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Delhi District Court
Amit Guglani vs L And T Housing Finance on 19 April, 2025
DLND010069942024
IN THE COURT OF MRS VINEETA GOYAL,
DISTRICT JUDGE (COMMERCIAL-03),
PATIALA HOUSE, NEW DELHI
OMP (Comm) No.186 of 2024
CNR No. DLND01-006994-2024
In the matter of:
1. Mr. Amit Guglani
s/o Mr. Manohar Lal Guglani
2. Ms. Nisha Guglani
w/o Mr. Amit Guglani
Both at : 882/5, Street No.6,
Opp. Bakein Bihari Mandir,
Patel Nagar, Gurgaon,
Haryana - 122001.
(M):+ 91-9717391620
Email ID: [email protected] ........ Petitioners
Versus
1. L&T Housing Finance Ltd.
Through : Managing Director
At : DCM Building, 16 Barakhamba Road,
Connaught Place, New Delhi-110001.
Email ID: [email protected], [email protected]
(M): +91-9158004777, +91-9681298310 Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:23:25
+0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 1 of 39
2. Raheja Developers Ltd.
Through Managing Director
At: W4D 204/05, Keshav Kunj,
Western Avenue, Cariappa Marg,
Sainik Farms, New Delhi-110062.
Email ID: [email protected]
(M): +91-8722108722. ...... Respondents
Date of institution of suit : 02.09.2024
Date of Judgment : 19.04.2025
Appearance : Sh. Chaitanya Rohilla, Ld. Counsel for petitioners.
Sh. Arvind Jadon and Ms. Taru Saxena, Ld. Counsels for
respondent no.1.
Sh. Gurtej Pal Singh and Ms. Ashna Arora, Ld. Counsels for
respondent no.2.
JUDGMENT
1 This is a petition u/s. 34 of the Arbitration and
Conciliation Act, 1996 (as amended) (in short ‘the Act’) filed by
the petitioners for setting aside order dated 14.07.2024 passed by
Arbitral Tribunal in case file Ref. No.DIAC/7193/11-23 titled as
‘Amit Guglani & Anr. Vs. L&T Housing Finance Ltd. & Anr.‘ on
an application u/s. 23(3) of the Act preferred by the petitioners
herein.
2 Brief background leading to present petition is that the
respondent no.1, a company, is engaged in the business of
advancing finance in different categories such as home loans, auto
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:23:36
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loans, micro loans, etc, under a Scheme of Amalgamation, merged
with NLT Finance Limited w.e.f. April 12th 2021. The respondent
no.2, a company, engaged in the business of real estate, invited
application for allotment by sale of residential units in its
residential real estate project ‘Raheja Vanya’ situated at
Sector-99A, Gurgaon, Haryana, on construction link plan. The
petitioners booked a residential unit in the ‘Raheja Vanya’ Project
and approached respondent no.1 for a home loan of Rs.67 lakhs
towards payment of purchase consideration of the said residential
unit. A Tripartite Agreement dated 24.10.2018 was executed
between the petitioners, respondent no.1 and respondent no.2.
The petitioners and respondent no.2 had also agreed that the pre-
equated monthly installments shall be subvented by respondent
no.2 for a maximum of 48 months and the respondent no.1 shall
be deducting pre-EMIs for the term of this subvention, up front
from first disbursement. A loan agreement was also duly entered
between petitioners and respondent no.1 on 17.01.2019. The
respondent no.1 sanctioned and disbursed home loan to the
petitioners vide a letter dated 17.01.2019 as per the terms of the
loan agreement. As per the case of the petitioners, on 06.09.2019
the petitioners received a letter from the respondent no.1 regarding
the loan account mentioning that BPLR (Basic Prime Lending
Rate) of the petitioner’s home loan was erroneously mentioned in
the sanction letter to be 17.75%. The corrected BPLR was
18.10%. This change / modification in BPLR was contrary to the
terms and conditions of the Tripartite Agreement dated
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:23:45 +0530
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24.10.2018. The petitioners raised an objection against the
increase of BPLR by way of several communications addressed to
respondent no.1 alleging that unilateral modification of BPLR was
impermissible. The petitioners also received notice u/s. 13(2) of
SARFEASI Act from respondent no.1. Dispute and differences
arose between the parties. The petitioners also wrote to Grievance
Redressal Officer, however, there was no reconciliation of the
dispute. The petitioners sought appointment of independent
Arbitrator before Hon’ble Delhi High Court by preferring a
petition u/s. 11 of Arbitration and Conciliation Act, 1996 (Arb. P.
