Delhi District Court
Kavandeep Singh Sampuran vs Amit Choudhury on 21 August, 2019
1
IN THE COURT OF MS VANDANA JAIN
ADDITIONAL DISTRICT JUDGE-07
SOUTH-EAST DISTRICT, SAKET COURTS
NEW DELHI
Arbt No. 169/2018
In the matter of:
Kavandeep Singh Sampuran
R/o Fairview House, Southdown Road,
Shawford, Winchester, Hants,
SO21 2BY, England
.....Petitioner
VERSUS
1.Amit Choudhury
45/71, West Punjabi Bagh,
New Delhi-110026.
2. Sampuran Singh
R/o Fairview House, Southdown Road,
Shawford, Winchester, Hants,
SO21 2BY, England
....Respondents
Date of Institution : 05.06.2018
Date of Judgment : 21.08.2019
Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 1 of 38
2
ORDER
1. Vide this order, I shall dispose off an objection petition filed by petitioner under Section 34 of Arbitration & Conciliation Act 1996 against the impugned award dated 20.02.2018 awarding relief of specific performance of an agreement to sell dated 16.04.2015 and compensation of Rs. 10,00,000/- per annum on account of loss of opportunity with effect from 01.01.2006 till the date of execution of the sale deed by the respondents in favour of the claimant or by the court in enforcement of the Award.
2. Ld Sr. Advocate for petitioner has argued respondent no. 1 and his associates were in receipt of nearly Rs.7 Crores by direct bank transfers from the petitioner, given to them directly or to third entities at respondent no. 1's behest.
3. Ld Sr Advocate for petitioner has argued that no notice of reference for invoking arbitration has been served upon petitioner herein. It is further argued that award finds mention of legal notice dated 17.12.2016 which is shown to be a notice of reference, Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 2 of 38 3 however, no reference to such a letter has been made either in the claim statement or in the evidence of claimant/respondent herein. The claim statement finds mention of letter dated 23.12.2016. It is further argued that said notice dated 17.12.2016 is not accompanied by any proof of service and without any receipt the notice cannot be deemed to be served automatically.
4. Ld Sr. Advocate for petitioner has relied upon Milkfood Ltd V. GMC Ice Cream Pvt Ltd (2004) 7 SCC 288, M/s Oval Investment Pvt Ltd Vs. M/s Indiabulls Financial 2009 (112) DRJ 195, Alupro Building Systems Vs Ozone Systems 2017 SCC OnLine Del 7228.
5. Ld Sr. Advocate for petitioner has further argued that the notice of arbitration proceedings was never served upon petitioner herein. No notice has been received on any of the addresses. It is further argued that notice issued on address C-5, H. No. 56, 2 nd Floor, Vasant Kunj New Delhi is wrong as address is incorrect. It is further argued that though in Form-32 address of the petitioner herein given as C-5, H. No. 58, 2 nd floor, Vasant Kunj, however, respondent very well know that petitioner is permanent resident of Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 3 of 38 4 U.K. and house C-5, H. No. 58, 2 nd floor Vasant Kunj, New Delhi is not the permanent address of the petitioner herein. It is further argued that address of U.K given is also wrong as notice was issued on "Fairway house" whereas it is actually "Fairview House". It is further argued that notice was served upon the company HSE Sigma Ltd at Naurang House, Cannaught Place, New Delhi however, there is no company in the name of HSE Sigma Ltd incorporated in India and registered office of HSE Sigma Ltd is at U.K. It is further argued that there is no e-mail on record which shows that petitioner was ever served through e-mail. Ld Sr. Advocate for petitioner has further argued that the effective service has not been effected before Arbitrator, therefore, award is bad in law.
6. It is further argued that alleged agreement to sell dated 16.04.2015 is insufficiently stamped and same cannot be even read into evidence without impounding the same. Ld Sr. Advocate for petitioner has argued that agreement to sell has not been registered and non-registration of the said document is not to be seen for seeking relief of specific performance but has to be seen in respect of claiming possession of the property in question by the respondent, Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 4 of 38 5 without agreement to sell having been registered.
7. She has further argued that present case for specific performance is not arbitrable in view of Clause IX of the said agreement itself. It is further argued that specific performance could have been sought only through the court as per clause IX and the dispute could not have been referred to the Arbitrator in view of arbitration clause given in clause XIV in in the said agreement. It is submitted that Arbitrator is not a court and, therefore, use of word "court" in clause IX clearly shows that jurisdiction of Arbitrator was barred for deciding of specific performance. Ld Sr. Advocate for petitioner has further relied upon Privilege Health Care Services Vs DLF Qutab Encalve Complex 2013 SCC OnLine P7H 14290 in this regard.
