Karnataka High Court
M/S. Synergy Corporation vs Smt Rajashree W/O. J Rasaranjan on 11 March, 2010
Author: Mohan Shantanagoudar
Bench: Mohan Shantanagoudar
V" ' A 4 " 'Mdithya
in THE HIGH COURT oa= KARNATAKA A1' BANGALORE
DATED THIS THE 11*" DAY or MARCH
BEFORE: ' it 1_
THE HON'BLE MRJUSTICE M0!-IAN SHAN3iA.lti_)§§(5(§A--L}:D].AR' i
C.M.P. l\lo.19[?.;Z__#{A_)!iQ§" or -1' V
Between :
M/s.Synergy Corporation
A Registered partnership fiVrr'n.,V_
Having its office at "
No.60i, Hemlok, «
Kitachand Road, '
Kandivii West, 7.. ..
Mumbai--49G'AO.67;i.
Rep.by Mr.Kirit_ iVi'.7Sh_ah~,._ " . _
Managing'~.Parnter. " __ .. Petitioner
( By Sri Sreewjtsa, $r;_Cotizise.i~~'ifor Ucivadia &
Uduesm Advocates ')
1. '--sirni:i.'Ra§ja§éii;~eé;=
Wfio Jflasavranjan
Agedabout 50 years,
"ii«is-...:.st:}jha,
' D/o.3.Rasranjan,
'Aged about 29 years,
S/o }.Rasranjan
Aged about 23 years,
Respondents 1 to 3
C/o Deccan Nursery, III Cross, Sarakki C.R.Layout, Bangaiore--78.
. Smt.3.Mahisree, W/o Late J.Udayan, Aged about 54 years, . J.Agasthya S/0 Late J.Udayan, Aged about 25 Years, . Vasishta S/o Late J.l,.I.d'aya{{' * is Aged abodt 23¢-aes,t,c , Resporéderits, to is Residing at Jayanthi 'Bo Garden, 2"? Cro.ss,'v _ __ Sarakki, C.R.Layout, »--
Bangaiore--56Ds'C78.',--_ " Bv..':sLR.i,)eve!_opers P'v't'.*'Lt'd., V' Company, duiy incorporated v'V'.Jn'der'the Companies Act, , H-a_vé,ng'vét's.Brar§ch' Office at 'No.15, Cu'r¢"e_ Road, Tasker.--._'¥"ov.rri, Bangaio're-560 G01, .. Represented by ,Managing Director, _ Sr: Raghavendra Reddy.
tanicaf._ ' A .. Respondents = By Sri S.Srinivas Murthy, Advocate for R1 to 5 ) This Petition is flied under Section 11(5) of the Arbrtration and Conciiiation Act, 1996, praying to exercise power under&.Sectior§i*.,1V'i.. of the Arbitration and Conciiiation Act, 1996 and appoint'Hon,'bi'efJ--t,igiti--rfe~.» R.}.Babu, the retired High Court Judge of i~ion--'b-E-e.~oi'~», Karnataka as an Arbitrator to resolver.Jthe':'dis«pu«tethat'--h,asTarisen between the petitioner and the respondents inthe interest.o€ its-s'tice;' This Petition having been heardiand reserved tor on 5"' March 2010, pronounced the_sarne_on' th_is day/_ the to"-Ma"rch 2010 :
%,bRDeeS"
This pet_i,ti_on :,and_er 111(5) of the Arbitration and ConciiiVati'tx,,.q]*ii..,sjt;tv, referred to as 'the Arbitration Act' VfVo'r7..-:.ho:rt),,"prayirig "for an order of appointment of the Sole Ai'b_'iti'a,toxr' resolve the dispute that has arisen 'between the petiti"0'ner___and respondents. vSStn't.,iaai/anthi Nirrnaia was the owner of the land 'bearing No.59, measuring 2 acres 5 guntas and Survey measuring 16 guntas, situated in Sarakki viiiage, ,.._fitJtt_arahaiii Hobii, Bangalore South Taiuk. She is now no more. in/5 mi» 141 The respondents 1 to 6 herein are the legai representatives of the deceased Jayanthi Nirmala. The said Jayanthi Nirmala entered into joint development agreement dated 1.4.1995 with one M/s.N.P.S.Enterprises. The said [Vi/s.N.P.S.Enterprisesfiwere unable to perform as per the contract and therefdvreyégitilie was terminated." Thereafter, Smtjayanthi Nii"tnai4a':r%:a*ite're'd&g into a fresh joint development agreennent'.'