$~5 * + IN THE HIGH COURT OF DELHI AT NEW DELHI ARB.P. 517/2016 M/S. SUVED DEVELOPERS PVT. LTD Through : Mr Ankit Jain and Mr Sarvesh Rai, Advs. ........ Petitioner
versus MIS. HOLYSTAR INDUSTRIES & ANR. Through : Mr Naushad Ahmed Khan and Ms Astha Nigam, Advs. ........ RESPONDENTS
CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU % ORDER
1710.2016 VIBHU BAKHRU, J1 The petitioner has filed the present petition under Section 11 (5) of the Arbitration and Conciliation Act, 1996 (hereafter „the Act‟), inter alia, praying that an Arbitrator be appointed to adjudicate upon the disputes which have arisen between the parties in relation to the Agreement to Sell (hereafter „the Agreement) dated 21.05.2014.
2. The respondent disputes that the Agreement is a contract; it asserts that the Agreement is only a draft of an agreement, which is neither witnessed by any witnesses nor signed by the petitioner. It is further contended that since the Agreement has not been signed by the petitioner, it cannot be considered as a contract.
3. It is an admitted case that the parties had entered into an ARB.P. 517/2016 Page 1 of 6 arrangement for sale of a freehold industrial plot bearing No.25A, Sector-18, Gurgaon, Haryana admeasuring 2880 square meters (hereafter „the property‟). It is also admitted that the respondent had received an amount of ₹50.00 Lac as part sale consideration for the said property. The respondent had also executed the Agreement dated 21.05.2014 for sale of the aforesaid property and each page of the Agreement is signed by the respondent.
4. Mr Khan, the learned counsel appearing on behalf of the respondent relied upon the documents filed by the respondent along with its reply in O.M.P.(I) 14/2016. Mr Khan drew the attention of the court to several letters, which were sent by the respondent after the execution of the Agreement, and contended that the Agreement was only a draft agreement and did not record the terms of the transaction as agreed to between the parties.
5. Mr Jain, the learned counsel appearing on behalf of the petitioner countered the contentions advanced by Mr Khan and submitted that the Agreement was valid and binding and the absence of the signatures of the petitioner was not a necessary concomitant for a valid contract. He further relied upon the communication issued by the respondent to cancel the Agreement and submitted that such communication was not necessary if the Agreement was only a draft of an agreement as contended by the respondent.
6. I have heard the learned counsel for the parties.
7. At the outset, it is necessary to observe that there is no dispute ARB.P. 517/2016 Page 2 of 6 that the respondent is a signatory to the Agreement and that the said document was executed by the respondent. The letter dated 07.09.2014, which is strongly relied upon by Mr. Khan also indicates that the Agreement was executed by the respondent. Although, in the said letter, the respondent claims that it had refused to sign “such illegal sale agreement and decided to cancel the sale deal”, it is admitted that respondent had subsequently signed the Agreement, albeit on an assurance that the Agreement would be changed. A reading of the said letter also indicates that the respondent does not dispute that it had agreed to sell the Property for a consideration of ₹ 4 Crores. Further, the receipt of an amount of ₹50.00 Lac as part consideration for the property is also not in dispute. The respondent claims that an amount of ₹10.00 Lac was paid to a third person at the instance of the petitioner but the said contention is disputed by the petitioner. The letter dated 07.09.2014 was thereafter followed by letters dated 10.04.2015, 23.04.2015 and 28.03.2016 to the same effect. The petitioner disputes the receipts of the said letters.
8. The respondent issued a notice dated 01.06.2016 captioned as “CANCELLATION AND FORFEITURE NOTICE”. The said letter also indicates the existence of the transaction between the parties as the respondent has alleged that the petitioner had breached and violated the “the sales contract” and therefore, the respondent was “constrained to cancel the sell arrangement/agreement dated 21.05.2014”. Further, the respondent also claimed forfeiture of the earnest money paid as per what it described as a “draft agreement dt ARB.P. 517/2016 Page 3 of 6 21-5-2014”. Thus, the respondent also admits that it had received certain amount in terms of the Agreement.
9. In view of the above, the contention that the Agreement has not been signed by the petitioner and, therefore, cannot be considered as a contract, is without any merit. Even according to the petitioner, the amount paid by the petitioner was in terms of the Agreement. It is not the respondent‟s case that the terms of the Agreement were not acceptable to the petitioner; on the contrary, the respondent‟s case is that the petitioner induced the respondent to execute the Agreement.
10. It is not necessary that the agreements be signed by the parties. Signatures of parties on a document embodying an agreement only signifies their acceptance to what has been recorded therein. In the present case there is no dispute that the petitioner has accepted the terms recorded in the Agreement and thus, absence of its signatures on the agreement are not material.
11. It is also important to note that the respondent is not disputing the Agreement altogether; respondent‟s case is that certain terms of the Agreement were agreed to be changed but the petitioner had not done so. Insofar as the arbitration clause is concerned, there is no dispute that the respondent had agreed that any disputes arising between the parties in respect of the transaction of sale of the property would be resolved by arbitration in terms of the arbitration clause, which reads as under:-
"„2. That it is agreed between the parties that in case of any disputes or differences arising between ARB.P. 517/2016 Page 4 of 6 in to respect them the understanding and interpretation and any other matter arising there from in respect of the present Agreement to Sell, then the said disputes and differences, if not amicably resolved between the, parties, shall be referred to arbitration of sole arbitrator to be appointed, with the mutual consent of both of the parties. For all purposes, it is agreed between the parties that without any prejudice to the arbitration as above, the courts at New Delhi shall have the jurisdiction in case legal proceedings are required to be filed and instituted under the arbitration law. The place of arbitration shall also be at New Delhi.‟ 12. It is well settled that an arbitration clause is an independent agreement. Although, there are certain issues in regard to the arrangement entered into between the parties, the fact that the parties had agreed to resolve the disputes, if any, by arbitration is not disputed.
13. In view of the disputes, which have arisen between the parties, the petitioner had invoked the arbitration clause by its letter dated 04.03.2016. Admittedly, the parties have been unable to appoint an arbitrator by mutual consent. In the circumstances, it is necessary to appoint a sole Arbitrator to adjudicate the disputes between the parties.
14. Accordingly, Mr. K. S. Khurana (Retd ADJ) (Mobile No.9810257327) is proposed to be appointed as an Arbitrator in this case. Registry of this Court shall communicate the copy of this order to the ARB.P. 517/2016 Page 5 of 6 proposed Arbitrator for eliciting the disclosure under Section 12 of the Act. The parties are also at liberty to approach the proposed Arbitrator for obtaining the necessary disclosure.
15. List on 03.11.2016. OCTOBER17 2016 M VIBHU BAKHRU, J ARB.P. 517/2016 Page 6 of 6