DAULAT RAM DHARAM BIR AUTO PRIVATE LIMITED & ORS. vs. PIVOTAL INFRASTRUCTURE PRIVATE LIMITED & ORS.

2023:DHC:2823
IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: April 27, 2023

+ ARB.P. 1230/2021

DAULAT RAM DHARAM BIR AUTO PRIVATE LIMITED & ORS.

..... Petitioners
Through: Mr. Rajiv Bajaj and
Mr. Karan Prakash, Advs.

versus

PIVOTAL INFRASTRUCTURE PRIVATE LIMITED & ORS.

..... Respondents
Through: Mr. Divjyot Singh, Ms. Avsi Malik
and Ms. Aditi Saxena, Advs. for R-1
Mr. Harish Malhotra, Sr. Adv. with
Mr. Harsh Gurbani and
Mr. Abhishek Bose, Advs. for R-2
AND
+ O.M.P.(I) (COMM.) 29/2020

DAULAT RAM DHARAM BIR AUTO PRIVATE LIMITED & ORS.
..... Petitioners
Through: Mr. Rajiv Bajaj and
Mr. Karan Prakash, Advs.
versus

PIVOTAL INFRASTRUCTURE PRIVATE LIMITED & ORS.
..... Respondents
Through: Mr. Divjyot Singh, Ms. Avsi Malik
and Ms. Aditi Saxena, Advs. for R-1
Mr. Harish Malhotra, Sr. Adv. with
Mr. Harsh Gurbani and
Mr. Abhishek Bose, Advs. for R-2
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
J U D G M E N T
V. KAMESWAR RAO, J
ARB.P. 1230/2021
1. It is a case where the petitioner Nos. 1 to 3 („Petitioner Group‟)
are companies duly incorporated under the provisions of the
Companies Act, 1956 („Act of 1956‟), have filed the instant petition
under section 11 of the Arbitration and Conciliation Act, 1996 („Act of
1996‟) with the following prayers:
“PRAYER
That in the light of arbitration agreement existing between
the parties, a dispute covered by the arbitration Agreement
having arisen and the parties having failed to agree upon
the appointment of an arbitrator, it is prayed that this
Hon'ble Court may be pleased to:
a. Appoint an Arbitrator and refer the aforementioned
dispute to the Ld. Arbitrator for adjudication;
b. Pass such other/further order(s) as this Hon'ble Court
may deem fit and proper in the interest of justice.”
2. Whereas the respondent No. 1 herein, is also a company duly
incorporated under the provisions of the Act of 1956, having its
registered office at Plot No.12, Sector-4, Faridabad, Haryana-121004.
3. It is stated that the respondent No. 2 is also a company duly
incorporated under the provisions of Act of 1956 and was earlier a part
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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of the Petitioner Group. However, currently the same is under
liquidation and is thus being sued through its Liquidator appointed by
the National Company Law Tribunal.
4. Facts leading to the filing of the instant petition (as it relates to
the Petitioner Group) are: that the Petitioner Group together with the
respondent No.2, each of whom owned a piece of land, handed over
the possession of parcel of their lands to the respondent No.3 (which is
also a company incorporated under the provisions of the Act of 1956,
[„Original Developer‟ herein]) and permitted the latter to develop,
construct and complete the building on such lands, i.e., built-up area at
projects titled as „Royal Heritage‟ & „Faridabad Eye‟ under License
No. 78 of 2009 & 33 of 2010, granted by Directorate of Town and
Country Planning, Haryana, („DTCP‟), Haryana, [„project land‟].
While the Petitioner Group and the respondent No.2 provided their
piece of land for development and construction of buildings, the
respondent No.3, in exchange of same, undertook the obligation to
provide 10% share in the built-up area of the project land to the
Petitioner Group. It is pertinent to mention here that the respondent
No.3, being the Original Developer in respect of the project land has
been arrayed as a Pro-forma Party, since the impleadment thereof is
necessary for proper adjudication of the present petition.
5. It is also stated, after that the Original Developer undertook the
steps to conduct development over the project land by applying for
licenses and other necessary compliances.
6. It is stated, the Petitioner Group and the respondent No. 2
companies transferred the development rights over the said project land
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
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to the respondent No.3 through Collaboration Agreements dated June
04, 2007, while retaining the rights, title and interest to the land
underneath amongst themselves. It is also stated that as per the
Collaboration Agreements, the respondent No. 3 was to have 90%
share over the built-up area (FSI) and the remaining 10% share over
the built-up area was to be handed over back to the Petitioner Group
and the respondent No.2, respectively. That under the aforesaid
agreement, the respondent No. 3 was therefore designated as the
„Original Developer‟.
7. It is further stated that the respondent No. 3 (in its capacity as
the Original Developer, having the development rights under the
Collaboration Agreement) thereafter, entered into the Deed of
Assignment, dated February 27, 2008 and by virtue of that, the
Petitioner Group and the respondent No. 2, being signatories to it,
further assigned the development rights to the respondent No.1 for a
consideration of ₹6,47,89,944/-. As a result, the respondent No.1
stepped into the shoes of the respondent No. 3 and was thus designated
as the „Assignee Developer‟.
8. It is also the case of the Petitioner Group that as per the terms
of the Collaboration Agreements, upon completion of the project and
the issuance of the necessary Occupation Certificates from the
Statutory Body, 10% share in the built-up area (FSI) on the project
land was to be handed over back to the original landowners (i.e., the
Petitioner Group and the respondent No.2), by the respondent No.1.
9. It is stated that irrevocable power of attorneys were also
executed (and duly registered) by the Petitioner Group and the
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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respondent No.2, on November 05, 2009, in favour of the respondent
No. 1, in order to enable it to commence and conclude the proposed
project. Moreover, the right of liaising with government departments,
licenses, approvals, etc. and the right of appearing before DTCP,
Haryana, was also given to the respondent No. 1, in pursuance to the
Collaboration Agreements and the Deed of Assignment.
10. It is the case of the Petitioner Group that as per the Deed of
Assignment, the consideration of ₹6,47,89,944/- was to be paid by the
respondent No. 1 to the respondent No.3, within 90 days of the
registration of the Deed of Assignment and on the grant and transfer of
statutory licenses by DTCP, Haryana. However, the same still remains
unpaid as on date.
11. It is stated that the requisite licenses qua the project land were
obtained from the DTCP, Haryana only on December 03, 2009
(License No. 78 of 2009) and on April 21, 2010 (License No. 33 of
2010) due to administrative delays. That, thereafter, the respondent
No.1, initiated steps for transfer of the licenses in their name from the
respondent No. 3 and accordingly, the same was effected by May 23,
2013.
12. It is stated, thereafter respondent No.3 approached the
respondent No.1 for their payment of Rs. 6,47,89,944/- for the
assignment of Development Rights, along with the requisite
compensation for the delay. That initially, the respondent No. 1 sought
some time to make the payment, citing paucity of funds and thereafter,
it kept on delaying the payments on one pretext or the other.
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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13. It is the case of the Petitioner Group that on September 30,
2013, they came to know that the respondent No. 1 was misusing some
power of attorneys (whereby the right of appearing and liaising with
government departments, licenses, approvals, etc., was given to the
respondent No.1) and had already executed illegal and fraudulent sale
deeds, whereby the respondent No. 1 through one Kapil Minocha had
transferred the project land in its own name. It is their case that the said
power of attorney was not even in favour of Kapil Minocha, let alone
for the purpose of transferring the whole rights, title and interest in the
said lands.
14. It is also the case of the Petitioner Group that the respondent
No.1, has cheated them of their land as well as the developed share, as
the respondent No.1, has already started selling the flats over which the
Petitioner Group as well as respondent No.2, have their share of 10%.
15. That thereafter, the Petitioner Group along with respondent
Nos.2 and 3, filed a petition under section 11 of the Act of 1996,
bearing, Arb. P. 528 of 2013, before this Court and the same got
disposed of on February 25, 2014, with constitution of the Arbitral
Tribunal, which ultimately, upon constitution, dismissed the Statement
of Claim filed by the Petitioner Group and respondent Nos.2 and 3,
vide Award dated August 11, 2019, on the grounds of limitation and
the liability having already been discharged by the respondent No.1,
herein.
16. It is stated that the afore-said Award is presently lying under
challenge before this Court under section 34 of the Act of 1996, having
been registered as O.M.P. (Comm.) 522 of 2019. Furthermore, another
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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petition under section 34 of the Act of 1996, against the same award
has also been filed by the respondent No. 2 (under Liquidation)
through its Liquidator and the same is registered as OMP (Comm.) 529
of 2019.
17. It is also primarily the case of the Petitioner Group that the
afore-said Arbitral proceedings were only on the aspects of: 1) non-
payment of consideration amount of ₹6,47,89,944/- towards the Deed
of Assignment on the part of respondent No.1, 2) cancellation of the
fraudulently executed sale deeds and 3) for handing over of original
title documents qua the project land back to the Petitioner Group.
18. It is also their case that the Petitioner Group had also
conducted some inquiries and whilst doing that they came to know,
that the respondent No. 1 has already alienated most of the built-up
units over the lands owned by the Petitioner Group to some unknown
home-buyers and has, in all likelihood, exceeded the 90% of the built-
up area allotted to it, in order to frustrate the claims of the Petitioner
Group and the respondent No. 2.
19. It is also stated that the respondent No.1 has also failed to call
upon the Petitioner Group to inspect and choose the units over which
they were entitled to have 10% share in the built-up Area.
20. It is further their case that the respondent No.1 has breached
the terms of the Deed of Assignment, by not fulfilling its obligations
under the same, specifically, qua not handing over 10% of built-up area
to the Petitioner Group, which obligation, the respondent No.1 had
assumed while purchasing the Development Rights from the Original
Developer or the respondent No.3.
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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21. That in the light of the afore-said circumstances, the Petitioner
Group was constrained to send a Notice under section 21 of the Act of
1996, dated December 21, 2019, to the respondent No.1, demanding
that the Authorized Representative of the Petitioner Group be allowed
to inspect the built-up units in respect of which the Occupation
Certificates have been granted and work out the modalities under
which the share of 10% could be allocated to the Petitioner Group and
also to hand over the said units along-with the necessary
documentations required for transfer thereof. Moreover, it was also
demanded by the Petitioner Group that a written declaration to the
effect that the Petitioner Group be declared as the rightful owners of
the 10% share in the units should also be given in any future
agreements, wherein the rights, title and interest falling to the share of
the Petitioner Group were already being alienated to some unknown
homebuyers. The Petitioner Group, by sending the afore-said Notice to
the respondent No.1, had invoked Clause 21 of the Deed of
Assignment, which stipulates the Arbitration Clause and the same is
reproduced as follows:
"21. Arbitration: Any claim, controversy or dispute arising out
of under this Deed not settled by mutual Deed of the parties
involved within 30 days after a party is provided written notice
for settlement thereof, shall be referred to Arbitration to a sole
arbitrator jointly appointed by the parties under the Indian
Arbitration and Conciliation Act of 1996. In the event the
parties are unable to agree upon a sole Arbitrator, the claim,
controversy or dispute shall be referred to a panel of three
arbitrators, one of whom shall be appointed by the Original
Developers, one by the Assignee Developer and third to be
appointed by the aforesaid two arbitrators. The arbitration
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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proceeding shall be conducted in New Delhi, India and shall
be governed by and construed in accordance with the laws of
India. The Language of the Arbitration shall be in English. The
costs and expenses of the arbitrator(s) and holding the
arbitration shall initially be borne in equally by the Assignee
Developers and Original Developer. Initially each party will
bear its own legal, travelling and other similar costs. However,
the arbitrator(s) may in his/ their award, require any party to
such costs as the arbitrator(s) think fit, including the costs and
expenses of the arbitration, travel, costs and advocate fees. The
parties shall be entitled to specific performance all the terms of
this Deed."


