALOOR, COCHIN-682017, PERMANENT ADDRESS
AT VATTAKUZHI HOUSE, CHEMBUMUKKU, CIVIL LANES
ROAD, COCHIN-682030.
BY ADV SRI.PEEYUS A.KOTTAM
THIS ARBITRATION APPEALS HAVING BEEN FINALLY HEARD ON
31.05.2021, ALONG WITH Arb.A.23/2020 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 6
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 31ST DAY OF MAY 2021 / 10TH JYAISHTA, 1943
ARB.A NO. 8 OF 2021
AGAINST THE ORDER 20.12.2019 IN O.P(ARB) 267/2018 OF THE
COURT OF ADDITIONAL DISTRICT JUDGE - VII, ERNAKULAM,
APPELLANT/PETITIONER:
M/S. DLF HOME DEVELOPERS LTD.,
0
HAVING ITS REGISTERED OFFICE AT 9TH FLOOR
DLF CENTRE, SANSAD MARG, NEW DELHI - 110 001
AND HAVING ITS REGIONAL OFFICE OPP. DOORDARSHAN
KENDRA SEAPORT AIRPORT ROAD,
KAKKANAD, COCHIN - 682 030
REPRESENTED BY ITS AUTHORISED SIGNATORY,
MR.SAYED EBRAHIM.
BY ADVS.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
SHRI.DOMINIC ANTONY
RESPONDENT/RESPONDENT:
1 ANTO THOMAS, S/O.SRI.THOMAS V.CHIRAYIL,
CHAKUNGAL HOUSE, BANK ROAD,
NEAR STATE BANK OF INDIA,
VYTILLA, KOCHI - 682019.
Arb.Appeal No.23 of 2020 & Conn. cases 7
2 KAVITHA JOSEPH, W/O.ANTO THOMAS,
CHAKUNGAL HOUSE, BANK ROAD,
NEAR STATE BANK OF INDIA,
VYTILLA, KOCHI - 682 019.
BY ADVS.SRI.SAIBY JOSE KIDANGOOR(caveator)
SRI.SAIBY JOSE KIDANGOOR
SRI.BENNY ANTONY PAREL
THIS ARBITRATION APPEAL HAVING BEEN FINALLY ON 31.05.2021,
ALONG WITH Arb.A.23/2020 AND CONNECTED CASES, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
Arb.Appeal No.23 of 2020 & Conn. cases 8
"C.R."
JUDGMENT
Ravikumar, J.
The same appellant viz., M/s.DLF Home Developers Ltd., filed the captioned appeals under Section 37 of the Arbitration and Conciliation Act, 1996, hereafter referred for brevity 'the Act' only, against different orders of dismissal passed in Original Petitions (Arbitration) filed by it under Section 34 of the Act on being aggrieved by different arbitral awards passed in favour of the respective respondent in the appeals. M/s.DLF Home Developers Ltd. and the respective respondent in each of the appeals had entered into agreements, on different dates styled as the Apartment Buyers Agreement for the purpose of purchase of apartments in the then proposed project of the appellant by name "DLF Riverside". At the request of the parties and also taking note of the commonness of the issues as also the contentions the appeals were jointly heard and they are being disposed of by this common judgment. For a proper disposal of the appeals we think it appropriate to make a succinct narration of the relevant factual aspects involved in each of the appeals. Arb.Appeal No.23 of 2020
2. This appeal is filed against the order dated 22.1.2020 in O.P.(Arb)No.287 of 2018 of the Court of the Additional District Arb.Appeal No.23 of 2020 & Conn. cases 9 Judge-VII, Ernakulam. The respondent-claimant initially booked Apartment No.RSC-083 as per agreement dated 1.2.2008, in DLF Riverside Project. On acceptance of the announced scheme for upgrading to a larger apartment and pursuant to the execution of 'Apartment Buyers Agreement' with the appellant on 7.1.2009 the respondent was, later, allotted Apartment No.RSC-062, on the 6 th floor of Tower-C. Even after execution of the said agreement, 1.2.2008, which is the date of the agreement in relation to Apartment No.RSC- 083 initially booked by him, was mutually agreed as the date of the agreement. The respondent effected a total payment of Rs.1,26,19,660.89. The total cost of the newly allotted apartment, of course, to be handed over on completion of the construction, was informed as Rs.1,32,85,731.49 inclusive of the cost of two car parking spaces. According to the respondent, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 1.9.2010, but it was not handed over, as agreed, even by 15.9.2015. Hence, raising aforesaid contentions, the respondent in this appeal filed claim, numbered as Arbitration Case No.8/2015, on 15.9.2015 for a sum of Rs.1,26,19,660.89 claiming to be the sum total paid for the purchase of Apartment No.RSC-062. In addition, he claimed an amount of Rs.1,53,75,210/- towards interest computed at the rate of 18% per Arb.Appeal No.23 of 2020 & Conn. cases 10 annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% per annum on the principal amount of Rs.1,26,19,660.89 from the date of claim petition till the date of award. He claimed an amount of Rs.1 Crore as damages and also claimed future interest from the date of award at the rate of 18% per annum till realisation. The sole Arbitrator passed an award on 1.8.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.2,32,88,271.47 (Rupees Two Crores Thirty Two Lakhs Eighty Eight Thousand Two Hundred and Seventy One and Forty Seven Paise only). The respondent-claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.1,26,19,660.89, at the rate of 9% per annum till recovery. Arb.Appeal No.26 of 2020
3. This appeal is filed against the order dated 16.1.2020 in O.P.(Arb)No.264 of 2018 of the Court of the Additional District Judge-II, Ernakulam. The respondent-claimant booked a Duplex Apartment (RSE-
122) in DLF Riverside Project of the appellant. The total cost of the apartment allotted and, of course, to be handed over on completion of construction, was Rs.1,48,10,475/- inclusive of the cost of two car parking spaces. He paid a sum of Rs.1,41,30,524.61, towards the cost of the apartment allotted to him. As per the Apartment Buyers Arb.Appeal No.23 of 2020 & Conn. cases 11 Agreement dated 31.1.2008, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 31.8.2010, but it was not handed over, as agreed, even by 1.9.2015. Hence, the respondent in this appeal filed claim, numbered as Arbitration Case No.15A/2015, on 1.9.2015 for a sum of Rs.1,41,30,524.61 claiming to be the sum total paid for the purchase of Apartment No.RSE-122. In addition, he claimed an amount of Rs.1,96,47,873.59 towards interest computed at the rate of 18% per annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% on the principal amount of Rs.1,41,30,524.61 from the date of claim petition till the date of award. He claimed an amount of Rs.50,00,000/-as damages and also claimed future interest from the date of award at the rate of 18% per annum till realisation. The sole Arbitrator passed an award on 16.7.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.2,60,11,803.24 (Rupees Two Crores Sixty Lakhs Eleven Thousand Eight Hundred and Three and Twenty Four Paise only). The respondent-claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.1,41,25,664.26 at the rate of 9% per annum till recovery. Arb.Appeal No.23 of 2020 & Conn. cases 12 Arb.Appeal No.31 of 2020
