Bks Galaxy Realtors LLP v. Sharp Properties & Ors.

(i) As a security for the monetary consideration payable to

Respondent No.1 for compliance of obligations of the said Agreement which are detailed in MoU 2015, Appellant No.1 and 2 had issued an Allotment Letter dated 5th November 2015 in favour of Respondent No.1 (j) Respondent No.6 and 7 executed a registered Conveyance Deed dated 2nd March, 2022 in favour of Appellant No.1 and 6 of 30 2 in the ratio of 75:25 as the undivided share in the subject property. It is pertinent to note that Appellant No.2 had thereafter transferred 25% undivided share in the subject property in favour of Appellant No.1. (k) Respondent No.1 to 5 filed Special Civil Suit No.87 of 2024 (“Suit”) before the Civil Judge, Senior Division, Belapur, C.B.D. Belapur, Navi Mumbai for the following prayers:- (a) That this Hon’ble Court be pleased to declare that the said MoU and said Allotment Letter dated 05 November 2015 is subsisting, valid and binding on the Defendants 1 to 9. (b) That this Hon’ble Court be pleased to declare that the Plaintiff No.1, has 50% rights in the total constructed area in the construction undertaken or to be undertaken by the Defendant No.1 and 2 on the said Property and entitlement of 50% rights in total area of the said Property.

(c) That this Hon’ble Court be pleased to direct the

Defendants No.1 to 7 to allot and or enter into Agreement for sale of 50% of the total flats and shops in the buildings being constructed on the suit lands, in the name of the Plaintiff No.1 before entering into any further Allotment / Agreement Sale / Sale Deed with any 3rd party in respect to and shop / flat in the buildings/s being constructed on the suit lands.

(l) In an Application taken out by Respondent No.1 to 5 for ex-parte temporary injunction (Exh.5), the Trial Court granted the ex-parte injunction vide order 6th April, 2024 in favour of Respondent No.1 restraining Appellant No.1 and 2 7 of 30 from creating third party rights in the subject property over constructed area to the extent of 50% out of commencement certificate dated 12th April, 2023 till further orders.

(m) The Appellants filed an Application under Section 8 of the

Arbitration Act on 16th April, 2024 inter alia on the grounds that (i) the Agreement for sale dated 5th November, 2015 contained an Arbitration Clause (Clause No.35); (ii) the MoU and the Allotment Letter were documents executed in furtherance of the said Agreement; (iii) the performance of the MoU / the Allotment Letter was dependent on the said Agreement; and (iv) the said documents were interlinked, had to be jointly considered and were not separate and distinct from each other. (n) By the impugned Order dated 2nd May, 2024, the Application filed by the Appellants under Section 8 of the Arbitration Act was rejected. (o) Being aggrieved by the impugned order, the present Arbitration Appeal under Section 37 of the Arbitration Act has been filed.

3. Mr. Samdhani, learned Senior Counsel appearing for the Appellants has submitted that the Agreement for Sale dated 5th 8 of 30 November, 2015 (referred to as “the said Agreement”) is the main / principal document and all other documents therein are intertwined and integrally connected. He has submitted that the said Agreement, the MoU and the Allotment Letter are all executed on the same day and simultaneously. He has in support of these submissions referred to the averments made in the plaint and more particularly the paragraphs of the Plaint and corresponding page numbers in the Arbitration Appeal Paper Book wherein the said Agreement, the Mou and the Allotment Letter have been expressly referred to: (para “H” at page 152, para 56 at 153, para 57(d) at page 155, para 57(e) at page 157, para 57(f) at page 158, para 57(h) at page 159, para 58 at page 159, paras (ii) and (iii) at page 160, para 58 (iv) at page 161, para (vi) at page 162 and para 59(a) at page 163). Mr. Samdhani has submitted that the said Agreement, MoU and Allotment letter are part of one transaction. In law, they constitute an integral part of one transaction. This factual position has been admitted in the plaint.