22. It is further stated that for the purpose of calculation of the

share of the Petitioner Group (i.e. 10% of the built-up area), the total
saleable built-up area, as per the record available with the concerned
local authority, is to the extent of 1,79,597.91 Sq Mts. or
19,29,946.6411 Sq. Ft. That out of the said total built-up area, the
Petitioner Group, on the basis of their proportions as to land holding
are entitled to a built-up area of 6,01,549.522-Sq. Ft., 3,99,053.582 Sq.
Ft. and 71,259.568 Sq. Ft. respectively, which is further trifurcated as
follows:
Under OC dated
30.11.2017 (Sq.
Feet)
Under OC dated
25.06.2018 (Sq.
Feet)
Balance Area for
OC Not received
(Sq. Feet)
Petitioner‟s
Cumulative
Share (Sq. Feet)
(10%)
588616.218 34255.74 140690.72 107186.27
The above does not include the share of respondent No.2.
23. That as per the Petitioner Group, the market rate of the units
(in respect of which the Occupation Certificates have been received),
as advertised on the website of the respondent No. 1 themselves, is
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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about ₹ 4774/- per Sq. Feet and computing the current market value of
the share of the Petitioner Group, it comes out to be of ₹ 52 Crores.
24. So, in light of forgoing facts and circumstances, the Petitioner
Group has filed the present petition seeking appointment of a Sole
Arbitrator for adjudication of disputes which have arisen between the
Petitioner Group and the respondent No.1.
RESPONDENT NO.1’S CASE
25. Whereas, on the other hand it is primarily the case of the
respondent No.1 that the dispute(s) sought to be referred to arbitration
by way of this instant petition, stand already adjudicated in the earlier
arbitration proceedings which took place between the same parties.
26. It is stated that even the claim of the Petitioner Group,
specifically qua their 10% share in the built-up area constructed over
the lands and/or share in the land underneath, has already been raised
before the learned Sole Arbitrator and thus all the disputes between the
parties stand adjudicated vide detailed Award dated August 11, 2019.
So, it is the case of the respondent No.1 and as contended by Mr.
Divjyot Singh, learned counsel appearing on behalf of the respondent
No.1 that because of the afore-said reason, the Petitioner Group cannot
be allowed to again raise the same dispute in respect to the same
subject matter. Thus, it is the case that the present petition is nothing
but an abuse of the process of law and thus liable to be dismissed.
27. It is also the case of Mr. Singh, that the Arbitration Clause
sought to be invoked by the Petitioner Group does not survive or exist,
anymore. It is his submission that the earlier arbitration proceedings
initiated before learned Sole Arbitrator, Mr. Justice (Retd.) G.S.
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
16:30:52
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Singhvi, were commenced by the Petitioner Group & respondent Nos.2
and 3 by invoking the same Arbitration Clause stipulated in the Deed
of Assignment and in the present petition also, the Petitioner Group is
again invoking the same Arbitration Clause of the same Deed of
Assignment with respect to the same disputes. So, he submitted that
since the Petitioner Group have already availed their remedies for
adjudication of disputes by way of arbitration, therefore there is no
question of any dispute being again referred to arbitration.

