JAGDISH BASTIMAL MEHTA Vs. HIRACHAND PUKHRAJ GULECHA

JUDGEMENT

(1.) THE appeal arises from a judgment rendered by the Learned Single Judge on an Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996. The Learned Single Judge has granted relief in terms of prayer clause (a) of the Petition which reads as follows :

(2.) SIMPLY put, the issue is whether in a proceeding under Section 9, the Court has to make a final determination about the existence of an arbitration agreement. The principal submission of the Appellants which we have been called upon to consider is that when, in opposing an application under Section 9, a respondent contends that the agreement between the parties has been executed as a result of the exercise of coercion or undue influence, it is not sufficient for the Court to enter a prima facie finding and the Learned Single Judge was bound to determine conclusively and finally whether an arbitration agreement exists between the parties.

(3.) THE Appellants are carrying out the development of land at Shahapur, admeasuring 25,630 sq.mtrs. of which the First Appellant is the owner. The Second Appellant is a partnership firm in which the First Appellant is a partner. On 9 April 2012, a Power of Attorney was executed by the Appellants by which the Respondents were authorised to sell a part of the property. A stamp duty of Rs. 2.27 lakhs was admittedly paid by the Appellants and the Power of Attorney was registered. On 14 April 2012 an MOU was executed between the parties confirming in Clause 2, the advance of Rs. 2.50 crores by the Respondents to the Appellant for the development/construction of the property. On 16 May 2012, the Appellants executed another Power of Attorney against payment of stamp duty of Rs.4.40 lakhs and which admittedly has also been registered. On 4 August 2012, a notice was addressed on behalf of the Appellants by their Advocate to the Respondents stating that the Respondents had been appointed as Constituted Attorneys because the First Appellant was unable to attend the office of the Sub-Registrar for admitting the execution of documents in respect of the plot developed and sold by him. It was stated in the notice that the Respondents were appointed as Constituted Attorneys to lessen the burden of work of the First Appellant, but since his son has now joined the business, it was not necessary to continue with the Powers of Attorney which were revoked. On 28 August 2012, an MOU was executed between the parties which forms the subject matter of the dispute. The MOU records that an investment of Rs. 7.07 crores has been made by the Respondents in the project of the Appellants. Under the MOU, twenty three separate allotment letters were issued by the Appellants and the title deeds of the property were lodged in escrow with the father of the First Appellant. Cheques in the amount of Rs.2.50 crores were handed over to the Respondents in repayment of the moneys advanced. On 3 September 2012, the original Power of Attorney was allegedly taken by the Appellants from the Respondents.