4. Mr. Samdhani has submitted that the said Agreement is the principal document. The Arbitration Clause contained therein also applies to all subsidiary and integral connected documents in respect of a single transaction. In support of his submission, he has placed reliance upon the decisions of the Supreme Court as under:- 9 of 30 Decisions Referred paragraphs 1 Ameet Lalachand Shah and ors. Vs. Rishabh Enterprises and anr.[1] - 24-26, 28, 30

2 Sushma Shivkumar Daga and anr. Vs. Madhukumar Ramkrishnaji Bajajand ors. 2 - 21, 24 to 26, 34, 35 3 Sushma Shivkumar Daga and anr. Vs. Madhukumar Ramkrishnaji Bajajand ors. 3 - 8, 13 to 15, 24, 25 4 Chloro Controls India Private Limited Vs. Severn Trent Water Purification Inc. And Ors. 4 - 11, 151-158

5. Mr. Samdharni has submitted that absence of Arbitration Clause in the subsidiary documents is immaterial. The learned Trial Court erred in holding that the MoU does not have an Arbitration Clause thereby treating the MoU as a stand-alone document overlooking that the MoU was one of the subsidiary documents to the principal document i.e. the said Agreement.

6. Mr. Samdhani has submitted that at the stage of Application under Section 8 of the Arbitration Act, only a prima facie enquiry is required and not a mini trial. In support of his submission, he has placed reliance on the following judgments:-  Ameet Lalchand Shah and Ors. (supra) (paragraph 28);  Sushma Shivkumar Daga (supra) (paragraphs 25 and 35);

4 (2013) 2 Supreme Court Cases 641 10 of 30  Sanjiv Prakash Vs. Seema Kukreja and Ors.[5] (paragraphs 21 to 23);  SBI General Insurance Co. Ltd Vs. Krish Spinning 6 (paragraphs 94, 102);  Ajay Madhusudan Patel and Ors. Vs. Jyotrindra S. Patel and Ors. 7 (paragraphs 59, 63, 65,68, 79)  DLF Limited Vs. PNB Housing Finance Ltd. And Ors.[8] (paragraphs 32-37);

7. Mr. Samdhani has submitted that in the present case, the learned Trial Court conducted a mini trial and rendered a finding contrary to the admitted position in the plaint. The Legislative intent is to lean in favour of relegating parties to an arbitration for a speedy trial and to bring the matter to a logical end. In support of his submission, he has relied upon Govind Rubber Limited Vs. Louis Dreyfus Commodities Asia Private Limited[9] at paragraph 17 and Ameet Lalchand Shah and Ors. (supra) at paragraph 30.

8. Mr. Samdhani has submitted that the Arbitration Clause is very wide in its language and a similar Arbitration Clause was also considered by the Supreme Court in Renusagar Power Co. Ltd. Vs. General Electric Co.10 (paragraph 25). He has submitted that the 5 (2021) 9 Supreme Court Cases 732

11 of 30 subject matter of the Suit and reliefs sought therein are squarely covered under the Arbitration Clause under the said Agreement.

9. Mr. Samdhani has submitted that the reliance placed by the learned Trial Court and Respondent Nos.[1] to 5, on the Judgment of the Supreme Court in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. 11 more particularly paragraphs 6, 11, 14, 22, 23, 26 and 28 is erroneous for the following reasons:a. The argument before the Supreme Court was that the Arbitration Clause contained in the tender document is incorporated by reference in the Letter of Intent. The argument was not that the Letter of Intent was a subsidiary document to the tender document (main document). The said Agreement, in the present case, itself contemplates the subsidiary documents (MoU and Allotment Letter). The present case is one of single contract in respect of one transaction, the terms of which are contained in three documents, as admitted in the Plaint. b. In the case of NBCC (India) (supra), the Letter of Intent provided that all the conditions of Tender were applicable, unless modified by the Letter of Intent. The dispute redressal mechanism provided under the letter of intent clearly modified and intentionally departed from the dispute redressal mechanism under the Tender, by use of expression “alone” and “only”, thus expressly excluding the Arbitration Agreement contained in the Tender. 11(2024) 7SCC 174 12 of 30 c. In the instant case, the clauses and the language of the said Agreement and the averments in the body of the plaint, leave no manner of doubt that the MoU and the Allotment Letter are intertwined and integrally connected to the said Agreement and the same form part thereof.