28. He contended that the disputes sought to be referred by the
Petitioner Group by way of instant petition, do not pertain to the
Arbitration Clause stipulated in the Deed of Assignment executed
between the Petitioner Group and the respondent No.1. It is his
contention that only the Petitioner Group, respondent No.2 and the
Original Developer (respondent No. 3 herein) were parties to the
Collaboration Agreements. The respondent No.1 was not a party to the
Collaboration Agreements. He also contended that the respondent No.1
did not step into the shoes of the Original Developer. In fact, all rights,
title, interest in the whole of the project land (including the built-up
area to be constructed) were transferred by the Petitioner Group,
respondent No.2 and the Original Developer to the respondent No.1
through the Deed of Assignment and Sale Deeds for valuable
consideration. He substantiated his argument in the following manner:
(A)that under the Deed of Assignment there was no obligation on
the respondent No.l to transfer 10% of built-up area of the
Disputed Property to the Petitioner Group;
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
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(B) that perusal of Clause 1, 10(d) and Clause 16 of the Deed of
Assignment reveals that the entire construction on the
Disputed Property belongs entirely and exclusively to
respondent No. 1. Moreover, the Deed of Assignment
nowhere provides that 10% or any portion of the built-up
area/Disputed Property will be transferred back to the
Petitioner Group;
(C) that the Arbitration Clause under the Deed of Assignment
provides that any claim/dispute arising out of or under this
Deed shall be referred to arbitration. Therefore, only the
disputes arising out of or relating to the Deed of Assignment
can be referred to arbitration and from the foregoing, it is
evident that the disputes sought to be referred to arbitration do
not relate to the arbitration agreement which was executed
between the parties and therefore, the disputes should not to
be referred to arbitration;
(D) that the Court whilst exercising its jurisdiction under section
11 of the Act of 1996 ought to embark upon an enquiry as to
whether the dispute sought to be referred to arbitration
pertains to the arbitration agreement invoked or not. Reliance
has been placed upon the judgments of the Supreme Court in
Duro Felguera S.A. v. Gangavaram Port Limited (2017) 9
SCC 729 and M/s Emaar India Ltd. v. Tarun Aggarwal
Projects LLP & Anr., Civil Appeal No. 6774 of 2022 ,
decided on 30.09.2022, to contend the same.
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
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29. Apart from the afore-mentioned argument, another limb of his
argument is that the claims sought to be referred to arbitration are
anyway barred by the contours of limitation and hence deadwood.
Following submissions have been made to substantiate the same:
(A) that the Petitioner Group has claimed that the cause of
action for filing the present petition arose in 2017,when the
Occupation Certificate was issued by the competent authority.
However, the said contention is without any merit. The issuance
of an Occupation Certificate in no manner gives rise to a cause of
action for a claim qua the built-up area;
(B) that the cause of action for claiming 10% of share in the
built-up area could be said to have arisen on the following dates
and events and taking any of the dates as cause of action, the
Notice invoking arbitration issued in December 2019 would
evidently be hit by the law of limitation:-
(ba) Cause of Action will start from the date, the
respondent No.l had started selling the units belonging to
the built-up area- As per the License No. 78 of 2009, which
was issued on December 03, 2009 by the DTCP, Haryana in
the name of the Petitioner Group under the Haryana
Development and Regulation of Urban Areas Act, 1975
(„HDRUA Act') and Rules made there-under for
development of a Group Housing Colony, the respondent
No.1 had started selling the units of the built-up area from
the year 2013 onwards. Therefore, the cause of action for
claiming 10% of the built-up area arose only in the year
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
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2013 and accordingly expired in 2016. Thus, the Arbitration
Clause invoked in December 2019 is barred by limitation;
(bb) Cause of Action will start from the date when the
Petitioner Group got the knowledge that more than 95%
of the built-up area had been sold- that it has been an
established fact that in the order dated March 09, 2016,
passed by the Civil Judge (Sr. Division), Faridabad in CS
No. 561 of 2016, it was recorded that more than 95% of the
units of the group housing complex have already been sold
by the respondent No. 1; Therefore, at least from March 09,
2016, the Petitioner Group knew that their alleged share was
being sold. Accordingly, limitation for protecting the 10%
share started at least in March 2016 and thereby expired in
March 2019. Again, the invocation of arbitration was in
December, 2019, therefore the same is barred by limitation;
(bc) Cause of action will start from the date of knowledge
of the registered Sale Deeds qua the Project Land- that
the sale deeds dated January 11, 2010 qua the whole of the
project land were executed in favour of the respondent No.l
by the Petitioner Group. The Petitioner Group claims that
they obtained the knowledge about the registered sale deeds
on September 30, 2013. It is his submission that even if it is
assumed that the Petitioner Group had obtained the
knowledge of the registered sale deeds on September 30,
2013, the limitation for invoking arbitration seeking 10% of
the built-area arose on September 30, 2013 i.e., when the
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
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Petitioner Group obtained the knowledge that the entire
project land was transferred to the respondent No.l.
Therefore, the limitation expired in September 2016 and
accordingly, the invocation of the arbitration agreement in
December, 2019 is barred by limitation; also, during the
course of the arguments, the counsel for the Petitioner Group
had also contended that the built-area was sold to the
respondent No.1 without the land underneath and therefore
the execution of the sale deeds is irrelevant. The said
contention of the Petitioner Group is belied from the
definitions provided under the Haryana Apartment
Ownership Act, 1983('Apartment Act') which is applicable
to the Group Housing Complex in question. A combined
reading of section 2(b) and 2(c) of the Apartment Act, shows
that an apartment owner is the owner of not only the
apartment but also of the undivided interest in the land on
which the building is located.
(C) Reliance has been placed upon the following judgments
to demonstrate that the facts of the present case would reveal that
the claims sought to be referred for arbitration by the Petitioner
Group are ex-facie barred by limitation:
(ca) Bharat Sanchar Nigam Ltd. and Ors. v. Nortel
Networks India Pvt. Ltd. (2021) 5 SCC 738;
(cb) Siemens Healthcare Pvt. Ltd. v. Director General
Armed Forces Medical Services, Arb. P. 84 of 2022 ,
decided on 05.07.2022 ;
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
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(cc) V.K. Dewan and Co. v. Delhi Jal Board and Ors., Arb.
P. 866 of 2019 decided on 06.10.2022.
30. It is also one of the submissions of Mr. Singh that the
contention of the Petitioner Group that the claim of 10% in the built-up
area was not raised and/or decided in the proceedings previously
adjudicated between the parties, is absolutely wrong and misleading.
He submitted that the Petitioner Group, in the civil and arbitration
proceedings, whilst claiming ownership of the entire project land, had
already claimed that they be declared as the owners of at least 10% of
the built-up area on the project land. Mr. Singh has substantiated this
argument in the following succeeding paragraphs.
31. That in this instant petition, the Petitioner Group has not
disclosed about the four civil suits bearing Suit No. 2549,2583,2584
and 561 of 2016 filed by them, before the Civil Judge (Sr. Division),
Faridabad seeking identical relief i.e., a decree of declaration to the
effect that they be declared as the absolute owners of the properties
owned by them as the Land Owners. The said civil suits were
dismissed by the Civil Judge (Sr. Division), Faridabad vide detailed
order dated February 21, 2019. It is his case that this is a material fact
which has been deliberately concealed by the Petitioner Group in the
present petition. Therefore, on this ground alone, the present petition
deserves to be dismissed.
32. That under the Deed of Assignment, the Petitioner Group had
assigned all of their rights, title and interest qua the project land in
favour of the respondent No.1. According to him, the transferred rights
also included the right to further sell the units after the construction. It
Signature Not Verified
Digitally Signed
By:JYOTIRMOY GHOSH
DASTIDAR
Signing Date:27.04.2023
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is his case that pursuant to the execution of the Deed of Assignment,
sale deeds with respect to the project land have also been executed in
favour of the respondent No.1 by the Petitioner Group. So, as per him,
the respondent No.1 has become the absolute owner of the project land
and therefore, after the sale of lands, the Collaboration Agreements on
the basis of which the Petitioner Group based its claim, do not exist
anymore.
33. That on October 28, 2013 the Petitioner Group had filed the
petition under section 9 of the Act of 1996 bearing OMP No. 1057 of
2013 before this Court seeking direction that the respondent No.1 be
restrained from alienating or creating any third-party rights in the land
located in Sector 70, Faridabad (part of the project land). However, the
said petition was withdrawn by the Petitioner Group with the liberty to
move an application seeking interim relief before the Arbitral Tribunal
as and when the same is constituted.
34. That subsequent thereto, on filing of the Arbitration Petition,
this Court had appointed the Sole Arbitrator to adjudicate upon the
disputes which had arisen between the parties herein. Thereafter, the
Petitioner Group on April 28, 2014 also filed an Application under
section 17 of the Act of 1996 seeking same reliefs as claimed under the
withdrawn section 9 petition. The said Application under section 17 of
the Act of 1996 was also dismissed by the learned Sole Arbitrator vide
detailed order dated July 02, 2014.
35. That during the pendency of the Arbitration proceeding, the
Petitioner Group had filed four civil suits and along with those suits,
the Petitioner Group had also filed an application under Order 39 Rule
Signature Not Verified
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DASTIDAR
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1 & 2 of the Code of Civil Procedure,1908 ('CPC') and that
Application was dismissed by the Court of Civil Judge (Sr. Division),
Faridabad vide its order dated August 02, 2017 after specifically
holding that the "Plaintiff (petitioner No.1, herein) and its associates
company had already assigned all rights in suit property in favour of
the Defendant No. 1(respondent No.1, herein)".
36. That the Petitioner Group after having failed to procure an
injunction order, from the Civil Judge (Sr. Division), Faridabad, filed
an another Application under section 17 of the Act of 1996, before the
learned Sole Arbitrator and in the said Application, the Petitioner
Group had specifically made a submission qua their alleged entitlement
to 10% of the developed area on the project land and concomitantly
prayed that the respondent No.1 be restrained from alienating 10% of
the developed property and that Application was also dismissed by the
learned Sole Arbitrator vide its order dated September 21, 2017.
Immediately thereafter, a third Application under section 17 of the Act
of 1996 was also moved and the same was also dismissed by the
learned Arbitrator.
37. That the Petitioner Group thereafter filed a Review Application
under section 33 of the Act of 1996, seeking review of order dated
December 23, 2017 passed by the Sole Arbitrator (in the third
Application under section 17 of the Act of 1996). The said review
Application of the Petitioner Group was also dismissed by the Sole
Arbitrator vide order dated December 31, 2017.
38. That the Petitioner Group had even preferred an appeal against
the order dated August 02, 2017, whereby the Civil Judge (Sr.
Signature Not Verified
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DASTIDAR
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Division), Faridabad had dismissed the Application under Order 39
Rule1 & 2 of the CPC and the said appeal was also dismissed by the
Additional District Judge, Faridabad vide order dated January 18,
2018. He further submitted that the Petitioner Group did not stop there
and after that filed a Revision Petition bearing No. 1115 of 2018 before
the High Court of Punjab and Haryana and the said Revision Petition
was also dismissed by the High Court of Punjab and Haryana vide
order dated February 19, 2018.