1317/2022). The Hon’ble Delhi High Court vide judgment dated
22.08.2023 dismissed the said petition observing that even when
the agreement provides unilateral appointment of Arbitrator, it
does not exempt a parties from adhering to notice requirement
stipulated u/s. 21 of the Act. Moreover, the Hon’ble Delhi High
Court observed that in the absence of a notice invoking arbitration
u/s.21 of the Act, the court could not exercise jurisdiction u/s.
11(6) of the Act. While the petition filed by the petitioners was
dismissed, the Hon’ble High Court clarified that such dismissal
would not preclude the petitioners from invoking the arbitration
clause 27 in Tripartite Agreement for reference of dispute in
arbitration, in accordance with law. Subsequently, the petitioners
again preferred a petition u/s. 11 of the Act for appointment of
Arbitrator. The Hon’ble Delhi High Court vide its order dated
02.11.2023 passed in arbitration proceedings bearing Arb.
Digitally
P.1143/23 constituted Arbitral Tribunal. signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:23:51
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2.1 The petitioners then filed their Statement of Claim
before Arbitral Tribunal, while the arbitration proceedings were
pending, the petitioners realizing that new facts and circumstances
have arisen since the Statement of Claim was filed by petitioners,
the petitioners moved application u/s. 23(3) of the Act claiming
that as per clause 7.1 of Agreement to Sell dated 12.10.2018, the
respondent no.2 was scheduled to complete the project within a
period of 48 months + / – 12 months i.e. grace period
(commitment period) from the date of execution of Agreement to
Sell. However, even after the expiry of 65 months, the project is
far from its completion and still under construction stage. The
petitioners learnt that the respondent no.2 had still not applied for
OC (Occupation Certificate) with Real Estate Regulating
Authority (RERA). The respondent no.2 in dire contravention of
the terms as per Agreement to Sell dated 12.10.2018 (herein
referred as ‘Agreement’), has not still given delivery and
possession of the flat in the said project to the petitioners. The
petitioners have also stressed that in the Agreement, there is a
default clause that in the event the respondent no.2 fails to give
possession, the respondent no.2 is liable to pay interest at the rate
prescribed for every month of delay. The petitioners till date had
paid Rs.32,99,577/- to respondent no.2, thus as per the terms of
Agreement, the petitioners are entitled for interest @ 10.85% on
the aforesaid amount for every month of delay till handing over
the possession of the flat. Further the interest is to be calculated in
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:23:59 +0530
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terms of Haryana Real Estate (Regulation and Development)
Rules, 2017. Additionally, the petitioners also claimed that they
are entitled for the loss on rental profitability on account of such
delay.
2.2 The petitioners, on the strength of these pleas, moved an
application u/s. 23(3) of the Act seeking permission to allow the
supplementary claims of the claimant (petitioners herein) to be
taken on record for adjudication. With a detailed order dated
14.07.2024 (hereinafter referred to as impugned order), the said
application was dismissed by Ld. Arbitrator.
3 Aggrieved by this, the petitioners has filed the instant
petition on the grounds as follows :-
a) The Ld.Arbitrator failed to appreciate that the Tripartite
Agreement dated 24.10.2018 is the main or umbrella
agreement between the petitioners and respondents and the
Agreement to Sell dated 12.10.2018 is connected with
Tripartite Agreement inextricably and the disputes raised in
the present application as well as Statement of Claim by the
petitioners can only be resolved by reading the covenants of
both the agreements. The Hon’ble Delhi High Court while
deciding Section 11 application of the petitioners in Amit
Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr.,
2043 DHC 5279, has observed in para 30 as under :-
“30. From a reading of the aforementioned judgments, it
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:24:07
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clearly emerges that where there are two agreements which
are connected and interlinked and both contain Arbitration
Clauses, which are not similar to one another, in order to
determine the nature of the arbitral proceedings, the two
documents have to be read in harmony or reconciled and
parties should get the disputes resolved under the main or
umbrella agreement. Applying these principles, this Court
finds merit in the contention of the Petitioners that
reference to arbitration has to be made by invoking the
Arbitration Clause in the Tripartite Agreement which reads
as follows :-”
b) The Ld. Sole Arbitrator failed to appreciate that the
Hon’ble High Court has categorically observed that the
Tripartite Agreement is to be the umbrella agreement for
adjudication of disputes between the petitioners and
respondents.
c) The Ld. Sole Arbitrator failed to appreciate that the
present case is similar to the case which was decided by
Hon’ble High Court in arbitration No.1317/2022. The
Buyer Builders Agreement is only a breach of Tripartite
Agreement i.e. main / umbrella agreement and has to be
read together. In the said petition, the respondent no.1 has
raised the argument since the issue pertains to loan
agreement, hence the dispute resolution clause should be
applicable. This argument was rejected by Hon’ble Court.
In the present case also, the respondent no.2 is raising the
similar arguments that since the issue pertains to Buyer
Builder Agreement, hence the Dispute Resolution clause in
the said Agreement should be applicable. The petitioners
Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:24:15
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submitted that issues raised in supplementary Statement of
Claim have to be adjudicated by the Arbitral Tribunal and
they are very well within the scope of reference of the
Tribunal.
d) The Ld.Sole Arbitrator failed to appreciate that no
separate notice u/s. 21 of the Act is required to be issued by
the petitioners to the respondents.
e) Ld. Arbitrator failed to appreciate that the arbitration
agreement in the Tripartite Agreement dated 24.10.2018
does not require the Ld. Arbitrator to decide only the
specifically referred dispute hence the petitioners after
filing the Statement of Claim, add / supplement to the
claims already made.
f) The Ld. Arbitrator failed to appreciate that arbitration
agreement in the Tripartite Agreement dated 24.10.2018
does not require the Ld. Arbitrator to decide only the
specifically referred dispute, whom the petitioners can after
filing of Statement of claim, add / supplement to the claims
already made.
g) The Ld. Arbitrator failed to appreciate that remedy
available to the petitioners under RERA Act is in addition to
the remedy available under other special statutes and the
availability of alternative remedy is not a bar to the
entertaining of a petition filed under the Act. But once
elected, then the other remedy will not lie in respect of same
dispute. Petitioners have not initiated any proceedings
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:24:24 +0530
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under RERA Act, hence election of remedy of arbitration is
not barred.
4 The respondent no.2, on the other hand, appeared and in
their reply raised various objections inter alia that the instant
petition is not maintainable u/s. 34 of the Act since the impugned
order dated 14.07.2024 is not an interim award ; that Tripartite
Agreement dated 24.10.2018 is not an umbrella Agreement ; that
this Tripartite Agreement was executed only after the institution of
Agreement to Sell dated 12.10.2018 between petitioners and
respondent no.2 which does not contain an arbitration clause ; that
clause 33 of the Agreement provides that disputes arising between
the parties is to be adjudicated by an Adjudicating Officer and the
jurisdiction cannot be assumed in the absence of arbitration clause
in the Agreement. The respondent no.2 also urged that Section
23(3) of the Act does not envisage fresh claims.
4.1 At the outset, Ld. Counsel for respondent no.2 has raised
an objection that rejection of application of petitioners seeking
supplementary Statement of Claim by Ld. Arbitrator vide order
dated 14.07.2024, does not constitute the interim award in terms
of Section 2(1)(c ) of the Act and is not challengeable u/s. 34 of
the Act.
4.2 In case of Cinevistaas Ltd. v. Parsar Bharti 2019 SCC
OnLine Del 7071, the Hon’ble Delhi High Court has held that
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
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under Section 2(1)(c) of the Act, an award includes an ‘Interim
Award’, and whether an impugned order constitutes an Interim
Award or not is to be decided by seeing the nature of order and not
the title of the application. The relevant paragraph of the judgment
is reproduced herein below :-
“22. The question that then arises is whether the order of
the Ld. Arbitrator constitutes an ‘Award’. Under Section
2(1)(c), an award includes an ‘interim award’. Whether the
impugned order in the present case constitutes an interim
award or not is to be decided by seeing the nature of the
order and not the title of the application, which was
decided. …”
4.3 Ld. Counsel further submitted that from a bare
reading of para 11.15 of the impugned order dated 14.07.2024, it
is evident that the impugned order dated 14.07.2024 makes a
determination qua the jurisdiction of the arbitral tribunal and not
on the additional claims of the petitioners.
4.4 Further, in the case of Punj Lloyd Ltd. v. Oil and
Natural Gas Corporation Ltd., 2016 SCC OnLine Bom 3749 , the
Hon’ble Bombay High Court has held that an order of the tribunal
refusing to allow amendment to the claim did not constitute an
Interim Award or a final award and such order was not amenable
to appeal under Section 34 of the Act. The relevant paragraph is
being reproduced hereinbelow:-
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:24:39
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“17. Section 2(1)(c) of the Act provides that the arbitral
award includes an interim award. A conjoint reading of
section 2(1)(c) of the Act with section 34 clearly indicates
that an application for setting aside an arbitral award under
section 34 can be only made only if the award is final or
interim. Insofar as the application for amendment is
concerned, the said application was made under section 23
of the Act. The decision was taken by the arbitral tribunal
under section 23(3) of the Act. Insofar as submission of
learned Counsel for the petitioner that in view of the
rejection of the application for amendment by the arbitral
tribunal with regard to additional claims proposed to be
made by the petitioners, the same has attained finality and
thus, such a decision has to be construed as an award within
the meaning of section 2(1)(c) of the Act is concerned in
my view, since there was no adjudication of the claim made
by the petitioners on merits, which is an essential
requirement for construing any decision as an award within
the meaning of section 2(1)(c) of the Act, such a decision
rejecting an application for amendment of the claim cannot
be construed either as an interim award or as a final award.”