10. Mr. Samdhani has submitted that the argument of Respondent No.1 to 5 that there has been (i)accord and satisfaction; and (ii) novation is based on the plea that the Sale Deed being executed which does not contain an Arbitration Clause, is an argument which finds no place in the plaint and infact the case in the plaint is to the contrary.

11. Mr. Samdhani has submitted that the plea of accord and satisfaction and novation cannot be adjudicated in the scope of enquiry under Section 8 read with Section 16(1)(b) of the Arbitration Act. He has in support of his submission, placed reliance upon the various decisions of the Supreme Court as under:-  Sanjiv Prakash Vs. Seema Kukreja and Ors (supra) at paragraphs 21 and 23;  SBI General Insurance Co. Ltd Vs. Krish Spinning (supra) at paragraphs 45, 48 to 51, 53, 54, 92, 93, 96, 101;  Ajay Madhusudan Patel and Ors. Vs. Jyotrindra S. Patel and Ors. (supra) at paragraphs 59, 63, 65, 66, 68, 79. 13 of 30

12. Mr. Samdhani has submitted that the argument of Respondent Nos.[1] to 5 is on the basis of Arbitration Act, 1940 for which they have relied upon the decision of the Supreme Court in Union of India Vs. Kishorilal Gupta & Bros.12, which is incompatible with Arbitration Act, 1996, more particularly Section 16(1)(b) thereof. Mr. Samdhani has submitted that the decision of the Supreme Court in Union of India Vs. Kishorilal Gupta & Bros. (supra) is completely redundant, as held by the Supreme Court in Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and stamp Act, 1899 13, more particularly at paragraph 116 and in Sanjiv Prakash Vs. Seema Kukreja and Ors (supra) at paragraph 23.

13. Mr. Samdhani has submitted that the argument of Respondent Nos.[1] to 5 that this is not a case of single transaction and / or the said Agreement is separate and district from the MoU is contrary to the admitted position in the plaint read with the said Agreement and the MoU. In the plaint, Respondent No.1 to 5 have stated that the MoU and the Allotment Letter are a part of the said Agreement. Further, the argument that in the said Agreement the transaction was only for sale of land is factually incorrect in as much as the owner and the 2nd confirming party i.e. Respondent No.6 and 1 respectively, were

14 of 30 under obligation to obtain various permissions for development of the said property, including obtaining full Commencement Certificate, and change of user from industrial to residential. He has submitted that the Plaintiffs’ contention in the Suit is that they are entitled to the benefit under the MoU on the basis that their obligations under the said Agreement being discharged, whilst avoiding the Arbitration Agreement contained therein to ascertain performance thereof.

14. Mr. Samdhani has submitted that there is clear distinction between the principles of incorporation by reference and documents being part of one transaction contained in the said Documents wherein the main / mother agreement contains an Arbitration Clause. He has submitted on facts, it is an admitted position in the plaint that there is only one transaction. In the circumstances, the judgment of the Supreme Court in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. (supra) is inapplicable to the case in hand. He has accordingly submitted that the impugned order be set aside and the subject matter of the Suit be referred to Arbitration under Arbitration Clause in the Agreement.

15. Dr. Tulzapurkar, the learned Senior Counsel appearing for Respondent Nos.[1] to 5 has submitted that the impugned order is a well reasoned order and there is no error committed by the learned trial 15 of 30 Judge in rejecting the Application of the Appellants who are original Defendant Nos.[1] and 2 in the Suit on the ground that no case is made out under Section 8 of the Arbitration Act.

