R RAMASWAMY CHARITABLE TRUST REPRESENTED BY ITS TRUSTEE D V MURALIDHARAN, Vs. KOKIO SPACES PRIVATE LTD

JUDGEMENT

(1.) This Original Petition is filed seeking for appointment of an Arbitrator to adjudicate upon the disputes between the petitioner and the respondent.

(2.) The petitioner is a Public Charitable Trust created by late R.Ramasamy with the noble object of extending medical relief to the poor through well-established hospitals and nursing homes. The Trustees of the petitioner were given responsibility to ensure the fulfillment of the above said objects. As the Trust has only one property, which is the subject matter, in order to augment the income of the Trust, Memorandum of Agreement dated 107.2013 was entered into with the respondent for sale of the said property on the Chamiers Road. The respondent had offered Rs. 8 crores per ground as the sale consideration for the sale of the available area of 5.065 grounds amounting to a total agreed value of Rs. 40,52,00,000/- and an advance of Rs. 1,00,000/- was also paid by the respondent to the petitioner trust. After obtaining a letter of administration in the year 2015, the respondent had not showed any interest in purchasing the property. All the reminders sent by the petitioner were replied by the respondent by only seeking extension of time for the completion of the sale. As the respondent was delaying the purchase of the property, the petitioner had cancelled the memorandum of agreement of sale dated 107.2013 and also returned the advance of Rs. 1,00,000/-, which was received by them on 23.07.2016. However, the said cancellation letter and the cheque was returned by the respondent stating that it is an unilateral action. The memorandum of agreement also contains an arbitration clause, which says that the parties can invoke it in the event of any dispute.

(3.) While so, the respondent filed O.S.No.4052 of 2016 in the City Civil Court, Chennai, seeking to declare the termination of the memorandum of agreement dated 12.07.2013 as illegal and for other reliefs and also obtained an order of injunction restraining the petitioner from alienating the subject property to any third party other than the respondent. It is contended that as there was an arbitration clause in the memorandum of agreement, the suit is not maintainable. Hence, the petitioner Trust filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (in short "1996 Act"), in I.A.No.10803 of 2016 to refer the dispute to arbitration and to dismiss the suit.