4.5 Ld. Counsel for the respondent no.2 further referring
to Sections 16 and 23(3) of the Act submitted that when a Tribunal
determines its jurisdiction, as in the present case, the aggrieved
party has no remedy except waiting for the final award and
challenging the same under Section 34 of the Act. This is also
evident from Section 37 of the Act which provided for Appeals.
Section 37 of the Act does not provide any appeal against any
order under Section 16 of the Act.
Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:24:47
+0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 11 of 39
4.6 Ld. Counsel for respondent no.2 further argued that
Section 23(3) of the Act makes it evident that the provision only
permits ‘amendment’ or “supplementation’ of claim or defence”. It
does not provide for the supplementation or addition of a
completely different claim. Amendment and supplementation are
incremental in nature, whereas by way of the present application,
the petitioners are defeating the legislative intent. The sole
legislative intent behind the same is only to ensure that the
proceedings are not derailed or impeded – the mere asking of a
party.
4.7 Ld. Counsel for respondent no.2 further submitted
that in the case of Lindsay International Private Limited vs IFGL
Refractories Limited, 42 SCC OnLine Cal 1880, the Hon’ble
Court looked into the meaning of the arbitration award as defined
in Section 2(1) (c) and 31(6) of the Act and further analysed the
scope of Section 23 of the Act respectively. The Hon’ble Court
considered whether the order in question meets the criteria for an
interim award capable of being challenged through Section 34 of
the Act or whether it is simply an order that must be kept outside
the remedy available under Section 34 of the Act. In the present
case, the Hon’ble Court opined that the introduction of a new
cause of action, which is not a part of the subject matter of
reference cannot amount to an “interim award” under the ambit of
Section 31(6) of the Act.
Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:24:54
+0530
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4.8 While relying in case of Vil Rohtak Jind Highway
Pvt. Ltd. Vs National Highways Authority of India, 2022 SCC
OnLine Del 4670, Ld. Counsel submitted that the the Hon’ble
Court has held that an order can be considered as an ‘interim
award’, if it completely decides an issue. Thus, finality is the key
to identifying whether an ‘interim order’ qualifies as an ‘interim
award’. It is only when the nature of an award is final in the sense
that it conclusively decides an issue, the award would qualify as
an interim award. The Hon’ble Court has opined that the
impugned order is not an interim award.
4.9 Further, in the case of Punita A. Bhardwaj vs Rashmi
Juneja, 2022 SCC OnLine Del 2691 , the Hon’ble Court was of the
view that the statute clearly vests discretion in the arbitral tribunal
to disallow a party to amend or supplement its pleadings on the
ground that the application is belated. The relevant paras are as
under :-
“18. The three judgments of this Court cited by learned
counsel for the parties must be read in the context of this
provision. The statute clearly vests discretion in the arbitral
tribunal to disallow a party to amend or supplement its
pleadings on the ground that the application is belated. In
Container Corporation, the amendment was rejected by the
arbitral tribunal on this ground and the challenge under
Section 34 of the Act was held not to be maintainable. In
Cinevistaas and Lt.Col. H.S. Bedi Retd. on the other hand,
the Court came to the conclusion that the rejection of the
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:25:02
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amendments were in the nature of final adjudication of the
claims and defences proposed to be raised. It is this factor
which clothed the orders of the tribunal with the
characteristic of finality and rendered them susceptible to
challenge as interim awards. This distinction, in my view, is
the key to determining the maintainability of the present
petition.
19. In the facts of the present case, the learned arbitrator
has proceeded only on the ground that the amendment was
sought belatedly. Paragraphs 12 and 13 of the impugned
order make this position clear, and in fact, in paragraph 13,
the learned arbitrator has stated that “expression of any
view herein before will not be treated as expression on the
merit of the case”.