16. Dr. Tulzapurkar has submitted that the claims in the Suit do not arise out of a single transaction. The transaction mentioned in the said Agreement is different from the transaction in the MoU and the Allotment Letter. The object of the said Agreement was getting the properties which are subject matter of Agreement for Sale transferred from the owners i.e. Defendant Nos 8 and 9 who are Respondent Nos.[6] and 7 to the Arbitration Appeal. The MoU pertains to the allotment and transfer of certain units to the Plaintiffs by Defendant nos.[1] and 2 on the terms and conditions mentioned therein. The rights and obligations arising under the MoU and the Allotment Letter are distinct and separate from those mentioned in the said Agreement. In fact, on a proper reading of the MoU and the Allotment Letter, the Plaintiffs became entitled to claim rights after the culmination of the said Agreement in a Conveyance and they become enforceable only after Conveyance is executed in pursuance of the said Agreement.

17. Dr. Tulzapurkar has submitted that once a Conveyance is executed the object, purpose and effectiveness or validity of the said 16 of 30 Agreement comes to an end. The rights if any in respect of the Suit property are enforceable under the Conveyance. He has submitted that in the instant case, there is a Conveyance executed by the owners i.e. Defendant Nos. 8 and 9 (Respondent Nos. 6 and 7 herein) in favour of the Appellants. Thus, efficacy of the said Agreement is over and alongwith that the Arbitration Clause also comes to an end. The said Agreement stands discharged and does not continue to have any legal effect.

18. Dr.Tulzapurkar has in support of this contention placed reliance on the decision of the Supreme Court in Union of India Vs. Kishorilal Gupta & Bros (supra), paragraphs 8, 9 and 10 as well as the decision of the Karanataka High Court in Smt. Nagamma & Ors. Vs. Rudrayya & ors. 14 at paragraph 6, 7 and 8.

19. Dr.Tulzapurkar has submitted that the observations of the Supreme Court in Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and stamp Act, 1899 (supra) relied upon by the Appellants to contend that the Arbitration Act, 1996 renders the Judgment in Union of India Vs. Kishorilal Gupta & Bros (supra) redundant, are not applicable to the facts of the present case 14 WP NO.105278 of 2018 (GM-CPC) dated 25 July, 2024 17 of 30 as Respondent No.1 and 2 have not contended that the said Agreement is null & void, or frustrated or breached. The decision in the case of Union of India Vs. Kishorilal Gupta & Bros (supra) states that once the Agreement ceases to exist, the Arbitration Clause contained in it also perishes. In the case in hand, by virtue of the execution of the Conveyance (Sale Deed), the said Agreement comes to an end and thus, the Arbitration Clause perishes.

20. Dr.Tulzapurkar has submitted that the entitlement of the Plaintiffs to receive the portion of the property / value thereof arises only after a Conveyance is executed subject to the terms and conditions or on the terms mentioned in the MoU and the Allotment Letter and not on the terms and conditions or subject to terms and conditions mentioned in the said Agreement. He has submitted that the transaction covered by the MoU and the Allotment Letter are quite distinct and different from the said Agreement and which are to be enforced only in terms of the MoU and the Allotment Letter, without any reference to the said Agreement. He has submitted that the rights which are sought to be enforced by the said Suit arise only under the MoU and the Allotment Letter to which two documents the owners i.e. Defendant Nos.[8] and 9 are not parties at all. He has submitted that accordingly the contention of the Appellants that there is one transaction is untenable. 18 of 30

21. Dr.Tulzapurkar has submitted that the entitlement of Respondent Nos.[1] to 5 will be triggered as soon as the Conveyance is executed as recorded in Clause 10 read with Clauses 15(j) and 15(l) of the said Agreement. He has also referred to Clause 19 of the said Agreement which categorically records the understanding between the parties viz. “inter alia agreed between the parties that following steps shall be taken by the owners for giving effect to the transaction of sale and upon the completion of the following, the owners shall execute Deed of Conveyance in favour of the Purchasers…”. He has further referred to the understanding recorded in the MoU at page 105 to the Arbitration Appeal which reads as under:- “Sharp Properties have agreed to sell their 50% entitlement in the proposed residential / commercial project on Plot bearing Gut No.51(2), 56 and 57(2) at Dighe (Airavali), Navi Mumbai to M/s. BKS Galaxy Realtors Pvt. Ltd. and proviso Builders & Developers at the rate Rs.3500/- (Rupees Three Thousand Five Hundred Only) per sq. ft of the salable area to be calculated as defined below, on the payment terms as mentioned below and subject to documentation regarding Final Conveyance Deed between Purchasers and Owners...”

