Madras High Court
K.V.Sathyanarayanan vs M/S.Sidharth Foundations & Housing ... on 23 February, 2021
Equivalent citations: AIRONLINE 2021 MAD 953
Author: M.Sundar
Bench: M.Sundar
O.P.No.72 of 2020 &
O.P.No.67 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 23.02.2021
Coram
THE HONOURABLE MR. JUSTICE M.SUNDAR
O.P.No.72 of 2020
&
O.P.No.67 of 2021
K.V.Sathyanarayanan .. Petitioner
vs.
M/s.Sidharth Foundations & Housing Limited
No.169, Habibullah Road
T.Nagar, Chennai – 600 017 ... Respondent
Prayer in O.P.No.72 of 2020: Petition filed under Section 34 (2)(iv) of
Arbitration and Conciliation Act, 1996 to set aside the award dated
10.09.2019 and pass such further and other orders as this Hon'ble Court
may deem fit and proper in the facts and circumstances of the case.
For Petitioner : Mr.P.H.Arvindh Pandian
Senior counsel
for Mr.C.V.Shailandharan
& Mr.Avinash Krishnan Ravi
For Respondents : Mr.M.K.Kabir
Senior counsel
for Mr.T.Jayaraman
&
Ms.M.K.Padma
https://www.mhc.tn.gov.in/judis/
1/10
O.P.No.72 of 2020 &
O.P.No.67 of 2021
O.P.No.67 of 2021
M/s.Sidharth Foundations & Housing Limited
No.169, Habibullah Road
T.Nagar, Chennai – 600 017 ... Petitioner
Vs.
K.V.Sathyanarayanan .. Respondent
Prayer in O.P.No.67 of 2021: Petition filed under Section 34 (2) (iv) of
Arbitration and Conciliation Act, 1996 to set aside the award dated
10.09.2019 passed by the learned Arbitrator in so far it relates to the
dismissal of the counter claims by the petitioner herein.
For Petitioner : Mr.M.K.Kabir
Senior counsel
for Mr.T.Jayaraman
&
Ms.M.K.Padma
For Respondents : Mr.P.H.Arvindh Pandian
Senior counsel
for Mr.C.V.Shailandharan
&
Mr.Avinash Krishnan Ravi
ORDER
This common consent order will dispose of captioned two https://www.mhc.tn.gov.in/judis/ 2/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 'Original Petitions' ('OPs' in plural and 'OP' in singular for the sake of convenience) and the captioned application, namely A.No.441 of 2020. Captioned OPs have been filed under Section 34 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity.
2. In this order, from hereon, for the sake of convenience and clarity 'O.P.No.72 of 2020' (presented in this Court on 06.12.2019) shall be referred to as 'senior OP' and 'O.P.No.67 of 2021' (presented in this Court on 22.11.2019) shall be referred to as 'junior OP'.
3. Senior and junior OPs, for all practical purposes are cross OPs as both are directed against the same arbitral award i.e., 'arbitral award dated 10.09.2019' (hereinafter 'impugned award' for the sake of brevity) made by an 'Arbitral Tribunal' ('AT' for the sake of brevity).
4. To be noted, senior OP has been filed by the owner, who was sole claimant before AT and junior OP has been filed by the builder /developer company, which was the lone respondent before the AT. As already alluded to supra, senior and junior OPs are cross OPs.
5. Owing to the trajectory captioned matters have taken today, it will suffice to say that a 'Joint Development Agreement' ('JDA' for the https://www.mhc.tn.gov.in/judis/ 3/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 sake of brevity) dated 22.11.2012 (hereinafter 'said contract' for convenience) is the fulcrum of the lis between the parties, vide said contract, land admeasuring 15 grounds or thereabouts was to be developed inter alia by putting up superstructures consisting of apartments and the developed property was to be shared in the ratio of 70% to the owner and 30 % to the builder/developer. Pursuant to said contract, two Powers of Attorney documents dated 03.04.2013 and 06.03.2017 were executed by the owner in favour of the builder/developer and these Power of Attorney documents came to be cancelled by the owner on 06.03.2017 and 19.03.2018 respectively. If said contract is the fulcrum of the lis, this cancellation can be described as the epicentre of the lis. It is not necessary to dilate any further on facts owing to the trajectory the matter has taken today (as already alluded to supra).
6. In the hearing today Mr.M.K.Kabir, learned Senior Advocate instructed by Mr.T.Jayaraman and Ms.M.K.Padma, counsel on record for builder/developer (petitioner in junior OP) and Mr.P.H.Arvindh Pandian, learned Senior Advocate instructed by Mr.C.V.Shailandharan and https://www.mhc.tn.gov.in/judis/ 4/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 Mr.Avinash Krishnan Ravi, counsel on record for the owner (petitioner in senior OP) are before this Court. It is further to be noted that the learned counsel on record and learned senior counsel stand swapped in terms of respondent appearance in senior and junior OPs. In this scenario, with the consent of learned counsel on both sides, both captioned main OPs were taken up for final disposal.
7. A preliminary point turning on Section 29-A of A and C Act was raised by learned senior counsel for owner. The preliminary point is, the impugned award has not been made by AT within the 12 months period prescribed under Section 29-A (1) of A and C Act.
