Punjab-Haryana High Court
M/S Land Mark Apartments Pvt. Ltd vs Sombir And Others on 11 January, 2013
Equivalent citations: AIR 2013 PUNJAB AND HARYANA 63, (2013) 1 LANDLR 231
Author: A.K. Sikri
Bench: A.K. Sikri
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Arbitration Case No.121 of 2011
DATE OF DECISION: January 11, 2013
M/s Land Mark Apartments Pvt. Ltd.
.....Petitioner
versus
Sombir and others
.....Respondents
CORAM:- HON'BLE MR.JUSTICE A.K. SIKRI, CHIEF JUSTICE
Present: Mr.R.K. Mailk, Senior Advocate with
Mr.Raman Deep Singh, Advocate for the petitioner
Mr.Amit Jain, Advocate for the respondents
..
A.K. SIKRI, C.J.:
1. This petition is filed under Section 11 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment of an Arbitrator to settle the dispute between the applicant and the respondents as per the provisions of Clause 27 of the Collaboration Agreement dated 08.8.2010 entered into between the parties. In the application, 17 persons are arrayed as the respondents. However, during the pendency of the present application, the applicant have settled the matter with most of the respondents except Respondent Nos.3, 4, 6, 7, 12 & 15. Therefore, the instant petition survives only qua these respondents.
2. The respondents are the owners in possession of land comprising in Rect. No.10, Killa No.2/2(4-14), Killa NO.3 (7-11), Killa No.4/1 (3-
16), KIlla No.6 (7-11), Killa NO.7 (7-6), Killa No.15 (8-0), Killa No.17 (8-0), Killa No.17(8-0), Killa No.16 (8-0), Killa No.25/1 (3-11), Killa ARB-121-2011 -2- No.8/1 (4-0), Killa No.26 (0-10) total measuring 66 kanals 5 marlas (8.28125 acre) out of the total land of 70 kanals 19 marlaas situated in Revenue Estate of Village Tikampur, Tehsil & District Gurgaon (hereinafter referred to as 'the said land'). The applicant and respondents entered into a Collaboration Agreement dated 08.8.2010. It was agreed between both the parties that applicant will develop the said land by constructing Multi Storied Group Housing on the said land after obtaining the requisite license from the concerned authorities and getting the plans sanctioned/approved from the competent authority. It was also agreed to divide the project as a whole in ratio of 32% and 68% amongst the respondents and applicants, respectively. The respondents were entitled to get 32% of the total saleable area while 68% of the area was to go to the applicant. The applicant paid a sum of Rs.31,50,000/- per acre, i.e., Rs.2,60,85,937.50 to the respondents towards interest free non refundable security. In furtherance of the said collaboration agreement dated 08.8.2010, the respondents executed a special power of attorney dated 08.8.2010 in favour of Mr. Sandeep Chillar, the Director of the applicant firm.
3. As per the applicant, after the execution of Collaboration Agreement dated 08.8.2010, the respondents again approached the applicants and showed their willingness to transfer the said land in favour of the applicant instead of getting 32% share in the project as earlier agreed as per Collaboration Agreement dated 08.8.2010. It is also the case of the applicant that on the request of the respondents, agreement for sale was duly executed between the parties on 09.8.2010 and the amount of Rs.2,60,85,937.50/- paid by the applicant to the respondent as interest free security was adjusted ARB-121-2011 -3- towards agreement for sale dated 09.8.2010 as advance/earnest amount adjustable towards the total sale consideration towards the cost of the said land. The total sale consideration of the said land was fixed at Rs.3,15,00,000/- per acre, i.e., Rs.26,08,59,375/- as the cost of the said land measuring 66 kanals 5 marlas.
4. It is also averred by the applicant in this petition that it was agreed between the respondents and the applicant that the respondents will hand over the actual vacant and physical possession of the said land at the time of execution of the sale deed after receiving the balance sale consideration from the applicant. The balance sale consideration of Rs.23,47,73,437.50/- was payable by the applicant to the respondents within 180 days of the execution of the agreement for sale. After execution of the agreement for sale dated 09.8.2010, the applicant applied for grant of license with the Government for setting up a group housing colony on the said land along with its other land. The applicant has deposited a huge amount as fee for grant of the license. The DTCP, Haryana was pleased to issue letter of intent dated 08.12.2010 for grant of license under Section 3 of the Haryana Development and Regulation of Urban Areas Act, 1975 and Ruls, 1976 framed thereunder for the development of Group Housing Colony. The DTCP Haryana has directed the owners to fulfill certain obligations.
5. According to the applicant, after the grant of license by the Government vide letter dated 08.12.201, it approached the respondent and requested them to fulfil their part of obligation. However, since the respondents were delaying the matter, the applicant filed a Civil Suit seeking injunction from alienating the suit land in favour of any other persons, which is still pending in the Civil Court, Junior Division, ARB-121-2011 -4- Gurgaon. The respondents, in the said suit, have taken the plea that no agreement to sell was executed between the parties and only a Collaboration Agreement dated 08.8.2010 was executed.
6. In the meantime, the respondents also filed a Suit against the applicant with a prayer to restrain the applicant to interfere with the peaceful possession of the respondents and also to restrain the applicant from to alienating/booking/selling the apartment or any part of the land, relying upon the Collaboration Agreement dated 08.8.2010. The said suit is pending before the Additional Civil Judge, in which the applicant has moved the application under Section 8 of Act stating that the Collaboration Agreement dated 08.8.2010 contains an arbitration clause.
7. This Clause, viz., 27 of Collaboration Agreement reads as under:
"CLASUSE 27: In case of any dispute or difference, the parties shall try to settle the same amicably, falling which the matter shall be referred to arbitration under the Indian Arbitration and Conciliation Act, 1996 and the parties shall appoint one Arbitrator on their behalf and if required a third Arbitrator to act as Empire provided under the said Act."