8. Ld Sr. Advocate for petitioner has further argued that respondent had nowhere pleaded and proved before Ld Arbitrator that he was ready and willing to perform his part of the contract. Section 16(c) of Specific Relief Act couches bar in absolute term. It is further argued that court is bound to assess and give finding on readiness and willingness even, if no defence is raised and she has Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 5 of 38 6 relied upon Baldev Behl Vs. Bhule & Ors 2012 (132) DRJ 247, Ashok Nanda Vs Mohinder Sharma (2018) 250 DLT 142, Surjit Singh Bhatia Vs. Tej Raj Goel (2014) 7 High Court Case (Del) 4 in this regard.
9. Ld Sr. Advocate for petitioner has submitted that several judgment of Hon'ble Supreme Court have categorically mentioned that statutory law cannot be disregarded by an award. Ld Sr Advocate for petitioner has relied upon Mcdermott International Inc vs Burn Standard Co. Ltd (2006) 11 SCC 181, Associate Builders Vs DDA 2015 (3) SCC 49, Shri Chandrashekhar Vs. M/s Yogi Construction (2019) 1 Mah Lj 628 and (2018) 6 Bom CR 213.
10. It is further argued that in the e-mails exchanged between the parties is only with reference to return of money. On perusal of all the bank statements and e-mails, it would show that there had been transfer of around Rs. 7 Crores by bank transfers till March 2016 and by taking the consideration amount back claimant/respondent had rescinded the contract and he could not have pressed for relief of specific performance. Ld Sr Advocate for petitioner has placed reliance upon Surjit Singh Bhatia Vs Tej Ram Goel (DB) (2016) Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 6 of 38 7 158 DRJ 157.
11. Ld Sr Advocate for petitioner has further argued that while passing award, Ld Arbitrator had relied upon a bank record. It is argued that bank records shows that payment of Rs. 80,00,000/- was made to petitioner herein from the account of respondent's wife Neelu Vaid and the below demand draft, prepared for the said purpose, "return of loan" is mentioned. It is further argued that Rs. 80,00,000/- shown as advance/bayana given on 16.04.2015 to petitioner herein was actually towards return of loan which was given to the respondent's wife in the year 2015 in two installments i.e. one of Rs. 45,00,000/- and second is Rs. 35,00,000/-. It is argued that impugned award is liable to be set aside.
12. Ld counsel for respondent on the other hand, has argued that notice of reference to invoke arbitration was duly served upon petitioner on address of C-5, H. No. 58, 2nd floor, Vasant Kunj letter dated 23.12.2016. It is further argued that after Ld Arbitrator had given its consent to act as Sole Arbitrator. Notices were issued through him on all the available addresses. It is argued that service was effected upon C-5, H. No. 58, 2 nd floor, Vasant Kunj, New Delhi Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 7 of 38 8 which was received back with report of refusal. He has relied upon P.Dhandapani & Anr Vs The Motor & General Finance Ltd 2006 (2) Arb. LR 274 (Delhi) in order to say that refusal is deemed service. He has further argued that apart from service at aforesaid addresses, petitioner was served at the Naurang House, K.G. Marg, Connaught Place New Delhi address as well as at his address in U.K. Ld counsel for respondent has further argued that witness was also served through newspapers publication having circulation in Delhi and U.K. He has further argued that besides these modes, notice was also sent to petitioner herein by way of e-mail on 04.01.2017 and 06.01.2017. It is further argued that notice of arbitration proceedings were also sent to the solicitors of the petitioners in U.K who acknowledged the same. It is further argued that petitioner failed to appear before Ld Arbitrator despite service of notice and having knowledge of the proceedings. He has relied upon Harish Chand Gupta & Anr Vs Ashok Leyland Finance & Anr 2009 (Suppl.2) Arb. LR 171 (Madras), P.Dhandapani & Anr Vs The Motor & General Finance Ltd 2006 (2) Arb. LR 274 (Delhi) to argue that parties cannot take advantage of its non-appearance and Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 8 of 38 9 arbitration proceedings on the ground of not serving notice cannot be said to be bad.
13. He has further argued that relief of specific performance can be sought through arbitration and he has relied upon Olympus Superstructures Pvt Ltd Vs. Meena Vijay Khetan & Ors (1999) 5 SCC 651, Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd & Ors (2011) 5 SCC 532, State of U.P. Vs. Allied Constructions (2003) 7 SCC 396 in this regard.
