SA. DURAISAMY Vs. MILLENIA REALTORS PVT. LTD

JUDGEMENT

(1.) THIS application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) seeking appointment of an Arbitrator to adjudicate upon the disputes that have arisen between the petitioner and the respondent in connection with the Development Agreement dated 26.3.2004 and the subsequent letter of Undertaking dated 12.5.2006 issued by the respondents in furtherance to the Development Agreement.

(2.) THE petitioner, along with M/s. Malar Publications Pvt. Ltd., entered into a Development Agreement with the respondent on 26.3.2004. In terms thereof, the respondent was to promote an I.T. on a land of an extent of 6.62 acres in Perungudi, Chennai, which had been in the ownership of the petitioner. The entitlement of the petitioner and M/s. Malar Publications, who were the land owners in terms of the Development Agreement, was 36% of the total saleable built -up area, which was computed at 2,15,400 sq.ft. and towards this extent, the petitioner and M/s. Malar Publications were allotted a block of five floors designated as Campus -IA I in RMZ Millenia -I. The Development Agreement envisaged the saleable built -up area to be conforming international standards, with facilities and fixtures comparable to the best of world standards. However, it turned out that the building did not conform to the specifications agreed upon and several discrepancies were noted, with the use of sub -standard materials and deviation between the sanctioned drawings and the actual constructions. On physical inspection, it was noticed that the materials used for construction of Campus -IA building were of inferior quality when compared to the specifications used in the building retained by the respondent, viz. Campus -IB. In terms of the Development Agreement, there was to be parity in terms of the quality of constructions of the building retained by the Developer and the one earmarked to the petitioner/land owners. It is the case of the petitioner that the respondent had, for their personal gains, deliberately chosen to use sub -standard and inferior quality materials in constructing the building earmarked for the land owners. When these discrepancies were brought to the notice of the respondent, they agreed for a compromise package, which was reduced to writing on 12.5.2006.

(3.) IT is the case of the petitioner that though he had called upon the respondents to adhere to the Compromise Agreement dated 12.5.2006, his legitimate demands were neglected. In view of the respondent's abject disregard to the performance of their obligations and breach of the agreement, the petitioner invoked the arbitration clause envisaged in the Development Agreement dated 26.3.2004 and appointed a retired Judge of this Court as their arbitrator, calling upon the respondent to nominate their arbitrator, so as to enable the two arbitrators to identify the Umpire. The respondent replied on 16.3.2009 that the Compromise Agreement did not stipulate the arbitration clause and hence, no arbitrator could be appointed in this case. Therefore, the petitioner has approached this Court for the relief as stated above.