NIRMAL Vs. ALANKAR REAL ESTATE (PVT) LTD.

JUDGEMENT

(1.) This appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, 'the said Act') takes exception to the judgment dated 25.06.2008 in Miscellaneous Civil Application No.03/2006 by which the application preferred by the appellant under Section 34 of the said Act has been dismissed.

(2.) The facts giving rise to the present proceedings are that on 26.11.1999 the appellant and the respondent nos. 1 and 2 entered into two agreements by which the appellant agreed to purchase two flats from the respondent nos. 1 and 2. By the first agreement a flat on the fourth floor of Building No.2 admeasuring about 230.8545 square meters was agreed to be purchased by the appellant for a consideration of Rs.18,00,000/-. As a consideration for undivided share in the said property, further amount of Rs.7,00,000/-was agreed to be paid. In the said agreement, it was stated that out of the amount of Rs.18,00,000/-, an amount of Rs.15,00,000/-had already been received by the respondent nos.1 and 2 and remaining amount of Rs.3,00,000/- was to be paid by 26.01.2000. The further amount of Rs.7,00,000/- was also agreed to be paid by 26.01.2000. It was agreed between the parties that the time was the essence of the contract and delay on the part of the appellant in making any payment would result in interest @ 24% per annum being liable to be paid. It was however provided that the respondent nos. 1 and 2 could extend the time to pay the balance amount. In the said agreement Clause 14 provided for referring the disputes that could arise in relation to the said agreement with reference to the matters covered by the agreement and/or connected therewith to be referred to an Arbitrator. By the second agreement also entered into on the same day the appellant agreed to purchase another flat on the fifth floor of Building No.2 having same area as per the flat on the fourth floor. It was agreed that total consideration for the said flat would be Rs.26,28,000/-. Rs.18,00,000/- was agreed as cost of construction of the said flat and Rs.1,28,000/- was to be paid for an extra servant room that was to be constructed. Rs.7,00,000/- were to be paid towards undivided share in the said property. It was agreed that an amount of Rs.18,00,000/- was already received by the respondent nos. 1 and 2 and on the date of the agreement Rs.5,52,000/- was to be paid. The amount of Rs.1,48,000/- was to be paid by 26.01.2000. Similarly, the remaining amount of Rs.1,28,000/- was to be also paid by 26.01.2000. There was a similar clause with regard to payment of interest and Clause No.14 also related to referring the disputes to the named Arbitrator in case such disputes arose.

(3.) According to the respondent nos. 1 and 2, the appellant did not comply with the time schedule within which the payments were to be made. Though certain post-dated cheques had been issued by the appellant to the respondent nos. 1 and 2, they were not presented immediately for clearance on the request of the appellant. It was further stated that the appellant was liable to pay interest on the belated payments as well as occupation charges @ Rs.12,000/- per month as the appellant was in possession since December, 1999. The appellant did not reply to the said notice. Thereafter on 12.12.2001 the respondent nos. 1 and 2 again issued a legal notice to the appellant reiterating the aforesaid stand taken in the earlier notice. It was then stated that since the disputes between the parties were not being resolved, the respondent nos. 1 and 2 intended to invoke the arbitration clause. The appellant filed a reply to the aforesaid notice on 02.01.2002. It was stated that the claim made by the respondent nos. 1 and 2 was beyond the purview of both the agreements. There was no dispute whatsoever that could be referred for arbitration.