20. Further, it is evident that the suit was filed before this
Court as far back in 2014 and referred to arbitration in the
year 2016. The application for amendment was filed by the
petitioner only on 21.07.2017. Even thereafter, it is
recorded by the learned arbitrator that the matter proceeded
without the petitioner seeking an adjudication of the said
application until 04.11.2019, when the impugned order was
passed. In the meanwhile, proceedings continued before the
learned arbitrator, and issues appear to have been framed in
these proceedings on 17.05.2018. During the pendency of
the present petition before this Court also, I am informed
that the parties have proceeded to lead evidence before the
learned arbitrator and the proceedings are now at the stage
of final arguments. ”
4.10 Further in the case of NTPC Lid vs Larsen and Turbo
Limited & Anr., 2023 SC Online, the Hon’ble Court held that the
Tribunal has only rejected the application for amendment on the
ground that same has been made after a long lapse of time. Thus,
the impugned order not having the nature of an interim award, the
petition filed under Section 34 of the Act shall not be
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
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maintainable. The relevant paragraph is being reproduced herein
below:
“54. The facts in Cinevastaas (supra) and the facts herein as
demonstrated above are at variance inasmuch in the present
case, the Tribunal has only rejected the application for
amendment on the ground that the same has been made
after a long lapse of time. In fact, it has granted liberty to
the petitioner herein to invoke a fresh arbitration insofar as
the claims sought to be put forth through the application are
concerned. Surely, the petitioner shall be at liberty to take
all pleas on the maintainability of the claims in such
arbitration. In fact, from paragraph 7.20 of the impugned
order, it can be seen that the Tribunal has refrained itself
from going into the issue of limitation and waiver. In other
words, the issue of limitation with regard to the merits of
the updation/amendment sought by the petitioner has not
been adverted to by the Tribunal at all. If that be so, it
cannot be said that such claims of the petitioner have been
decided finally, and as such the impugned order does not
fulfill the requirements toner have been decide finally, and
as such the impugned order does not fulfill the
requirements of an award or an interim award under the Act
of 1996. So the impugned order not having the nature of an
interim award, this Court is of the view that the petition
under Section 34 shall not be maintainable.”
4.11 Ld. Counsel for respondent no.2 further submitted
that no notice u/s. 21 of the Act was given to respondent no.2.
Entire purpose of invoking an arbitration by way of a mandatory
notice under Section 21 of the Act, a requirement which the
petitioners did not comply with initially, is to provide the opposite
parties with the nature and scope of the claims. In the present case
there was not even a whiff about any dispute arising out of
Agreement to Sell in the notice sent by the petitioners under
Section 21 of the Act. Therefore, the petitioners cannot add any
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
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claim at their own pleasure and will and referred to the case of
Alupro Building Systems Pvt. Ltd. vs Ozone Overseas Pvt. Ltd.
2017 SCC OnLine Del 7228, wherein the Hon’ble Court was
pleased to uphold that the significance of invoking arbitration
proceedings in terms of Section 21 of the Act is to ensure that
party against whom the arbitration is being invoked should know
what the claims are. The intent behind making the other party/
recipient aware about all of the claims is to provide due
opportunity to the recipient to point out if some of the claims are
time barred, or barred by law or are untenable in fact.
4.12 Ld. Counsel for respondent no.2 further vocifirously
contended that the petitioners have wrongfully claimed that
Tripartite Agreement dated 24.10.2018 is the main or umbrella
agreement between the petitioners and the respondents. The
Tripartite Agreement was excuted only after the Agreement to Sell
dated 12.10.2018, hence the petitioners’ averment that the said
Tripartite Agreement is the umbrella agreement is neither tenable
nor logical. Ld. Counsel emphasized that it is well settled that an
umbrella Agreement’s arbitration clause will be applicable to
interlinked or independent agreements. However, an interlinked
agreement’s arbitration clause ought to have a specific reference to
the main or umbrella agreement. It is submitted that the two
agreements which were directed to be construed harmoniously by
the Hon’ble High Court vide its order dated 22.08.2023 were the
Tripartite Agreement dated 24.10.2018 and the Home Loan
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
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Agreement dated 17.01.2019 only. In terms of paragraph no. 30
of the judgment dated 22.08.2023 under Section 11 of the Act, it
was held that where there are two agreements which are connected
and interlinked and both contains the Arbitration clauses which
are similar to one another, in order to determine the nature of the
arbitral proceedings, both the documents will have to be read
harmoniously and the parties should get the disputes resolved
under the main or umbrella agreement. Importantly, the Hon’ble
High Court was not adjudicating upon the interlinkage of
Agreement to Sell with Tripartite Agreement dated 24.10.2018
and the Home Loan Agreement dated 17.01.2019. Further, no
claims have been based on the Agreement to Sell either in the
invocation notice, the petitions under Section 11 of the Act or the
Statement of Claim. Hence, there was no occasion for the Hon’ble
High Court to have adjudicated upon the said issue. Ld. Counsel
further urged that Agreement to Sell does not contain any
arbitration clause. Clause 33 of the said Agreement provides for
dispute resolution through appointment of adjudicating officer
appointed by RERA, which reproduced as under :-
“33. DISPUTE RESOLUTION-
All or any disputes arising out of or touching upon or
relating to the terms and conditions of this Agreement,
including the interpretation and validity of the terms thereof
and the respective rights and obligations of the Parties, shall
be settled amicably with mutual discussions, by holding 3
meetings mutually recorded, failing which the same shall
be settled through the adjudicating officer appointed under
the Act”. Digitally signed
by VINEETA
VINEETA GOYAL
Date:
GOYAL 2025.04.19
17:25:31
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4.13 Ld. Counsel addressed the plea taken by petitioners
that Tripatite Agreement is an umbrella Agreement and urged that
it is well settled that an Arbitrator derives its powers from an
Arbitration Agreement. A conjoint reading of the aforementioned
clauses clearly shows that the Tribunal cannot go beyond the
Arbitration Agreement and assume jurisdiction for the Agreements
which are not a part of the same transactions and especially where
the jurisdiction has expressly been conferred upon RERA.
Pertinently, Agreement to Sell dated 12.10.2018 was executed
only between the respondent no.2 and the petitioners. The
respondent no.1 is a common party in the Tripartite Agreement
and the Home Loan Agreement. However, respondent no.1 is not a
party to the said Agreement and hence has no right, interest or role
in the said Agreement. Therefore, a corollary cannot be drawn to
claim that Agreement to Sell will also be subject to arbitration.
4.14 Ld. Counsel further submitted that the option to
‘elect’ a remedy is only available when such remedy is available.
According to Snell’s Principles of Equity the ‘Doctrine of
Election’ of remedies is applicable only when there are two or
more co-existent remedies available to the litigants at the time of
election. In the present case, the ‘Doctrine of Election’ cannot
apply to the petitioners since in terms of the aforementioned
Clause 33 of the said Agreement, it is clear that in case disputes
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arose between the parties, the said disputes will be adjudicated by
an adjudicating officer appointed under the RERA and not by an
Arbitrator. Therefore, it is submitted that the petitioners have
wrongfully relied upon a clause i.e. the arbitration clause which
does not exist between the parties. Even otherwise, in terms of
Section 7(5) of the Act, there is no clause in either of the three
agreements which links the arbitration clauses in the other two
agreements to the Agreement to Sell.
5 Refuting the above submissions, Ld. Counsel appearing
on behalf of petitioners argued that as per Section 2(1)(c) of the
Act, an arbitral award includes an interim award. Section 31(6) of
the Act allows the Arbitral Tribunal to make an interim award on
any matter on which it may make a final award. The Hon’ble
Supreme Court in IFFCO v. Bhadra Products (2018) 1 SCR 848,
had clarified that an interim award is a final determination of a
specific issue within the arbitration.
5.1 Ld. Counsel for petitioners further relied upon the
observations made by the Hon’ble Division Bench of the Delhi
High Court in MBL Infrastructure Ltd. v. Rites Limited
(2023:DHC:2912), wherein it has been categorically held that an
order rejecting an amendment application that forecloses claims
constitutes an interim award and more specifically para 3, 9.2, 10,
14 to 16 to argue that the rejection of the amendment application
was an interim award under Section 2(1)(c) of the Act, the
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relevant para are reproduced as under :-
“9.2 Therefore, it was held by the Supreme Court in the
IFFCO case (supra) that there can be an interim award
which finally decides an issue, prior to culmination of
proceedings by a final award.
xxxxxxx
12.1 In our view, the extract from the judgment of the
Supreme Court in IFFCO case (supra) is clear and
categoric. A decision of an Arbitral Tribunal which brings a
quietus to an issue before it and is an order which the
Arbitral Tribunal is empowered to pass at the final stage
would constitute an interim award within the meaning of
Section 31(6) as also Section 34 of the Act.
xxxxxx
14 The amended claims are stated to be claims based on
events subsequent to the filing of the Statement of Claim.
The Impugned Arbitral Order by rejecting the Amendment
Application has finally adjudicated upon the additional
claims of MBL for the work done upto the completion of
the Project, as the right of MBL to proceed further with its
additional claims has effectively been foreclosed.
15 MBL would not be able to proceed with adjudication of
its additional claims without an amendment to the
Statement of Claim since, to adjudicate upon the additional
claims, the Arbitral Tribunal would be required to allow the
Amendment Application and take on record the amended
claims, permit RITES to file an amended statement of
defence, and thereafter, permit both parties to adduce
evidence in respect of their respective contentions.
16 The Arbitral Tribunal’s approach as reflected in
paragraph 17 of the Impugned Arbitral Order, which is, that
MBL could agitate its claim before “competent authority” is
inexplicable. The arbitral disputes between MBL and
RITES with respect to the Project are being adjudicated by
the Arbitral Tribunal in the present proceedings.
Clause 25 of the contract between the parties is the disputes
settlement and arbitration clause which encompasses all
disputes between the parties. Referring certain disputes to
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another forum, especially when this Arbitration has been on
for more than five years, will be unnecessary and further
delay the proceedings. Adjudicating upon additional claims
under the Final Bill in separate proceedings will also lead to
multiplicity of proceedings.”
5.2 Ld. Counsel further submitted that the facts of MBL
Infrastructure Ltd. v. Rites Limited (supra) are squarely applicable
to the present case. In MBL Infrastructure (supra), the Arbitral
Tribunal rejected an amendment application and granted liberty to
approach another forum, but the Hon’ble Delhi High Court has
held that this amounted to an interim award. Similarly, in the
present case, the Ld. Arbitrator rejected the amendment /
supplementation application, yet observed that the petitioners
could avail remedies before another forum. This approach was
specifically rejected by the Hon’ble Delhi High Court in MBL
Infrastructure Ltd. (para 16), where it was held that such a ruling
effectively forecloses claims and amounts to a final adjudication.
He thus submitted that the order dated 14.07.2024 constitutes an
interim award under Section 2(1)(c) of the Act. It forecloses the
petitioners’ right to amend/supplement their claim within
arbitration, thereby making a final determination on an issue. As
per MBL Infrastructure Ltd. v. Rites Limited (supra) , such an
order qualifies as an interim award and is amenable to challenge
under Section 34 of the Act. The observation allowing recourse to
another forum is legally untenable, as held by the Hon’ble
Division Bench of the Delhi High Court. He thus submitted that
impugned order is in the nature of an award. Digitally signed
by VINEETA
GOYAL
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5.3 On merits, Ld. Counsel for petitioners submitted that
the Tripartite Agreement dated 24.10.2018 is the main or umbrella
agreement between the petitioners herein and the respondents and
the Agreement to Sell dated 12.10.2018 is connected with the
Tripartite Agreement inextricably and the disputes raised in the
present application as well as in the Statement of Claim by the
petitioners can be resolved by reading the covenants of both the
agreements.
5.4 Ld. Counsel further submitted that the Hon’ble Dehi
High Court while deciding the Section 11 application of the
petitioners in Amit Guglani and Anr. Vs. L&T Housing Finance &
Anr (supra), had categorically held the Tripartite Agreement dated
24.10.2018 to be the umbrella agreement for the adjudication of
disputes between the petitioners & respondents. The Builder
Buyer Agreement (in short ‘BBA’) is only a branch of the
Tripartite Agreement i.e. main/umbrella agreement and have to be
read together. Ld. Counsel further submitted that in Arb.P.
1317/2022, the respondent no.1 had raised the argument that since
the issue pertains to the loan agreement, hence the dispute
resolution clause in loan agreement should be applicable. This
argument was effectively rejected by the Hon’ble Court. In the
present case also, the respondent no.2 is raising the similar
argument that since the issue pertains to the BBA, hence the
dispute resolution clause in the BBA should be applicable. Ld.
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Counsel submitted that the issues raised in supplementary
Statement of Claim have to be adjudicated by Arbitral Tribunal
and they are very well within the scope of reference of this
Tribunal.
5.5 Ld. Counsel for petitioners further submitted that no
separate notice U/s 21 of the Act is required to be issued by the
petitioners to the respondents. The Hon’ble Supreme Court of
India in the judgment of Civil Appeal No. 4987/201 ‘State of Goa
Vs. Praveen Enterprises‘ had categorically held:-
“16. There can be claims by claimant even without a notice
seeking reference. Let us take an example where a notice is
issued by a claimant raising disputes regarding claims ‘A’
and ‘B’ and seeking reference thereof to arbitration. On
appointment of the arbitrator, the claimant files a claim
statement in regard to the said claims ‘A’ and ‘B’.
Subsequently if the claimant amends the claim statement by
adding claim ‘C’ [which is permitted under section 23(3) of
the Act] the additional claim ‘C’ would not be preceded by a
notice seeking arbitration. The date of amendment by which
the claim ‘C’ was introduced, will become the relevant date
for determining the limitation in regard to the said claim ‘C’,
whereas the date on which the notice seeking arbitration
was served on the other party, will be the relevant date for
deciding the limitation in regard to Claims ‘A’ and ‘B’.”
