S Z JAFREY Vs. MODERN INDUSTRIAL ENTERISES INDORE

JUDGEMENT

(1.) On 18-9-2001 an application was filed by the petitioner under Section 11 (5) of the Arbitration and Conciliation Act, 1996, which shall be referred hereinafter as Act, wherein it was prayed to appoint the Arbitrator to settle the dispute between the parties. In the petition it was alleged that on 24-9-1998 respondent executed the sale deed in favour of the petitioner which contains the following Arbitration Clause :-

(2.) It was submitted that since there was a dispute regarding selling out the covered parking area of Devdarshan building situated at South Tukoganj, therefore notices were issued to the respondents for appointment of Arbitrator for resolving the dispute between the parties, in view of the arbitration clause quoted in the Sale Deed itself, but of no avail. Hence it was prayed to appoint the Arbitrator. Application was opposed by the respondents on various grounds including that the petitioner is claiming for appointment of the Arbitrator on the basis of recital in the Sale Deed. It was submitted that as per Section 7 (3) (a) of the Act an Arbitration Agreement is required to be signed by the parties. It was alleged that since the sale deed was signed by only one of the parties, therefore, it cannot be treated as Arbitration Agreement. For the purpose of the convenience Section 7 of the Act is quoted herein below :- Section 7. Arbitration Agreement:-

(3.) Learned counsel for the petitioner submits that prior to the execution of the sale deed parties entered into an agreement to sale the property vide agreement dated 11/9/1997 wherein there was a Clause of Arbitration which has been reproduced in the sale deed dated 24/9/1998. It was submitted that sale deed was the consequent of the Agreement, therefore it cannot be said that there was no agreement between the parties regarding appointment of Arbitrator. It was further submitted that since the sale amount was paid by the petitioner and in lieu of which the sale deed was executed, therefore, impliedly the petitioner was agreed for appointment of the Arbitrator. On the strength of this it was argued that in the circumstances the application filed by the petitioner cannot be thrown out on the ground that there is no agreement which has been signed by the parties. Furthermore it was submitted that the objection that there was no arbitration clause in the agreement could have been taken by the petitioner but not the respondents who has agreed in writing while executing the sale deed.