Delhi High Court Prime Century City Developments Pvt. ... vs Ansal Buildwell Limited on 31 October, 2002 Equivalent citations: 2003(2)ARBLR127(DELHI), 102(2003)DLT445, [2003]42SCL256(DELHI) JUDGMENT Vikramajit Sen, J. 1. This windingup Petition has been filed with the grievance that the Petitioner's advance payment of Rs. 10,00,000/ has not been returned to it despite its several requests. The parties had entered into an Agreement dated 26.12.2000 for the development of a residential Complex in Moradabad. Ninety Three plots of various dimensions were to be carved out and sold from a planned area of approximately 1,00,000 Square Meters. However, some portions of the proposed meterage are owned by third parties who could not be persuaded to participate in the envisaged project called "Century City". It is alleged that considerable delay occurred causing a sharp increase in the project costs. Since time to resolve the dispute according to the Agreement had expired and due to the alleged willful failure of the Respondent to provide necessary basic services, the entire plan got dislocated and disrupted, thereby frustrating the project itself. The Agreement contained the following Arbitration Clause, which has generated considerable arguments: "Any dispute which may arise during the course of this, OA (within 12 months from the date of signing of this MOA) efforts will be made to resolve it amicably by having meeting between Mr. Gopal Ansal and mr. Mohammed Mansoor. However, in the event the amicable resolution is not arrived at the dispute shall be referable to Arbitration as per Indian Arbitration and Reconciliation Act, 1996. The jurisdiction of the Arbitration and/or the Court of law shall be at New Delhi." 2. In its Reply in opposition to the Petition, it has been disclosed that the Respondent had already moved the Civil Court for interim orders under Section 9 of the Arbitration and Conciliation Act, 1996 and for the appointment of an Arbitrator or for settlement of disputes before such an appointment. It has been further pleaded that payment of certain cheques in favor of the Respondent had been stopped by the Petitioner thus raising disputes between the parties. It is the Respondent's case that windingup proceedings cannot be maintained for recovery of bona fie disputed sums of money. The Respondents had already undertaken various activities immediately after the execution of the said Agreement, for which it is entitled to monetary compensation. It has been pleaded that "the question of Rs. 10,00,000/ paid in the Memorandum of Agreement becomes adjustable at the final accounting which will be taken note of at the time of accounts are settled between the parties". It is categorically denied that the Respondents induced the Petitioner to pay the said advance of Rs. 10,00,000/. With regard to the project, it is stated that all the activities could not be undertaken without possession of the entire land. It has been categorically denied that there was any agreement to the effect that even if the Contract was unilaterally terminated, the said amount of Rs. 10,00,000/ would be refundable. 3. The first question to be answered is whether the existence of an Arbitration Clause would invariably have the effect of closing the doors of the Company Court to the Petitioner. Learned Counsel for the Petitioner has predicated his arguments that the Company Judge retains jurisdiction regardless of such a clause on the decision of the Hon'ble Supreme Court in Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd., in which it has been observed as follows: "Section 8(1) (of the Arbitration and Conciliation Act, 1996) provides that the judicial authority before whom an action is brought in a matter will refer the parties to arbitration the said matter in accordance with the arbitration agreement. This, however, postulates that what can be referred to the arbitrator is only that dispute or matter which the arbitrator is competent or empowered to decide. The claim in a petition for winding up is not for money. The petition filed under the Companies Act would be to the effect, in a matter like this, that the company has become commercially insolvent and, therefore, should be woundup. The power to order windingup of a company is contained under the Companies Act and is conferred on the court. An Arbitrator, notwithstanding any agreement between the parties, would have no jurisdiction to order winding up of a company." The presence of an arbitration clause was found not to preclude the jurisdiction of the Company Court, it being statutory relief. This is not to say that in ever case the Company Judge will proceed to adjudicate,, till the very end, the disputes brought before him, even though on further reflection and cogitation, it appears to him to be apposite and expedient to refer the parties to arbitration, where the issu