39. That the four civil suits filed by the Petitioner Group before the
Civil Judge (Sr. Division), Faridabad were also dismissed by the Trial
Court vide its common order dated February 21, 2019 and the
Petitioner Group aggrieved by the Judgment passed by the Civil Judge
(Sr. Division), Faridabad, filed four separate appeals against the
common judgment and the appeals preferred by the Petitioner Group
and respondent No.2 herein against the dismissal of the Suits, have
been dismissed by the Additional District Judge, Faridabad.
40. So, in an essence, it is the case of Mr. Singh that the findings
of the Judgment of the Supreme Court in the case of Bharat Sanchar
Nigam Ltd. and Ors. (supra) squarely falls upon the facts of this case
as the claims sought to be referred: (i) are not relatable to the
Arbitration Clause invoked; (ii) are beyond the period of limitation and
(iii) have previously been adjudicated between the same parties in
different proceedings. Therefore, he prays before this Court that the
present petition be dismissed along with heavy cost.
SUBMISSIONS ON BEHALF OF THE PETITIONER GROUP
AND RESPONDENT NO.2
Signature Not Verified
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DASTIDAR
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41. Whereas it has been extensively submitted by Mr. Rajiv Bajaj,
learned counsel appearing on behalf of the Petitioner Group and Mr.
Harish Malhotra, learned senior counsel appearing for the respondent
No.2, that the obligation of giving 10% built-up area back to the
Petitioner Group became legally ascertainable only on the issuance of
the Occupation Certificates (i.e., on November 30, 2017, June 25, 2018
and August 17, 2020) by the DTCP, Haryana and as on date
Occupation Certificates in respect of Towers no. l and no. 2, are yet to
be received by respondent no. l. Reliance in this regard has been placed
on section 264 of the Haryana Municipality Act, 1994.
42. They submitted that the claim of 10% built-up area has never
been sought before any Court or Tribunal as the same became legally
ascertainable only when the Flats built on the project land received
necessary approvals in the form of Occupation Certificates. They
substantiated their contention by submitting that only the following
claims were raised in the previous arbitration proceedings and the Civil
Suits filed before the Civil Judge (Sr. Division), Faridabad, Haryana:
A) The claim of non-payment of ₹6,47,89,944/- to the respondent
No.3 herein (Original Developer) was raised in the Arbitral
Proceedings before Justice G.S. Singhvi (Retd.);
B) Declarations as to the fraudulent sale deeds and consequential
injunctions were sought before the Civil Judge (Sr. Division),
Faridabad, Haryana.
43. It is their submission that the reliefs sought in the civil suits
were only restricted to the aspects of: Declaration of ownership,
injunctions against interference with possession and restraint on
Signature Not Verified
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DASTIDAR
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alienation/further creation of charges and mandatory injunction qua
handing over of the title documents of the project land.
44. It is also their submission that the present dispute arises out of
the respondent No.1 undertaking the obligations of the respondent
No.3 (Original Developer) under the Collaboration Agreements by way
of Deed of Assignment.
45. They submitted that the respondent No.1 merely stepped into
the shoes of the respondent No.3 and was thus, in an essence, required
to discharge the following obligations towards the Petitioner Group
and the respondent No.2 pursuant to the Collaboration Agreements,
Deed of Assignment and General Power of Attorneys:
(A) pay a sum of ₹6,47,89,944/- to respondent No.3 for the
assignment of Development Rights on the project land and the
retention of 90% built-up area in the project;
(B) handover 10% of the built-up area to the Petitioner Group.
46. Therefore, they submitted that the arbitration sought to be
invoked in respect of non-delivery of 10% built-up area in the project
land is urgent due to the fact that most of the units have already been
sold and the possessions have also been delivered and the same shall
surely become infructuous, in case the relief being sought is not
granted.
47. It is also their submission that the present petition is not barred
by the contours of res judicata (constructive as well) or Order II Rule 2
of the CPC.
48. They submitted that the claims sought by the Petitioner Group
are well within the period of limitation as the project is yet to be
Signature Not Verified
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DASTIDAR
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completed, and even otherwise, before the grant of Occupation
Certificate, the units could not have been identified and allocated to the
Petitioner Group. So, they contended that the present petition is well
within the period of limitation and thus, the same should be allowed
and disputes be referred to arbitration.
O.M.P.(I) (COMM.) 29/2020
49. That the present petition has been filed by the Petitioner Group
under section 9 of the Act of 1996 seeking multiple interim measures
against the respondent No.1.

50. Specifically, the following interim reliefs have been sought by
them from this Court:
“PRAYER
It is, therefore, most respectfully prayed that this Hon'ble
Court may be pleased to:
(a) Restrain the Respondent No.1 from alienating any more
units or entering into any Apartment Buyer Agreements or any
other sort of agreement in respect of the Built-up area in the
projects titled as "Royal Heritage" and "Faridabad Eye" at
Sector 70,Faridabad;
(b) Appoint a Receiver and an Expert Valuer to inspect the
projects titled as "Royal Heritage" and "Faridabad Eye" at
Sector 70, Faridabad and value the share of the Petitioners
and furnish the same before this Hon'ble Court in as much as
the moulding of relief(s) is to be carried out and further to take
into possession the share of the Petitioners in the said project;
Or in the alternative,
(c) Direct the Respondent No.1 to deposit an amount of Rs.
52Crores by way of FDR with this Hon'ble Court so as to
secure the rights of the Petitioners as and when they succeed in
the Arbitration Proceedings;
(d) Direct the Respondent No.1 to issue a written
Signature Not Verified
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By:JYOTIRMOY GHOSH
DASTIDAR
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declaration as to the pendency of the dispute over the share of
the Petitioners and incorporate the same into the any
agreement/transfer documents/sale documents which may be
entered into with the potential homebuyers and that a
communication be issued to the homebuyers currently in
possession of the units;
(e) Pass any other or further orders as may deem fit and
proper in the facts and circumstances of the case and in the
interest of justice”.

51. It is pertinent to mention here that the facts revolving around
both section 11 petition bearing Arb. P. No.1230/2021 and the instant
section 9 petition are same. Therefore, the same are not repeated herein
and only grounds and submissions qua maintainability of the instant
petition, raised and made, by the respective counsel have been stated
hereinafter.
PETITIONER GROUP’S SUBMISSIONS ON SECTION 9
PETITION

52. So, it is the case of the Petitioner Group and so contended by
Mr. Rajiv Bajaj, learned ounsel appearing on behalf of the Petitioner
Group that if the afore-said reliefs, as sought, are not granted then they
shall be left with no remedy, as the respondent No.1 shall, alienate the
10% built-up area falling under the share of the Petitioner Group by
virtue of the Collaboration Agreements, Deed of Assignment and all
other documentations, to unaware homebuyers.

