VARDHAMAN BUILDERS Vs. NARENDRA BALASAHEB GHATGE

JUDGEMENT

(1.) THE applicants' prayer for appointment of named sole arbitrator in accordance with the provisions of section 11(6) of the Arbitration and Conciliation Act, 1996, hereafter referred to as the "Act", is opposed by the respondents on the ground that (a) the application itself is not maintainable in view of the bare contents of provisions of section 69(3) of the Partnerships Act and the same is liable to be dismissed and (b) the Respondents submit that they are not aware of any arbitration agreement or memorandum of understanding, thus there is no existing and binding agreement between the parties.

(2.) IN order to examine the merit or otherwise of the contentions of the respondents, I may refer to the relevant facts of the case. The applicant is a partnership firm engaged in the business of development of property and construction of buildings for residential purpose. They claim to be the owners of immovable property admeasuring about 1580.28 square meters bearing TPS No.49/CTS No.323 situated at Mahadeobhai Desai Road, Borivli East, Mumbai. The applicants claim to have entered into an agreement with the father of respondent No.2, late Mr. Vasant Balasaheb Ghatge. Under the terms of the said agreement, the property was to be developed jointly by the parties and the respondents were to receive a sum of Rs.1.25 crores and 30%; of the net profits accruing as a result of the development and exploitation of the said property. After the death of their father the respondents executed a memorandum of understanding dated 27th August 2005 wherein it was agreed that the said property would not be developed as a joint venture but would be developed exclusively by the applicants at the lump sum consideration of Rs.1.50 crores. The agreement dated 27th August 2005 contains arbitration clause No.18, which reads as under: "All dispute and differences which may arise between the parties hereto form or out of or in any manner whatsoever relating or incidental to these presents, shall be referred to Arbitration of a sole Arbitrator as may be mutually agreed upon by the parties hereto. Such Arbitration shall be governed by the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification or reenactment thereof for the time being in force. Arbitrator shall have power to grant interim and ad-interim relief. The award of the Arbitrator/s shall be final and binding upon the parties. Such arbitration shall be held in Mumbai."

(3.) THE other objection with regard to the fact that the applicants who filed suit for specific performance, the dispute capable of being referred to the arbitral tribunal is also equally without any merit, keeping in view that the judgment of this court in the case of M/s Farohar and Co and ors. vs. Hemant Manohar Nabar and ors., AIR 1992 Bombay 8 wherein the court, relying upon the judgment of the Supreme Court in the case of Continental Construction Co. Ltd. Vs State of Madhya Pradesh AIR 1988 SC 1166, held that such dispute with regard to immovable property or specific performance thereof was referable to arbitration. THE applicant has not placed on record the agreement dated 30th November 2003 but had placed on record the MOU dated 27th August 2005 which in terms refers to 30th November 2003 agreement. This MOU of 27th August 2005 is stated to have been signed by the parties and is a registered document. Clause 20 of the said agreement clearly states that all the terms and conditions of the earlier MOU dated 30th November 2003, which are not inconsistent with the MOU of 2005, shall be followed and continued to operate. Clause 18 of the MOU, which is already reproduced above, clearly shows that all the disputes and differences between the parties would be referred to the sole arbitration as may be mutually agreed upon by the parties and the Arbitration shall be governed by the provisions of the Arbitration and Conciliation Act, 1996. THE arbitration clause is wide enough to cover any kind of dispute. It has been stated in the arbitration clause that "all disputes and differences which may arise between the parties and from or out of or in any manner whatsoever relating to incidental to these presents" are to be referred to the arbitration. Reference can be made to the judgment of the Supreme Court in the case of Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khetan and ors., AIR 1999 SC 2102 where the court stated that such an arbitration clause would be wide enough and all such matters would be covered under the arbitration clause.