TaxTMI 
TaxTMI 
2023 (11) TMI 1377
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....) is the sole and exclusive owner of land admeasuring 27740 sq.yards along with the old construction thereon, commonly known as 'Jaipuria Mill' at 6926, Clock Tower, Subzi Mandi, Delhi (hereinafter referred to as "Suit Property"). The appellant and the respondent/Anant Raj Ltd.(Claimant in the Arbitral proceedings hereinafter referred to as the 'Respondent')entered into an Agreement dated 12.06.2007 for development of a Residential-cum-Commercial Complex on the said land in collaboration (hereinafter referred to as the "Project"). The large portions of the lands were in possession of the tenants both commercial and residential, as was mentioned in the Agreement itself. Out of approximately 200 tenancies, more than a majority were commercial. 3. The appellant in terms of the Agreement executed Special Power of Attorney and a General Power of Attorney on 13.06.2007 in favour of the representative of the respondent/Anant Raj Ltd. in terms of Clause (1) of the Agreement. The land cost was agreed between the parties at Rs.25 Crores as mentioned in Clause 2.The appellant was required to extend full support to the respondent/Anant Raj Ltd. for reaching the settlements with the tenants fo....
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....5. The case of the respondent/Anant Raj Ltd. was that in terms of the Agreement, all the requisite steps were to be taken by it to seek eviction of the tenants and it was expected that necessary sanctions would be obtained within a period of 60 months which shall commence from the day of getting the tenants vacated. It was claimed by the respondent/Anant Raj Ltd. that the appellant chose to act capriciously and deliberately failed to perform its reciprocal promises under the Agreement thereby paralysing the development of the Project despite the respondent/Anant Raj Ltd. having invested huge amounts of money amounting to Rs.5 Crores. 6. The appellant/Raghunath Builders Pvt. Ltd. denied the entire claim in toto and asserted that it was the respondent who had failed to perform its obligations under the Agreement. The respondent in the period of 3 years from the date of execution of the Agreement i.e., upto 2010 evicted only 32 persons pertaining to 14 tenancies. Further, the Agreement provided for a period of 60 months from the date of Agreement to obtain necessary sanctions, but even after the lapse of 8 years since the Agreement dated 12.06.2007, the respondent/Anant Raj Ltd. had ....
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....ted 12.06.2007 by the Respondent/Counter Claimant, and declare the said Agreement as cancelled and terminated directing the parties to perform the consequences for termination thereof in terms of Clause 19(a) therein. Counter Claim 2: Direct the claimant to remove its employees, security personnel, representatives and others who are forcibly occupying the portions got vacated from the tenants specifically considering the fact that the same can only be treated as the joint possession of both the parties. Counter Claim 3: Costs of Arbitration incurred by the Respondent. The Respondent craves leave to provide the details of the expenditure upon completion of the Arbitration proceedings." 10. The learned Arbitrator considered the submissions and read the various clauses in the Agreement dated 12.06.2007, to conclude that the Agreement between the parties was not a Collaboration Agreement as was claimed by the respondent/Anant Raj Ltd. but was a Developmental Project. After the tenants were evicted, the joint possession was to be taken by both the parties in the lands. It was also observed that Power of Attorneys were not supported by any consideration but were only to enable ....
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....e Award. The Counter-Claim 3 for cost of arbitration proceedings however was declined. 14. Aggrieved by the Award dated 09.09.2017, respondent/Anant Raj Ltd. preferred the Objections under Section 34 of the Act, 1996 vide OMP (COMM) 368/2017 before this Court. 15. The learned Single Judge observed that Clause 6 contemplated two situations viz.(i) within 60 months from the date of getting the tenanted area vacated and (ii) in case part is vacated and as per law, part plan could be sanctioned, then it will be got sanctioned accordingly. It was observed that the learned Arbitrator had failed to appreciate second limb of the Clause 6 and had given a finding only on the basis of part (i) of the Clause 6. 16. On conjoint reading of Clause 6 with Clause 19 of the Agreement, it was evident that the right to terminate the Contract would accrue 60 months after the vacation of the land by the tenants. Thus, the counter conclusions by the learned Arbitrator were not supported by express provisions of the Agreement. 17. It was concluded by the learned Single Judge that the learned Arbitrator fell in error in concluding that the Agreement dated 12.06.2007 and Power of Attorneys dated 13.06.2....
