SHARMA, J. - (1.) THIS is an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short 'act') for appointment of independent arbitrator.
(2.) THE arbitration agreement relied upon in this application is with reference to Memorandum of Understanding (for short 'mou') dated January 31, 2005 and the Collaboration Agreement dated March 9, 2005 entered into between the parties. Under the MOU dated January 31, 2005 entered into between the respondent Harsh Rathore, referred to as 'the first party' in the MOU and the applicant M/s. Jagdambey Builders Pvt. Ltd. , referred to as 'the Builder Company' in the MOU. It was agreed that the respondent Harsh Rathore on the terms and conditions agreed upon would hand over/surrender his land admeasuring 7913 sq. Yds. bearing plot No. 6, forming part of Khasra No. 50, situated at Sodala Civil Lines, Jaipur, popularly known as ''rathore Nursery'' to the applicant for developing and constructing a commercial complex and that the entire cost for construction of the complex including all incidental expenses would be to the account of applicant and on construction so made 50% of the constructed/built up area would vest in the respondent and remaining 50% of constructed/built up area would belong to and vest in the applicant. An amount of Rs. 4. 5 crores was agreed to be paid by the applicant to respondent out of which 2. 25 crores was non refundable and remaining 2. 25 crores was refundable on completion of the construction of the proposed commercial complex. THE applicant as per agreed terms made payment to the respondent. Clauses 17 and 18 of the MOU dated January 31, 2005 read thus:- ...[VERNACULAR TEXT OMMITED]... "17. That any dispute or difference that may at any time arise in connection with or incidental to this MOU shall be settled by mutual consent failing which by arbitration under the Arbitration & Conciliation Act, 1996 and thus MOU shall be deemed to be an Agreement to submit to arbitration." ...[VERNACULAR TEXT OMMITED]... "18. That this MOU has been prepared in duplicate with original signatures of both the parties and attesting witnesses and one set has been kept by each party which is original. Until and unless agreed mutually in writing this MOU shall remain irrevocable." A look at the said clauses demonstrates that MOU shall remain irrevocable and a formal collaboration agreement to be signed between the parties. On March 9, 2005 a collaboration agreement was signed and executed between the parties and by that date as against the total of Rs. 4. 5 crores an amount of Rs. 3 crores as per the terms agreed was already paid by the applicant to respondent, receipt whereof was duly acknowledged and admitted by the respondent in the said agreement. The respondent delivered/surrendered possession of the land to the applicant under the possession letter dated March 9, 2005 except the house over a part of the said land occupied by the respondent for his residence. Remaining 1. 5 crores was payable by the applicant after sanction of the plan for the complex and on handing over possession of, the house in occupation of the respondent covering a part of the land in question as aforesaid. Clause 49 of the collaboration agreement dated March 9, 2005 reads thus:- ...[VERNACULAR TEXT OMMITED]... "49. That any dispute or difference that may at any time arise in connection with or incidental to this collaboration agreement shall be settled by mutual consent, failing which by arbitration under the "arbitration & Conciliation Act, 1996." As per another MOU dated January 31, 2006 was entered into between the parties to incorporate certain amendments in the collaboration agreement dated March 9, 2005. The collaboration agreement dated March 9, 2005 read with MOU dated January 31, 2006 remained in full force, operative and binding on the parties. The applicant, by the time MOU dated January 31, 2006 was signed, paid a total amount of Rs. 4 crores to the respondent, the receipt whereof was duly acknowledged and admitted by the respondent in MOU dated January 31, 2006.
(3.) IT appears that some dispute arose between the parties and an application under Section 9 of the Act was filed before the Court of District Judge, Jaipur City for interim measures respondent from transferring or entering into any agreement with any third person and to maintain status quo in respect of the property. Learned District Judge vide order dated December 22, 2006 restrained the respondent from transferring the land and by subsequent order dated March 28, 2007 directed both the parties to maintain status quo in respect of the property. The interim order is operative and binding on the parties. I however find that the respondent in the reply to the said application denied even the existence of arbitration agreement. It is contended by learned counsel for the applicant that the dispute and differences between the parties arising out of the MOU dated January 31, 2005, Collaboration agreement dated March 9, 2005 and MOU dated January 31, 2006 are required to be referred to arbitration. It is further contended that the applicant in filing the application under Section 9 of the Act suggested so and expected of the respondent to agree for reference of the dispute to the mutually agreed arbitrator, but the respondent did not agree. Since the dispute is arbitrable and respondent since opposed to the appointment of arbitrator as also arbitration agreement, it became necessary for the applicant to invoke Section 11 of the Act. The respondent has submitted the reply to the instant application raising preliminary objection about the maintainability of the application on the ground that after subsequent MOU dated Jan. 31, 2006 was executed the arbitration clause in the earlier MOU did not remain in existence. I have been taken though the MOU. ;