_'wi'thlithe 8"' April 1997 as per Ann§3t<:i~i:t:e.:'i According to the agreement,i':v all the claims of M/s.N . ns of Smt.Jayanthi Nirmalalfi Tine is also a signatory to the joint édreveloprneritlg" agiieenient dated 8"" April 1997 vide Annex§orVe=.'A'. ?et.itioner: was also unable to take positive steps A":_VinV;*deve.,llopingV"~--the scheduled properties as per the joint aygrleement dated 8"' April 1997. Thereafter, the fiV7'"' respoizdevnt viz., M/s.B.S.R.Development Pvt. Ltd., entered 9' lfintollang agreement with respondents 1 to 6 on 3*" January 2002. copy of joint development agreement is produced at iwwé Annexure--' 8' to the petition. Petitioner is also a signatory to the said joint development agreement as a consenting witn.e_ss_,'i~._The petitioner is termed as an agreement holder in __t*h.e vide Annexure-'B'. Certain rights fiowi.n,.favo.ti%"oifipet_itioner* from the joint deveiopment agreement date'd 3"'d- The said agreement is stiii suhs.i:s'tii.ng. A'There.aiter['~-thedispute'V has arisen between the pair'tie.sg_.jAecordingto respondents 1 to 6, the entire the petitioner, whereas, accorifi:ving;::to_'Vthegpeti't'ion:er;the"re'spondents 1 to 6 are stiii due to tiiea as on 315' December 2008. on that aspect. However, the dispute "is not s'etti"ed bietjnieen the parties. tit 'sis reievvantizo note at this stage Clause-19 of 'the '2'_'i-oi'r:.t_r- agreement dated 3"' ianuary 2002 vide Anne-xure_f»'"'Ej,ri'.»which reads thus : Ciause~19 2 in the event of any dispute arising 'between the parties herein on any matter concerning the issues in this agreement, the same EA flowfagaiinst tn'e..:r_espondents from the agreement vide Ann'exuref"~.B';.:tiiat the petitioner is also an integral part of the fa tripartiteihagreement and therefore, the petitioner is entitled to A ":lirivoil<'e~i..the arbitration clause. 7_ respondents 1 to 6 dated 6.11.2007 is produced as Anne><ure--'l-i' to the petition. Hence, the petitiorier has approached this Court by filing the present Section 11 (S) of the Arbitration Act, praying of Sole Arbitrator.
4. Sri Sreevatsa,' on behalf of the development agreement dated'Simdanuary 2002 is a tripartite"a_gteernei*it{_ pietitiioner has signed as a consenting that certain rights fiow in favour oftheiipVetitioner»~arg.d44'consequent liabilities/duties also agrehernent a"ndA'itherefore, the agreement in question is virtuaiiy /S i' , 3 a Per contra, the petition is opposed by respondents 1 to 6 by contending that, though certain rights flow in favour-of the petitioner from the agreement vide Annexure-'8'_Ha_ndftAh'odgh certain iiabiiities flow against theMmresponde-ntsd'i«f;fovn*ii7' agreement in question, the agreemeritis b:'eitween"thVe-.., respondents 1 to 6 on one hanidiand resnondenit on the other. According to thern;-,_thei'petitio_;3er'~-being theixconsenting witness, is not a party tothe, agre,en*ievnt'~:Va,nd that he cannot invoke the arb_iti,ratii§n' '_cia,n'*se.i is Before' proceediiigfurther, it is reievant to note Certain ciauses of' thetiaVgreer§'.er.»t::'V.§ide Annexure--'B' dated 3" January 2O02.,«_%fg§.n'V which t'h'e..V;jVetitioner is termed as a agreement hoiders. ~reie\.;Aa'nt'ii:?i'i'ti_ons of the ciauses read thus 2 the Agreement Hoiders aiong w:tn':.I Party Owners, have not been abie to take up xgiiany positive steps for development of Scheduie c it 'Property in terms of the aforesaid agreement and after detailed discussions and negotiations, the re -9- Agreement Holders are presently willing to terminate the said agreement on mutually agreed terms hereinafter recorded to enable to I Parts,/"'*--.,, Owners to take up the development through alternative Developers.
WHEREAS the I Party Ovvners do"*noff~have it financial resources, profess:i'onal expe'rie'nceK: expertise to take "up proj'ec;t'"ancl therefore approached ' ' s.lIfi* l?a rfyi,.'jiL}ev'e.l,ope rs and after due _n'egotiatioras,f:the..,.':»l?a'rties:" herein have finalised on certain terms agreed to be ber1e'fic-§a:l':ii,to Cwners, through the 11 Party express consent of the Agreenfient H'o.ld"ers»--.