4. This appeal is filed against the order dated 16.1.2020 in O.P.(Arb)No.263 of 2018 of the Court of the Additional District Judge-II, Ernakulam. The respondent-claimant booked a Duplex Apartment (RSE-061) in DLF Riverside Project of the appellant. The total cost of the apartment was Rs.2,18,29,660/- inclusive of the cost of two car parking spaces. He paid a sum of Rs.2,10,24,512.31, towards the cost of the apartment allotted to him and to be handed over on completion of construction. As per the Apartment Buyers Agreement dated 30.1.2008, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 30.8.2010, but it was not handed over, as agreed, even by 22.9.2015. Hence, the respondent in this appeal filed claim, numbered as Arbitration Case No.15/2015 on 22.9.2015 for a sum of Rs. 2,10,24,512.31 claiming to be the sum total paid for the purchase of the Apartment No.RSE-061. In addition, he claimed an amount of Rs.2,85,31,506.47 towards interest computed at the rate of 18% per annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% on the principal amount of Rs.2,10,24,512.31 from the date of claim petition till the date of award. He claimed an amount of Rs.50,00,000/- as damages and also claimed future interest from the Arb.Appeal No.23 of 2020 & Conn. cases 13 date of award at the rate of 18% per annum till realisation. The sole Arbitrator passed an award on 16.7.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.3,82,54,276.67 (Rupees Three Crores Eighty Two Lakhs Fifty Four Thousand Two Hundred and Seventy Six and Sixty Seven Paise only). The respondent-claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.2,08,13,429.31 at the rate of 9% per annum till recovery. Arb.Appeal No.6 of 2021
5. This appeal is filed against the order dated 20.12.2019 in O.P.(Arb)No.273 of 2018 of the Court of the Additional District Judge- VII, Ernakulam. The respondent-claimant booked a Duplex Apartment (RSC-054) in DLF Riverside Project of the appellant. The total cost of the apartment was informed as Rs.80,19,750/- inclusive of the cost of two car parking spaces. He paid a sum of Rs.76,02,768/- towards the cost of the apartment allotted to him. As per the Apartment Buyers Agreement dated 7.8.2008, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 7.3.2011, but it was not handed over, as agreed, even by 21.8.2015. Hence, the respondent in this appeal filed claim, numbered as Arbitration Case No.12/2015 on 21.8.2015 for a sum of Rs.76,02,768/- claiming to be the sum total paid for the Arb.Appeal No.23 of 2020 & Conn. cases 14 purchase of the Apartment No.RSC-054. In addition, he claimed an amount of Rs.82,15,688.59 towards interest computed at the rate of 18% per annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% on the principal amount of Rs.76,02,768/- from the date of claim petition till the date of award. He claimed an amount of Rs.25,00,000/- as damages and also claimed future interest from the date of award at the rate of 18% per annum till realisation. The sole Arbitrator passed an award on 23.7.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.1,35,90,891.38 (Rupees One Crore Thirty Five Lakhs Ninety Thousand Eight Hundred and Ninety One and Thirty Eight Paise only). The respondent-claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.76,02,768/- at the rate of 9% per annum till recovery. Arb.Appeal No.7 of 2021
6. This appeal is filed against the order dated 20.12.2019 in O.P.(Arb)No.254 of 2018 of the Court of the Additional District Judge- VII, Ernakulam. The respondent-claimant booked a Duplex Apartment (RSB-061) in DLF Riverside Project of the appellant. The total cost of the apartment was Rs.2,19,03,475/- inclusive of the cost of two car parking spaces. He paid a sum of Rs.1,86,17,954.50 towards the cost Arb.Appeal No.23 of 2020 & Conn. cases 15 of the apartment allotted to him. As per the Apartment Buyers Agreement dated 1.2.2008, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 1.8.2010, but it was not handed over, as agreed, even by 1.9.2015. Hence, the respondent in this appeal filed claim, numbered as Arbitration Case No.1/2015 on 1.9.2015 for a sum of Rs.1,86,17,954.50 claiming to be the sum total paid for the purchase of the Apartment No.RSB-061. In addition, he claimed an amount of Rs.2,29,43,841.22 towards interest computed at the rate of 18% per annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% on the principal amount of Rs.1,86,17,954.50 from the date of claim petition till the date of award. He claimed an amount of Rs.50,00,000/- as damages and also future interest from the date of award at the rate of 18% per annum till realisation. The sole Arbitrator passed an award on 6.7.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.3,45,29,652.80 (Rupees Three Crores Forty Five Lakhs Twenty Nine Thousand Six Hundred and Fifty Two and Eighty Paise only). The respondent-claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.1,86,17,954.50 at the rate of 9% per annum till recovery.
Arb.Appeal No.23 of 2020 & Conn. cases 16Arb.Appeal No.8 of 2021
7. This appeal is filed against the order dated 20.12.2019 in O.P.(Arb)No.267 of 2018 of the Court of the Additional District Judge- VII, Ernakulam. The respondent-claimant booked a Duplex Apartment (RSA-061) in DLF Riverside Project of the appellant. The total cost of the apartment was Rs.1,65,96,000/- inclusive of the cost of two car parking spaces. He paid a sum of Rs.1,58,22,189.60 towards the cost of the apartment allotted to him. As per the Apartment Buyers Agreement dated 5.3.2008, the apartment was to be fully built, complete with all facilities, amenities and services and with all statutory approvals and clearances etc., by 18.11.2010, but it was not handed over, as agreed, even by 1.8.2015. Hence, the respondent in this appeal filed claim, numbered as Arbitration Case No.19/2015 on 1.8.2015 for a sum of Rs.1,58,22,189.60 claiming to be the sum total paid for the purchase of the Apartment No.RSA-061. In addition, he claimed an amount of Rs.1,80,60,658.14 towards interest computed at the rate of 18% per annum on the principal amount from the respective dates of each payment till the date of claim petition. He also claimed interest at the rate of 18% on the principal amount of Rs.1,58,22,189.60 from the date of claim petition till the date of award. He claimed an amount of Rs.50,00,000/- as damages and also claimed future interest from the date of award at the rate of 18% per annum till Arb.Appeal No.23 of 2020 & Conn. cases 17 realisation. The sole Arbitrator passed an award on 16.7.2018, upon considering the evidence on record as also the rival contentions, partly allowing the claim petition and awarding a sum of Rs.2,87,57,850.76 (Rupees Two Crores Eighty Seven Lakhs Fifty Seven Thousand Eight Hundred and Fifty and Seventy Six Paise only). The respondent- claimant was also held entitled to claim future interest on the principal amount paid viz., Rs.1,58,16,614.13 at the rate of 9% per annum till recovery.
