Full Text
HIGH COURT OF DELHI
Date of Order: 27th February, 2023
VIMAL BANKA KARTA OF VIMAL KUMAR BHAJAN LAL BANKA HUF ..... Petitioner
Through: Mr. Raghav Alok, Mr. Kumar Ravishankar and Ms. Vasudha Trivedi, Advocates
ORS. ..... Respondents
Through: None
CHANDRA DHARI SINGH, J (Oral)
JUDGMENT
1. The present petition has been filed by the petitioner under section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of sole arbitrator for adjudication of disputes between the parties arising out of Memorandum of Understanding (MoU) dated 15th June, 2016.
2. Learned counsel appearing on behalf of the petitioner submitted that the petitioner, Vimal Kumar Banka, is a Karta of Vimal Kumar Bhajan Lal Banka (HUF) and a resident of B-03, Sector-44, Noida, Uttar Pradesh. It is further submitted that he booked a Golf Suit Apartment (Project of Respondent No.1) with the number TF06/12/S[2] for investment purposes.
3. It is submitted on behalf of the petitioner that the respondent No.1 is a company constituted under the terms of the Companies Act, 2013 with its registered office located at M-53, 2nd Floor, Block-M, Greater Kailash-II, New Delhi-110048. The respondent No. 1 is involved in the real estate industry. The respondent No.2 is a director of respondent No.1 who provided a personal guarantee to the petitioner on behalf of respondent No.1 for the amount invested as well as the return/interest. The respondents Nos. 3 and 4 are also directors of respondent No. 1's company.
4. It is submitted that the respondent No. 1 and the petitioner signed an MoU dated 15th June, 2016. The petitioner purchased a Golf Suit Apartment bearing No. TF06/12/S[2] in the project "The Hemisphere" at REP-2, Sector-27, Greater Noida at a rate of Rs. 943.40 per square foot for investment purposes through the aforementioned MoU dated 15th June, 2016. In furtherance of the same, the petitioner has paid Rs. 15,00,000/- to respondent No. 1.
5. It is submitted that in light of the above-mentioned MoU, it was agreed between the respondent No. 1 and the petitioner that the respondent No. 1 will pay interest on the mentioned amount @ 26% p.a. to the petitioner. It is further submitted that it was agreed between the petitioner and the respondent that the petitioner would surrender the above-mentioned apartment to respondent No. 1 upon receipt of the above-mentioned whole investment amount plus appreciation. Also, it was agreed between the petitioner and respondent No. 1 that the petitioner is allowed to maintain the aforementioned apartment until respondent No. 1 returns the total investment amount plus appreciation.
6. It is submitted on behalf of the petitioner that respondent No.1 was unable to pay the booking/invested sum of Rs.15,00,000/- together with the appreciated value of Rs.15,00,000/- to the petitioner following the expiration of the aforementioned MoU by 12 months. Thus, the petitioner and the respondent No.1 mutually agreed to extend the above-mentioned MoU for an additional 12 months, and a Renewal Agreement dated 24th August, 2017 to the MoU dated 15th June, 2016 was executed between respondent No.1 and the petitioner.
7. It is submitted on behalf of the petitioner that vide the said renewal agreement, it was agreed between the parties that subsequent to expiry of 12 months from the signing of the renewal agreement the respondent NO. 1 will pay Rs. 30,00,000/- to the petitioner. It is further submitted that following the expiration of 12 months from the above-mentioned Renewal Agreement dated 24th August, 2017, respondent No. 1 was unable to pay the booking/invested sum of Rs.15,00,000/- in addition to Rs.15,00,000/- in appreciation to the petitioner. The respondent No. 2 and the petitioner reached an agreement to extend the prior Renewal Agreement for an additional year. Therefore, the petitioner and the respondent No. 1 inked a Renewal Agreement dated 11th August, 2018 to the MoU dated 15th June, 2016.
8. It is submitted on behalf of the petitioner that respondent No. 1 again failed to pay the said amount in view of the above-mentioned Renewal Agreement. Subsequent thereto, another Renewal Agreement dated 22nd July, 2019 to the MoU dated 15th June, 2016 was executed between the parties.
9. It is submitted on behalf of the petitioner that subsequent to signing of the aforementioned Renewal Agreement on 22nd July, 2019, the directors of respondent No. 1 acquired the dishonest purpose to steal the petitioner's hard-earned money. After signing the aforementioned Renewal Agreement, respondent No. 1 ceased paying the agreed interest on the initial booking price and did not reimburse Rs. 30,00,000/- to the petitioner even after the expiry of the aforementioned Renewal Agreement on 22nd July, 2019.
10. It is submitted on behalf of the petitioner that the petitioner attempted to contact the respondents multiple times for the payment of the aforementioned amount, but they consistently evaded him by providing reasons. The respondent No.1 submitted a letter on 27th November, 2021, informing the petitioner that full payment will be made on 9th December, 2021, after the petitioner exerted considerable effort to persuade the respondent. Yet, the respondent failed to pay on the agreed date. Thereafter, the petitioner repeatedly attempted to contact the respondents but they did not reply to requests of the petitioner.
11. Learned counsel appearing for the petitioner submitted that being aggrieved by the illegal actions of the respondent, the petitioner was constrained to invoke the arbitration clause, i.e., clause 7 as provided under the Renewal Agreement dated 22nd July, 2019 vide its legal notice dated 11th March, 2022. The said arbitration clause is reproduced hereunder:
12. It has been submitted that despite numerous opportunities by this Court, learned counsel appearing on behalf of the respondent has not filed reply to the instant petition.
13. Heard the learned counsel for the petitioner and perused the record.
14. This Court is of the view that the present dispute is arbitral in nature and thus, finds it evident to appoint a Sole Arbitrator to adjudicate the disputes arising between the parties with respect to the MoU followed by the Renewal Agreement dated 22nd July, 2019. Hence, the following order: ORDER
(i) Mr. Apoorv Kurup, Advocate is appointed as a sole arbitrator to adjudicate the disputes between the parties which have arisen under the MoU dated 15th June, 2016 followed by the Renewal Agreement dated 22nd July, 2019;
(ii) The learned sole arbitrator, before entering the arbitration reference, shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996;
(iii) The fee of the appointed sole arbitrator shall be in accordance with the schedule of fees prescribed under the Delhi International Arbitration Centre (Internal Management) Rules, 2012 and Delhi International Arbitration Centre (Administrative Cost and Arbitrators’ Fees) Rules, 2018 as amended vide notification dated 15th November, 2022;
(iv) At the first instance, the parties shall appear before the learned sole arbitrator within 10 days from today on a date which may be mutually fixed by the learned sole arbitrator;
(v) All contentions of the parties are expressly kept open.
15. A copy of the order be forwarded to the learned sole arbitrator on the following address: Mr. Apoorv Kurup, Advocate A-2/141, Lower Ground Floor, Safdarjung Enclave, New Delhi-110029 Phone No. +91-8800332253 Email: office@akurup.com
16. The petition is disposed of in the aforesaid terms along with pending applications, if any.
17. The order be uploaded on the website forthwith.