1 ARP59.09.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION ARBITRATION PETITION NO. 59 OF 2009 M/s. Seema Constructions ... Petitioner Vs Sumant Dattatraya Raut (since deceased) through his heirs & legal representatives ... Respondents Mr. Rajesh S. Datar for the Petitioner. Mr. Shishir S. Joshi for the Respondent Nos.1 to 4. CORAM : S.J. VAZIFDAR, J. DATED : 30TH SEPTEMBER , 2010. P.C. : 1. This is a petition under section 11 of the Arbitration & Conciliation Act, 1996. 2. The parties had admittedly entered into an agreement dated 20th April, 2002. The Petitioner was to develop a property on which was constructed a building. There are about twelve flats in the building. The Respondent is one such flat-owner. The agreement has been 2 ARP59.09.sxw entered into only between the Petitioner and the Respondent. Similar agreements have been entered into with about seven other flat owners. Under the agreement, upon redevelopment of the property, the Petitioner is required to provide the Respondent, a flat admeasuring 860 square feet carpet area and two other premises admeasuring 300 square feet each. By a supplementary agreement, a sum of Rs. 15,00,000/- is also to be paid. Consequences for default viz. payment of interest is provided. 3. It is not disputed that the agreement contains an arbitration clause. It is contended, however, that in view of clause 22 of the agreement, the entire agreement has come to an end and the arbitration clause has accordingly perished with it. The agreement is in Marathi. The parties have agreed that clauses 22 and 23 thereof are correctly translated to read as under :- “22. While executing this agreement and especially while deciding the compensation in lieu of Development Rights, its nature, quantum, the Party of the First Part has presumed that the said Ashirwad building is in dilapidated condition and by declaring the said Building as such additional F.S.I. will be made available to the said proposed building by T.M.C. As per provisions of D.C. Rules. On this presumption the compensation is decided. Hence, in future if such additional F.S.I. in 1:2 3 ARP59.09.sxw proportion is not made available to the said property then quantum of compensation and its nature shall be proportionately re-determined. The party of the second part is aware of the fact that if compensation is not re- determined in this manner then in that event party of the first part will incur loss while carrying out the development which means it will be impossible for Party of the First Part to carry out development of the said Property. If such re-determination is to be done then the party of the first part agree that the same will be done prior to party of second part vacating his residential premises. The party of the first part agree that there shall not be any changes in this Agreement once the residential flat is vacated.” 23. If in future if any disputes and or differences in respect of this transaction and/or terms and conditions of the said agreement arise between both the parties then in that event same will be resolved by Arbitration. Both the parties will appoint one Umpire from their respective side and the decision given by them will be binding upon both the parties.” 4. The consequences of the FSI as contemplated by the parties at the time of entering into agreement not being made available is provided in clause 23. Clause 22 expressly provides that the size of the consideration and the type of the consideration shall be redetermined “in that proportion”. Thus, the parameters of redetermination of the consideration is stipulated in the agreement.. I hasten to add that whether the FSI, as contemplated by the parties at the time of entering into the agreement, was not available 4 ARP59.09.sxw subsequently or not is a question for the determination by the arbitrator. I am not concerned with the same and I express no view in respect thereof. It is also clarified that all other contentions, including as to whether there was delay on the part of the Petitioner leading to reduction in the FSI is also a question which pertains to the merits of the matter with which I am not concerned in this petition under section 11. 5. In view of the above, I am unable to agree that the agreement has come to an end for the above reason alone. In any event, I am unable to agree that the arbitration clause has perished in view of the above submission. 6. The Petitioner has, by its letter invoking the arbitration dated 14th September, 2009, appointed an arbitrator and called upon the Respondent to appoint an arbitrator which the Respondent has failed to do. 7. The arbitration clause requires a tribunal of three learned arbitrators. The learned counsel, however, states that without 5 ARP59.09.sxw prejudice to their rights and contentions to challenge this order, the matter may be referred to a sole arbitrator keeping in mind, the costs and convenience involved. Accordingly, Vijay Agashe, an advocate practising in the Thane Court is appointed as a sole arbitrator 8. The Arbitration Petition, accordingly, stands disposed of.