Khera Buildcon Pvt. Ltd. And Anr. vs. B.K.Bansal

Case Type: Arbitration Appeal

Date of Judgment: 16-01-2024

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.A. 1/2023, I.A. 10996/2023
KHERA BUILDCON PVT. LTD. AND ANR. ..... Appellants
Through: Mr. Amit Seth, Mr. Mukul Saluja,
Mr. D. N. Kumar, Advs.

versus

B.K.BANSAL ..... Respondent
Through: Mr. Mahip Dattta Parashar, Mr.
Aman Vasisth, Advs.

% Date of Decision: 16.01.2024.

CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

J U D G M E N T

DINESH KUMAR SHARMA, J. (Oral)
1. The present appeal has been filed under Section 37 of the Arbitration
and Conciliation Act, 1996 (herein referred to as “the A&C Act”)
against the order dated 23.02.2023 passed by the learned Arbitral
Tribunal comprising of Sole Arbitrator in case Ref. No. DAC/3210/09-
21 titled as “B.K. Bansal vs. Khera Buildcon Pvt. Ltd. & Anr.”.
2. Briefly stated the facts are that the matter was referred to the learned
Arbitrator in arbitration petition bearing No. 773/2021 titled as B.K.
Bansal vs. Khera Buildcon Pvt. Ltd. & Anr. vide order dated
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09.09.2021.
3. During the proceedings the claim petition was filed by the
claimant/respondent on which primarily the following claims were
raised:
Claim No.1
Mandatory Injunction Directing Respondents To Remove
Himself The His Representatives / Staff / Agents From The
Property Admeasuring 360 Sq. Yards Bearing No. D-145,
Situated In The Railway Board Employs Cooperative
Housing Society Ltd., Anand Vihar, Delhi-110092.
Claim No.2
Recovery Of Rs. 9,00,000/- (Rupees Nine Lakhs Only)
Outstanding Towards The Malba, Fixtures And Woods Of
Existing Structure alongwith Interest @ 18% Compounded
Annually In Terms of Collobaration Agreement Dated
18.07.2012.
Claim No.3
Recovery Of Rs. 64,73,380/- (Rupees Sixty Four Lakh
Seventy Three Thousand Three Hundred Eighty Only)
Against The Financial Assistance Provided By The
Claimant In Terms Of Supplementary Agreement Dated
26.11.2016 Along With Interest @ 18% Compounded
Annually.
Claim No.4
Recovery Of Rs. 86,52,948/- (Rupees Eighty Six Lakh Fifty
Two Thousand Nine Hundred Forty Eight Only) In Lieu Of
The Amount Spent By The Claimant and His Sons On His
Behalf On The Pending Construction Of The Property
admeasuring 360 Sq.Yards Bearing No. D-145, Situated In
The Railway Board Employs Cooperative Housing Society
Ltd., Anand Vihar, Delhi-110092 Out Of Their Own Funds
And Resources Alongwith Interest @12% Compounded
Annually.
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Claim No.5
Recovery For An Amount Of Rs. 2,55,00,000/- (Rupees Two
Crore Fifty Five Lakh Only) Against The Damages In Terms
Of Collaboration Agreement Alongwith Interest @18%
Compounded Annually.
Claim No.6
Recovery For A Sum Of Rs. 84,00,000 (Rupees Eighty Four
Lakh Only) On Account Of The Rent To The Paid By The
Respondents To The Claimant Along With Interest @12%
Compounded Annually.
Claim No.7
Recovery For A Sum Of Rs.1,20,00,000/- (Rupees One
Crore Twenty Lakh Only) For Future Expenses To Be
Incurred On Completion Of The Pending Civil And
Finishing Work At The Subject Premsies.
Claim No.8
Recovery For A Sum Of Rs.1,00,00,000/- (Rupees One
Crore Only) Towards Mental Harassment Suffering, Pain
And Agony.
Claim No.9
Recovery For Damages On Account Of Depreciation Of The
Building Being Constructed On Admeasuring 360 Sq.Yards
Bearing No. D-145, Situated In The Railway Board Employs
Cooperative Housing Society Ltd., Anand Vihar, Delhi-
Ll0092.
Claim No.10
Claim For Pendent-Lite Interest From 30.08.2021 To The
Date Of Making Of The Award And Future Interest From
The Date Of The Award Till The Date Its Realization.
Claim No.11
Costs.”
4. While the proceedings were pending, an application under Section 17
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of the A&C Act was moved by the respondent herein with the
following prayer:
“i. Ad-interim order be passed in favour of the Claimant
and against the Respondents for restoring back the physical
possession of the subject property in favor of the Claimant
from the Respondents and their employees, successors,
administrators, representatives; and executors, agents,
ii. Ad-interim order be passed in favour of the Claimant and
against the Respondents putting the Claimant back into the
physical possession of the subject property; and
iii. Ad-interim injunction restraining the Respondent, their
employees, successors, executors, agents, administrators,
representatives from frivolously representing to the third
party its authorization on behalf of the present Claimant to
deal with the said property in any manner, whatsoever; and
iv. Pass such other further order(s) as this Hon'ble Tribunal
may deem fit and proper in the facts and circumstances and
in the interest of justice,”
