TaxTMI 
TaxTMI 
TaxTMI 
2008 (10) TMI 359
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....he arbitration application arises out of the purported memorandum of understanding (in short MoU) entered upon between the Ravilal Nanji Dedhia group and Rajesh Builders group. It is the case of the appellant that a MoU was executed between the Ravilal Nanji Dedhia group and Rajesh Builders group on 8 November, 2004, wherein in arbitration clause, both the parties had jointly appointed one Shantilal Vershi Haria as a sole arbitrator. Mr. Aney, the learned senior counsel appearing on behalf of the appellant contended that it was a joint venture arrangement, whereby both the parties had agreed to jointly develop a property situated at Prabhadevi by demolishing an existing structure. Mr. Aney, the learned senior counsel pointed out that, as per the aforesaid MoU, the share would be on 50:50 percentage sharing basis. Mr. Aney, the learned senior counsel, pointed out that before the aforesaid development could take place, various other formalities had to be completed as mentioned in clause 2 of the aforesaid MoU. It is the case of the appellant that, pursuant to the aforesaid joint venture agreement, the appellant had contributed a sum of Rs. 31 lacs on 10 November, 2004 and another sum....
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....ing that the earlier affidavit was filed without reading it and also the original MoU was kept with him with the consent of both parties. However, the original MoU was not traceable, as the same was misplaced in his office. In the aforesaid second affidavit dated 27 August, 2007, Mr. Haria also stated that he had made an incorrect statement in his earlier affidavit that the MoU was not in his possession and as such he prayed for withdrawal of his earlier affidavit. 7. Finally, all the parties had argued before the learned Single Judge with regard to the arbitration petition filed under section 9 of the Act, and the learned Single Judge by his detailed judgment and order dated 27 August, 2007, had criticised the conduct of the arbitrator and found that there were serious disputes between the parties as to the very existence of the MoU. The learned Single Judge had expressed doubt about any right, title and interest in property so created in favour of the Rajesh Builders group. Under these facts and circumstances of the case, the learned Single Judge had dismissed the above arbitration petition filed under section 9 of the Act. 8. Aggrieved thereby, the present appeal has been file....
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....id amount Ravilal Nanji Dedhia group cannot back track and that they have to act on the basis of the said MoU. 11. Mr. Aney also emphasised that pursuant to the said joint venture agreement, the Everest Construction Company as well as Lake View Developers and Satinder Pal Investment Pvt. Ltd. have retired and only Dedhia group and Rajesh Builders group remained, so as to enable the Rajesh Builders group and Dedhia group to jointly develop the said property. 12. Mr. Aney, the learned senior counsel, having regard to the aforesaid facts and circumstances of the case and also in view of the categorical affidavit of the learned arbitrator, Mr. Haria, that the duly engrossed original MoU was with him and the same has been misplaced in his office and as such the court ought to protect the interest of the appellants and the learned Single Judge had committed a serious error in not granting the relief sought in the said proceedings. 13. Mr. Madon, the learned senior counsel appearing on behalf of respondent Nos. 1 and 2 very strongly contended that there is absolutely no MoU dated 8 November, 2004. He pointed out that when the inspection of the purported original MoU dated 8 November, 2....
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....n and in fact out of the said amount of Rs. 2.81 crores, a sum of Rs. 1.5 crores has been returned back as mentioned hereinabove. Mr. Madon emphasised that all these facts clearly indicate that there is no real MOU. If the appellant wants to invoke the said arbitration, clause, then the memorandum of undertaking has to exist. Under these facts and circumstances of the case Mr. Madon contended that the judgment and order passed by the learned Single Judge was fully justifiable and this court ought not to interfere with the same. 16. Mr. Madon also referred to the certain following serious discrepancies in the purported MoU which was annexed to the arbitration petition under section 9 and the arbitration application filed under 11(6) of the said Act. Both the above arbitration petition and the arbitration application have been filed by the appellants. Difference between MoU annexed to the Arbitration Petition No. 336 and annexed to the arbitration application and additional affidavit of respondent No, 5 Annexed to the petition Sr. No. Page Para No. Annexed to the petition 1 1 Heading Thereof be mean and include 2 1 Heading To the context or meaning thereof be mean inclu....
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....until there is an agreement as defined under section 7 of the Act there cannot be any arbitration between the parties. 20. Mr. Samdani, the learned senior counsel appearing on behalf of respondent Nos. 3 and 4 referred to section 7 of the Act, which reads as under: "7. Arbitration agreement - (1) In this part, arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2)An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3)An arbitration agreement shall be in writing. (4)An arbitration agreement is in writing if it is contained in - (a)a document signed by the parties; or provide (b)an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c)an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5)The reference in a contract to a document containing an arbitration clause constitutes an arb....
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.... Housing Society Ltd. in Appeal No. 619 of 2007 in Arbitration Petition (L) No. 233 of 2007 decided on 30 January, 2008, wherein also this court had held that an application under section 9 of the Act can be entertained only if there is an arbitration agreement, then only the learned judge can assume jurisdiction under the said section and if there is no clear evidence that an arbitration agreement signed by the parties, then, there is no question of invoking section 9 of the Act for granting relief. In the said judgment, this court had held that if there is no arbitration agreement, even the court cannot exercise the power under section 11 of the Act, since there is no concluded contract between the parties. 22. Under these circumstances, Mr. Samdani contended that the order passed by the learned Single Judge is fully justifiable and this court ought not to interfere with the same. 23. Right at the outset Mr. Kamdar appearing on behalf of the applicants in the above arbitration application, referred to and relied upon a judgment of the Hon'ble Supreme Court in the case of SBP & Co. v Patel Engineering Ltd. [2006] 2 Comp LJ 7 (SC): [2005] 8 SCC 618, 618, especially paragraph 47, ....
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....d after perusal of the record, we find that none of the aforesaid payments which were purportedly made in pursuance of the joint venture agreement dated 8 November, 2004 i.e., to say three payments of Rs. 31 lacs were paid on 10 November, 2004, Rs. 1 crore was paid on 18 May, 2005, and Rs. 1.5 crores were paid on 25 April, 2006, there is no covering letter sent along with the aforesaid three payments, indicating that the same was pursuant to the above arguments dated 8 November, 2007 Another pertinent fact to note is that all the aforesaid three payments were made individually to Ravilal Nanji Dedhia. There is also no dispute that the aforesaid payments were made by crossed cheques. It is rather strange for the appellants being seasoned businessman and builders to enter into a Mou and not even retain xerox copy of the MoU though the purported original MoU had been handed over to the arbitrator. None of the aforesaid three payments indicate that they were made towards the aforesaid purported MoU. 28. Another vital aspect to be noted here is that the aforesaid sum of Rs. 1.5 crore was returned back on 5 May, 2006, i.e., much before the aforesaid dispute arose and the appellants had ....