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....unjab State Civil Supplies Corporation Ltd. and Another Vs. Ramesh Kumar and Company and Others (2021) SCC OnLine SC 1056 and Welspun Speciality Solutions Ltd. Vs. ONGC (2022) 2 SCC 382. 23. It was prayed that the impugned Order of the learned Single Judge dated 16.10.2017 be set aside and the Award dated 09.09.2017 of the learned Arbitrator, be restored. 24. Learned counsel on behalf of the respondent/Anant Raj Ltd. has submitted that the Special Power of Attorney and General Power of Attorney executed in its favour, were illegally revoked by the appellant since they were irrevocable in nature being for valuable consideration. The Agreement dated 12.06.2007 was also allegedly terminated by claiming that since the respondent had failed to obtain requisite sanctions/permissions etc. within 60 months from the date of Agreement in clause of Clause 19(a), the Agreement stood automatically cancelled. However, Clause 6 clearly stated that the sanctions were to be obtained within 60 months from the date of getting the tenanted area vacated. The occasion to obtain the sanctions did not arise and the period of 60 months did not commence as the tenanted area was not got vacated from the te....
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....be the owner on which the flats were to be constructed by the respondent/Anant Raj Ltd. The learned Arbitrator therefore rightly concluded that the appellant was well within its right to revoke the Power of Attorneys. 29. Now, coming to the second main aspect or the revocation of the Agreement vide letter dated 17.11.2014. The learned Arbitrator again considered the various terms of the Agreement and observed that the obligation was of the respondent/Anant Raj Ltd. to get the premises vacated but over a period of 8 years, only 14 tenancies were vacated while the appellant had extended full support for filing 80 litigations in which favourable Orders were given in 40 cases. Further, there was a mention in the Award that some premises from which the tenants had been evicted had been re-let by the respondent but there was no evidence to show as to how many premises have been re-let. It was thus, observed by the learned Arbitrator that there was no act of the appellant which could inferred as a hurdle in the execution of the Agreement. 30. A detailed interpretation of Clause 6 and Clause 19 was made to determine whether the Agreement was validly terminated. A bare reading of Clause 6....
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....easoned order has held that the termination of the Agreement was valid and was in accordance with the terms of the Agreement dated 12.06.2007. 34. In the impugned order the learned Single Judge has interpreted Clause 6 and 19 differently to conclude that the 60 months period would commence from the date the tenants were evicted. First and foremost, we find that the learned Arbitrator in his well reasoned order had interpreted the terms of the Agreement in the perspective of the Agreement being a Commercial Contract which was required to make commercial sense. The learned Single Judge has given another interpretation to aforesaid Clauses which may or may not be possible but essentially, it amounts to re-appreciation of facts to come to a different conclusion. 35. The scope of grounds on which an Arbitral Award can be challenged under Section 34 of the Act is limited and are circumscribed by Section itself and the judicial precedents interpreting the said provision. 36. The scope of a challenge under Section 34 and Section 37 of the Act, 1996 is limited to the grounds stipulated in Section 34 as held in MMTC Limited v. Vedanta Ltd, (2019) 4 SCC 163. The comprehensive judicial lite....
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....atter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within the fundamental policy of Indian law, namely, the contravention of a statute not linked to public policy or public interest cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality. It was also made clear that re-appreciation of evidence which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award. A change that has been brought in by the Amendment Act, 2015 is that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction and would fall within the new ground of patent illegality added under Section 34(2A). 41. It was further explained that a finding based on no evidence at all or an Award which i....
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.... deals with matters not allotted to him, he commits a jurisdictional error. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The ambiguity of the Award can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the Award. Such a jurisdictional error needs to be proved by evidence extrinsic to the award. 47. In McDermott International Inc. vs. Burn Standard Co. Ltd. (2006) 11 SCC 181,, it was further noted that the construction of the contract Agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpre....