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4 Mr. Khambata, learned Senior Counsel appearing for the Petitioner, submits that the impugned award suffers from breach of public policy as also patent illegality appearing on the face of the award in as much as it wrongly treats the MoU as an agreement under MOFA, contrary to the mandate of law and binding judgments of Indian Courts including the Supreme Court. Learned Counsel submits that the arbitrator, in effect, has ruled in favour of the Respondent, by holding the area of 1 lac sq.ft. mentioned in the MoU as carpet area solely on the basis of the mandate of MOFA and not by interpreting the individual terms of the MoU in the light of attending circumstances or otherwise at all. Learned Counsel submits that there are binding authorities of Supreme Court as well as of our court which hold that for an agreement to be considered as an agreement under Section 4 of MOFA it must be in the form provided in Section 4 read with rules framed under MOFA. Learned Counsel submits that, at any rate, any agreement, in order to qualify as an agreement under Section 4, must at least in substance satisfy the requirements of that Section read with the rules. Learned Counsel submits that contrary to this mandate and the law Chittewan 4/22 901. ARBP 708-14.doc laid down by courts, the learned arbitrator held the MoU to be an agreement under MOFA, though it was neither in the form stipulated under Section 4 of MOFA read with rules nor in substantial compliance of Section

10 Mr. Khambata relies on the cases of Jayantilal Investments Vs. Madhuvihar Co-operative Housing Society11 and Axis Bank Ltd Vs. Madhav Prasad Aggarwal12 in support of his submission that any agreement which does not satisfy the requirements of Section 4 of MOFA is 11 AIR 2007 S.C. 1011 12 Appeal No.360 2017 Decided on 26 October 2018 Chittewan 11/22 901. ARBP 708-14.doc not an agreement for the purposes of MOFA and does not confer on the parties thereto any right under MOFA. Jayantilal's case inter alia considers statutory obligations of a promoter. The Supreme Court in that case inter alia held that a promoter is not only statutorily obliged to give particulars of land, amenities, facilities etc., he is also required to make full and true disclosure of the development potentiality of the plot which is the subject- matter of the agreement. He is required to declare whether the plot in question is capable of being loaded in future with additional FSI/floating FSI/TDR. In other words, at the time of execution of the agreement with the flat takers, the promoter is obliged statutorily to place before them the entire project/scheme, be it a one building scheme or a multiple buildings scheme. All this discussion in Jayantilal was in the context of whether the promoter was required to obtain prior consent of flat takers before putting up any additional construction. The court held that prior consent was not necessary in a case where these obligations were fulfilled by the promoter and the construction proposed was in accordance with the disclosures made in compliance. The observations of the Supreme Court that these obligations were strengthened by insertion of sub-section (1A) in Section 4 of MOFA by Maharashtra Amendment Act 36 of 1986 inter alia requiring every agreement between the promoter and the flat taker to comply with the prescribed form, have to be seen in that context. There is nothing in the judgment to suggest that no right can be claimed by a flat purchaser under MOFA, if his agreement with the promoter does not comply with the prescribed form. In Axis Bank Limited (supra), a Division Bench of our court was concerned with an application under Order VII Rule 11 of CPC for rejection of a plaint against a bank, who had taken symbolic possession of an incomplete development project under Section 13 of the Chittewan 12/22 901. ARBP 708-14.doc Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act"). The case of the bank, in its application under Order VII Rule 11, was that its action in taking over such possession being a measure provided for in Section 13, the plaint against it was barred under Section 34 of SARFAESI Act. The observations made by the division bench in that judgment concerning the requirement of Section 4 of MOFA have to be seen in that light. What the Division Bench held was that there being no registered agreement as prescribed under Section 4 of MOFA, there was no question of any right being claimed by the plaintiff- flat purchasers for their protection under MOFA so as to legally override the charge created by the bank on the project assets. Anyway, the division bench itself made it clear that these observations were limited in the context of issues before it under the provisions of Order VII Rule 11 of the Code of Civil Procedure, namely, the case of the bank for rejection of the plaint against it on account of bar of jurisdiction under Section 34 of SARFAESI Act, and not on the merits of the flat purchasers' case against the promoter himself in that case. There is no warrant for treating it as a definitive or general authority for determining inter se rights between a promoter and a flat purchaser under an agreement for sale of a flat, which does not comply with the provisions of Section 4 of MOFA.