14. He has further argued that registration of the agreement to sell does not have any significance in a case for specific performance as for seeking specific performance, agreement is not required to be registered. He has further argued that records of arbitration are sufficient to furnish proof that the arbitration proceedings were fairly carried out.
15. With respect to readiness and willingness, he has further argued that since more than 90% of the total consideration amount was already paid, therefore, respondent was under no obligation to prove readiness and willingness. He has further argued that he has approached the petitioner before invoking arbitration i.e. on Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 9 of 38 10 01.12.2015 and 07.12.2015 calling upon petitioner herein to receive balance amount and for execution of sale deed but the petitioner never turned up to execute sale deed and receive balance amount.
16. He has further argued that petitioner has not explained as to how the original title deeds are in the possession of the respondent without having been handed over by petitioner to the respondent.
17. He has further argued that apart from the agreement to sell dated 16.04.2015, separate MOU was also executed on that day (16.04.2015) wherein loan of Rs. 3,00,00,000/- (Three Crores) was given to the petitioner herein and on that day, total amount given to the petitioner was Rs. 2.6 Crores out of which Rs. 80,00,000/- were towards agreement to sell. It is argued that Ld Sr Advocate for the petitioner has mixed both the transactions in order to confuse the court. He further submits that objections are liable to be dismissed.
18. I have heard the arguments and have perused the record carefully.
19. I shall deal with the objections point wise. (A) Notice of Reference u/s 21 of Arbitration & Conciliation Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 10 of 38 11 Act: Section 21 of Arbitration & Conciliation Act is provided herein under:-
"Unless otherwise agreed by the
parties, the arbitral proceedings in
respect of a particular dispute
commence on the date on which a request
for that dispute to be referred to
arbitration is received by the
respondent."
This section talks about the commencement of arbitral proceedings on the date of which a request for the dispute to be referred to arbitration is "received" by the respondent. The section itself makes it clear that issuance of notice is not sufficient.
Perusal of the arbitral proceedings reveals that two notices have been annexed in the arbitral record, one is dated 17.12.2016 at C-5, H. No. 56, 2nd floor, Vasant Kunj, New Delhi having no postal receipt and another dated 23.12.2016 at C-5, H. No. 58, 2 nd floor, Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 11 of 38 12 Vasant Kunj, New Delhi.
None of the tracking reports showing service upon the petitioner herein of the said notices has been filed on record. Ld Sr Advocate for the petitioner has relied upon judgments i.e. Milkfood Ltd V. GMC Ice Cream Pvt Ltd (2004) 7 SCC 288, M/s Oval Investment Pvt Ltd Vs. M/s Indiabulls Financial 2009 (112) DRJ 195, Alupro Building Systems Vs Ozone Systems 2017 SCC OnLine Del 7228.
In these judgments, it was held that mere issuance of notice is not sufficient, the receipt of notice is mandatory.
Perusal of arbitral record further reveals that minutes of arbitral proceedings have been recorded by the Ld Arbitrator. First minutes of arbitral proceedings held on 17.01.2017 are on record. The first paragraph of said minutes talk about notice of reference issued to the parties, however, there is no reference of receipt of that notice upon the petitioner herein. Even the address on which petitioner was served is not discussed in the said paragraph. It is already mentioned above that as per the case of the respondent, service of reference notice was allegedly effected on C-5, H. No. 56, 2 nd floor, Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 12 of 38 13 Vasant Kunj, New Delhi on 17.12.2016 and on C-5, H. No. 58, 2 nd floor Vasant Kunj, New Delhi on 23.12.2016. Respondent himself has filed form-32 of one company namely HSE Sigma India Pvt Ltd wherein petitioner herein is shown to be director and his present address is shown to be C-5, H. 58, 2 nd floor, Vasant Kunj, New Delhi wherein he is stated to be a national of Great Britain. It is pertinent to mention here that this form 32 was received by respondent in February 2017, whereas service has effected upon petitioner at C-5, H. No. 58, 2nd Floor, Vasant Kunj, New Delhi allegedly on 23.12.2016. If the respondent knew that actual address was C-5, H. No. 58, 2nd Floor, Vasant Kunj, New Delhi, why the service notice dated 17.12.2016 was addressed to C-5, H. No. 56, 2nd Floor, Vasant Kunj, New Delhi. Though, this C-5, H. No. 56, 2 nd Floor, Vasant Kunj, New Delhi is mentioned in agreement to sell, but the other address is not there. Parties were having good acquaintance. So it is unbelievable that respondent did not have the correct address of petitioner herein. It is clear from the record that no attempt was made to serve the petitioner herein on his permanent address of U.K. despite having the knowledge of same. It is further pertinent to Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 13 of 38 14 mention here that respondent was also aware of e-mail address of petitioner herein but no notice was sent even through e-mail. Therefore, without any service of reference notice upon petitioner herein, the entire arbitral proceedings are void. (B) Service on commencement of Arbitral Proceedings :-
As per first minutes of arbitral proceedings, Ld Arbitral Tribunal has sent two e-mails dated 04.01.2017 & 06.01.2017 on the notified e-mail addresses of the petitioner herein, however, perusal of arbitral record reveals that those two e-mails have been furnished by Ld counsel for respondent herein to the Ld Arbitrator in February, 2017 whereas Arbitral Tribunal claims to have sent the e-mails on 04.01.2017 and 06.01.2017. No document is on record showing that any such e-mails were either sent or received by the petitioner herein. Therefore, recording of these minutes is not substantiated by any document and no service was effected upon petitioner herein through any e-mail.