8. Heard.
9. Common contentions were raised in the defence statement submitted by the appellant herein in all the aforementioned Arbitration Cases, before the Arbitrator as also in the petitions filed under Section 34 of the Act for setting aside the award passed in the respective Arbitration Cases. So also, in all these appeals similar contentions, on identical facts, are raised. As stated earlier, it is in the aforesaid circumstances that joint hearing of the appeals was sought for. Such common contentions raised by M/s.DLF Home Developers Ltd.,-the appellant would undoubtedly reveal that the delay occurred in delivering the apartments to the respondent concerned in these appeals, is not disputed by the appellant. In fact, it is indisputable in view of the admitted factual position, discernible from the pleadings. Obviously, in all these appeals, the appellant would contend that it was Arb.Appeal No.23 of 2020 & Conn. cases 18 prevented from handing over the apartment due to 'force majeure' conditions. In that regard it was contended that as per Clause 36 of the 'Apartment Buyers Agreement' executed between the appellant and the respondent concerned, if the appellant is prevented from handing over possession of the apartment due to 'force majeure' conditions the appellant could not be held responsible or liable for not performing any of its obligations as provided in the agreement. In elaboration of the said contention the appellant would also contend that when the apartment was completed and was ready to occupy, a local resident filed a writ petition viz., W.P.(C)No.27248 of 2012 before this Court seeking demolition of the apartment complex by name 'DLF Riverside' and the High Court had granted an interim order of injunction against the Corporation of Kochi for granting occupation certificate. Further it is contended thus:-
As per judgment dated 8.12.2014 in W.P.(C)No.27248 of 2012 a learned Single Judge of this Court ordered for demolition of the said apartment complex by name 'DLF Riverside' and thereupon the appellant took up the matter in appeal as W.A.No.1987/2014. The Division Bench initially granted a stay of the operation of the judgment and ultimately the judgment dated 8.12.2014 was set aside by the Division Bench though the findings of the Single Bench regarding the Building Rules violations were upheld and then the Division Bench Arb.Appeal No.23 of 2020 & Conn. cases 19 directed the appellant herein to pay a fine of Rs.1 Crore to the District Collector, Ernakulam for being used exclusively for building up environment, maintaining ecological balance etc. in Chilavannoor river.
Earlier, in view of the judgment of the Single Bench in W.P. (C)No.27248 of 2012 the Corporation of Kochi refused to grant occupancy certificates after numbering the apartments and virtually, it was the said situation that prevented the appellant from delivering the apartment to the customers including the respondents. That apart, the appellant relied on Clauses 10.1 to 10.4 of the Apartment Buyers Agreement to resist the claim of the respondents and to contend that they would be entitled only to get refund of the amount actually paid without interest, subject to the other conditions enjoined under the Apartment Buyers Agreements. It is also contended that the conditions in the agreement did not entitle the respondents to claim interest. The contentions raised on the aforesaid lines based on force majeure conditions and clauses 10.1 to 10.4 of the agreements were rejected by the sole Arbitrator and in the Arbitration Cases, after considering such contentions, the District Judge had also rejected such contentions. All those contentions are reiterated before us and it is contended that it is the perverse consideration of such contentions by the Arbitrator as also by the District Court which resulted in adverse arbitral awards and orders of their confirmation by the Courts. We will consider all the Arb.Appeal No.23 of 2020 & Conn. cases 20 contentions including such contentions, in accordance with law, after referring to the scope of jurisdiction to interfere with arbitral awards under Sections 34 & 37 of the Act, in the light of the binding precedents on the subject.
10. An appeal is normally heard on questions of fact and on questions of law. However, an appeal filed under Section 37 of the Act against an order under Section 34 of the Act refusing to set aside the award can be heard only on limited grounds. An arbitral award could be set aside by the Court on one or more of the grounds set forth under Section 34(2) of the Act. Normally, the award of the Arbitrator is final and conclusive as long as the Arbitrator had acted within his authority and according to the principles of fair play. It is not open to the Court to re-assess the evidence in order to find out whether the Arbitrator had committed any error or to decide the question of adequacy of evidence as the Arbitrator appointed by the parties is the sole Judge of the quantity and quality of evidence when he delivers arbitral award and therefore, an award based on little evidence or evidence which does not measure up in quality to a trained legal mind could not be held invalid. Ordinarily, the Arbitral Tribunal should be the final arbiter of both the questions of fact and law referred to it. The Court would not be justified in interfering with an abitral award, merely because in a given case, the interpretation on the terms of the contract by the Arbitrator, Arb.Appeal No.23 of 2020 & Conn. cases 21 did not accord with the interpretation which the Court, if it were to conduct the adjudication at the first instance, would have placed on such terms of contract. The Court cannot undertake an independent assessment of the merits of the award and it can only ascertain whether the power under Section 34 of the Act was exercised in terms of the provisions under Section 34 of the Act or whether the exercise of power by the Court under Section 34 has exceeded the scope of the provision thereunder.
11. We will refer to the various decisions which settled the aforesaid positions of law. In Hindustan Construction Co. Ltd. v. Governor of Orissa reported in AIR 1995 SC 2189 the Hon'ble Apex Court held that the Court while considering the question whether an arbitral award should be set aside, did not examine the question as an Appellate Court. In P.R.Shah, Shares & Stock Brokers (P) Ltd. v. B.H.H.Securities(P) Ltd. reported in (2012) 1 SCC 594, at paragraph 21 the Apex Court held that a court could not sit in appeal over the award of an Arbitral Tribunal by re-assessing or re- appreciating the award and that an award could be challenged only under the grounds mentioned in Section 34(2) of the Act.
12. As regards test of perversity the decisions of the Hon'ble Supreme Court in H.B.Gandhi, Excise and Taxation Officer- cum-Assessing Authority, Karnal v. M/s.Gopi Nath & Sons (1992 Arb.Appeal No.23 of 2020 & Conn. cases 22 Supp (2) SCC 312) and in Kuldeep Singh v. Commr.of Police [(1999) 2 SCC 10] assume relevance. In paragraph 7 of Gopi Nath's case the Apex Court held:-
"7. ..... It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law."
In paragraph 10 of the decision in Kuldeep Singh's case (supra) the Apex Court held:
"10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence is on record which is acceptable and which could be relied upon, however compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."
13. In the decision in ONGC Ltd. v. Saw Pipes Ltd., [(2003) 5 SCC 705] the Apex Court held that the decision of Arbitral Tribunal must be within the bounds of its jurisdiction conferred under the Act or the contract and in exercising the jurisdiction the Arbitral Tribunal could not act in breach of some provision of substantive law or the provisions of the Act. Therefore, if the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal, which could be Arb.Appeal No.23 of 2020 & Conn. cases 23 interfered with under Section 34 of the Act. However, such failure of procedure should be patent affecting the rights of the parties, it was further held therein.
14. In paragraph 17 of the decision in Associate Builders v. Delhi Development Authority reported in (2015) 3 SCC 49 the Apex Court held:
"It will be seen that none of the grounds contained in sub-section (2)(a) of Section 34 deal with the merits of the decision rendered by an arbitral award. It is only when we come to the award being in conflict with the public policy of India that the merits of an arbitral award are to be looked into under certain specified circumstances."