_CIlaus'e"'-=--....2"'b : That the Schedule C .,VProvpe,rtyWis_ free from all encumbrances, lien, vplease, mortgage, alienation, prior *~..agr__eem.ent, Court or other attachments, acquisition aii.cj__'3- requisition proceedings, minors' interest, it 'madverse or third party claims, or any other legal 'impediments of whatever nature. However, the Agreement holders have agreed to relinquish their El:/s ,;3_ conditions stipulated in the agreement vide AnnexLire~'B'. It was the sole responsibility of respondents 1 to 6 herein to pay the compensation to the petitioner. Repayment pattern is also stated in the agreement in question. The respondenvts_j:'1_4b_ltov 6 herein have agreed to indemnify and keep the fuliy harmless against any law O-ri"'""t'Ei'.ie"u settlement of agreed compensation to.th:e_A_lpetitliofl,Aér.._ refundabie security deposit antththe .prejfixe§;;._: é~nVd"""p'rorate"' expenditure to be incurre'i:i.._by éhe'r'ein"v§about the deveiopment of the land he by the 7"
respondent only of the petitioner. Clause M12 or' that the sites falling to the to flauhelvrein shall be subject to the charge forthge "outstanding to the petitioner. As per ClaLr'sef17,.Vthejrespovndent No.7 herein is entitled to recover t:heiiall'i:o_tin:Ats .lE;t«.2CvOf'IV€i1l€i'lt instaliments from respondents 1 to 6 o'ut"lo_f«1 of sale proceeds falling to the share of EM respondents 1 to 6, subject to settlement of liability of the petitioner as agreed in the agreement vide Annexure~' Clause-18 makes it amply cleargthat..the.''''fre§hiliagreehnent 00 is entered into between the respond__en--t§' 1 to_A'6. petitioner, which reads thus :
Clause ~ 18 : It is h'zutual--!y falgfre'edji between the I Party Ownersand Agree.meritAh.oldeirsV 'as;u'nder :
(a) The Va{;r*eed to pay a total coi'npensa"tion'":'gap? 'R,s.'90,00;000/- (Rupees Ninety Lai<hs'~ only)'u'toj-.tjhepAg:reenient holders towards the refundof seC':,iri"ty'deposithpald by them inclusive of ;intesrest'4.etc,A,'upto.31«."t0.2003 and jointly undertake .'to:,.pay».the slameiout of their hare of sale proceeds
---invthe;'deye_lopment project. The first installment '".--..,wilVl'lV from 1.11.2002 or earlier date if any 'plots or flats are sold and their share of sale T proceeds is received by the 1 Party Owners from Vlkthe 11 Party Developers and the entire repayment 00 will be completed on or before 31.10.2003.
pt pig.
(in) In order to facilitate early settlement of____ the aforesaid compensation agreed to be payabl.e_i»-11. to the Agreement Holders, the I Party Ql{Vf"Ie'fS.,_"'::
hereby authorize the 11 Party Deve_lo_p'e-ts A allocate 50% of the sale pror:e'eds«.o_ut_ of.tn~e_ I:
Party Owners' share of entitlement :a_nd';direc_t' to pay the same directly tothe Agreementirldoidersg by A/C Payee cheques unde4r"~«a';dv_Ece to"th:e'i Party Owners until the enti'r'e i\§"s'...90,00yO00/~ is fully repaid. P' it A' (Q) the above und_ertal:in:gio_y the Agreement miideirs n¢.sepyia:marsh an right and interest in thegiointi"DeVveVl'opme:nt.:Agreement dated 8.41997 and dieflare Vttiatlrtheyfhave no manner of right or ..§gntei'r=est or claim in the Schedule C Property or any palrtytheireof or against the 11 Party Developers.
holders hereby give their '.__4'Vdune.qui'vi.:ical consent and approval for the joint 'development of the Schedule C Property in terms A' '*-._ofv'this agreement by the II Party Developers V' "without any hindrance, obstruction or interference either by the Agreement holders or any one i"
M17'-
respondents 1 to 6 on certain matter reiating to repayment of dues to the petitioner. In consideration of the undertaking given by respondents 1 to 6 in Clause--18 of the agreement, the petitioner being the earlier agreement holder, relinqu~is_he_d~~.VVits rights in joint deveiopment agreement dated 8""
Consequently, the petitioner has declared..that.'_"it"ha's-Ino°mann'eré of right or interest or claim in 1°the7.--A.AStihed't:le Clause~18 of Annexure--' B' is the-v.i:'n'tegral."part' of t'hé"'~ag'reeVmentl"
Consequently, the petitio"n.er is:i'a'ls'oVj'anfintegral'"player in the agreement.
