SATYAM CINEPLEXES LIMITED Vs. PATEL REALTY INDIA LTD

JUDGEMENT

(1.) Petitioner is a company incorporated under the provisions of the Companies Act and engaged in the business of managing, operating and running multiplex cinema halls under the name of style of "Satyam Cineplexes". Respondent No. 1 is also a company incorporated under the provisions of the Companies Act and engaged in the business of acquiring, developing and programme real estate assets. Respondent No. 2 is also a company engaged in the business of constructing and developing commercial complexes and malls.

(2.) Petitioners contend that on 17.07.2010 they entered into a Memorandum of Understanding (for short 'the MOU') with respondent No.1 wherein respondent No.1 agreed to develop property and to lease 52000 sq.ft. area in the II floor of a building called "Mall of Bangalore" subject to certain terms. Under the MOU the petitioners have paid a sum of Rs.15.00 lakhs as interest free security deposit. In furtherance of MOU several meetings were held, E-mails were exchanged and there came to be a concluded agreement to lease on 03.08.2012 and addendum to agreement to lease. This agreement to lease and addendum are accompanied by annexures. Respondent No. 1 instead of discharging their obligation under the agreement to lease and addendum got issued a notice on 07.09.2012 refunding the security deposit of Rs.15.00 lakhs on the ground that the terms of lease which was to be executed under the agreement to lease could not be finalized.

(3.) Petitioners contend that clause 29 of the MOU and clause 16 of agreement to lease and clause 79 and 80 of the addendum provides for an arbitration clause for settlement of the disputes. In view of the stand taken by the respondents the petitioners invoked the arbitration clause and got issued a lawyer's notice on 19.11.2012 nominating an arbitrator on their side and requesting respondent No. 1 to nominate the arbitrator on their behalf. The respondents instead of complying the demand made in the petitioners' lawyer's notice got issued a reply through their lawyers on 18.12.2012 inter alia contending that there is no enforceable agreement and as such the question of referring the dispute to an arbitrator will not arise.