53. That the Petitioner Group, till date, has not been approached by
the respondent No. 1 for allocation of their 10% share in the built-up
area and on top of the fact that the Authorized Representative of
respondent No. 1 has admitted during his Cross-examination in Arb.
Signature Not Verified
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DASTIDAR
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No. 264 of 2013, that units exceeding 90%, have already been allotted
and Apartment Buyers Agreements in respect of the same have already
been executed by respondent No. 1 in favour of some unknown home-
buyers.
54. That the counsel of the respondent No.1 had himself submitted
before the Court of Civil Judge (Sr. Division), Faridabad, Haryana that
units exceeding 90% have been sold and the same fact has been
recorded vide Order dated March 09, 2016 in CS No. 561 of 2016 (the
suit instituted on behalf of respondent No.2 herein).
55. It is also his submission that this Court is to only see the
existence of a prima facie case in favor of the Petitioner Group and the
test for ascertaining whether irreparable damage shall be caused or not
has also to be taken into account.
56. It is also his case that as per the law laid down by the Supreme
Court, the Courts whilst adjudicating petitions under section 9 of the
Act of 1996, have to be more liberal than whilst deciding Applications
usually filed under Order XXXIX Rules 1 and 2 of the CPC.
57. It is further his case that the cause of action for filing the
instant petition arose only on November 30, 2017, when the first
Occupation Certificate was received by the respondent No.1 in relation
to Tower No.5, 6, 7, 8, 9, 10, 11 and 12 for allotment of 10% of the
built-up area to the Petitioner Group. The cause of action further arose
on June 25, 2018 when the second Occupation Certificate was received
by the respondent No.1 in relation to Tower No. 13, 14, 15 and 16 and
it again further arose on December 21, 2019, when the Notice under
section 21 of the Act of 1996 was sent to the respondent No.1, urging
Signature Not Verified
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DASTIDAR
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that the Authorised Representative of the Petitioner Group be allowed
to inspect the built-up units in respect of which the Occupation
Certificates have been granted and to work out the modalities under
which the share of 10% could be allocated to the Petitioner Group.
58. So, in light of above-mentioned grounds, the Petitioner Group,
has filed the instant petition, seeking multiple interim reliefs against
the respondent No.1
RESPONDENT NO.1’S SUBMISSIONS

59. On the other hand, in an essence, it is Mr. Singh‟s primary
submission that claims sought to be referred to arbitration by the
Petitioner Group: (i) are not arbitrable; (ii) are barred by limitation;
and (iii) have already been adjudicated between the parties in previous
civil and arbitral proceedings. So, he submitted that when the petition
under section 11 of the Act of 1996 is itself not maintainable then on
this ground alone, the instant petition should also be dismissed.
60. That Mr. Singh has specifically made the following
submissions to substantiate that the Petitioner Group cannot be granted
any of the reliefs sought by virtue of the instant petition:
(A) that all the units in the built-area on the Project Property stand
already sold to third parties as on date. Therefore, no question
arises for restraining respondent No.1 from alienating any more
units and/or directing it to incorporate the pendency of the present
dispute in the agreements to be executed with third parties;
(B) on the contention of Mr. Bajaj that 10% of the built-up area
became legally determinable on issuance of the Occupation
Certificate in November 2017, it is his submission that even if it is
Signature Not Verified
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DASTIDAR
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assumed that the cause of action for filing the present section 9
petition arose in November 2017, still the petition was filed by
them only in January 2020 i.e. more than 3 years after the cause of
action arose, as per their own case;
(C) that even after filing the captioned petition belatedly, no
urgency was shown by the Petitioner Group for claiming the reliefs
sought in the instant petition. It is his case that till date, no Notice
qua instant petition has been issued to the respondent No.1. Even,
he emphazised upon the following orders passed by this Court in
the instant petition to demonstrate the lackadaisical approach on
part of the Petitioner Group:
“
Date
Of Order
Order passed
04.02.2020 First Date of hearing of the captioned Petition.
Although the Respondent No.1 appears on advance
notice. Notice on the Petition is not issued by the
Hon’ble Court.
11.12.2020 The following order was passed by this Hon’ble
Court:
“None appears for the petitioner. In the interest of
justice, adverse orders are deferred.
List on 05.05.2021.”
06.09.2021 The following order was passed by this Hon’ble
Court:
“1. There is no appearance on behalf of the
Petitioner. The Court Master has been informed that
Mr. Rajiv Bajaj, counsel for the Petitioner had a
doctor’s appointment and he will joining after some
time. However, despite call, no one has appeared.
2. Re-notify on 16th November, 2021.”
21.04.2022 The following order was passed by this Hon’ble
Court:
Signature Not Verified
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DASTIDAR
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“1. Request for adjournment is made on behalf of
learned counsel for the petitioner on the ground of
medical emergency.
2. At request, renotify on 14.07.2022.”
14.07.2022 None appeared for the Petitioners. The matter was
renotified to 28.07.2022
28.10.2022 The following order was passed by this Hon’ble
Court:
“1. A request for adjournment is made on behalf of
Mr. Rajiv Bajaj on the ground that he is in personal
difficulty.
2. At his request, renotify on 2nd November, 2022.”
”
(D) that even as on date, the Petitioner Group has not pressed for
the reliefs sought in the instant petition on the ground of urgency.
Therefore, even after lapse of five years since the cause of action
had arisen, no urgency is shown or pleaded by them;
(E) that the Petitioner Group had the knowledge, at least on March
09, 2016, that the respondent No.1 has sold more than 90% of the
built-up area of the Project Land. Despite that, they have filed the
instant Petition almost four years later (in January 2020) seeking
restraint against respondent No.1 from alienating the units;
(F) that it is a settled law that a party who by its inaction/delay in
filing necessary proceedings, allows third party rights to accrue, is
not entitled to the equitable relief of injunction. Reliance has been
placed upon the following judgments to contend the same:
(fa) Ambalal Sarabhai Enterprise Limited and Ors. v. KS
Infraspace LLP Limited and Ors. (2020) 5 SCC 410;
(fb) Mandali Ranganna and Ors. v. T. Ramachandra and
Ors. (2008) 11 SCC 1.
Signature Not Verified
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By:JYOTIRMOY GHOSH
DASTIDAR
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(G) that it is a settled law that a party seeking relief in a petition
filed under section 9 of the Act of 1996, is additionally required to
satisfy the Court that the relief(s) being sought cannot await the
constitution of an Arbitral Tribunal. Emergent necessity of grant of
interim measures is therefore a sine qua non for grant of interim
measures of protection, as the power of an Arbitral Tribunal to
grant interim reliefs under section 17 of the Act of 1996, is akin to
granting of interim reliefs under section 9 of the Act of 1996. It is
his case that in the present case, the conduct of the Petitioner Group
disentitles them from grant of any interim measures at this stage.
Reliance has been placed upon the following judgments in this
regard:
(ga) Avantha Holdings Limited v. Vistra ITCL India
Limited OMP (I) (Comm.) 177/2020, decided on 14.08.2020;
(gb) Kuber Enterprises v. Doosan Power Systems India Pvt.
Ltd. and Ors., OMP(I)(COMM)364/2021& OMP(I)(COMM)
365/2021, decided on 12.11.2021.
(H) that no grounds for passing of an order of attachment before
judgment have either been pleaded or made out by the Petitioner
Group. Reliance in this regard is again placed on the judgment in
the case of Kuber Enterprises (supra).
61. So, on the afore-said grounds, Mr. Singh has argued for the
dismissal of the instant petition.
ANALYSIS
62. Having heard the learned counsel for the parties and perused
the record, at the outset, it may be stated, this petition has been filed by
Signature Not Verified
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DASTIDAR
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the Petitioner Group. A prayer has also been made on behalf of the
respondent No.2 for allowing it to participate in the arbitral
proceedings as claimant for its own individual share in the built-up
area, to avoid multiplicity of litigation. The Notice invoking the
Arbitration Clause was sent by the respondent No.2 only on October
19, 2022 i.e., during the pendency of these proceedings. It is not
known whether any reply has been sent by the respondent No.1 to the
said Notice. In any case, in the absence of substantive petition by the
respondent No.2, the afore-said prayer in these proceedings cannot be
accepted. Nonetheless, nothing precludes the respondent No.2 to seek
reference in accordance with law.
63. The reliance placed by Mr. Malhotra on the judgment of the
Co-ordinate Bench of this Court in the case of Raghuvir Buildcon Pvt.
Ltd. v. Ircon International Limited, (2021) SCC OnLine Del 2491 , in
support of his contention that the claim of 10% share in the developed
area by the Land Owners has not been settled by former the arbitration
proceedings and hence, present arbitral reference deserves to be
admitted, would not be applicable in the facts of this case, in view of
my above conclusion.
64. Having said that, I first intend to consider the petition filed by
the Petitioner Group seeking appointment of the Arbitrator. In this
petition, the Petitioner Group has culled out the purpose of seeking the
appointment of Arbitrator, i.e., for adjudication of dispute between the
Petitioner Group and the respondent No.1, which arises out of the
Deed of Assignment, the subject matter of which is the non-delivery of
10% built-up area by the respondent No.1 to the Petitioner Group in
Signature Not Verified
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DASTIDAR
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the project titled as “Royal Heritage” under the License No.78 of 2009
and 33 of 2010 granted by DTCP, Haryana.
65. The petition has been contested by Mr. Singh, learned counsel
appearing for the respondent No.1 by stating that under the Deed of
Assignment (which contains the Arbitration Clause): (i) there was no
obligation on the part of the respondent No.1 to transfer 10% of built-
up area of the project land to the Petitioner Group. (ii) The perusal of
clauses 1, 10 (d) and 16 of Deed of Assignment reveals that the entire
construction on the project land belongs entirely and exclusively to the
respondent No.1. (iii) Only dispute arising out of or relating to the
Deed of Assignment can be referred to the arbitration, so, it follows
the dispute for which the reference is sought does not relate to the
arbitration agreement which was executed between the parties and
therefore, the dispute should not be referred to arbitration; (iv) the
Court while exercising jurisdiction under section 11 of the Act of 1996
has to embark upon an inquiry as to whether the dispute for which
reference is sought pertains to the arbitration agreement invoked or
not; (v) in any case, the claims for which reference is being sought
shall be barred by limitation, being, deadwood, inasmuch as (a) the
cause of action had arisen on the date, the respondent No.1 had started
selling the units belonging to the built-up area in the year 2013
onwards; (b) cause of action would also start from the date when the
Petitioner Group got the knowledge that more than 95% of the built-up
area had been sold in the year 2016 in terms of order dated March 09,
2016 passed by Civil Judge (Sr. Division), Faridabad; (c) even
otherwise, the cause of action would start from the date of knowledge
Signature Not Verified
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DASTIDAR
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of the registered sale deed qua the project land in favour of the
respondent No.1 and (vi) the issue of 10% has already been
adjudicated in the earlier rounds of litigation before the Civil Judge
(Sr. Division), Faridabad; the learned Arbitrator and the Additional
District Judge, Faridabad.
66. Having noted the broad submissions made by Mr. Singh,
before embarking upon to consider the rival submissions, it is
necessary to reproduce some of the relevant Clauses of the
Collaboration Agreements and also the Deed of Assignment. The
Collaboration Agreements were executed between the Petitioner
Group, respondent No.2 and the respondent No.3 (herein). The Clause
16 (identical in all the Collaboration Agreements) thereof reads as
under:
“16. The Owner and the Developer have agreed to divide the
built-up area permitted over the said land (FSI) in the
following manner:
OWNER’S SHARE 10%
DEVELOPER SHARE 90%
It is further agreed that any increase in developed area shall
be to the benefit of the developer only and Owner shall not
make any claim towards the said increase in developed area
on any ground whatsoever.”