5. The appellant has duly filed the reply taking various objections to the
application and predominantly including that the reliefs claimed in the
application filed under Section 17 of the A&C Act are the same which
have been claimed in the main petition and if this prayer is allowed it
would amount to passing an award in favor of the claimant. However,
the learned Arbitrator after considering the entire material on record
allowed the application and passed the order in favor of the respondent.
6. Learned counsel for the appellant has challenged the order of the
learned Arbitrator on the ground that the impugned order is manifested
wrong, perverse, and not based upon the settled principles of law. It has
been submitted that the claim of the respondent is malafied , vexatious,
and liable to be rejected.
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7. It has further been submitted that the learned Arbitrator has wrongly
granted the final relief prayed by the respondent in the claim petition
vide the impugned order. Learned counsel submits that this relief could
have been granted only after due adjudication by the Arbitral Tribunal
on the claims of the respondent.
8. It has further been submitted that by virtue of the impugned order the
learned Arbitrator has wrongly dispossessed the appellants from the
premises i.e., from D-145, situated in the Railway Board Employs
Cooperative Housing Society Ltd., Anand Vihar, Delhi-110092 in
which the appellants were in a settled position.
9. Learned counsel has further submitted that the learned Arbitrator has
granted the prayer of permitting the respondent to let out the disputed
property on rent, lease, or license which was not even claimed by the
respondent. It has further been submitted that there was no material on
the record that the appellant handed over the possession to the
respondent and there was not even a prima facie proof vide which the
respondent had re-entered into the possession of the property.
10. It has been submitted that there was no cause of action with the
respondent to file an application under Section 17 of the A&C Act
11. Learned counsel has further submitted that the work is 80% complete
and the appellant has invested a lot of money and the remaining work
could not be completed on account of the act and conduct of the
respondent. The attention has also been invited to the various e-mails
which have been exchanged between the parties and have also been
reproduced by the learned Arbitrator.
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12. Learned counsel submitted that the learned Arbitrator did not take into
account the reasons attributed to the respondent which caused the delay
in completion of the project.
13. Learned counsel has relied upon U.P. Junior Doctors’ Action
Committee and Others vs. Dr. B. Sheetal Nandwani and Others 1992
Supp (1) SCC 680 in which it was inter alia held that it is a well known
rule of practice and procedure that at interlocutory stage a relief which
is asked for and is available at the disposal of the matter is not granted.
14. The reliance has also been placed upon Metro Marins and Ors. vs.
Bonus Watch Co. Pvt. Ltd. and Ors. 2004 SCC 54 wherein it was held
that an interim mandatory injunction can be granted only in exceptional
cases coming within the exceptions noticed in “Dorab Cmvasji
Warden v. Coomi Sorab Warden” .
15. Learned counsel submits that in these circumstances the impugned
order is liable to be set aside.
16. Learned counsel for the respondent has submitted that the learned
Arbitrator has passed a reasoned order after taking into account the
submissions and counter submissions of the parties. It has been
submitted that the learned Arbitrator has properly secured the interest
of both parties. Learned counsel has further submitted that the
jurisdiction of this court while entertaining an appeal under Section 37
is very limited and has relied upon Konkan Railway Corporation
Limited vs. Chenab Bridge Project Undertaking in Civil Appeal No.
2903 of 2023 dated 17.08.2023. Learned counsel submits that therefore
the appeal is liable to be dismissed.
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17. It is settled preposition that the intention of the legislature is that while
entertaining an appeal under Section 37, the jurisdiction of the court is
very limited. Though the legislature unlike Section 34 has not laid any
parameter defining the scope of jurisdiction of an appeal filed under
Section 37. But it has to be understood that if the jurisdiction of the
court while entertaining an objection against final award is very
limited, therefore by implication the jurisdiction of the court while
entertaining an appeal filed under Section 37 against interim measure
under section 17 of the A&C Act, 1996 has to be very narrow.