In the same minutes, it is stated that copy of notice was also sent to the solicitors of petitioners in U.K. This cannot deemed to be an appropriate service upon the petitioner as solicitors may not be Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 14 of 38 15 authorized to receive notice of everything happening against the petitioners.
Thirdly the notice was sent by way of speed post at the residential address at U.K. It is pertinent to mention here that notice was sent at "Fairway House", Southdown Road, Winchester, U.K. whereas address given in the Form-32 was "Fairview" not "Fairway".
Notices were again sent as per minutes of the 2nd arbitral proceedings held on 03.03.2017. The said minutes are reproduced herein as under:-
" Name of the Attendees:
Mr. Hrishikesh Baruah, Mr Kshitij Paliwal and Mr. Shikhar Mittal, Advocates for the claimant. None for respondent.
MINUTES OF THE 2nd ARBITRAL PROCEEDING HELD ON 03.03.2017 AT 4 PM. AT COMMITTEE ROOM NO. 2, INDIA INTERNATIONAL CENTER, ANNEXE BUILDING, NEW DELHI.
Pursuant to the hearing held on 17.01.2017, the Claimants side was expected to take certain actions in regard to the service of notice on the Respondent by registered posts, by email and by publication of notices Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 15 of 38 16 in his name in two newspapers namely "The Tribune" and the "Times of India" having an overseas circulation in UK as well. Since it was brought to the notice of the Tribunal that neither the "Times of India" nor "The Tribune" is having overseas circulation in Great Britain, on a request made from the side of the Claimant, the stipulation in the minutes dated 17.01.2017 was modified to the effect that publication of notice may be made in the Times of India, New Delhi Edition and in Hampshire Chronicle having its wide circulation in the area of Winchester, Great Britain.
The Notices by Registered Post was sent to the Respondent on the following five addresses furnished by the Claimant including his address at Winchester, Great Britain: [ii] Mr. Kavandeep Singh Sampuran, C5, H. No. 56, 2nd Floor, Vasant Kunj, New Delhi110070 [iii] Mr. Kavandeep Singh Sampuran Fairway House, Southdown Road, Winchester, SO 21 2 BY, U.K. [iv] Mr. Kavandeep Singh Sampuran, SigmaHSE Ltd, Unit 2, Moorside Point, Winchester, Hampshire, SO 23 7RX. UK Telephone: +44 (0) 1962840570 Email info@sigmahse.com Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 16 of 38 17 [v] Mr. Kavandeep Singh Sampuran SigmaHSE Ltd Office 802, Naurang House, K.G. Marg, Connaught Place, New Delhi110001 India.
Out of the five notices sent to the Respondent through Registered AD post [Indian Postal Services] on the following addresses have been returned back with th endorsement of Postal Authorities [Indian Postal Services and Royal Mail] with the endorsement "refused".
Mr. Kavandeep Singh Sampuran, Resident of C5, H. No. 58, 2nd Floor, Vasant Kunj, New Delhi110070 Mr. Kavandeep Singh Sampuran, Fairway House, Southdown Road, Winchester, SO 21 2 BY, U.K. The notice sent under Registered AD Cover on the following address has been returned with the endorsement "this person has left".
Mr. Kavandeep Singh Sampuran, SigmaHSE Ltd, Office 802, Naurang House, K.G. Marg, Connaught Place, New Delhi110001 India.
Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 17 of 38 18 Mr. Kavandeep Singh Sampuran, Resident of C5, H. No. 56, 2nd Floor, Vasant Kunj, New Delhi110070 The AD Cards of the notices sent on the following addresses have been returned back, but without the postal article under which the notices were sent, but without the signatures of the addressee.
