K.NALLIAPPAN Vs. KIRON FASHIONS PVT. LTD.

JUDGEMENT

(1.) This Petition is filed by the Respondent in the arbitration proceedings to set aside the Arbitral Award dtd. 24/12/2018 (the Award) in the dispute between the Petitioner and the Respondents herein.

(2.) The case of the Petitioner is that he is the owner of an immovable property, which was the subject matter of an agreement of sale between the Petitioner and Respondents herein. The said Agreement for Sale was entered into on 5/1/1996 (Ex.A2)(the Agreement) for the sale of Plot Nos.5164, 5165, 5166 and 5167 in T.S.No.2 Part Block No.12, Ayanavaram Village in the Registration Sub District of Anna Nagar along with the superstructure thereon ad-measuring about 51,000 sq.ft. The said property was agreed to be sold by the Petitioner to the Respondents herein for a total sale consideration of Rs.11.00 Crores. Out of the said sum of Rs.11.00 Crores, a sum of Rs.2.75 Crores was required to be paid as an advance in two installments. The balance sale consideration of Rs.8.25 Crores was required to be paid within four months from the date of the Agreement or within a period of 30 days from the date of receipt of a no objection certificate from the appropriate authority under Sec. 230 of the Income Tax Act,1962. The Agreement further provided as follows:-

(3.) Eventually, by letter dtd. 6/7/1996(Ex.A8), the Petitioner called upon the Respondents to have the sale deed executed and registered in their favour on or before 15/7/1996, failing which, the Agreement shall stand cancelled. On account of the non payment of the balance sale consideration and the non registration of the sale deed on or before 15/7/1996, the Agreement was cancelled and by notice dtd. 7/8/1996(Ex.A9), the Petitioner called upon the Respondents to pay a total sum of Rs.5.10 crores towards losses sustained on account of the breach of the Agreement by the Respondents. By reply dtd. 31/1/1997(Ex.A11), the Respondents informed the Petitioner, through its Advocate, that the Respondents were unable to purchase the property as per the Agreement on account of huge losses in export trade and on account of proceedings initiated by the Enforcement Directorate. It was further stated therein that the Agreement envisages the payment of Rs.10.00 lakhs or the actual loss, whichever is less, as damages for breach of contract and that the Respondents are willing to accept a refund of Rs.2.5 crores after permitting the Petitioner to deduct the sum of Rs.10.00 lakhs towards liquidated damages as per the Agreement. Accordingly, the Petitioner was called upon to refund the sum of Rs.2.5 crores within 7 days from the date of receipt of the notice dtd. 31/1/1997 failing which the Respondents would invoke the arbitration clause and refer the dispute to the arbitrators.