Anand Divine Developers Pvt Ltd v. Sohan Bahadur Gurong

9. Some of the correspondence which was placed before the learned Arbitrator may also be referenced in this context: Emphasis supplied.

Anand that he was not interested to continue with the property due to financial crisis, and sought to surrender the same by buyback scheme as per the Agreement[5].

10. The learned Arbitrator has negated Anand’s contentions herein with the following findings: “40. I am of the opinion that the Tripartite Agreement primarily secured the interest of the bank and governed the Refer page No. 166 of the petitioner’s list of documents. Refer page No. 105 of the petitioner’s list of documents. Refer page No. 170 of the petitioner’s list of documents. Refer page Nos. 106-107 of the petitioner’s list of documents. Refer page Nos. 109-110 of the petitioner’s list of documents. relation inter se the bank and the parties before this Tribunal as the bank was funding the investment on behalf of the claimant in the project. The clauses of the MOU also protect the interest of the bank; whose loan is to be discharged at a priority. The same is clear from clauses 5 and 8 of the MOU; which are extracted as under:

41. From the aforegoing clauses, it appears that upon the claimant opting for the buy-back option within the provided window of time, the respondent was to pay the claimant upfront as well as pay the charges to the bank for closure of the loan. The obligation of the claimant to execute the necessary documents for the transfer of the apartment was only “upon receipt of payment”; measuring thereby that the amount was to be refunded to the claimant and later, the documents were to be executed. The period in between would be used to discharge the loan of the bank whereby relieving the parties of their obligations under the Tripartite Agreement and only then, the claimant was to transfer the apartment to the respondent. To put it simply, upon the reading of the MOU and the Tripartite Agreement in conjunction, the following order emerges for the performance of reciprocal promises: a. The claimant was to exercise its option of calling upon the respondent to buy-back the apartment within a time frame of 33 to 36 months of the date of booking. b. The respondent was then obligated to refund the entire amount paid (either by the claimant or on his behalf by the bank) along with premium to the claimant; c. Thereafter, the claimant was to discharge the loan of the bank whereby relieving the parties from their obligations under the Tripartite Agreement or obtaining no objection from the bank; d. At the time of foreclosure of the loan, the charges for the same were to be borne by the respondent; e. Only thereafter, the claimant was to execute the necessary documents for surrendering the apartment; f. The entire process was to be concluded within 30 days of the expiry of 36 months.

42. The clauses of the agreements are clear and unambiguous not permitting any other interpretation. It is settled law that if the terms of the document are clear and unambiguous, extrinsic evidence to ascertain the true intention of the parties is inadmissible [see Raj Kumar Rajinder Singh vs. State of H.P., (1990) 4 SCC 320 (para 19)]. If the interpretation advanced by the respondent is to be accepted, the clause 8 of the MOU would be rendered otiose and redundant and the only mechanism for surrender would be under clause 13 of the Buyer’s Agreement. Further, the order of performance of the contracts would lead to absurd consequences whereby the claimant would be obligated to obtain the permission and the original documents from the bank, entailing the discharge of the loan from his pocket only to be reimbursed by the respondent later. This cannot be the intention of the parties especially in view of clause 5 of the MOU.

43. The entire case of the respondent is built on the aspect that the claimant had failed to exercise the buy-back option validly owing to the absence of the prior written consent form the bank. For the aforegoing reasons, I hold that the prior written consent was not required from the bank. I am fortified in my conclusion by the correspondence exchanged between the parties.”9

11. The learned Arbitrator has also analysed the correspondence between the parties and come to the conclusion that Anand’s letter dated 10.02.2017 “clearly negates the stand of the respondent that the MOU was no longer valid and binding in view of the Tripartite Agreement or the Buyer’s Agreement.”10

12. The learned Arbitrator has also found that Sohan had not accepted Anand’s extension of the MoU. For this purpose, the learned Arbitrator has inter alia considered Sohan’s letter dated 13.02.2017 and subsequent reminder as well as Anand’s communications dated 13.02.2017 and 02.06.201711.

13. On the basis of these findings, the learned Arbitrator has issued the following operative directions in the impugned award:

14. Having heard learned counsel for the parties, I am of the view that the award does not call for interference within the parameters stipulated in Section 34 of the Act.

15. The learned Arbitrator, on an interpretation of the MoU under which the arbitral proceedings arose, alongwith other contemporaneous contractual arrangements, has come to a conclusion that the Bank’s NoC was required only as a security against thirdparty transfers of the property by Sohan, and did not pertain to the exercise of Sohan’s option to surrender the property in accordance with the MoU. The provisions of the Tripartite Agreement are consistent with this finding. The restrictions on transfer were clearly intended to protect the Bank against a third party transfer by Sohan, and Clause 12 thereof (cited by Mr. Kalra), in fact, suggests that all agreements between the parties (which would include the MoU also) must be faithfully implemented. Clauses 21 and 24 of the Tripartite Agreements apply to transfer of Sohan’s interest, and not to surrender of the property to Anand itself under the MoU. The undisputed fact that the MoU was not within the knowledge of the Bank at the time of signing of the Tripartite Agreement, lends further credence to the position that the Tripartite Agreement was not intended to affect exercise of Sohan’s rights thereunder. Significantly, there is no provision in the MoU corresponding to Clause 17 of the Buyer’s Agreement, which provides for a NoC from the Bank in the event the allottee intends to transfer the property.

16. The analysis of the contractual arrangements in the award, therefore, appears to me to be quite reasonable, and certainly does not suffer from any perversity, as sought to be argued by Mr. Kalra.

17. Mr. Karla’s second objection relates to the extension of the MoU. Here also, the learned Arbitrator has rendered a factual finding that the unilateral extension of the MoU in Anand’s communication dated 03.04.2017 was not, in fact, agreed by Sohan. The finding is based upon the correspondence between the parties, which were part of the evidence on record. The learned Arbitrator has found that Anand required Sohan to sign a copy of the letter in token of his confirmation of the extension, which was factually not done. In these circumstances, the view taken by the learned Arbitrator is based on an appreciation of evidence which cannot be characterised as suffering from any such patent illegality so as to invite the interference of the Court under Section 34 of the Act.

18. In my view, the arguments advanced by Mr. Kalra, in fact, invite the Court to re-interpret the contract, and to reappreciate the evidence, far beyond the permissible scope of interference under Section 34 of the Act. The judgments of the Supreme Court inter alia in Associate Builders vs. Delhi Development Authority12, Ssangyong Engineering and Construction Company Limited vs. National Highways Authority of India (NHAI)13, and Delhi Airport Metro Express Private Limited vs. Delhi Metro Rail Corporation Limited14 clearly lay down that both these aspects are within the province of the arbitral tribunal. The tribunal’s reading of the contract and evidentiary assessment are liable to be interfered with only on very limited grounds of manifest arbitrariness or perversity. For the reasons outlined above, I do not find the present case to fall within that limited exception.

19. In these circumstances, the petition is dismissed, but with no order as to costs. All pending applications also stand disposed of.

PRATEEK JALAN, J MARCH 20, 2023/‘Bhupi’