ASHWANI KHATTAR Vs. VIJAY KUMAR BHATIA

JUDGEMENT

(1.) The present appeal has been filed under section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter the "Act") read with section 13 (1) of the Commercial Court Act, 2015, and directed against the order dated 05.03.2018 passed by learned Single Judge of this Court, dismissing the petition under Section 34 of the Act, the appellant herein had led challenge to the award dated 14.12.2017. The objections to the award dated 14.12.17 stand dismissed.

(2.) Some necessary facts required to be noticed for disposal of this appeal are that the appellant is the sole proprietor of M/s. Shruti & Siddharth Constructions and claims to be a leading builder and developers' company in the real estate market in Delhi. The respondent had approached the appellant for joint development of respondent's properties, being industrial plot bearing nos. 7,8 and 9 in Sector-1, Noida each admeasuring approximately 387 sq. Mts. The parties had entered into a Collaboration Agreement on 08.04.2008 (hereinafter referred to as the 'agreement'). The appellant herein (Builder) agreed to demolish the structure existing on all the three plots. He was also to get the plan sanctioned, take permissions from the concerned authorities, at his own cost and thereafter, the said plots were to be developed by the appellant by raising a new construction as per the sanctioned plan. For the sake of clarity, it may be noted that in the agreement, plots bearing no.B-8 & B-9 were referred to as property no.2 and the same was allocated to the share of the respondent (Owner), whereas the plot bearing no. B-7, referred to as property no. 1 and was exclusively to fall to the share of a Builder in terms of the agreement. In terms of the agreement, the appellant was to pay Rs.1,75,00,000/- (One Crore Seventy Five Lakhs only) as a refundable security deposit to the Owner. Additionally, the Builder was to bear the cost and expenses for construction of the buildings on all the three plots. An amount of Rs.35,00,000/- was to be paid at the time of execution of the agreement, while the balance amount of Rs.1,40,00,000/- was to be paid by the Builder by 15.05.2008 or within 15 days from the date of grant of sanction for construction of buildings on the plots in question. The refundable security deposit was to be repaid from the revenue generated from property no.2 i.e. built up of land over plots bearing no.B-8 and B-9, Sector 1, Noida. The physical possession of the three plots were handed over to the appellant. However, title and the possession of the property No.1 was to pass in favour of the Builder only upon the completion of the construction of the Owner's share in all aspects. There is no dispute that the Builder paid the sum of Rs.35,00,000/- to the Owners at the time of signing the agreement and thereafter, paid a sum of Rs.1 crore. The amount paid by the Builder has been recorded in four trenches in the year 2008, the balance payment was made in the following manner:-

(3.) The appellant failed to pay the balance amount of Rs.40,00,000/- out the total sum of Rs. 1.75 cr to the Owner. It is also not in dispute that the appellant applied for sanction of the building plans and work of demolition also commenced on 09.07.2008. According to the counsel for the appellant, after the building plans were sanctioned, the appellant approached the Electricity Department for grant of electricity connection for the purposes of carrying out construction in October, 2008, but to his utter surprise and shock, the appellant learned that there was a huge demand in the form of arrears amounting to Rs.1,20,00,000/- towards electricity dues with respect to the properties in question. It is also the case of the appellant that since the respondent, even after the repeated requests, did not clear the outstanding amount, rather continued to state that there were no arrears of any dues and further the respondent contested that the appellant had not called upon the respondent to clear the same, resultantly, no construction could commence.