18. In Konkan Railway Corporation Limited vs. Chenab Bridge Project
Undertaking the Hon’ble Supreme Court has inter alia held as under:
“14. Analysis: At the outset, we may state that the
jurisdiction of the Court under Section 37 of the Act, as
clarified by this Court in MMTC Ltd. v. Vedanta Ltd., is
akin to the jurisdiction of the court under Section 34 of the
Act. Scope of interference by a court in an appeal under
Section 37 of the Act, in examining an order, setting aside
or refusing to set aside an award, is restricted and subject
to the same grounds as the challenge under Section 34 of
the Act.
15. Therefore, the scope of jurisdiction under Section 34
and Section 37 of the Act is not akin to normal appellate
jurisdiction. It is well-settled that courts ought not to
interfere with the arbitral award in a casual and cavalier
manner. The mere possibility of an alternative view on facts
or interpretation of the contract does not entitle courts to
reverse the findings of the Arbitral Tribunal.10 In Dyna
Technologies Private Limited v. Crompton Greaves Limited
(2019) 20 SCC 1, this Court held:
"24. There is no dispute that Section 34 of the
Arbitration Act limits a challenge to an award only on
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the grounds provided therein or as interpreted by
various courts. We need to be cognizant of the fact that
arbitral awards should not be interfered with in a
casual and cavalier manner, unless the court comes to
a conclusion that the perversity of the award goes to
the root of the matter without there being a possibility
of alternative interpretation which may sustain the
arbitral award. Section 34 is different in its approach
and cannot be equated with a normal appellate
jurisdiction. The mandate under Section 34 is to
respect the finality of the arbitral award and the party
autonomy to get their dispute adjudicated by an
alternative forum as provided under the law. If the
courts were to interfere with the arbitral award in the
usual course on factual aspects, then the commercial
wisdom behind opting for alternate dispute resolution
would stand frustrated.
25. Moreover, umpteen number of judgments of this
Court have categorically held that the courts should
not interfere with an award merely because an
alternative view on facts and interpretation of contract
exists. The courts need to be cautious and should defer
to the view taken by the Arbitral Tribunal even if the
reasoning provided in the award is implied unless such
award portrays perversity unpardonable under Section
34 of the Arbitration Act."”
19. It is pertinent to mention here that it is an admitted fact that property
bearing No. D-145, situated in The Railway Board Employs
Cooperative Housing Society Ltd., Anand Vihar, Delhi-110092 is
owned by the respondent. The appellant is a developer. The parties
entered into a collaboration agreement on 18.07.2012 for the
construction of the said property. Initially, it was agreed upon that the
construction would be completed within twenty-four months. However,
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since it could not be completed the supplementary agreement was
entered into on 25.11.2016. However, for reasons that may not be
relevant here to discuss in detail the work is yet not fully completed.
20. The contention of the appellant is that by virtue of the collaboration
agreement, he is in physical possession of the same and remains to be
the same. The contention is that the plea raised by the respondent that
he was illegally dispossessed on 21.01.2021 is entirely false and
contrary to the court.
21. Per contra, the plea of the learned counsel for the respondent is that in
fact time was the essence of the contract. It has further been submitted
that the appellant was only in permissive possession. Learned counsel
has further invited the attention to paragraph Nos. 6A and B of the
collaboration agreement which defined the portion of owner/first party
and the portion of builder/second party.
22. The perusal of the same indicates that the developer was given the right
to dispose of the share of his portion with the fully constructed second
floor (with two car parking spaces; one big-sized car and one small-
sized car) with a common right to use entrance, passage, and stair-case
and lift with electrical meter and water meter with proportionate
undivided, indivisible and impartible ownership rights in the land
underneath together with all fittings, fixtures, connections, structure
standing thereon on the said floor, with proportionate rights in the other
common facilities and amenities provided therein of the
redeveloped/reconstructed residential building on the said property
except roof rights of the terrace. However, this right was subject to the
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condition of the completion of the redevelopment of the proposed
residential building.
23. The perusal of the impugned award also indicates that the learned
Arbitrator vide a detailed and reasoned order has taken into account the
submissions of both parties. It is advantageous to reproduce the inter
alia findings of the learned Arbitrator:
“63. Although, the law is clear that mandatory injunction is
to be granted in rare cases and there is no quarrel with this
proposition. In this case, as per the Collaboration
Agreement and the Supplementary Agreement which are
both admitted documents, the shares of the parties are
defined. It is not the case of the respondent that the claimant
is not entitled to the property except the second floor. The
respondent was granted possession of the property to
redevelop the same by a Collaboration Agreement which
was executed between the parties. The redevelopment work
to the extent it had to be completed has been completed it
not the case of the claimant that the respondent should be
directed to complete the balance work. It is also not the case
of the respondent that the respondent is interested to
complete the remaining project, nor such a relief has been
prayed. Both parties have made monetary claims. Needless
to say that it is in the interest of both the parties to secure
the property. The rights of both the parties can be safe
guarded by directing the parties not to sell alienate transfer
or part with possession with the subject property.
Accordingly keeping in view the agreed terms of the
agreements entered into between the parties the possession
shall be handed over by the respondents to the claimant of
the entire property except the second floor within 15 days of
receipt of this order.
64. As far as the second floor is concerned the same shall be
kept locked and status quo with regard to title possession
and construction shall be maintained. In this way the rights
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of both the parties shall stand secured in case either or both
the parties succeed.
65. Another reason as to why the possession of the entire
property is to be handed over to the claimant (except second
floor) is that he respondent by email dated 19.9.2018
informed the claimant that they were not in a position to
complete the project and hand over the site and the claimant
should settle the account. Although the said mail is not
clearly worded the meaning as well as issuing the same has
not been disputed. In response various mails were
addressed by the claimant to the respondent to meet and
settle the account as well as to remove the material. All the
said mails were not replied. Receipt of the mails by the
respondent has not been denied.
66. The relevant emails have been extracted in paras 22