67. The Deed of Assignment was executed between the respondent
No.3, respondent No.1, petitioner No.1, petitioner No.2, petitioner
No.3, respondent No.2 and Shri Desh Raj and Shri Tej Pal. The
Clauses J, 1, 10 (d) and 16 of the Deed of Assignment read as under:-
“J. The Original Developer has agreed to assign the
entire Development Rights on the said Property and the
Owners have consented to such assignment to the
Signature Not Verified
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DASTIDAR
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Assignee Developer under this Deed at or for the
consideration and on the terms and conditions herein
below recorded.
*
1. Pursuant to this Deed, the Original Developer and
the Owners hereby grant, convey, transfer and assign to
the Assignee Developer, the Development Rights in
respect of the said Property together with all right, title
interest and obligations in respect of the said property
including the rights contained in Collaboration
Agreements and in this deed.
(emphasis supplied)
*
10. The Original Developer / Owners hereto covenant
that upon the execution of these presents the Assignee
Developer shall, subject to what has been recited and
stated hereinabove, be entitled to do the following acts,
deeds, and things in relation to the said property without
any obstruction or hindrance from the Original Developer
/ Owners.
*
d. The Assignee Developer shall be entitled to enter
into Deeds to Sell and otherwise transfer the
building / s and / or flat / s and also all rights and
benefits including by way of TDR in the form of
DRC accruing from the said property with the
intending purchasers in the proposed building
which may be constructed by the Assignee
Developer on the said Property and shall also be
entitled to do all such acts, deeds and things
required in that behalf and also the appropriate all
proceeds thereof.

68. Having reproduced the relevant Clauses, it is clear that in terms
of Clause 16 of the Collaboration Agreements, the Petitioner Group,
the respondent No.2 (on one side) and the developer / respondent No.3
(on the other side) had agreed to divide the built-up area of the project
Signature Not Verified
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DASTIDAR
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land in the ratio of 10% and 90%, respectively. Subsequently, vide the
Deed of Assignment, the rights in the Collaboration Agreements stood
assigned in favour of the respondent No.1. It is clear from Clause 1 of
the Deed of Assignment which I have reproduced above, that, the
Original Developer and the owners granted, conveyed, transferred and
assigned to the Assignee Developer, i.e., the respondent No.1, the
development rights in respect of the said property together with all
rights, title, interest and obligation in respect of property including the
rights contained in the Collaboration Agreements and the Deed of
Assignment.
69. If the above stipulation is read in perspective, all rights, title,
interest and obligations in respect of the property stood transferred in
favour of the respondent No.1, which, shall include the rights under
Clause 16 of the Collaboration Agreements.
70. So, it means, the dispute in respect of 10% built-up area relates
to the Deed of Assignment and as such need to be adjudicated in terms
of Arbitration Clause as find mentioned in the said Deed.
71. The reliance placed by Mr. Singh on paragraph 3 of the
judgment of the Supreme Court in the case of Duro Felguera S.A.
(supra), which is reproduced as under, squarely covers the issue in
favour of the Petitioner Group in view of my conclusion in paragraphs
68, 69 and 70, above:-
“3. Section 11(6A) added by the 2015 Amendment, reads as
follows:
11(6A) The Supreme Court or, as the case may be, the
High Court, while considering any application Under
Sub-section (4) or Sub-section (5) or Sub section (6),
Signature Not Verified
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DASTIDAR
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shall, notwithstanding any judgment, decree or order of
any Court, confine to the examination of the existence of
an arbitration agreement.
From a reading of Section 11(6A), the intention of the
legislature is crystal clear i.e. the Court should and need only
look into one aspect-the existence of an arbitration agreement.
What are the factors for deciding as to whether there is an
arbitration agreement is the next question. The resolution to
that is simple-it needs to be seen if the agreement contains a
Clause which provides for arbitration pertaining to the
disputes which have arisen between the parties to the
agreement.” (emphasis supplied)


72. Reliance placed by Mr. Singh upon the judgment of the
Supreme Court in the case of M/s Emaar India Ltd. (supra), wherein
the Supreme Court in paragraphs 6.3, 6.7, 6.8 and 7 has held as under,
shall also not help his case that the disputes are not governed by the
Arbitration Clause:-
“6.3 In the case of Rajasthan State Industrial Development
and Investment Corporation Vs. Diamond and Gem
Development Corporation Ltd.; (2013) 5 SCC 470 , it is
observed and held by this Court that a party cannot claim
anything more than what is covered by the terms of the
contract, for the reason that the contract is a transaction
between two parties and has been entered into with open eyes
and by understanding the nature of contract. It is further
observed that thus the contract being a creature of an
agreement between two or more parties has to be interpreted
giving literal meanings unless there is some ambiguity therein.
The contract is to be interpreted giving the actual meaning to
the words contained in the contract and it is not permissible
for the Court to make a new contract, however reasonable, if
the parties have not made it themselves. It is further observed
that the terms of the contract have to be construed strictly
without altering the nature of a contract as it may affect the
interest of either of the parties adversely (Para 23).
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(emphasis supplied)
xxxxxx xxxxxx xxxxxx
6.7 On the question, who decides on non-arbitrability of the
dispute, after referring to and considering the earlier decisions
on the point, more particularly, the decisions in the cases of
Garware Wall Ropes Ltd. Vs. Coastal Marine Constructions
& Engg.: (2019) 9 SCC 209: United India Insurance Co. Ltd.
Vs. Hyundai Engg. & Construction Co. Ltd.; (2018) 17 SCC
607, and Narbheram Power & Steel (P) Ltd. (supra), it is
observed and held that the question of non-arbitrability
relating to the inquiry, whether the dispute was governed by
the arbitration clause, can be examined by the Courts at the
reference stage itself and may not be left unanswered, to be
examined and decided by the Arbitral Tribunal. Thereafter, in
para 153, it is observed and held that the expression,
"existence of arbitration agreement" in Section 11 of the
Arbitration Act, would include aspect of validity of an
arbitration agreement, albeit the Court at the reference stage
would apply the prima facie test. It is further observed that in
cases of debatable and disputable facts and, good reasonably
arguable case etc., the Court would force the parties to abide
by the arbitration Agreement as the Arbitral Tribunal has the
primary jurisdiction and authority to decide the disputes
including the question of jurisdiction and non-arbitrability.
Ultimately in para 154, the proposition of law is crystallized as
under:

"154. Discussion under the heading 'Who decides
Arhitrability?' can be crystallized as under:
154.1. Ratio of the decision in Patel Engineering Ltd. on
the scope of judicial review by the court while deciding
an application under Sections 8 or 11 of the Arbitration
Act, post the amendments by Act 3 of 2016 (with
retrospective effect from 23-10-2015) and even post the
amendments vide Act 33 of 2019 (with effect from 9-8-
2019), is no longer applicable.
154.2. Scope of judicial review and jurisdiction of the
court under Section 8 and 11 of the Arbitration Act is
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identical but extremely limited and restricted.
154.3. The general rule and principle, in view of the
legislative mandate clear from Act 3 of 2016 and Act 33
of 2019, and the principle of severability and
competence-competence, is that the arbitral tribunal is
the preferred first authority to determine and decide all
questions of non-arbitrability. The court has been
conferred power of "second look" on aspects of non-
arbitrability post the award in terms of sub-clauses (i),
(ii) or (iv) of Section 34(2)(a) or sub-clause (1) of Section
34(2)(b) of the Arbitration Act.
154.3. Rarely as a demurrer the court may interfere at
the Section 8 or 11 stage when it is manifestly and ex
facie certain that the arbitration agreement is non-
existent, invalid or the disputes are non-arbitrable,
though the nature and facet of non-arbitrability would, to
some extent, determine the level and nature of judicial
scrutiny. The restricted and limited review is to check
and protect parties from being forced to arbitrate when
the matter is demonstrably "non-arbitrable" and to cut
off the deadwood. The court by default would refer the
matter when contentions relating to non-arbitrability
plainly arguable; when consideration in summary
proceedings would be insufficient and inconclusive;
when facts are contested; when the party opposing
arbitration adopts delaying tactics or impairs conduct of
arbitration proceedings. This is not the stage for the
court to enter into a mini trial or elaborate review so as
to usurp the jurisdiction of the arbitral tribunal but to
affirm and uphold integrity and efficacy of arbitration
as an alternative dispute resolution mechanism."
(emphasis supplied)

6.8 In the case of Vidya Drolia (supra), it is specifically
observed and held by this Court that rarely as a demurrer, the
Court may interfere at Section 8 or 11 stage when it is
manifestly and ex facie certain that "the arbitration agreement
is non-existent, invalid or the disputes are non-arbitrable",
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though the nature and facet of non-arbitrability would, to some
extent, determine the level and nature of judicial scrutiny. It is
further observed that the restricted and limited review is to
check and protect parties from being forced to arbitrate when
the matter is demonstrably "non-arbitrable and to cut off the
deadwood." It is further observed that the prima facie review
at the reference stage is to cut the deadwood and trim off the
side branches in straightforward cases where dismissal is
barefaced and pellucid and when on the facts and law the
litigation must stop at the first stage.
(emphasis supplied)
xxxxxx xxxxxx xxxxxx

7. Applying the law laid down by this Court in the aforesaid
decisions and considering Clauses 36 and 37 of the Agreement
and when a specific plea was taken that the dispute falls within
Clause 36 and not under Clause 37 and therefore, the dispute
is not arbitrable, the High Court was at least required to hold
a primary inquiry/review and prima facie come to conclusion
on whether the dispute falls under Clause 36 or not and
whether the dispute is arbitrable or not. Without holding such
primary inquiry and despite having observed that a party does
have a right to seek enforcement of agreement before the Court
of law as per Clause 36, thereafter, has appointed the
arbitrators by solely observing that the same does not bar
settlement of disputes through Arbitration and Conciliation
Act, 1996. However, the High Court has not appreciated
and considered the fact that in case of dispute as mentioned in
Clauses 3, 6 and 9 for enforcement of the Agreement, the
dispute is not arbitrable at all. In that view of the matter, the
impugned judgment and order passed by the High Court
appointing the arbitrators is unsustainable and the same
deserves to be quashed and set aside. However, at the same
time, as the High Court has not held any preliminary inquiry
on whether the dispute is arbitrable or not and/or whether the
dispute falls under Clause 36 or not, we deem it proper to
remit the matter to the High Court to hold a preliminary
inquiry on the aforesaid in light of the observations made by
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this Court in the case of Vidya Drolia (supra) and in the case
of Indian Oil Corporation Limited (supra) and the
observations made hereinabove and thereafter, pass an
appropriate order. (emphasis supplied)

73. Having said that, now I come to the issue whether the claim of
10% share in the built-up area stood settled in terms of the past
litigations initiated by the Petitioner Group herein before the Civil
Judge (Sr. Division), Faridabad / Additional District Judge, Faridabad
and the learned Arbitrator. This submission of Mr. Singh is akin to a
plea of res judicata. In other words, it is his plea, as the disputes for
which reference is being sought stood settled in terms of the past
litigation, the disputes cannot be referred to arbitration.
74. On the other hand, Mr. Bajaj in support of his submissions had
relied upon the judgment of the Supreme Court in the case of Indian
Oil Corporation Limited v. SPS Engineering Limited, (2011) 3 SCC
507 , to contend that the issue whether the claims are barred by res
judicata , does not arise for consideration in the proceedings under
section 11 of the Act of 1996. In other words, the scope of section 11
of the Act of 1996, does not permit examination on maintainability or
tenability of a claim, either on facts or law, as decision on res judicata
requires consideration of pleadings as also the claims / issues / points
and the award in first round of arbitration, in juxtaposition with
pleadings and issues / points / claims in second arbitration. So, it shall
be left for the Arbitral Tribunal to examine and decide whether the
claims stand barred by res judicata .
75. I agree with the said submission of Mr. Bajaj as the Supreme
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Court, in the afore-said judgment, has in paragraphs, 14 and 16, held
as under:
“14. To find out whether a claim is barred by res
judicata, or whether a claim is “mala fide”, it will be
necessary to examine the facts and relevant documents.
What is to be decided in an application under Section 11
of the Act is whether there is an arbitration agreement
between the parties. The Chief Justice or his designate is
not expected to go into the merits of the claim or examine
the tenability of the claim, in an application under Section
11 of the Act. The Chief Justice or his designate may
however choose to decide whether the claim is a dead
(long-barred) claim or whether the parties have, by
recording satisfaction, exhausted all rights, obligations
and remedies under the contract, so that neither the
contract nor the arbitration agreement survived. When it
is said that the Chief Justice or his designate may choose
to decide whether the claim is a dead claim, it is implied
that he will do so only when the claim is evidently and
patently a long time-barred claim and there is no need for
any detailed consideration of evidence. We may elucidate
by an illustration: if the contractor makes a claim a
decade or so after completion of the work without
referring to any acknowledgment of a liability or other
factors that kept the claim alive in law, and the claim is
patently long time-barred, the Chief Justice or his
designate will examine whether the claim is a dead claim
(that is, a long time-barred claim). On the other hand, if
the contractor makes a claim for payment, beyond three
years of completing of the work but say within five years
of completion of work, and alleges that the final bill was
drawn up and payments were made within three years
before the claim, the Court will not enter into a disputed
question whether the claim was barred by limitation or
not. The Court will leave the matter to the decision of the
Tribunal. If the distinction between apparent and obvious
dead claims, and claims involving disputed issues of
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limitation is not kept in view, the Chief Justice or his
designate will end up deciding the question of limitation
in all applications under Section 11 of the Act.
(emphasis supplied)
xxx xxx xxx

16. The question whether a claim is barred by res
judicata, does not arise for consideration in a
proceeding under Section 11 of the Act. Such an issue
will have to be examined by the Arbitral Tribunal. A
decision on res judicata requires consideration of the
pleadings as also the claims/issues/points and the award
in the first round of arbitration, in juxtaposition with the
pleadings and the issues/points/claims in the second
arbitration. The limited scope of Section 11 of the Act
does not permit such examination of the maintainability
or tenability of a claim either on facts or in law. It is for
the Arbitral Tribunal to examine and decide whether the
claim was barred by res judicata. There can be no
threshold consideration and rejection of a claim on the
ground of res judicata, while considering an application
under Section 11 of the Act. ”
(emphasis supplied)

76. Though, Mr. Bajaj, has also relied upon the judgments of the
Supreme Court in the cases of Oriental Insurance Co. Ltd. and
Another v. Dicitex Furnishing Ltd., 2019 SCC OnLine SC 1458 and
Booz Allen and Hamilton INC. v. SBI Home Finance Limited and
Others , (2011) 5 SCC 532 , I do not see any reason to refer to those
judgments as the judgment of the Supreme Court in the case of Indian
Oil Corporation Limited (supra) squarely covers the issue in hand.
Even, the judgment in Indian Oil Corporation Limited (supra) , has
been followed by the Co-ordinate bench of this Court in the case of
Parsvnath Developers Limited and Ors. v. Rail Land Development
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Authority , MANU/DE/4281/2018 , wherein, this Court in paragraphs
11 and 13, has held as under:
“11. The question whether the claim of the petitioner would
be barred by the principles of res judicata or estoppel or by
Order II Rule 2 of the CPC are not matters to be
considered by this Court while exercising its jurisdiction
under Section 11 of the Act. (Indian Oil Corporation Ltd.
vs. SPS Engineering Ltd. MANU/SC/0122/2011 : (2011) 3
SCC 507)).
xxx xxx xxx
13. In view of the above, I see no impediment in appointing
a nominee Arbitrator for the respondent to adjudicate the
disputes that are sought to be raised by the petitioners in
relation to the abovementioned Development Agreement. In
such proceedings, all objections of the respondent shall
remain open and it would be for the Arbitral Tribunal to
decide the same, may be as primary issues.”

77. Moreover, in a recent judgment of the Co-ordinate bench of
this Court, between the same parties as in Parsvnath Developers
Limited and Ors. , tilted as Parsvnath Developers Limited and Ors. v.
Rail Land Development Authority , bearing Arb. P. 710/2019 , decided
on May 19, 2020 , the Court in paragraph 36, has held as under:
“36 . Reading of Section 11(6A) and the judgments of the
Supreme Court, as mentioned above, leaves no doubt that
the law on the scope of examination by the Court in a
petition under Section 11 is no longer res integra. At this
stage, the scope and power is restricted only and only to
examining the existence of the Arbitration Clause and not
even its validity. Therefore, the objection raised by the
Respondent requiring this Court to examine whether the
disputes sought to be raised are overlapping with the
claims in the earlier arbitrations between the parties
and/or are barred by principles of Order II Rule 2 CPC
cannot be sustained in law. These are issues which clearly
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fall in the domain of the Arbitral Tribunal and would be
decided if and when raised by the Respondent before the
Tribunal .”
(emphasis supplied)

78. Now, the question that remains to be decided is whether the
claim qua 10% of the built-up area is barred by limitation on the
grounds already stated above. According to Mr. Singh, the initial cause
of action arose in favour of the Petitioner Group against the respondent
No.1, in the year 2013, when the latter started selling the units
belonging to the built-up area. Alternatively, he stated that the cause of
action also arose when the Petitioner Group got the knowledge that
more than 95% of the built-up areas have been sold in the year 2016
and it again arose from the date of knowledge of the registered sale
deed qua the project land in favour of the respondent No.1. It is also
his submission that 100% of the built-up area has been sold.
79. Reliance has also been placed by Mr. Singh on the judgment of
the Supreme Court in the case of Bharat Sanchar Nigam Ltd. and
Ors. (supra) , particularly on paragraphs 37 and 38 of the said
judgment, to contend that the claims sought to be referred to be
adjudicated by way of arbitration are ex facie barred by limitation.
The aforesaid paragraphs are reproduced as under:
“37. The upshot of the judgment in Vidya Drolia is
affirmation of the position of law expounded in Duro
Felguera and Mayavati Trading, which continue to hold the
field. It must be understood clearly that Vidya Drolia has not
resurrected the pre-amendment position on the scope of
power as held in SBP & Co. v. Patel Engineering (supra).
It is only in the very limited category of cases, where there is
not even a vestige of doubt that the claim is ex facie time-
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barred, or that the dispute is non-arbitrable, that the court
may decline to make the reference. However, if there is even
the slightest doubt, the Rule is to refer the disputes to
arbitration, otherwise it would encroach upon what is
essentially a matter to be determined by the tribunal.
38. Applying the law to the facts of the present case, it is clear
that this is a case where the claims are ex facie time barred
by over 5 ½ years, since Nortel did not take any action
whatsoever after the rejection of its claim by BSNL on
04.08.2014. The notice of arbitration was invoked on
29.04.2020. There is not even an averment either in the notice
of arbitration, or the petition filed Under Section 11, or
before this Court, of any intervening facts which may have
occurred, which would extend the period of limitation falling
within Sections 5 to 20 of the Limitation Act. Unless, there is
a pleaded case specifically adverting to the applicable
Section, and how it extends the limitation from the date on
which the cause of action originally arose, there can be no
basis to save the time of limitation.”
(emphasis supplied)
80. Reliance has also been placed upon the judgments of the
Coordinate Bench of this Court in the cases of Siemens Healthcare
Pvt. Ltd. (supra) and V.K. Dewan and Co. (supra) , to also contend
that the claims are ex facie barred by limitation and should not be
referred to arbitration.
81. It is apposite to mention here that this Court in Siemens
Healthcare Pvt. Ltd. (supra) was dealing with the facts where the
respondent therein had terminated the contract with the petitioner
therein in the year 2015 and there was a lull between 2015 and May
14, 2021, when the counsel of the petitioner had finally sent the legal
Notice dated October 25, 2021, calling upon the respondent to
discharge its liability. So, it was in those circumstances, this Court,
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whilst relying upon the judgment of the Supreme Court in Bharat
Sanchar Nigam Ltd. and Ors. (supra) , had rejected the petition filed
by the petitioner being barred by limitation.
82. More so, in V.K. Dewan and Co. (supra) , this Court, had
rejected the petition seeking appointment of the arbitrator, in the facts
that the respondent therein had issued the completion certificate to the
petitioner therein in the year 2005, when the cause of action had first
accrued. Thereafter, the matter was referred to the sole Arbitrator in
the year 2005 and the petitioner by way of letter dated January 14,
2008, withdrew the claims filed before the Arbitrator, who passed the
award imposing cost.
83. The petitioner with respect to the same disputes / claims again
issued a second Notice dated July 26, 2019, for referring them to
arbitrator. In the light of the facts, this Court has held that the
withdrawals of the claims by the petitioner before the arbitrator did not
stop the limitation period in any manner and as such the claims were
held to be barred by limitation.
84. On the other hand, the submission of Mr. Bajaj, learned
counsel for the Petitioner Group is primarily that the cause of action
had accrued in favour of the Petitioner Group only when the
Occupation Certificates were issued by the DTCP, Haryana and
according to him, the Occupation Certificates were issued in 2017,
2018 and 2020 and the Notice invoking arbitration was issued in 2019,
i.e., within three years of the issuance of the Occupation Certificates
and as such the claim(s) has been raised well within limitation and are
not deadwood.
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85. The stand of the parties is at variance with each other. An
issue of limitation is a mixed question of law and fact. To decide the
issue, it is to be seen, when exactly the cause of action had first arisen
to make a claim in that regard. The claim of the Petitioner Group is
for 10% of the built-up area. It is to be seen, whether the Petitioner
Group could have raised a claim at the time of execution of the sale
deeds in respect of the project land or at the time of completion of
construction of the project land or at the time of grant of Occupation
Certificates qua the built-up area on the project land. It also need to be
decided as to whether all the claims are barred by limitation or only
some shall be barred. This makes me to say, the claims of the
Petitioner Group are not ex facie stale claims, for this Court, while
exercising jurisdiction under section 11 of the Act of 1996, to refuse
appointment of an Arbitrator. More so, the Supreme Court in its
judgment in Bharat Sanchar Nigam Ltd. and Ors. (supra) has culled
out the law that the rule is to refer the claims in case of slightest of
doubt.
86. In view of my above discussion, the petition under section 11
of the Act of 1996 needs to be allowed. I accordingly appoint Justice
Rajiv Sahai Endlaw, former Judge of this Court as the learned
Arbitrator to adjudicate the dispute(s) which have arisen between the
Petitioner Group and the respondent No.1, in respect of 10% of the
built-up land.
87. The learned Arbitrator shall fix his fee in consultation with the
counsel for the parties. All the contentions of the parties are left open
to be decided by the learned Arbitrator. The learned Arbitrator shall
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give his disclosure in terms of section 12 of the Act of 1996.
O.M.P.(I) (COMM.) 29/2020
88. Since, I have appointed learned Arbitrator for adjudication of
the disputes between the Petitioner Group and the respondent No.1,
appropriate shall be that this petition under section 9 of the Act of
1996 is treated as an application under section 17 of the Act of 1996 to
be decided by the learned Arbitrator in accordance with law.
89. The petitions are accordingly disposed of.

90. Let a copy of this order be sent to Justice Rajiv Sahai Endlaw
(Retd.) by the Registry on his following address:
17, Babar Lane,
Bengali Market,
New Delhi - 110001

91. Liberty is with the counsel for the parties to send a copy of this
order to the learned Arbitrator for his information.


V. KAMESWAR RAO, J

APRIL 27, 2023 /aky/jg


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