22. Dr.Tulzapurkar has submitted that similar understanding is also recorded in the letter of allotment at page 112 of the Arbitration Appeal. 19 of 30

23. Dr.Tulzapurkar has submitted that though there is reference in the Plaint to the said Agreement, it is only a historical reference and not because the said Agreement is the subject matter of the Suit. The nature of the Suit described in the Plaint after the title shows that the Suit is for declaration, injunction, recovery and specific performance in respect of the MoU and the Allotment letter. He has also referred to the prayers in the Suit which refers to the MoU and the Allotment Letter and by which the specific performance has been sought by entering into the Agreement for sale of 50% of the total flats and shops in the building to be constructed in the name of Plaintiff No.1 before entering into any further Allotment Agreement or Sale Deed with any third party. Thus, there is no right claimed by the Plaintiffs under the said Agreement and the Suit itself is not covered by the said Agreement containing the Arbitration Clause.

24. Dr.Tulzapurkar has submitted that where there is no specific reference to the Arbitration Clause in the said Agreement, the Arbitration Clause does not get incorporated or becomes applicable or governs the rights under the MoU and the Allotment letter. He has submitted that it is a settled position in law that unless there is a specific reference to the Arbitration Clause in a subsequent Agreement and which Clause is part of the earlier Agreement, the said Clause is 20 of 30 not applicable for enforcement of the subsequent Agreement. He has placed reliance upon the decision of the Supreme Court in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. (supra) at paragraph 17.

25. Dr.Tulzapurkar has submitted that the attempt of the Appellants to distinguish the said case viz. NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. (supra) on the ground that there were two contracts therein, is also not tenable as the present case is also a case of two contracts, one governed by the said Agreement and the other governed by the MoU and the Allotment letter. In fact, there is general statement of law in paragraph 30 of NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. (supra) that a general reference would not have the effect of incorporating the Arbitration Clause.

26. Dr.Tulzapurkar has referred to paragraph 24 of the decision of the Supreme Court in the case of MR. Engineers and Contractors Pvt Ltd. Vs. Som Datt Builders Ltd.15 wherein the Supreme Court has held that the Arbitration Clause from another contract can be incorporated into the contract where such reference is made only by a specific reference to Arbitration Clause.

27. Dr.Tulzapurkar has submitted that the obligations of the Plaintiffs mentioned in the said Agreement were to become part of the subsequent independent Agreement in terms of Clause 16 of the said Agreement. Thus, the parties intended that there was a need to execute a separate writing categorically identifying all the obligations of the first party and also for consideration and terms and conditions to be mentioned therein. He has submitted that a separate writing on the parties own showing is an independent and separate writing without containing any Arbitration Clause. This shows that the parties never intended to agree to go for arbitration in respect of the disputes under such independent agreement.

28. Dr.Tulzapurkar has submitted that the contention of the Appellants that the Arbitration Clause in the said Agreement is applicable to MoU and the Allotment letter is not sustainable at all. Arbitration Appeal is therefore liable to be dismissed with costs.

29. Ms. Srinivasan, learned counsel appears through V.C. on behalf of Respondent Nos. 6 and 7. Respondent Nos. 6 and 7 have supported the submissions advanced by Respondent Nos. 1 to 5. Further, they have raised the submission that Respondent No.6 and 7 not being parties to the MoU cannot be referred to Arbitration. Respondent Nos. 6 and 7 have also contended that they were only 22 of 30 concerned with the Sale of the said land and were not made aware of the existence or contents of the MoU. Respondent Nos. 6 and 7 have also contended that they are not connected to the dispute in the Suit and have been made formal parties therein.