13 Coming now to the second limb of Mr. Khambata's arguments, namely, want of locus on the part of the present Respondent to prosecute the arbitration reference, it may be noted at the very outset that in this case, what we are dealing with is an arbitration reference already sought by parties to an arbitration agreement and made by the court and not an application of a third party transferee seeking a reference either under Section 11 or under Section 8 of the Arbitration Act. The issue in the present case is whether, by virtue of a scheme of amalgamation sanctioned by the court, the transferee company can continue to prosecute an arbitration reference commenced by the transferor company, and not whether the transferee company can seek an arbitration reference under Sections 8 or 11 in a pre-2015 amendment scenario. Mr. Khambata relies on the Supreme Court decision in General Radio & Appliances Co. Ltd (supra) in support of his submission that any transfer to, or vesting of a right in, a transferee company on the basis of an order sanctioning a scheme of amalgamation of companies under Sections 391 and 394 of the Companies Act, is a voluntary transfer. The court in that case was considering Section 14(b) of Delhi Rent Control Act, which prohibited sub- letting of rented premises or assignment or other modes of parting with possession thereof without the consent of the landlord. The court held that the transfer of tenancy in that case, which was the result of a scheme of amalgamation as between the transferor and transferee companies, could not be called an involuntary transfer effected by law or a court order. The court held that transfer of tenancy as between transferor and Chittewan 16/22 901. ARBP 708-14.doc transferee companies in that case was a voluntary transfer in contravention of the Rent Act as well as of the terms and conditions of the rent agreement, making the transferee liable to be evicted from the tenanted premises. Learned Counsel also relies on the case of Singer India Limited Vs. Chander Mohan Chadha14, which was also a case arising under Section 14(1)(b) of Delhi Rent Control Act. The Supreme Court, after considering the case law on the subject, held in Singer India Ltd., that even if there was an order of a court sanctioning a scheme of amalgamation under Sections 391 and 394 of the Companies Act, whereunder a lease, tenancy or occupancy right of the transferor company got vested in, and became a property of, the transferee company, it would make no difference insofar as the applicability of Section 14(1)(b) was concerned, as the Rent Control Act did not make any exception in favour of a lessee who may have adopted such course of action in order to secure compliance with law. Using these legal propositions, Mr. Khambata argues that the transfer as between Accord and the present respondent was nothing but a voluntary transfer; the Respondent, in the premises, claimed its locus in the reference as a party claiming under Accord through such transfer; and there being no recognition in Section 8 of the Act of any party claiming under a party to an arbitration agreement, the arbitrator lacked the jurisdiction to adjudicate any dispute between the Petitioner and the Respondent under the subject arbitration agreement.

17 (2009) 148 Com Cases 809 (Bom) 18 Arb. Petn. 509 of 2011 dated 20 July 2016 Chittewan 19/22 901. ARBP 708-14.doc 18 Mr. Khambata cannot point out any provision or principle of law or authority to contest this position. He, however, relies on the case of Chloro Controls (supra) to suggest otherwise. In Chloro Controls, the invocation of an arbitration agreement was under Section 45 of the Act by a non-signatory, and the Supreme Court was called upon to consider permissibility of an arbitration reference between a signatory and a non- signatory or third party to the arbitration agreement. The entire discussion on this point in that case is in the context of principles of "group of companies" or "composite performance" and not assignment of an arbitration agreement. Mr. Khambata lays emphasis on the distinction drawn by the Supreme Court between Section 45 of the Act on the one hand and Section 8 on the other. The Court had observed that Section 8 of the 1996 Act used the expression "parties" simplicitor without any extension, whereas, in a significant contradistinction, Section 45 used the expression "one of the parties or any person claiming through or under him". The court was of the view that this aspect could not be ignored; due weightage had to be given to the legislative intent; and Section 45 had to be interpreted liberally. Nothing in this discussion rules out the invocation of an arbitration agreement by an assignee of a party under Section 8. A judgment, it is trite to say, is an authority for the proposition it decides or bases its decision on, and not for what follows logically from it. What the Supreme Court decided or based its ruling on was the wide construction to be given to Section 45 of the Act and allowing it to be invoked by parties claiming under parties to arbitration agreement. Merely because the court, whilst construing the amplitude of Section 45, contrasted it with Section 8, it cannot be said to have laid down any proposition of law that Section 8 is restrictive in that it does not admit of its invocation by an assignee to an Chittewan 20/22 901. ARBP 708-14.doc arbitration agreement.