IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 82 of 2009 Date of Decision: 10.3.2010 M/s K.S. Estate Developers and Promoters Pvt. Ltd ….Petitioner Vs. Kulbushan Raj Bajaj and ors …..Respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Sanjiv Vij, Advocate for the petitioner Mr. Alok Jagga, Advocate for respondents. HEMANT GUPTA, J The petitioner has sought appointment of an Arbitrator in respect of the disputes arising out of an Agreement dated 14.8.2006 (Annexure A-1). The said agreement contains the following Arbitration Clause: - 24. That in the eventuality, the parties do not arrive at amicable resolution of any dispute or difference, the same shall be referred to the arbitration of a retired Judge of the Punjab and Haryana High Court or of the Supreme Court in accordance with provisions of the Indian Arbitration and Conciliation Act, 1996, and/or any statutory re-enactment or modification thereof. It is the case of the petitioner that the aforesaid Agreement was entered upon with M/s Jaycee Landbase Pvt. Ltd., of which the respondents were the shareholders. Vide the aforesaid Arb. Case No. 82 of 2009 Agreement, respondents were to transfer their shareholding in the said Company to the petitioners for a total sale consideration of Rs. 57,00,01,440/-. It is the case of the petitioner that one of the terms of the Agreement was that the petitioner can deduct from the consideration payable to M/s Jaycee Landbase Pvt. Ltd. Company and/or its shareholder, i.e. the present respondents, in case there is an inordinate delay in transfer of the shares or settlement of cases pending at that time relating to surplus are land purchased by the aforesaid Company. It is asserted by learned counsel for the petitioner that in terms of the said Clause, the petitioner has not paid Rs. 4 Crores to the respondents. In the meantime, the pending litigation in respect of the alleged surplus area of which the Company was the purchaser was decided. The petitioner paid the aforesaid Rs. 4 crores at the time of the execution of the Agreement dated 21.8.2007 (Annexure A-2). The said agreement does not contain any Arbitration Clause. It is the case of the petitioner that in terms of the Clause 7 of the aforesaid Agreement, the petitioner has paid an amount of Rs. 2 crores to the vendors of M/s Jaycee Landbase Pvt. Ltd. over and above the sale consideration agreed in the earlier agreement dated 14.8.2006. Therefore in terms of the Clause 7 of the agreement, the said amount is payable to the petitioner. Such dispute in respect of nonpayment of Rs. 2 crores by the respondent is referable for adjudication by an Arbitrator in terms of Arbitration Clause in the Agreement dated 14.8.2006 (Annexure A-2). Mr. Jagga, learned counsel for respondents pointed out that the Agreement dated 14.8.2006 has been executed in its entirety and no steps are remained to be taken by any of the parties in respect of the aforesaid Agreement. Therefore, in the absence of any 2 2 Arb. Case No. 82 of 2009 Arbitration Clause in the subsequent Agreement dated 21.8.2007, the claim of the petitioner in respect of the recovery of Rs. 2 crore is not referable to an Arbitrator. Learned counsel for the petitioner has vehemently argued that the Agreement dated 21.8.2007 is consequent to the first Agreement dated 14.8.2006, therefore, the Arbitration Clause contained in the aforesaid Agreement would be applicable in respect of the claim of Rs. 2 crores from the respondents herein. Having heard learned counsel for the parties at some length, I do not find that the claim of Rs. 2 crores raised by the petitioner against the respondents is required to be decided by an Arbitrator in terms of Arbitration Clause contained in the Agreement dated 14.8.2006. It is not disputed that the shareholding of M/s Jaycee Landbase Pvt. Ltd. stands transferred in the name of the petitioners i.e. subject matter of agreement dated 14.8.2006. The entire sale consideration of Rs. 57,00,01,440/-, agreed in the agreement dated 14.8.2006 also stands paid including the amount of Rs. 4 crores which was withheld by the petitioner at one stage. In view of the said fact, there is no subsisting obligation on any of the parties in respect of the Agreement dated 14.8.2006 which is required to be complied with by the other party. The second Agreement dated 21.8.2007 is in respect of the payment of Rs. 4 Crores which was withheld at one stage. The claim of the petitioner is to recover a sum of Rs. 2 crores which was not part of either the Agreement dated 14.8.2006 or 21.8.2007. The claim of the petitioner is based upon interpretation of Clause 7 which contemplates that any expenses incurred by the petitioner for settlement of litigation shall be borne by the respondents. 3 3 Arb. Case No. 82 of 2009 Since, the respondents have taken a categorical stand that the disputes are not referable to the Arbitrator as such disputes are not part of the Agreement dated 14.8.2006, therefore, the present application is dismissed. However, it shall be open to the petitioner to seek its remedy from the competent court of law in accordance with law. (HEMANT GUPTA) JUDGE 10.3.2011 preeti 4 4