While dealing with the question as to when interference with finding(s) of fact in an arbitral award is permissible it was held:
"It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass the muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrator's approach is not arbitrary or capricious, then he is the last word on facts."
As relates interpretation of terms of a contract, after observing about the third subhead, patent illegality that it is really a contravention of Section 28(3) of the Arbitration Act and extracting Section 28(3), it Arb.Appeal No.23 of 2020 & Conn. cases 24 was further held in paragraph 42.3 of the decision in Associate Builders case thus:-
"This last contravention must be understood with a caveat. An Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator contrues a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do."
15. Associate Builders case was decided on 25th November, 2014 when Section 28(3) of the Act stood thus:-
"In all cases, the Arbitral Tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction."
(underline supplied) Subsequently, as per Amendment Act, 2015 Section 28(3) was amended as hereunder:-
"While deciding and making an award, the Arbitral Tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction."
(underline supplied)
16. In the decision in Ssangyong Engineering & Construction Co.Ltd. v. National Highways Authority of India (NHAI) reported in AIR 2019 SC 5041 the Hon'ble Apex Court considered paragraphs 42.3 to 45 in Associate Builders case(supra) Arb.Appeal No.23 of 2020 & Conn. cases 25 with reference to the change made in Section 28(3) of the Act by the Amendment Act, 2015. It reads thus:-
"29. The change made in Section 28(3) by the Amendment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (AIR 2015 SC 620), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take.
Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he committs an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2A).
30.What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (AIR 2015 SC 620)(supra), while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse."
17. The learned counsel for the appellant cited certain decisions worthy to be noticed in the contextual situation. The decision of the Apex Court in New India Civil Erectors Pvt. Ltd. v. Oil Associate Builder and Natural Gas Corporation reported in AIR 1997 SC 980 is relied on to contend that the Arbitrator being a Arb.Appeal No.23 of 2020 & Conn. cases 26 creature of the agreement, must operate within the four corners of the agreement and he could not travel beyond it. Relying on the decision in Steel Authority of India v. J.C.Budharaja reported in AIR 1999 SC 3275 it was contended by the learned counsel for the appellant that to find out whether the arbitrator has travelled beyond his jurisdiction and acted beyond the terms of the agreement between the parties, agreement is required to be looked into and though the interpretation of a particular condition in an agreement would be within the jurisdiction of the Arbitrator in cases where there was no question of interpretation of any term of the contract, but and it is applicable solely for reading the same as it is and still the Arbitrator ignores the said position and awards amount despite the prohibition in the agreement, the award would be arbitrary, capricious and without jurisdiction. It was further held therein that since the question whether the Arbitrator had acted beyond the terms of the contract or had travelled beyond his jurisdiction would depend upon facts, which however would be jurisdictional facts and are required to be gone into by the Court and that the Arbitrator might have jurisdiction to entertain claim and yet he might not have jurisdiction to pass award for particular items in view of the prohibition contained in the contract and, in such cases, it would be a jurisdictional error. Relying on the decision in Associated Engineering Company v. Government of Andhra Pradesh and Arb.Appeal No.23 of 2020 & Conn. cases 27 Others reported in AIR 1992 SC 232 it was contended by the learned counsel for the appellant that an Arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract and that his function is only to arbitrate in terms of the contract. The position of law settled by the aforementioned decisions and the provisions of law referred above would clearly demarcate the scope of consideration of an appeal filed under Section 37 of the Act. Applying the position thus revealed we will examine whether the arbitral awards and the orders of the District Judge virtually, confirming them call for interference, on the grounds raised and urged.
18. Now, we will consider the core contention of the appellant raised in the above appeals. We have already taken note of the fact that in all the appeals the factum of occurrence of delay in handing over apartment to the respondent concerned is not disputed. However, the contention is that Clause 36 of the Apartment Buyers Agreement executed by the appellant with each of the respondents provides that the appellant could not be held responsible or liable for not performing any of its obligation provided under the agreement if the appellant was prevented from handing over the apartment to the buyer concerned due to force majeure conditions. The expression 'force majeure' is not a mere French version of the latin expression 'vis major', which means 'an act of God'. Undoubtedly, the expression Arb.Appeal No.23 of 2020 & Conn. cases 28 'force majeure' is a term of wider importance. A scanning of the decisions on the subject would reveal that where reference is made to 'force majeure', the intention is to save the performing party from consequences of anything over which he had no control. This is the widest meaning that could be given to the term 'force majeure' going by the decision of the Apex Court in Dhanrajamal Govindram v. Shamji Kalidas & Co. reported in AIR 1961 SC 1285. Taking into account the said widest meaning that could be ascribed to the said expression it could candidly be said that it is absolutely unavailable to a party to a contract to seek shelter and shun from the responsibility and liability under a 'force majeure' clause in a contract in case the so called force majeure situation is nothing but his own creation or it was one which could have been averted by due diligence or in other words, was within his control. This is because a person cannot be allowed to take advantage of his own wrong, in other words, no one can be allowed to benefits from his own wrongful act as explained by the legal maxim 'Commondum ex injuria sua memo habere debt'. The rulings and literature on 'force majeure' would show that where reference is made to 'force majeure', the intention is to save the performing party from the consequences of anything that created such a condition over which he had no control that caused the alleged breach of contract. Pithily stated, such happenings or eventualities which are claimed and Arb.Appeal No.23 of 2020 & Conn. cases 29 described as 'force majeure' conditions should not be one within the power and control of the promiser. Where the impossibility arises from an act or default of the promiser or nothing but a direct impact of the act or default of the promiser the promiser cannot be saved from the inevitable consequences of breach.
19. We have already adverted to the contentions raised by the appellant to rely on Clause 36 of the Apartment Buyers Agreement that provides that if the appellant is prevented from handing over the apartment due to 'force majeure' conditions he could not be held responsible or liable for not performing any of its obligations as provided in the agreement. After referring to Clause 36 of the Apartment Buyers Agreement this issue was considered by the sole Arbitrator as also by the District Court, as can be revealed from the respective arbitral award as also from the respective order of the District Court under Section 34 of the Act.
20. Clause 36 of the Apartment Buyers Agreement carrying 'force majeure' conditions, applicable in all these cases, reads thus:-
"36. 'force majeure' The Company shall not be held responsible or liable for not performing any of its obligations or undertaking as provided in the agreement if such performance is prevented or delayed due to 'force majeure' conditions."