6. All factsiicleiairliy reveal that though the petitioner""is,_V"teir*-need ..a's._:an"agreerinent holder or consenting witness in the Vagi*e'eme.n:tx--Q"';!\nn'e><Lare-'B', it is virtually third party to the«-..agvreemer:.t." other words, the agreement in
-'W,.queS'tjierr,_..,Ai'S __a tri"par.t.i.t.e agreement between the petitioner, respondents ,1» and respondent No.7. Merely because the petitioner hisiteirmed as agreement holder or consenting witness, re
-1g-
the Court cannot iose sight of the fact that the interest-o_f the petitioner is frilly protected by the agreement, inasmi_i'ehV"a's;r:.the rights flow from the agreement in favour of the "";i.etitionvér"%a:fi'd consequently, duties are cast on the f'espond.ents -:to-lpayggeewttailii sums of money as agreed. Since _certain rights flew. in t'av'0iirof'i.g the petitioner by virtue of the'V"i'ag"reement,.the petitioner is entitled to lay claim agai_r_is«t the respond'e«nts purstiant to the agreement. Hence, it cann.ot._be svaidl that't'n--ey«--petitioner is not a party to the agire,en?§eri.t. ..
Ex:/en --. ' -'signing the agreement vide Annexiire--'"Br'yi,_4"them has signed below the party «_Nos.V_1'5--andlA'2 on th"e--irigh_ty.side. Two other witnesses have signed V'*._on.Vthe. gAleft'sE'_de"of the agreement. Therefore, it cannot be said t:hattl'ie petivtrioaéer merely has acted as a witness. On the other %"«,.,_"ihand, t'ee"petitioner is also a party to the agreement in question. ~ 19 W
7. One of the modes by which a contract can be discharged is by the same process which created it i_._.e., by mutual agreement. The parties to the original agree:tr£e--nft*«.Vrrray enter into a new contract in substitution of the \rie_ii_gr of the subsequent agreement videj"An~nexure--_:5"Bf";[the-.prio--r rights of the parties flowing fror_n°~_V_}3inne$tvuAr¢»».'A'V' extinguished. They have, in fact',"Jh'een e.><c:h.arr'gei«d new it rights. Pursuant to the agiie«eme'n't_:_i'§-ti"quevstion, the petitioner is entitied to recover respondents 1 to 6. Charge of the properties.
Without cannot set! the flats.
It is releitrant 'tot:h.Ot.é3_.»_ée/értrlihfi-I.o_bse'nrations of the Apex Court in the case orgies»;/sn;cge4e;;.svmm rwvc; GMB H -15- me _ INDIA ion COR'P_rjI?A nfiro/v 1. n2, ( AIR 1999 sc 504), which A : The subm/ssron of Mr. /Var/'man that an Vagreemena even if not 5/gned by the parties, At 'T 'can be spelt out from correspondence exchanged between the part/'e5 adm/22$ of no doubt. In fact, L/R W 2(}~ various judgments Cited by him at the bar--___ unmistakably support this assertion. The ouestia~r.{g'f«..._e'~..v however, is can any agreement be spelt ot_i.t:"i'i'oi?ri:---..i --:-
the correspondence between the partiese_A'_inV _ he
- instant Case? fie Para--J5 : In this ._te.nnection the'e..ca'r_dina! principle to remember is is the ofithe court to construe' ;ceojr.res3--i§on-dent,e.éiv.i5th a to arrive at a tone/usione wrhe.--f'i'7e~r..:ev was any meeting Q,r--,¢ji;7d between which could create, a " "c"o_ntract ~..bet_ween'VVthem but the Court isnot a contract for the [3ie'i'ZLl'6_'5: the clear language used in the» eorresporideneeti:eA'e§?t'ept insofar as there are some ea,opi'opri;.atAe,implications of law to be drawn. ~ wfiunless from ..... 1' the correspondence it can he uneounroeally and Clearly emerge that the parties it .tad.A'jidem to the terms, it Cannot be said that an .-agreement had Come into existence between their? through Correspondence. The Court is be 'e reouireo' what the parties wrote and how they be "acted and from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered from the expressions used in the corresponisieneevi-~.i: J --I- i and the meaning it conveys and in case.
that there had been meeting ciftnlhd parties and they had acti;'all}r.A_V A'reaei2'ee'~ an":'i'A agreement, upon all mateiriai'-...terms; then alone can it be said that eontract ikvas capable of :« frorn it the correspondence. " '- _ 'i In the make it very ciear that the agreeimentin a tr'i_p'a'rtvite agreement. There was meeting parties. The agreement in question. cxreatesia bin<:iin'g tfontract between them. The rights of the Vp'etiti"oner i~fi_owingVj""f'rom the agreement are the integral part Aof:_th'e petitioner is entitled to execute such rights V it _ fiowihg fr.oni-the contract. In View of the same, this Court hoids the agreement in question is a tripartite agreement between .'the"paA'rties. If it is so, the petitioner is entitieci to invoke the it/3 'kw/r*%&' % petitioner to enable them to produce before the learned Arbitrator.
Petition is allowed accordingly.