Mr. Kavandeep Singh Sampuran, Resident of C5, H. No. 56, 2nd Floor, Vasant Kunj, New Delhi110070 Mr. Kavandeep Singh Sampuran, SigmaHSE Ltd, Office 802, Naurang House K.G. Marg, Connaught Place, New Delhi110001 So far as the publication of the notices in the newspapers Times of India, New Delhi Edition and in Hampshire Chronicle. Mr Hrishikesh Baruah, Ld Counsel for the Claimant informed the Tribunal that the notices issued by the Tribunal were duly published in the Times of India New Delhi Edition of 15th of February 2017 while it was so published in the Hampshire Chronicle in its Edition of 16.02.2017. Copies of which were also furnished to the Tribunal soon thereafter of the publication.
An affidavit in regard to service of notice of these Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 18 of 38 19 proceedings upon the respondent has also been filed by Mr. Amit Choudhary, Claimant thereby again annexing the photocopies of the said publications. Mr Hrishikesh Baruah has retained the original publications, which he has presented to the Tribunal for its perusal and the Tribunal has perused the same and found the same in order.
Mr Hrishikesh Baruah also submits that apart from sending notices to the Respondent on the above referred addresses the claimant also made a research and found out that the Respondent is a Director in a Registered Company Sigma HSE Ltd. He had submitted that in the Form No. 32 filed with the Registrar of Companies, the Respondent's residential address has been shown as C5, House No. 58, 2 nd Floor, Having noted the above developments, Mr Hrishikesh Baruah submits that all possible attempts have been made by the Claimant as well as by the Tribunal to effect service of the notice in regard to the pendency of these proceedings before this Tribunal and the Tribunal may therefore make an order to effect that the Respondent is neither interested nor desirous in participating in the Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 19 of 38 20 present arbitral proceedings. The Tribunal having considered the above developments noted in detail must hold that the Respondent has been duly and properly served with the notice of these proceedings and he has acquired full knowledge of the pendency of the present proceedings before this Tribunal but for the reasons best known to him he is not interested to participate in the present proceedings. The Tribunal therefore makes an order that further proceedings in this matter shall be taken up in absence of the Respondent.
Mr. Hrishikesh Baruah seeks four weeks' time to file the statement of claim complete with documents relied upon by the Claimant. The prayer is granted. Let the Statement of Claim with documents be filed on or before 03.04.2017.
Now the matter will come upon 07.04.2017 at 4 Pm at the same venue for further proceeding."
As per these minutes, the notices were sent to the petitioner on five addresses as given above. It is pertinent to mention here that no notice was sent at the 4 th address i.e. Sigma HSE Ltd at Moorside Road, Winchester, Hampshire SO 23 7RX, U.K. provided in the minutes though it is recorded that notices sent at these Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 20 of 38 21 addresses were received back with endorsement "refused". Along with this address, one e-mail was also given, but no notice was sent on this e-mail. It is pertinent to mention here that refusal report is only on respect of address at C-5, H. No 58 and "Fairway house", South Down Town Road, Winchester, U.K. It is again stated at the risk of repetition that refusal in respect of fairway house cannot be taken as appropriate service as address was incorrect in view of "Fairview" being mentioned as "Fairway".