30. I have heard the rival submissions. In my view, the Agreement for sale (referred to herein as “the said Agreement”) has come to an end by the execution of the Deed of Conveyance / Sale Deed. It is well settled that once a Conveyance is executed, the object, purpose, effectiveness and validity of the Agreement for sale comes to an end. In the present case, the Conveyance Deed has been executed by the owners i.e. Defendant Nos. 8 and 9 (Respondent Nos.[6] and 7 herein) in favour of the Appellants. Thus, the Arbitration Clause in the said Agreement comes to an end as the said Agreement stands fully discharged and does not have any legal effect upon the execution of the Conveyance.

31. An attempt was made on behalf of the Appellants to contend that the decision in Union of India Vs. Kishorilal Gupta & Bros. (supra) is rendered redundant in view of the subsequent decision of the Supreme Court in the case of Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and stamp 23 of 30 Act, 1899 (supra). However, this contention on behalf of the Appellants is not acceptable in view of there being no contention on behalf of Respondent Nos.[1] to 5 that the Agreement for Sale is null & void, or frustrated or breached.

32. In Union of India Vs. Kishorilal Gupta & Bros. (supra), the Supreme Court has held that if parties to an earlier contract substitute it with another contract, the Arbitration Clause in the original contract also perishes with it. This has been observed in paragraph 115 of Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and stamp Act, 1899 (Supra). Although in paragraph 116 of the said decision, the Supreme Court has held that its prior decisions in Damodar Valley Corpn. Vs. K.K. Kar 16 and Union of India Vs. Kishorilal Gupta & Bros. are redundant, this would be confined to the context of the plea that the contract is void, illegal or fraudulent affecting the entire contract alongwith the arbitration clause. This is on account of the enactment of the Arbitration Act, 1996 enabling Indian Courts to give effect to the separability presumption with general impetus. Paragraphs 115 and 116 of the said decision read thus:- “ 115. The separability presumption has undergone a significant evolution in India. Initially, the

24 of 30 Indian courts viewed an arbitration agreement as an integral part of the underlying contract without any existence beyond such contract. For instance, in Union of India v. Kishorilal Gupta & Bros., the issue before this Court was whether an arbitration clause in the original contract survived after the enactment of a subseuent contract. K. Subba Rao (as the learned Chief Justice then was) considered Heyman but distinguished it on the ground that it only dealt with repudiation, where rights and obligations of parties survive the termination of contract. It was held that in situations where the original contract is superseded by a subsequent contract, the arbitration clause in the original contract will also cease to exist. K. Subba Rao, J., speaking for the majority, held that first, an arbitration clause is a collateral term of a contract as distinguished from its substantive terms, but nonetheless it is an integral part of it; second, the existence of the underlying contract is a necessary condition for the operation of an arbitration clause; third, if the underlying contract was non est in the sense that it never came legally into existence or was void ab initio, the arbitration clause also cannot operate; fourth, if the parties put an end to a validly executed contract and substitute it with a new contract, the arbitration clause of the original contract also perishes with it; and fifth, in situations such as repudiation, frustration, or breach of contract, only the performance of the contract comes to an end, the arbitration clause persists because the contract continues to exist for the purposes of disputes arising under it.

116. In Damodar Valley Corpn. Vs. K.K. Kar, a two-Judge Bench of this Court held that the plea that a contract is void, illegal or fraudulent affects the entire 25 of 30 contract along with the arbitration clause. However, the enactment of the Arbitration Act in 1996 enabled the Indian Courts to give effect to the separability presumption with greater impetus. Section 16(1)(b), which provides that a decision by the Arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause, renders the decisions in Kishorilal Gupta and Damodar Valley Corpn. redundant. Consequently, even if the underlying contract is declared null and void, it will not ipso jure result in the invalidity of the arbitration agreement. Thus, the said decision refers to Section 16(1)(b) of the Arbitration Act which provides that a decision of the Arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the Arbitration Clause.