(underline supplied) Arb.Appeal No.23 of 2020 & Conn. cases 30
21. The term 'force majeure' was defined in the written agreement executed between the appellant and the respective respondent in these appeals and it is extracted in all the arbitral awards. The same reads thus:-
"Force Majeure" means any event or combination of events or circumstances beyond the control of a Party which cannot (a) by the exercise of reasonable diligence, or (b) despite the adoption of reasonable precaution and/or alternative measures be prevented, and which adversely affects a party's ability to perform obligations under this Agreement, which shall include but not be limited to:
(a) Acts of God, i.e. fire drought, flood, earthquake, epidemics, natural disasters or death or disabilities;
(b) explosions or accidents, air crashes and shipwrecks;
(c) strikes or lock-outs, Industrial Dispute;
(d) non-availability of cement, steel or other construction material due to strikes of manufactures, suppliers, transporters or other intermediaries;
(e) war and hostilities of war or civil commotion;
(f) non-receipt of any approval from any governmental authority or imposition of any adverse condition or obligation in any approvals (including the Approvals) from any governmental authority, including delay in issuance of the Commencement Certificate, Intimation of Disapproval, Occupation Certificate, Completion Certificate and/ or any other Certificates may be required;
(g) the promulgation of or amendment of any law, rule or regulation or the issue of any injunction, court order or direction from any governmental authority that prevents or restricts a party from complying with any or all the terms and conditions as agreed in this Agreement; or
(h) any event or circumstances analogous to the foregoing."Arb.Appeal No.23 of 2020 & Conn. cases 31
22. At the risk of repetition, we will refer to the situation explained by the appellant, in all these cases, to canvass the contention that delay in handing over possession of apartments was due to 'force majeure' conditions. The appellant's contention is that when the apartments were completed and were ready to occupy, a local resident filed a writ petition viz., W.P.(C)No.27248 of 2012 before the High Court of Kerala seeking demolition of the apartment complex by name 'DLF Riverside' and the High Court had granted an interim order of injunction against the Corporation of Kochi for granting occupation certificate. Feeling aggrieved by the judgment in W.P.(C)No.27248 of 2012 ordering demolition of the said apartment complex the appellant preferred W.A.No.1987/2014. The Division Bench initially granted a stay of the operation of the judgment and ultimately set aside the judgment in W.P.(C)No.27248 of 2012. Further, the Division Bench directed the appellant herein to pay a fine of Rs.1 Crore to the District Collector, Ernakulam for being used exclusively for building up environment, maintaining ecological balance etc. in Chilavannoor river. Earlier, in view of the judgment of the Single Bench in W.P. (C)No.27248 of 2012 the Corporation of Kochi had refused to grant occupancy certificates after numbering the apartments and virtually, it was the said situation, according to the appellant, that prevented it from delivering the apartments.
Arb.Appeal No.23 of 2020 & Conn. cases 32
23. A perusal of the respective arbitral award would reveal that the arbitrator took note of the relevant fact that in all these cases the agreement was to hand over pacca constructed apartment to the respondent concerned within 31 months from the date of execution of the Apartment Buyers Agreement and further that such dates in all these cases fell much before the filing of W.P.(C) No.27248 of 2012 before this Court. As noticed hereinbefore, the appellant would also admit occurrence of delay in handing over the apartments to the respondents in these appeals and that is why the appellant is relying on Clause 36 of the Apartment Buyers Agreement carrying 'force majeure' clause. Besides the said facts, there is another fact that is unassailable i.e., for the act of not having obtained prior clearance and proceeding on the basis of a deemed clearance the Hon'ble Apex Court held the direction of the Division Bench of this Court to deposit Rs.1 Crore to be treated as fine. The decision of the Hon'ble Apex court would also reveal as to why the authorities who were opposing the appellant herein were held not entitled to raise objection based on violation of the statutory provisions. The Arbitrator found the action which culminated in imposition of fine as avoidable. Consequently, it ws held the contingency that was described as 'force majeure' condition by the appellant was not in existence during the relevant period within which the apartments were to be completed and handed over to the Arb.Appeal No.23 of 2020 & Conn. cases 33 respondents and at any rate, the appellant herein could not attribute such circumstances as force majeure condition. Obviously, the Arbitrator further found that the Division Bench of this Court in the judgment in W.A.No.1987 of 2014 though set aside the order for demolition of the apartment complex directed the appellant to pay a fine of Rs. 1 Crore to the District Collector, Ernakulam for being used exclusively for building up enviroment, maintaining ecological balance etc., taking note of the violations of various statutory provisions. The appellant can only contend that the Hon'ble Apex Court did not fully agree with the findings of the Single Bench and also the Division Bench of this Court on the violations of the statutory provisions. The arbitral awards would reveal that this position was duly taken note of by the Arbitrator. The judgment of the Hon'ble Apex Court in the Civil Appeal filed against the judgment in W.A.No.1987 of 2014 reported in the decision in Secretary, Kerala State Coastal Management Authority v. DLF Universal and Others (AIR 2018 SC 389) was referred to by the Arbitrator and the relevant paragraphs were extracted in the awards. Paragraphs 64 and 65 of the decision reported in AIR 2018 SC 389, extracted in the awards, would reveal the flawlessness in the conclusion arrived at by the Arbitrator in the aforesaid circumstances and factual position and also lawful approach of the Courts in not interfering with them besides the hollowness in the contention of the Arb.Appeal No.23 of 2020 & Conn. cases 34 appellant that the Hon'ble Apex Court had exonerated the appellant of all allegations raised against it with regard to the violaions of satutory provisions:-
"64. It is the own wisdom of the MoEF that with the establishment of SEIAA the whole file should be forwarded to it and this was sought to be justified on the basis of the experts available with SEIAA. What weighs with us most is that post transfer of the file on 11.12.2013, the proposal was cleared by SEIAA, being the final authority, and that has never been withdrawn or cancelled or challenged. This clearance was post a show cause notice seeking explanation from DLF and on explanation being offered, was issued. Now for the authorities to say otherwise or contradict themselves would not be fair to DLF and would cause grave uncertainty if such an approach was to be permitted.
"65. We are, thus, not in agreement with the findings of the Courts below on the violations alleged against DLF except to the extent that there is a question mark on the issue of not having obtained prior clearance and proceeding on the basis of a deemed clearance, which aspect, at least for the future we have clarified that whatever be the manner in which Clause 8(3) of Notification of 2006 is worded, it should imply henceforth a prior clearance and necessary clarifications should be issued by the concerned authorities in a time bound manner to obviate such situations to arise in the future. We feel that the direction contained in the impugned order to deposit Rs.1 Crore (stated to be already deposited) can be treated as a fine for the said purpose."