As far as, 2nd address i.e. C-5, H. No. 58, 2nd Floor, Vasant Kunj, New Delhi is concerned, refusal can be deemed to be service as respondent herein ought to have produced the documents showing that the petitioner was in India at the time of issuance of said notice or date on which this report was prepared so that refusal could have been deemed to be an appropriate service. The petitioner was also deemed to be served at Sigma HSE at office Naurang House, K.G. Marg, Canuaght Place, New Delhi but it is pertinent to mention here that in order to seek support about this address, Form-32 has been filed. This Form-32 is not for Sigma HSE but Sigma HSE (India) Pvt Ltd. In Form-32 placed on record, Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 21 of 38 22 the column of registered office of the company is left blank and it is not mentioned from where this address was taken by the respondent no. 1. It is clarified that as per the admitted facts of the parties, this Sigma HSE Ltd is company based in U.K. which is clear from the aforesaid minutes wherein address of "Sigma HSE is of Moorside Road, Winchester, Hampshire SO 23 7RX, U.K.. It is pertinent to mention here that apart from serving the petitioner at these addresses, petitioner was attempted to be served at C-5, H. No. 56, 2nd floor, Vasant Kunj, New Delhi which was received back with report no such person resides at given address. Report is of 05.01.2017. The publication in newspapers i.e. Times of India and Hampshire Chronicle having publication in U.K. was done. Perusal of the record reveals that service in newspaper was at "Fairway House"
and not at "Fairview House". In order to effect publication in newspaper, the address should be correct. It is also pertinent to mention here that service through publication is only effected when the party cannot be served through usual modes at all the available addresses but the discussion made above shows that petitioner was not attempted to be served on all correct and available addresses. Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 22 of 38 23 Either the address given was partly wrong in the memo given for furnishing address of the petitioner or the service was not effected at right address. Relevant extract of the newspaper has been attached in the arbitral record which shows that service was effected in newspaper at "Fairway house" and not "Fairview house". Therefore, this court is of the view that service was not effected upon petitioner herein. Ld counsel for respondent has relied upon certain judgment i.e. Harish Chand Gupta & Anr Vs Ashok Leyland Finance & Anr 2009 (Suppl.2) Arb. LR 171 (Madras), P.Dhandapani & Anr Vs The Motor & General Finance Ltd 2006 (2) Arb. LR 274 (Delhi) and Gujrat Electricity Board & Anr Vs. Atmaram Sungomal Poshani (1989) 2 SCC 602 in respect of service. The ratio of these judgments are not disputed, however, in view of findings given above in respect of service it cannot be said that petitioner was served with the notice of arbitration proceedings by the Arbitral Tribunal. They would have been applicable only if the petitioner was served effectively.
(C) Whether the dispute in question was Arbitrable or Not ?
Perusal of award reveals that Ld Arbitrator had relied upon Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 23 of 38 24 clause XIV in order to invoke the arbitration and the respondent has also relied upon the same, however, agreement to sell dated 16.04.2015 finds mention of Clause IX.1 which provides for specific performance to be enforced by the court. Both the clauses i.e. IX.1 as well as XIV.1 are reproduced herein:-
"IX.1 The Seller agrees that on or before 31.12.2015 the Seller will execute the Sale Deed in relation to the property and get the same registered in favour of the Buyer or his nominee on receipt of the full and the final balance amount, failing which the Buyer will be entitled to get the Sale Deed executed and registered through the Court of law by specific performance and in such an event, the Seller will be liable for any expenses incurred by the Buyer for execution and registration of the Sale Deed."
" XIV.1 The Buyer and the Seller hereby agrees that in case of any dispute arising out of the present agreement to sell or any Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 24 of 38 25 dispute in relation to the implementation of the present agreement to sell, and then the said dispute shall be resolved by the mode of arbitration in terms of the Arbitration and Conciliation Act, 1996. The parties agree that the seat of Arbitration would be in Delhi."
Reading of both these clauses shows that clause XIV.1 is a general clause whereby all the disputes including dispute in relation to implementation of the agreement were to be referred to arbitration whereas clause IX.1 specifically provides enforcement of specific performance through the court. Section 2 (1) (e) of Arbitration Act defines "Court". Same is reproduced herein as under:-
"(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subjectmatter of a suit, but does not include any Civil Court of Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 25 of 38 26 a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subjectmatter of the arbitration if the same had been the subjectmatter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;"
Arbitral Tribunal has been defined separately under Section 2 (1) (d) which includes the sole Arbitrator or panel of arbitrator. Therefore, arbitral tribunal cannot mixed up with the court defined herein.
Ld counsel for respondent has relied upon Olympus Superstructures Pvt Ltd Vs. Meena Vijay Khetan & Ors (1999) 5 SCC 651, Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd & Ors (2011) 5 SCC 532, State of U.P. Vs. Allied Constructions (2003) 7 SCC 396 on the point that dispute seeking relief of specific Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 26 of 38 27 performance of an agreement to sell can be referred to arbitration. There is no denial to the ratio that the specific performance is an arbitrable dispute, however, proposition herein in the present case is completely different. In the present case two separate clauses have been given and there is an exclusive clause IX.1 to deal with enforcement of specific performance. The judgments relied upon by Ld counsel for respondent do not deal with this proposition and, therefore, they are insignificant under the present facts and circumstances.