33. The findings of the Supreme Court in Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and stamp Act, 1899 (supra) do not disturb the finding in Union of India Vs. Kishorilal Gupta & Bros. (supra), namely that if the parties put an end to a validly executed contract, the arbitration clause of the original contract also perishes with it. In the present case, by subsequently executing the Conveyance Deed / Sale Deed, the said Agreement has come to an end and with it the Arbitration Clause also perishes. 26 of 30

34. I also find much merit in the submission on behalf of Respondent Nos.[1] to 5 that the MoU and the Allotment letter are a separate transaction from the said Agreement. Further, the claims in the present Suit do not arise out of a single transaction. The obligations in the MoU and the Allotment letter are to be performed in accordance with the terms therein and the entitlement of Respondent Nos. 1 to 5 will be triggered as soon as the Conveyance Deed is executed.

35. This is clear not only from the MoU at page 105 of Arbitration Appeal which has been extracted above, but also from the said Agreement and in particular Clauses 10, 15(j) and 15(l) thereof. Further, this is also clear from the Allotment letter at page 112 to the Arbitration Appeal. Thus, I do not find any merit in the submissions on behalf of the Appellants that the Agreement for Sale is the main / principal document and the MoU and the Allotment letter are intertwined and integrally connected. This finding is on the presumption that the Agreement for sale is still in existence and its efficacy is not over upon the execution of the Conveyance Deed.

36. I further find merit in the submission on behalf of Respondent Nos.[1] to 5 that the reference in the Plaint to the said 27 of 30 Agreement is only by way of historical reference and not because the said Agreement is the subject matter of the Suit. The Suit is for declaration, injunction, recovery and specific performance in respect of the MoU and Allotment Letter and not in respect of the said Agreement which has comes to an end by execution of the Conveyance. [

37. The Appellants have contended that the decision of the Supreme Court in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. Is not applicable to the present case. There is an attempt made by the Appellants to contend that the said case was one of two contracts as against the present case of a single transaction. I do not find any such distinction. In my view, the present case is also one where there are two contracts i.e. one governed by the said Agreement and another governed by the MoU and the Allotment Letter. Thus, I find that the decision of the Supreme Court in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. is applicable to the present case.

38. Further, in NBCC (India) Vs. Zillion Infraprojects Pvt. Ltd. (supra), the Supreme Court has also held that there must be a specific reference to the arbitration clause contained in a prior document, in the subsequent document which the parties are enforcing. In MR. Engineers and Contractors Pvt Ltd. Vs. Som Datt Builders Ltd. (supra), 28 of 30 it is held that a general reference to a prior agreement in the subsequent agreement would not have the effect of incorporating the arbitration clause from the prior agreement into the subsequent agreement between the parties. In the present case, there is only a general reference of the prior Agreement of Sale / the said Agreement, in the MoU which is the subsequent agreement. There is absence of any specific reference to the arbitration agreement in the MoU. Hence, there is no incorporation of the arbitration agreement by reference in the MoU. The MoU is a separate writing which does not contain any arbitration clause. This would equally be apply to the Allotment letter and hence the parties to the MoU and the Allotment letter never intended to go for arbitration in respect of the disputes under the independent agreement.

39. The Judgments which have been referred to by the Appellants in support of their contention that under Section 8 of the Arbitration Act only a prima facie inquiry is required and not a mini trial, are not applicable in the present case as there is no question of any mini trial. It is a matter of law that the said Agreement having merged into the Deed of Conveyance / Sale Deed is rendered redundant which in turn makes the arbitration clause ineffective.

40. I accordingly do not find any infirmity in the findings of the 29 of 30 Trial Court that upon the execution of the Sale Deed the rights, obligations and responsibilities in the said Agreement for Sale have perished by the virtue of it having merged into the Sale Deed.

41. In view thereof, the above Arbitration Appeal is dismissed. There shall be no order as to costs.

42. In view of dismissal of Arbitration Appeal, Interim Application No.9968 of 2024 does not survive and is disposed of. Vina Khadpe [ R. I. CHAGLA J. ]