24. Thus, it can be said that it is after carefully going through the decision reported in AIR 2018 SC 389 of the Apex Court and understanding its relevance with respect to issues involved in the claim petitions that the Arbitrator arrived at the conclusions and findings as relates the following issue:-
Arb.Appeal No.23 of 2020 & Conn. cases 35
"Whether the respondent (the appellant herein) is in breach of the terms of the Apartment Buyers Agreement and the delay in handing over the apartments is caused due to the negligence of the respondent (the appellant herein) or force majeure conditions? "
25. After considering the entire circumstances and the aforesaid decision of the Hon'ble Apex Court the Arbitrator decided the aforesaid common issue framed in all the Arbitration Cases involved in these appeals, on the following lines:-
"39. In the aforesaid judgment, the Hon'ble Supreme Court has taken note of the fact that there is a question mark on the issue of the respondent not having obtained prior clearance and proceeding on the basis of deemed clearance for which the deposit of Rs.1 Crore by the respondent was to be treated as a fine for the said purpose. The act of the respondent in proceeding with the construction on the basis of a deemed clearance though could be described as an avoidable lapse, yet may not be termed as an act of wanton negligence. Thus, it cannot be held that the respondent has acted in willful breach of the agreement even though there were avoidable lapses on their part in obtaining prior clearances from the statutory authorities and the undue delay occasioned on account of the said circumstances cannot be attributed to factors exclusively Force Majeure. The issue is found accordingly."
26. In the petitions filed under Section 34 of the Act against the arbitral awards, obviously, the District Courts did not find any ground to interfere with the arbitral awards.
27. As stated earlier, before us the appellant did not dispute the crucial and very relevant aspect that W.P.(C) No.27248 of 2012 which was instrumental for refusal of occupancy certificate by the Corporation of Kochi was filed after the expiry of the agreed period for Arb.Appeal No.23 of 2020 & Conn. cases 36 completion and handing over of the apartments to the respondents and further that the claim petitions which culminated in the awards impugned before the District Courts only after more than four and a half years since the expiry of the agreed period for completion and handing over of the apartments, in all these cases. The said fact is indisputable going by the datas and details discernible from the records. It is the interim order passed in the said writ petition and the subsequent developments and the consequential refusal to issue occupancy certificate by the Corporation of Kochi that were claimed as 'force majeure' conditions by the appellant. Even though the appellant could contend that the Apex Court did not fully agree with the findings of the Single Bench and also the Division Bench of this Court on the violations of the statutory provisions the indisputable position obtained from the decision reported in AIR 2018 SC 389 is that the Apex Court held that there is a question mark on the issue of the appellant not having obtained prior clearance and proceeding on the basis of deemed clearance and it is on that count that it was held therein that the direction contained in the judgment of the Division Bench in W.A.No.1987 of 2014 to deposit Rs.1 Crore could be treated as fine. In this context, it is to be noted that in the Apartment Buyers Agreement the term "Force Majeure" was defined as any event or combination of events or circumstances beyond the control of a Party which cannot (a) Arb.Appeal No.23 of 2020 & Conn. cases 37 by the exercise of reasonable diligence, or (b) despite the adoption of reasonable precaution and/or alternative measures be prevented, and which adversely affects a party's ability to perform obligations under this Agreement, for the purpose of Clause 36 of the said agreement. In the light of the manner in which the term 'force majeure' has been defined in the Apartment Buyers Agreement for the purpose of Clause 36 of the agreement, which is relied on by the appellant; in view of the fact that for not having obtained prior clearance and proceeding on the basis of deemed clearance the direction for deposit of Rs.1 Crore was ordered to be treated as fine imposed on the appellant; being the builder by obtaining prior clearance or by refraining itself from proceeding based on deemed clearance and by proceeding with construction scrupulously Reading to all statutory requirements and the further fact that W.P(C).No.27248 of 2012 was filed only after the expiry of the period prescribed for completion and handing over of the apartments the appellant could have avoided the situation which it described as force majeure condition by showing due diligence. In short, the appellant could not be heard to contend that it was beyond its control. At any rate, the respondents herein who were the proposed buyers cannot be blamed or faulted for the delay occasioned in the matter of completion and handing over of the apartments. That apart, it is pertinent to note that even in these appeals the specific stand of the Arb.Appeal No.23 of 2020 & Conn. cases 38 appellant, after referring to the relevant conditions in the agreement, is that the respondents are entitled to get back the money paid by them. Grounds (I) and (J) raised relying respectively on Clauses 10.2 and 10.3 of Apartment Buyers Agreement in these appeals would undoubtedly reveal that the appellant itself would admit the liability to refund the amount paid by the respondents in these appeals. When the appellant themselves would admit the liability to refund the amount paid and when it is evident that in all these cases besides the amounts paid by the respondents they were awarded only interest thereon, at the rate of 9% per annum, in the manner specifically mentioned in those awards the only surviving contention is with respect to the grant of interest on the principal amount paid by the respondents.
28. It is true that the appellant got a case that in terms of Clause 10.3 of the agreement the remedy available to the respondents upon failure of the appellant to hand over possession of the apartment within the period agreed in the agreement, was to terminate the agreement and in such eventuality, the appellant would have the liberty to sell the apartment in question and to refund the amount within ninety days from the date of receipt of the entire sale consideration. It is also its case, placing reliance on Clause 10.2 of the agreement, that the only remedy of the respondents was to get refund of the amount paid without interest or damages. The arbitral awards would reveal Arb.Appeal No.23 of 2020 & Conn. cases 39 that the Arbitrator did not award compensation in any of the arbitration cases involved in the above appeals. Thus, it is obvious that the surviving ground of attack is against the grant of interest on the amount paid by the respondents. The appellant's contention is that the arbitral awards are against the public policy of India. In the light of the decision in Ssangyong's case (supra) 'public policy of India' is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders case (supra), or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders case (supra). Furthermore, it was held in Ssangyong's case (supra) thus:-
"Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco (AIR 2015 SC 363) (supra), as understood in Associate Builders (supra), and paragraphs 28 and 29 in particular, is now done away with."
It was also held in paragraphs 26, 27 and 30 therein thus:-
"26. Insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within "the fundamental policy of Indian law", namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor Arb.Appeal No.23 of 2020 & Conn. cases 40 when it comes to setting aside an award on the ground of patent illegality.
"27. Secondly, it is also made clear that reappreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
30. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (AIR 2015 SC 620) (supra), while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse."
In the light of the afore-extracted paragraphs from Ssangyong's case (supra), in the fitness of things and also to understand the position fully, we will extract paragraphs 18 and 27 of Associate Builders case (supra). They read thus:-
"18. In Renusagar Power Co. Ltd. v. General Electric Co. (1994 Supp (1) SCC 644), the Supreme Court construed Section 7(1)(b)(ii) of the Foreign Awards (Recognition and Enforcement) Act, 1961:
"7.Conditions for enforcement of foreign awards.-(1) A foreign award may not be enforced under this Act-
(b) if the Court dealing with the case is satisfied that-Arb.Appeal No.23 of 2020 & Conn. cases 41
(ii) the enforcement of the award will be contrary to the public policy."