On the other hand, Ld counsel for petitioner has relied upon Privilege Health Care Services Vs DLF Qutab Encalve Complex 2013 SCC OnLine P7H 14290 which has further relied upon "Dilip Bafna Vs. K.S. Vasudev 2008 (1) ICC 535"
In Privilege Health Care Services (Supra) clause 13 of the agreement provided for the consequences in case of making delay in making the payments by the 2nd part and clause 14 specifically provided the consequences flowing from the first paragraph, i.e. refusing or failing to fulfill its part of MOU. In clause 14 it was specifically mentioned that first part shall be entitled to either Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 27 of 38 28 terminate the MOU or to file suit for specific performance. In the aforesaid case there was a special clause 5 providing for arbitration clause in case of any dispute arising between the parties with respect to interpretation or with terms of performance on the terms and conditions of the MOU. In these facts and circumstances, court relied upon "Dilip Bafna Vs. K.S. Vasudev 2008 (1) ICC 535"
wherein also there were two clauses, claim of which provided a special one of which was very specific with respect to filing suit for specific performance. In this judgment, it was held that since there was a exclusive clause for specific performance to be enforced through court, therefore, this dispute will be decided by the court only and not through the mode of arbitration.
The facts of both of these cases are quite similar to the facts in hand. Since a specific clause 9 has been provided for getting the specific performance enforced through court of law, therefore, the words "dispute in relation to implementation of present agreement to sell" would not give the arbitrator the jurisdiction to decide the case of specific performance. In view of the aforesaid discussion, it is held that dispute between the parties was not arbitrable and the Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 28 of 38 29 claimant/respondent ought to have approached civil court for seeking specific performance.
(D) Consequence of Inadequate Stamping/Non-Registration of Agreement to Sell dated 16.04.2015:-
It is trite that the statutory law cannot be ignored by the Arbitral Tribunal.
In order to analyze the scope of section 34 CPC, reliance is placed upon judgment of Hon 'ble Supreme Court in "Steel Authority of India Ltd Vs Gupta Brother Steel Tubes Ltd (JT 2009 (12) SC 135) which summarizes the position of section 34 at para 18, as follows:-
" In a case where an arbitrator travels beyond the contract, the award would be without jurisdiction and would amount to legal misconduct and because of which the award would become amenable for being set aside by a court.
ii) An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 29 of 38 30 the face of the award.
iii) If a specific question of law is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law does not make the award bad on its face.
iv) An award contrary to substantive provision of law or against the terms of contract would be patently illegal.
v) Where the parties have deliberately specified the amount of compensation in express terms, the party who has suffered by such breach can only claim the sum specified in the contract and not in excess thereof.
In other words, no award of compensation in case of breach of contract, if named or specified in the contract, could be awarded in excess thereof.
vi) If the conclusion of the arbitration is based on a possible view of the matter, the court should not interfere with the award.
vii) It is not permissible to a court to examine the correctness of the findings of the arbitrator , as if it were sitting in appeal over his findings."
Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 30 of 38 31 Further, in addition to the same, it has to be seen that there should not be any arbitrariness or willingness while passing the award in this regard, judgment Associate Builders Vs DDA (2014) ARBLR 307 (SC) is clear wherein it was held:-
" it is clear that the juristic principle of a "judicial approach" demands that a decision be fair, reasonable and objective. On the observe side, anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective. The Audi Alterum Partem principle which undoubtedly is a fundamental juristic principle in Indian Law is also contained in section 18 and 34 (2) (a) (iii) of the Arbitration and Conciliation Act.. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where a finding is based on no evidence, or an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or ignores vital evidence in Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 31 of 38 32 arriving at its decision, such decision would necessarily be perverse.. 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 can not be corrected. A possible view by the arbitrator on facts has necessarily to pass 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 arbitrators approach is not arbitrary or capricious, then he is the last word on facts... It is with this very important caveat that the two fundamental principles which form part of the fundamental policy of Indian Law (that the arbitrator must have a judicial approach and that he must not act perversely) are to be understood."
Further, in addition, it has to be seen that award should not be Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 32 of 38 33 patently illegal which goes to the root of matter. In this regard reliance is placed upon "National Highways Authority of India Vs Afcons Infrastructure Ltd (152 (2008) DLT 24)" wherein it has been stated observed that :-
"the present case is not one where the arbitral tribunal has ignored the terms of the contract. What the arbitral tribunal had done is to arrive at a particular interpretation after considering the relevant terms of the contract and just because the interpretation that has been arrived at by the tribunal is not palatable to the petitioner, is not ground enough for interfering with the award. Such interference can only be justified where the award is contrary to the substantive provisions of law or the provisions of the Act or if it is against the terms of the contract. The award must be so patently illegal and that it goes to the root of the matter. If the illegality is of a trivial nature, the award can not be said to be against public policy. The award must be so unfair and unreasonable that it shocks the conscience of the court. It is then that such an award Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 33 of 38 34 can be said to be opposed to public policy of India. I do not find the present award to contain any such patent illegality, much less an illegality which goes to the root of the matter. The award is also not of such a kind that it shocks the conscience of the court... This being the case, no interference is called for."