Based on this Clause, present application under Section 11 of the Act is filed for the appointment of an Arbitrator as even after the service of Notice dated 27.5.2011 by the petitioner on the respondents, the respondents have not agreed upon any Arbitrator.
8. As pointed out above, except six respondents, all other respondents have settled the matter with the applicant. This Court was informed that the applicant has purchased the shares of those respondents in the lands in question. From the aforesaid averments made in the application, it is clear that the applicant has stated that there was a Collaboration Agreement dated 08.8.2010 entered into ARB-121-2011 -5- between the parties. This is accepted by the respondents also. This Collaboration Agreement contains an arbitration clause. There is no dispute upto this. However, the applicant alleges that after this Collaboration Agreement dated 08.8.2010, Agreement for Sale was executed between the parties on 09.8.2010 and interest free security of Rs.2,60,85,937.50, which was paid in the Collaboration Agreement was adjusted towards the Agreement to Sell. Total sale consideration, as per the Agreement to Sell dated 09.8.2010 was fixed at Rs.3,15,00,000/- per acre. It is this agreement to sell which is disputed by the respondents and as per them, no such agreement came to be executed between the parties.
9. On the basis of the aforesaid, the present petition for appointment of the Arbitrator is resisted on the ground that once the applicant itself states that the Collaboration Agreement dated 08.8.2010 stood superseded by Agreement to Sell dated 09.8.2010, the applicant now cannot rely upon the said Collaboration Agreement and seek appointment of Arbitrator in terms of Arbitration Clause contained therein.
10. Interestingly, the respondents claim that there was no agreement to sell and it is only Collaboration Agreement dated 08.8.2010, which was executed between the parties. However, the applicant is maintaining that the agreement to sell was executed between the parties on the basis of which, it has even filed the suit in the Civil Court. The question that would arise is as to whether on these facts, the applicant can still file the present petition predicated on the Collaboration Agreement. Answer has to be in the negative. Legal ARB-121-2011 -6- position in this respect stands settled by two judgments, one of the Calcutta High Court and other of the Delhi High Court.
11. In the case of Md. Ziaul Haque Vs. Calcutta Vyapar Pratisthan, AIR 1966 Calcutta 605, the plaintiff had pleaded two agreements of sale, the latter one superseded the earlier one. He, however, failed to prove the latter agreement. The Court held that the plaintiff cannot successfully ask for this specific performance of the earlier agreement, even though there is an admission of the earlier agreement by the other party. The Court was of the view that there cannot be two agreements subsisting at the same time in respect of the same subject matter. A contract is discharged by performance or by a new agreement. The parties may agree regarding termination of earlier contract, which is wholly or partially executory, and the consideration for discharging the agreement is the mutual release of liability. The ratio decidendi is that when the case of the plaintiff was that there were two agreements and when the plaintiff failed to prove the transaction alleged, it would be inadmissible to allow such party to set up the earlier agreement unmodified as the only agreement governing the parties. The reason is that it is intended to prevent false cases being set up and when such false cases are demonstrated to be untrue in a Court to allow a party to take recourse to an agreement in a manner which is completely different to the case alleged would be violative of the maxim of equity that he who seeks equity must come with clean hands. If by flexibility of evidence and conduct of the party a new case is made and the earlier agreement which was ineffective on the happening of the later agreement is resuscitated in terms different ARB-121-2011 -7- to the alleged terms in the plaint actions for specific performance and relief granted in equity will be meaningless.
12. Same view is taken by the Delhi High Court in the case of M/s. Dadri Cement Co. and another Vs. M/s. Bird and Co. Pvt. Ltd., AIR 1974 Delhi 223. The position in law was stated in this case is as under:
"(10) This substitution operated to bring about a novation of the original contract. According to section 62 of the Contract Act if the parties to a contract agree to substitute a new contract for it, or to rescind it or alter it, the original contract need not be performed. The original contract of sale, therefore, necessarily became inoperative and unenforceable and ceased to exist. The arbitration clause in the original contract perished with it. The submission, therefore, that the arbitration clause in the original contract should be held to survive to govern the substituted arrangement cannot be sustained.
(11) In Ramdas Dwarkadas v. Orient Pictures (A.I.R. 1942 Bombay
332) it was held that where the original agreement between the parties contained an arbitration clause and the subsequent new agreement without any arbitration clause materially affected and altered the rights and liabilities under the original agreement and imposed liabilities and conferred rights upon the parties which were not to be found in the original agreement at all, the arbitration clause could not have any applicability to the new rights and liabilities."
13. In the present case, it is clear from the averments made even in this application for appointment of the Arbitrator, as per the applicant itself after the Collaboration Agreement, Agreement to Sell was entered into between the parties. Obviously, two agreements cannot co-exist. The applicant has, in the entire petition, maintained the existence of Agreement for Sale dated 09.8.2010. If this is accepted, that would mean that the earlier Collaboration Agreement stands rescinded. The applicant, therefore, cannot be allowed to ride in two boats at the same time. Even if the respondents have disputed the existence of Sale Agreement, the applicant has not accepted this position. Once it is maintained that the Agreement to Sell exists between the parties, it has to take that step further to logical conclusion and to prove that such an agreement was entered into between the parties. ARB-121-2011 -8-
14. In the present application, I have to go by the averments made in the petition. It is stated at the cost of repetition that once the applicant has itself pleaded the execution of the Sale Agreement, which does not contain any arbitration clause, it cannot, at the same time, rely upon the Arbitration Clause contained in the Collaboration Agreement.
15. This petition, thus, fails and is dismissed accordingly.
January 11, 2013 ( A.K. SIKRI ) pc CHIEF JUSTICE