8. Undisputed dates, as can be culled out from the impugned award are, AT entered upon reference on 30.08.2018 and therefore the 12 months timeline within which AT ought to have made the impugned award as mandated under Section 29-A(1) elapsed on 29.08.2019 as the expression used in Section 29-A(1) is '........within a period of twelve months.......'. To be noted, there is an amendment to Section 29-A(1), which was brought in by an amending Act i.e., Act 33 of 2019, but the relevant provision in the amending Act, namely Section 6 of the amending Act was notified only on 30.08.2019 and therefore, it does not https://www.mhc.tn.gov.in/judis/ 5/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 save the day qua the impugned award in the case on hand.
9. Be that as it may, it is brought to the notice of this Section 34 Court (which has a supervisory jurisdiction) by learned senior counsel on both sides that invariably the date of the first sitting of the Arbitral Tribunal is taken as the reckoning date for computation of this twelve months. Both senior counsel submit that this misconception is prevalent not only with regard to the timeline for the AT to make the award, but even in cases where a party seeks extension post 18 months under 29- A(4). I have clarified this position in G.N.Pandian Vs. Mr.S.Vasudevan, Managing Director M/s. Ozone Projects Private Ltd., and another reported in 2020 (5) LW 276. The most relevant paragraphs are Paragraphs 16 and 20 and the same read as follows:
'16. This application seeking extension of time for said AT for passing arbitral award by six months has been filed taking 26.03.2018 (date of first sitting of said AT) as the reckoning date.
Considering the language in which Section 29-A is couched (prior to as well as post 2019 second amendment Act), this Court has no doubt or hesitation in saying that taking first sitting of said AT as reckoning date (for computing 12 or 18 months) is plainly incorrect. A bare perusal of aforesaid sub-section (1) of Section 29-A and plain language thereof reveals that the reckoning date either way is not the date of first sitting of Arbitral Tribunal. It is https://www.mhc.tn.gov.in/judis/ 6/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 the date on which the said AT entered upon reference upto 29.08.2019 and it is the date of completion of pleadings within the meaning of Section 23(4) of A & C Act on and from 30.08.2019.' '20. In this regard, the language in which sub-section (4) of Section 29- A is couched makes it clear that if the award is not made within the period specified in sub-section (1) and the extended period, the mandate of the arbitrator will terminate and extension of time of said AT under sub-sections (4) and (5) of Section 29-A can be made either before or after expiry of the extended period of six months post original 12 months. In the instant case, this application has been filed post extended period of 6 months, the termination will stand saved by this extension order.'
10. In the case on hand, this Court is informed without any disputation or disagreement that first sitting of the AT was on 14.09.2018 and that appears to have led to the scenario on hand.
11. Be that as it may, as already alluded to supra, both sides have agreed to go for rearbitration and the following consent order is passed:
a) Hon'ble Mr.Justice K.Ravichandrabaabu (Retd.,) at Flat 1D, Crescent Castle Apartment, 13, Second Crescent Park Road, Gandhi Nagar, Adyar, Chennai – 600 020 (Ph:24450060.
Mob:94980 33336) former Judge of this Court is appointed as sole Arbitrator to enter upon reference to adjudicate the lis https://www.mhc.tn.gov.in/judis/ 7/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 between the parties which form subject matter of captioned OPs.
b) There is an interim order dated 06.02.2020 made in A.No.441 of 2020 based on an undertaking affidavit filed by the owner. By consent, it is agreed that this interim order will continue to operate till the disposal of the arbitral proceedings with a further extension of the undertaking that it will include owner not encumbering the property, which is subject matter of dispute by creating any interest / third party interest in the same.
c) Hon'ble Arbitrator is requested to enter upon reference qua arbitral disputes that have arisen between the parties, adjudicate upon the same and pass an award in accordance with A and C Act.
d) It is open to Hon'ble Arbitrator to conduct rearbitration on the basis of the completed pleadings and evidence which is already available qua AT whose impugned award has now been set aside, but this will be entirely at the discretion of the Hon'ble Arbitrator.
https://www.mhc.tn.gov.in/judis/ 8/10 O.P.No.72 of 2020 & O.P.No.67 of 2021
e) Hon'ble Arbitrator is free to fix his fee at his discretion.
Captioned OPs and application are disposed of in terms of above consent order. There shall be no order as to costs.
23.02.2021 Speaking order: Yes/No Index: Yes/No gpa Note: Registry is directed to communicate this order to Hon'ble Mr.Justice K.Ravichandrabaabu (Retd.,) at Flat 1D, Crescent Castle Apartment, 13,Second Crescent Park Road, Gandhi Nagar, Adyar, Chennai – 600 020 (Ph:24450060. Mob:94980 33336) https://www.mhc.tn.gov.in/judis/ 9/10 O.P.No.72 of 2020 & O.P.No.67 of 2021 M.SUNDAR.J., gpa O.P.No.72 of 2020 & O.P.No.67 of 202 23.02.2021 https://www.mhc.tn.gov.in/judis/ 10/10