afore-going. I am also of the prima facie view that the
documents relied upon by the learned senior counsel for the
claimant to show possession from September 2018 to
January 2021 are genuine and the said documents show the
possession of the claimant.
67. Another ground as to why the claimant should be
granted possession of the property except second floor is
that in case the property is kept locked it will not serve any
purpose the condition shall deteriorate and thus lead to
multiplicity of proceedings. Based on the photographs filed
by the parties and the extent of construction that exists there
is no reason why the property should not be put to use. The
counsel for the respondent has failed to point a single
cogent ground as to why the possession of the property
which is to fall to the share of the claimant should not be
handed over to the claimant.”
24. Thus taking into account the factual matrix and the law, it has to be
seen whether the present case is entitled for any interference by this
court. In Dinesh Gupta and Ors vs. Anand Gupta and Ors. in ARB. A.
4/2020 dated 17.09.2020 the court while dealing with the scope of
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appeal filed under Section 37 went into a detailed analysis and inter alia
held as under:
“42. Legal principles are, however, in every instance,
required to be applied to the factual scenario, in which their
application is invited. While, therefore, appreciating the
jurisdiction of the High Court, under Section 37 of the 1996
Act, we are required to be aware of the fact that the order,
interference with which is being invited, was passed by an
arbitrator, or arbitral tribunal. The sanctity attached to
arbitral awards, especially in the context of the 1996 Act
which is based on the UNCITRAL model has, therefore,
necessarily to be borne in mind, while exercising
jurisdiction over the decision of the arbitrator, whether in
the form of a final award, or an interim award under
Section 17.
43. In the opinion of this Court, another important, and
peculiar, feature of the 1996 Act, which must necessarily
inform the approach of the High Court, is that the 1996 Act
provides for an appeal against interlocutory orders,
whereas the final award is not amenable to any appeal, but
only to objections under Section 34. If the submission of Mr.
Nayar, as advanced, were to be accepted, it would imply
that the jurisdiction of the Court, over the interlocutory
decision of the arbitrator, would be much wider than the
jurisdiction against the final award. Though,
jurisprudentially, perhaps, such a position may not be
objectionable, it does appear incongruous, and opposed to
the well settled principle that the scope of interference with
interim orders, is, ordinarily, much more restricted than the
scope of interference with the final judgement.
44. Here, yet another peculiar dispensation, in the 1996 Act,
apropos the scope of interference with the decision of the
arbitrator, manifests itself. The proviso to Section 36 (3)
ordains that the Court, while considering an application for
grant of stay of a final arbitral award for payment of money,
shall "have due regard to the provisions for grant of stay of
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a decree under the provisions of the Code of Civil
Procedure, 1908". By reference, therefore, Order 41 Rule 5
of the CPC, which deals with stay, by the appellate court, of
original decrees, stands incorporated into Section 36(3) of
the 1996 Act. Though, therefore, the final arbitral award is
not made amenable to appeal, by the 1996 Act, any prayer
for stay of the arbitral award, that accompanies objections
under Section 34, is required to be examined in the light of
the provisions, in the CPC, governing stay of original
decrees, in exercise of appellate jurisdiction. Though, for
the purposes of this judgement, it is not necessary to
psychoanalyse the legislative intent in providing for such a
peculiar dispensation, the fact that applications for stay of
final arbitral awards, are required to be considered on the
basis of the principles governing stay, by appellate courts,
under Order 41 Rule 5 of the CPC, indicate, to an extent,
that the principles of Order 41 are also required to be borne
in mind, while exercising appellate jurisdiction, under
Section 37.
45. The 1996 Act is, preambularly, a fallout of the United
Nation's Commission on International Trade Law
(UNCITRAL), adopted in 1995 as the Model Law on
International Commercial Arbitration. The Statement of
Objects and Reasons, preceding the 1996 Act, stipulates, in
paras 2 to 5 thereof, as under, in this respect:
“2. The United Nations Commission on International
Trade Law (UNCITRAL) adopted in 1985 the Model
Law on International Commercial Arbitration. The
General Assembly of the United Nations has
recommended that all countries give due consideration
to the said Model Law, in view of the desirability of
uniformity of the law of arbitral procedures and the
specific needs of international commercial arbitration
practise. The UNCITRAL also adopted in 1980 a set of
Conciliation Rules. The General Assembly of the
United Nations has recommended the use of these
Rules in cases where the disputes arise in the context of
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international commercial relations and the parties seek
amicable settlement of the disputes by recourse to
conciliation. An important feature of the UNCITRAL
Model Law and Rules is that they have harmonized
concepts on arbitration and conciliation of different
legal systems of the world and thus contains provisions
which are designed for universal applications.
3. Though the said UNCITRAL Model Law and Rules
are intended to deal with International Commercial
Arbitration and Conciliation, they could, with
appropriate modifications, serve as a model for
legislation on domestic arbitration and conciliation.
The present Bill seeks to consolidate and amend the
law relating to domestic arbitration, international
commercial arbitration, enforcement of foreign
arbitral awards and to define the law relating to
conciliation, taking into account the said UNCITRAL
Model Law and Rules.
4. The main objectives of the Bill are as under:-
a. to comprehensively cover international and
commercial arbitration and conciliation as also
domestic arbitration and conciliation;
b. to make provision for an arbitral procedure which is
fair, efficient and capable of meeting the needs of the
specific arbitration;
c. to provide that the arbitral tribunal gives reasons for
its arbitral award;
d. to ensure that the arbitral tribunal remains within
the limits of its jurisdiction;
e. to minimize the supervisory role of the courts in the
arbitral process;
f. to permit an arbitral tribunal to use mediation,
conciliation or other procedure during the arbitral
proceedings to encourage settlement of disputes;
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g. to provide that every final arbitral award is enforced
in the same manner as if it were a decree of the court;
h. to provide a settlement agreement reached by the
parties as a result of conciliation proceedings will have
the same status and effect as an arbitral award on
agreed terms on the substance of the dispute rendered
by an arbitral tribunal; and
i. to provide that, for purposes of enforcement of
foreign awards, every arbitral award made in a
country to which one of the two international
Conventions relating to foreign arbitral awards to
which India is a party applies, will be treated as a
foreign awards.
5. The Bill seeks to achieve the above objects.””

