Vimal Banka Karta of Vimal Kumar Bhajan Lal Banka HUF v. Royalgolf Link City Project Private Limited & Ors.

1. The present petition has been filed by the petitioner under section 11(6) 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[3] 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, II 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 No. 3 and 4 are also directors of respondent No. 1 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[3] 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 respondents 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 abovementioned 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-upon 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. Learned counsel for the petitioner submitted that all the efforts of the petitioner to resolve the dispute amicably have failed. Therefore, the petitioner was constrained to invoke the arbitration clause i.e. Clause 7 of the Renewal Agreement dated 22nd July, 2019. The arbitration clause is reproduced hereunder: “7.Any dispute arising out of this Renewal Agreement, the construction of any provision of this Renewal Agreement or the rights, duties, or liabilities of the parties under this Agreement shall be amicably settled by negotiation and consultation in good faith. In case of failure to resolve the dispute; the same shall be referred to arbitration to a sole arbitrator appointed by mutual consent of both the parties as per Arbitration & Conciliation Act,1996 and any amendment modification thereof. The seat of the Arbitration shall be at New Delhi and the language of arbitration proceeding shall be English. Each Party shall bear its own cost for arbitration.”

11. 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.

12. Heard the learned counsel for the petitioner and perused the record.

13. 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;