1 arbap226-07 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO.226 OF 2007 Kishore K. Maniar ....Applicant V/s. M/s.Vilayatram Mittal & Anr. ....Respondents Mr.Sanjeev Singh for the Applicant. Mr.Anil Singh with Mr.Ashwin Singh i/b Mr.D.R. Shah for the Respondents. CORAM : S.J. VAZIFDAR, J. DATE : 12TH AUGUST, 2010. P.C. :- 1. This is an application under section 11 of the Arbitration and Conciliation Act, 1996. 2. Respondent No.2 is one of the partners of the first Respondent firm. The Applicants, members of a family by the name Khandwala and Khandwala Griha Nirman Co-operative Housing Society had entered into a development agreement dated 20.9.1999. Subsequently these parties and Respondent No.1 executed a development agreement dated 24.2.2000. By this agreement the Applicant transferred his rights under the agreement dated 20.9.1999 to and in favour of the Respondents. 3. Thereafter an agreement dated 28.2.2000 was executed only between the Applicant and Respondent No.1. It is termed a Deed of Modification. Under this agreement, certain rights have been conferred on 2 arbap226-07 the Applicant alone by the first Respondent alone. The rights are conferred upon the Applicant and/or his nominee or nominees. Clause 7 of this agreement is an arbitration agreement. 4. The execution of this agreement is not denied. It was however, contended on behalf of the Respondents that this was only a modification of the earlier agreements dated 20.9.1999 and 24.2.2000 neither of which contains an arbitration clause. That would make no difference whatsoever. The agreement dated 28.2.2000 which contains an arbitration clause is an independent agreement which deals with the rights of the Applicant and Respondent No.1 inter-se. The other parties to the agreements dated 20.9.1999 and 24.2.2000 are not the parties to this agreement and are not concerned with the same. 5. It was then contended that certain representations were made by other parties and the Respondents under the agreements dated 20.9.1999 and 24.2.2000. As a result of the failure of the Applicant to comply with those representations, the Respondents have suffered a loss. These however are issues on merits. If the Respondents were unable to discharge all their obligations in view of the conduct of the Applicant or any other parties, the defence would be open to them. That issue also falls within the ambit of the arbitration clause. Even in respect of such disputes, the other parties are not necessary parties to an arbitration. 6. Clause 1 of the agreement dated 28.2.2000 reads as under :- “1. The party of the first part agrees to give 4 nos. of (BHK and 2 BHK) residential flats of salable area to be given to the party of the second part on behalf of following parties or their nominee/s in the free sale building to be constructed on the said property (with same amenities as 3 arbap226-07 of the other prospective purchaser/s) at free of cost and share of 25% profit amount on the sale/development of the SAS Reservation on the said property besides the terms agreed in the said agreement dated 24.1.2000.............................. (emphasis supplied)” 7. The words emphasized in the above clause do not affect the arbitration agreement. They only indicate that the terms and conditions of the agreements dated 20.9.1999 and 24.2.2000 in so far as they are applicable, would be incorporated into the agreement dated 28.2.2000. 8. Although the Respondents are not agreeable to having the disputes and differences referred to arbitration per-se, they have no objection as such to the learned Arbitrator suggested by the Applicant. 9. In the circumstances, the application is allowed by appointing Mr.S.R. Shah, an advocate of this Court, as a sole Arbitrator.