COMPACT GRIHA NIRMAN Vs. KUSUM ALLOYS LTD

JUDGEMENT

(1.) THE petitioner has preferred this petition under sub-section (5) of Section 11 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as the Arbitration Act) for appointment of an arbitrator to resolve the dispute between the parties.

(2.) THE subject matter of this proceedings is an industrial premises bearing Plot No. 9 out of Sy. No. 77, measuring 32012 sq. mtrs. or 344577 sq. ft. , situated at Doddannekkundi 1st Phase Industrial area, k. R. Puram, Bangalore East Taluk. The said land was originally allotted to M/s. Tanfort Tyres Limited by the Karnataka Industrial Area development Board. The first respondent has purchased the entire assets and liabilities of M/s. Tanfort Tyres Limited including the lease hold right over the said land. Respondent No. 1 has applied to the kiadb for grant of the said land in its name. By an agreement dated 10-8-1998 the KIADB has agreed to transfer the said and in favour of the first respondent subject to certain terms and conditions. Pursuant to the said agreement respondent No. 1 has been put in possession of the said land. Lease period in the said agreement dated 10-8-98 expired in the year 2000. First respondent has complied with all the terms and conditions of the said agreement and entitled to secure the absolute sale deed from the KIADB.

(3.) BY a Memorandum of Understanding/agreement made in april 2004 the respondents-2 and 3 on behalf of respondent No. 1d have agreed to sell the said land in favour of the petitioner subject to the terms and conditins mentioned in the said Memorandum of understanding. It was entered into on 18-4-2005. Under the terms of the said agreement a sum of Rs. 1 crore was paid by the petitioner to the respondent by way of advance and agreed to pay balance sale amount immediately after compliance of the pre-conditions stipulated under the agreement. Annexure-A is the said agreement. As compliance of the pre-conditions could not be complied within 90 days stipulated in the agreement, third respondent sought for extension of time which was granted. As decided by respondents-2 and 3 an agreement of sale dated 6-8-2005 was made between the first respondent and respondents-2 and 3 for purchase of other part, on certain terms and conditions mentioned in the agreement. Annexure-B is the said agreement. Rs 4,50,00,000/- was shown as the sale consideration against Rs. 3,11,19,450/ -. However, the respondents-2 and 3 issued a letter dated 12-1-2006 terminating/cancelling the agreement and sought to return the advance amount received under the said agreement on the ground that BIFR is not accepting their proposal of selling the said land in favour of the petitioner. Subsequently, telegrams were sent, letters were sent as per annexures mentioned to this petition. As the cancellation of the agreement by the first respondent on 12-1-2006 is arbitrary, false and dishonest the petitioner invoked arbitration clause contained in the agreement for appointing an arbitrator. As the respondent did not agree the petitioner was contrained to approach this court for appointment of an arbitrator.