25. Catena of the judgments has made it clear that the scope of the
supervisory role of the court in the Arbitral proceedings has to be
minimized and the court while exercising any kind of jurisdiction is
required to maintain an extremely circumspect approach.
26. A coordinate bench of this court in Asia Hotels (North) Ltd. v. Sital
Dass Sons & Anr. 2022/DHC/005842 inter alia held as under:
“43. This Court is aware of the limited scope of interference
in appeal against orders passed by Arbitrators on
applications under Section 17 of the Act. However, in
appropriate cases, Court can exercise its jurisdiction under
Section 37 of the Act to protect the legitimate interest of the
appellant, which includes modifying the order of the learned
Arbitral Tribunal. It may be noted that jurisdiction of this
Court under Section 37 of the Act is substantially different
from the scope of jurisdiction under Section 34 of the Act,
which does not include the authority to modify the award
passed by the Arbitral Tribunal.”

27. It is an established principle that arbitration serves as an alternative
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method of resolving disputes, and it is the court's responsibility to
ensure that such resolution is treated with appropriate deference. The
powers granted by section 37 of the A&C Act do not provide carte
blanche to the courts and must be utilized while considering the
principles of minimum judicial intervention advocated by the 1996 Act.
The arbitrator in present case as discussed above has passed a detailed
and a well-reasoned order after taking into account the contention of
the parties. There is nothing on record to suggest that the order is not
sustainable or the interest of the appellant has not been protected. I
consider that there is no scope for intervention.
28. Hence, the appeal along with pending application stands dismissed.



DINESH KUMAR SHARMA, J
JANUARY 16, 2024/AR/HT
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