With this background let's dwell upon this point. Ld Sr Advocate for petitioner has argued that agreement to sell is insufficiently stamped and is not registered. Ld counsel for respondent has relied upon Devender Singh Vs. Hari Singh 2017 SCC Online Del 8036. Ratio of this judgment is not at all disputed wherein it is held that agreement to sell is not required to be registered for seeking relief of specific performance. As far as specific performance is concerned, proviso of Section 49 of Registration Act, 1908 clearly provides that in a suit for specific performance, an unregistered agreement to sell can be relied upon, however, it is pertinent to mention here that in the present case, respondent has claimed that possession was also given to the respondent by way of executing a possession letter on the basis of Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 34 of 38 35 said agreement to sell. Section 17 (1-A) of Registration Act, 1908 amended w.e.f. 24.09.2001 provides for registration of agreement to sell and clearly states that it requires registration for the purposes of Section 53-A of the Transfer of Property Act, meaning thereby that possession can not flow from an unregistered agreement to sell, though there is no bar to seeking specific performance.
As far as Stamp Act is concerned, admittedly the document is insufficiently stamped. Section 35 of the Indian Stamp Act 1899 provides for procedure to be followed in case of instruments not duly stamped. Had it been the case that petitioner herein was duly served and thereafter would have not appeared deliberately before Ld Arbitrator, Section 36 of the Indian Stamp Act would have come into operation and there would have been implied waiver regarding the objection to the stamping, however, in the present case it has already been observed in the preceding paragraphs that petitioner herein was not duly served and, therefore, Section 36 of Indian Stamp Act 1899 would not come into play. Ld Sr. Advocate for petitioner has relied upon Garware Wall Ropers Ltd Vs. Coastal Marine Constructions (2019) SCC OnLine SC 515 wherein it has Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 35 of 38 36 been observed that in case document is insufficiently stamped, then the unstamped documents cannot be relied upon to invoke arbitration clause unless and until stamp duty is paid by the defaulting party. In the present cases, admittedly the document is insufficiently stamped. There is not even a whisper about the document being insufficiently stamped in the award. Therefore, it is clear that this issue was not taken into account by Arbitral Tribunal. Arbitral Tribunal ought not to have acted upon arbitration clause, therefore, dispute was not arbitrable even on account of this very reason.
(E) Award contrary to fundamental policy of Indian Award.
Scope of Section 34 of Arbitration & Conciliation Act, 1996 has been discussed above in preceding point.
These judgments specifically clarifies that statutory law cannot be disregarded. Ld Sr. Advocate for the petitioner has argued that Section 16 (c) of Specific Relief Act have not been adhered to by respondent and it has been proved that respondent was ready and willing to fulfill its part of performance. As far as this argument is concerned, I do not find any merit in the said argument as Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 36 of 38 37 respondent claims that he had already paid amount of Rs. 88,00,000/- out of Rs. 1,00,00,000/- (One Crore) which was the total sale consideration and, therefore, pleadings given in the statement of claim to the effect that he was ready and willing to perform his part of agreement were enough to comply with the requirements of Section 16 (c) of the said Act. In order to assess readiness and willingness, the facts and circumstances of the case have to be seen. 90% of the amount already stood paid allegedly so, nothing much was to be proved regarding readiness and willingness by respondent. The initiation of action itself would judicate the intention of the claimant or respondent.
(F) Rs. 80,00,000/- (Eight Lacs) Towards Return of Loan. Ld Sr. Advocate for petitioner has further argued that Rs. 80,00,000/- were given by the respondent to the petitioner towards return of loan which was given by the petitioner to the respondent's wife and same is apparent from the endorsement below the demand draft which shows that purpose as return of loan. In this regard, it is stated that scope of Section 34 of Arbitration & Conciliation Act is limited and this court cannot appreciate the said facts and cannot Kavandeep Singh Sampuran Vs. Amit Choudhury & Ors Page no. 37 of 38 38 interfere with the findings of Ld Arbitrator on the same.
20. In view of aforesaid discussions, objection petition falls within ambit of Section 34 (ii) (iii) (iv) of Arbitration & Conciliation Act, 1996. Therefore, objection petition is allowed. Impugned award dated 20.02.2018 is set aside.
21. File be consigned to Record Room after due compliance. Digitally signed by
VANDANA VANDANA JAIN
JAIN Date: 2019.08.28
16:46:29 +0530
Announced in the open ( VANDANA JAIN)
court on 21.08.2019 Additional District Judge-07
South-East, Saket Courts,
New Delhi.
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