In construing the expression "public policy" in the context of a foreign award, the Court held that an award contrary to
(i) The fundamental policy of Indian law,
(ii) The interest of India
(iii) Justice or morality, would be set aside on the ground that it would be contrary to the public policy of India. It went on further to hold that a contravention of the provisions of the Foreign Exchange Regulation Act would be contrary to the public policy of India in that the statute is enacted for the national economic interest to ensure that the nation does not lose foreign exchange which is essential for the economic survival of the nation (see SCC p.685, para 75). Equally, disregarding orders passed by the superior courts in India could also be a contravention of the fundamental policy of Indian law, but the recovery of compound interest on interest, being contrary to statute only, would not contravene any fundamental policy of Indian law (see SCC pp.689 & 693, paras 85 & 95).
xxxxxx
27. Coming to each of the heads contained in Saw Pipes [(2003) 5 SCC 705] judgment, we will first deal with the head "fundamental policy of Indian law". It has already been seen from Renusagar Power Co. Ltd. v. General Electric Co., (1994 Supp (1) SCC 644) judgment that violation of the Foreign Exchange Act and disregarding orders of superior courts in India would be regarded as being contrary to the fundamental policy of Indian law. To this it could be added that the binding effect of the judgment of a superior court being disregarded would be equally violative of the fundamental policy of Indian law."
29. It is held in Associate Builders case (supra) that what would be a public policy would depend upon the nature of transaction and nature of the statute. For the said purpose, the pleadings of the Arb.Appeal No.23 of 2020 & Conn. cases 42 parties and the materials brought on record would be relevant so as to enable the court to judge the concept of what was in public good or public interest or what would otherwise be injurious to the public good at the relevant point, as contradistinguished by the policy of a particular Government, as held in State of Rjasthan v. Basant Nahata [(2005) 12 SCC 77). Paragraph 21 of the decision in DDA v. R.S.Sharma and Co. reported in [(2008) 13 SCC 80] was extracted with agreement in Associates Builders case (supra).
30. As can be seen from paragraph 18 in Associate Builders case (supra) even recovery of compound interest on interest, being contrary to statute only, would not contravene any fundamental policy of India. If that be so, how can contravention of a clause in an agreement relating to interest or "not taking into account such a clause", in a domestic arbitral award would make it one against the fundamental policy of India so as to say that it is against the public policy of India. We have already extracted paragraph 29 of the decision in Ssangyong's case (supra). It would undoubtedly go to show that in the light of the amendment brought to Section 28(3) of the Act by Amendment Act, 2015 construction of the terms of a contract is primarily for an Arbitrator to decide, and therefore, in the light of paragraphs 42.3 to 45 in Associate Builders case (supra) unless the Arbitrator construes the contract in a manner that no fair- Arb.Appeal No.23 of 2020 & Conn. cases 43 minded or reasonable person would do, Court's intervention with the construction is absolutely uncalled for. In such circumstances, it can only be said that it would not be available for construction of the court if the view is a plausible one. Furthermore in Ssangyong's case (supra) it was held that if the Arbitrator wanders outside the contract and deals with the matters not allotted to him it can only be said that he commits an error of jurisdiction and in such eventuality, in the light of the decision, this ground of challenge will now fall only within the new ground added under Section 34(2A) of the Act viz., patent illegality. Section 34(2A) reads thus:-
"34. Application for setting aside arbitral award:-
xxxxxxxx xxxx xxxxxxx (2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence."
31. Once it is held that construction of an agreement fell for consideration of the Arbitrator, in the light of the amendment to Section 28(3) of the Act the determination thereupon shall not ordinarily be interfered with. To put it succinctly the Court's jurisdiction in this behalf is merely to see whether the Arbitrator had exceeded his Arb.Appeal No.23 of 2020 & Conn. cases 44 jurisdiction or not. It is also to be held that the expression "error apparent on the face of the records" employed in Section 34(2A) would not imply closer scrutiny of the merits of documents and materials on record and that if it is found that the view of the Arbitrator is a plausible one the Court would rather, should refrain from interfering with the arbitral award.
32. The Arbitration Act, 1940 did not contain any specific provision relating to the power of the Arbitrator to award interest and in such circumstances, as a matter of course, it was limited to awarding of interest from the date of the award till the date of realisation. In other words, prior to the coming into force of the 1996 Act there was considerable confusion as to the power of the Arbitrator to award interest from the date of cause of action up to the date of reference viz., pre-reference period as also pendente lite viz., from the date of reference to the date of award. However, the position in relation to the said stages was settled by the Hon'ble Apex Court by holding that in the absence of express bar in the contract concerned regarding the award of interest Arbitrator got jurisdiction and authority to award interest for all the three stages i.e., pre-reference period, pendente lite and post- award period (see the decisions of the Hon'ble Apex Court in Secretary, Irrigation Deptt., Government of Orissa v. G.C.Roy reported in (1992) 1 SCC 508, Executive Engineer, Dhenkanal Arb.Appeal No.23 of 2020 & Conn. cases 45 Minor Irrigation Division v. N.C.Budharaj reported in (2001) 2 SCC 721 and in Manalal Prabhudayal v. Oriental Insurance Co. Ltd. reported in AIR 2006 SC 3026. Now, in view of the express provision under Section 31(7) of the Act, on the issue of power of Arbitrator to award interest there is no scope for any confusion. Section 31(7) reads thus:-
"31. Form and contents of arbitral award:-
xxxxx xxxxxx 7(a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent, higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment."
Explanation.- The expression "current rate of interest"
shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of 1978)."
If at all there was any further room for doubt on that aspect it was also settled by the Apex Court in the decision in Sayeed Ahmed & Co. v. State of Uttar Pradesh and Others reported in (2009) 12 SCC 26. It was held therein that in view of Section 31(7)(a) of the Act in case where there is an express bar in the contract against claim for interest Arb.Appeal No.23 of 2020 & Conn. cases 46 it would operate not only during pre-reference period but also during pendente lite period. However, it was held that any provision in a contract barring interest would operate only till the date of award and not thereafter.
33. In the afore-circumstances, the question is by awarding interest whether the Arbitrator had committed any error apparent on the face of the record or had misconducted himself in passing the award. Before delving into the said issue in detail it is relevant to note that in every contract, there is an implied covenant of good faith and fair dealing and there is a general presumption that the parties to the contract will deal with each other honestly, fairly and in good faith so as not to destroy the right of the other party to receive the benefit of the contract.
34. Applying the provision under Section 31(7) and the position of law settled in Sayeed Ahmed & Co. Case (supra) the aforesaid question has to be considered, of course, by looking into the question whether there is any express bar to claim interest in the cases on hand in the agreements concerned. Admittedly, all the agreements concerned carry similar conditions. In the light of the pleadings and the nature of the arguments advanced we think that for a proper appreciation of the contention of the appellant on the aforesaid question it is only proper and profitable to refer to Clauses 10.2, 10.3 & 10.4 of Arb.Appeal No.23 of 2020 & Conn. cases 47 the Property Buyers Agreement.
35. A perusal of the arbitral awards challenged under Section 34 of the Act before the Courts below would reveal that the Clauses 10.2 to 10.4 of the Property Buyers Agreement fell for consideration of the Arbitrator. In such circumstances, in the light of the settled position of law referred above made in the light of the amended provision under Section 28(3) of the Act it cannot be interfered with. A bare perusal of Clauses 10.2 to 10.4 of the Property Buyers Agreement and the factual aspects described as force majeure conditions by the appellant to plead non-liability to pay interest on the amount paid by the respondents-apartment allottees, would reveal that the appellant cannot be permitted to wriggle out of the liability to refund the amount paid by the respondents with interest solely relying on the said clauses in the factual scenario obtained in the cases on hand. The arbitral awards impugned before the District Courts under Section 34 of the Act would reveal that the Arbitrator considered the contentions of the appellant made with reference to Clauses 10.2 to 10.4 of the agreements while passing the award. In such circumstances, consideration of the contentions made by the appellant based on the aforesaid clauses can be had only to see whether the awards are infected with patent illegality. Clause 10.2 of the agreements would reveal that it is applicable in a contingency where Arb.Appeal No.23 of 2020 & Conn. cases 48 failure to deliver possession was due to Government rules, order, notifications etc. To be precise, the said clause provides that if the appellant company is unable to construct/continue or complete the construction of the said building/the said complex due to conditions which have arisen because of any governmental/regulatory authority's action, inaction or omission and that apart it would further reveal that the further condition regarding applicability of the other limbs of the clause would arise only in the circumstances mentioned above if the company in its sole discretion challenge the said action, inaction or omission on the part of the governmental/regulatory authority's action, inaction or omission that made the company unable to construct/continue or complete the construction of the said building/said complex. The Arbitrator and the District Courts have already found that before filing of W.P.(C)No.27248 of 2012 the agreed period within which the construction of the apartments should have been completed and possession should have been handed over to the allottee respondents was over in all these cases. In such circumstances, it is not available to the appellant to canvass occurrence of force majeure conditions subsequent to the said period to escape the liability and to take shelter under Clause 10.2 of the agreement. Same is the position with respect to Clause 10.3 of the agreement. Solely because in terms of Clause 10.3 in case of failure to get delivery of possession Arb.Appeal No.23 of 2020 & Conn. cases 49 the apartment allottee would be having the liberty to terminate the agreement with notice to the appellant and in such eventuality the appellant would be entitled to sell or dispose the apartment and the parking spaces to any other party and would be liable to refund the amount paid by the allottee only within 90 days from the date of full realisation of the sale price after sale to such third party, cannot be a reason to canvass the position that it should be the only remedy available to apartment allotees like the respondents to aleviate such grievances and they could not take to arbitration in terms of the arbitration clause under the Apartment Buyers Agreement. Merely because under Clause 10.3 of the agreement the allottee is entitled to issue notice and following the procedure thereunder to terminate the agreement the appellant cannot contend that arbitration clause in the agreement should be unavailable to such allottees. True that, in case the allottee avails the said remedy it would, in a way, be beneficial to the appellant inasmuch as, in such eventuality, it would fetch opportunity to the appellant to effect sale of the apartment concerned to a third party and would also fetch the extended time to effect refund the amount paid by the allottees. Merely because the apartment allottee is entitled to terminate the agreement in terms of the said clause at no stretch of imagination it could be said that merely because of existence of such a clause the arbitration clause in the agreement Arb.Appeal No.23 of 2020 & Conn. cases 50 would become redundant. Being a party to the agreement, certainly, the appellant cannot be heard to raise such a contention. A perusal of Clause 10.4 of the agreement would reveal that it provides option to the appellant company to terminate the principal agreement and supplementary agreement in the contingency envisaged thereunder. It is an indisputable fact that the appellant company had not terminated the agreements with the respondents. In fact, we could not see any such case for the appellant raised before the Arbitrator and the District Courts.
36. Apart from the aforesaid aspects another important aspect is also to be looked into while considering the contention of the appellant against the grant of interest by the Arbitrator. There is no dispute with respect to the existence of arbitration clause in all the Apartment Buyers Agreements executed between the appellant and the respondents in the appeals. There is absolutely no case for the appellant that such a clause is not included in such agreements. In fact, Clause 47 of the agreements contains the arbitration clause and the same has been extracted in all the arbitral awards. In the contextual situation, it is also relevant to refer to clause 47 of the Apartment Buyers Agreement as hereunder:-
"47. Dispute Resolution Agreement.
All or any disputes arising out of or relating to or concerning or touching interpretation and validity of the Arb.Appeal No.23 of 2020 & Conn. cases 51 terms thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through arbitration. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereof for the time being in force. The arbitration proceedings shall be held at an appropriate location in Ernakulam by a sole arbitrator who shall be appointed by the Company and whose decision shall be final and binding upon the parties. The Apartment allottee hereby confirms that the Apartment Allottee shall have no objection to this appointment even if the person so appointed, as the sole arbitrator, is an employee or advocate of the Company or is otherwise connected to the Company and the Apartment Allottee confirms that notwithstanding such relationship/connection, the Apartment Allottee shall have no doubts as to the independence or impartiality of the said sole arbitrator. The Courts at Ernakulam alone and the Kerala High Court at Ernakulam shall have the jurisdiction."
In view of the existence of arbitration clause Section 16(1)(a) of the Act assumes relevance. It reads thus:-
"16. Competence of arbitral tribunal to rule on its jurisdiction.- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,-
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; .............."
Thus, the said provision declares that an arbitration clause in a contract shall be treated as an agreement under Section 7 of the Act independent of the other terms of the contract. A perusal of Clause 47 as extracted above would undoubtedly go to show that it does not Arb.Appeal No.23 of 2020 & Conn. cases 52 expressly bar claim of interest. In the aforesaid circumstances and in view of the absence of any express bar on claim of interest in the agreement and in the light of the decision of the Apex Court in M/s.Jagdish Rai and Brothers v. Union of India reported in AIR 1999 SC 1258 whereunder the Apex Court held that interest ought to be awarded in all cases when there is a decree of money unless there are strong reasons to decline the same. We do not find any reason to hold that the awards in question are infected with patent illegality. In fact, there is no illegality at all in the awards. In the contextual situation, it will not be inappropriate to refer to a contention taken up by the appellant in all these cases before the Arbitrator which was specifically mentioned in the arbitral awards concerned. It would reveal that the contention was that as per Clause 10.4 of the agreement, the liability of the appellant is limited to refund of the amounts paid by the apartment allottees with simple interest at 9% per annum for the period such amounts were lying with the appellant and that the respondents shall not be liable to pay any other compensation whatsoever. We have already noted that in none of the cases compensation was awarded. What was ordered is refund of principal amount with interest at all the three stages viz., pre-reference, pendente lite and post-award.
Arb.Appeal No.23 of 2020 & Conn. cases 53
For the aforesaid reasons we do not find any ground to interfere with the impugned orders passed by the District Courts under Section 34 of the Act whereby and whereunder the arbitral awards concerned were confirmed, in exercise of the limited scope under Section 37 of the Act. In the result, Arbitration Appeal Nos.23, 26, 31 of 2020 and 6, 7 & 8 of 2021 are dismissed but, without any cost.
Sd/-
C.T.RAVIKUMAR Judge Sd/-
K.HARIPAL Judge TKS