5.6 Ld. Counsel reiterates that the arbitration agreement
in the Tripartite Agreement dated 24.10.2018 does not require the
Ld. Arbitrator to decide only the specifically referred disputes,
hence the petitioners can, after fling the Statement of Claim,
ad/supplement to the claim also made. Ld. Counsel further argued
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that the remedy available to the petitioners under the RERA is in
addition to the remedies available under other special statutes and
the availability of alternative remedies is not a bar to the
entertaining of a petition filed under the Act. But once elected,
then the other remedy will not lie in respect of the same dispute.
Hence, once a RERA proceeding is initiated, the present
application under the Act would not lie. However, in the present
case, petitioners have not initiated any proceeding under RERA
Act, hence election of remedy of arbitration is not barred. Upon a
conjoint reading of Sections 88 and 89 of RERA Act, it clearly
emerges that provisions of RERA Act would be in addition to, and
not in derogation of, any other law, and that the provisions of
RERA would have effect notwithstanding anything inconsistent
with any other law in force. The supplementary claims are
arbitrable and are within limitation. The arbitral proceedings are
at a very nascent stage and the respondent no.2 has not yet filed
the Statement of Defence to the Statement of Claim by the
petitioners.
6 Having regard to arguments advanced by Ld. counsels
for parties and perused the record, the first issue that needs to be
decided is maintainability of this petition u/s. 34 of the Act. The
primary contention of respondent no.2 is that impugned order is
neither an award nor an interim award in terms of Section 2(1)(c )
r/w Section 31(6) of the Act. There is no final determination of
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prayers sought to be raised by the petitioners in supplementary
Statement of Claim in their application. The Ld. Arbitrator
rejected the contention and allowed the petitioner’s to avail
appropriate facility before any other forum / court in accordance
with law.
7. Section 2(1)(c) of the Act states that the term “arbitral
award” shall includes an interim award. At the same time Section
31(6) of the Act states that any time during arbitral proceedings,
Arbitral Tribunal may make an interim award on any matter which
it can make a final award. In case of Satwant Singh Sodhi vs.
State of Punjab, (1999) 3 SCC 487, the Hon’ble Apex Court held
as under :-
“6. The question whether interim award is final to the
extent it goes or has effect till the final award is delivered
will depend upon the form of the award. If the interim
award is intended to have effect only so long as the final
award is not delivered, it will have the force of the interim
award and it will cease to have effect after the final award
is made. If, on the other hand, the interim award is intended
to finally determine the rights of the parties it will have the
force of a complete award and will have effect even after
the final award is delivered. . . . . .”
8 The Hon’ble court in Cinevistaas Ltd. (supra), applied
the principles of Shah Babulal Khimji v. Jayaben D. Kania & anr.
(1981) 4 SCC 8, to hold that while determining whether the order
passed by the Arbitral Tribunal can be considered to be an interim
award regard should be had to whether the order determines the
substantial rights of the parties. It was held, as under :-
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“35. Arbitral proceedings are not meant to be dealt with in
a straightjacket manner. Arbitral proceedings cannot also be
conducted in a blinkered manner. There could be various
situations wherein, due to inadvertent or other errors,
applications for amendments/corrections may have to be
moved. So long as the disputes fall broadly within the
reference, correction and amendments ought to be
permitted and a narrow approach cannot be adopted. The
principles of Shah Babulal Khimji (supra) would have
greater application in arbitral proceedings as the said
judgment lays down the principle, that the substantive
rights affected ought to be seen, while determining what
kind of orders are challengeable. An interim order of the
present kind rejecting a large number of additional
amounts/claims would constitute an interim award under
Section 2(1)(c) of the Act.
9 In MBL Infrastructure Ltd. (supra), the Hon’ble
Division Bench reiterated in the above principles in the following
words :-
“In our view, the extract from the judgment of the Supreme
Court in IFFCO case (supra) is clear and categoric. A
decision of an Arbitral Tribunal which brings a quietus to
an issue before it and is an order which the Arbitral
Tribunal is empowered to pass at the final stage would
constitute an interim award within the meaning of Section
31(6) as also Section 34 of the Act.”
10 In Goyal MG Gases Pvt. Ltd. vs. Panama Infrastructure
Developers Pvt. Ltd. & Anr., 2023 SCC Online Del 1894 , the
Hon’ble Court dealt with principles applicable to determine if the
order amounts to an interim award or not in the following words :-
“20. It is reflecting that an order would said to be an
award or interim award when it decides a substantive
dispute which exists between the parties. It is essential
before an order can be understood as an award that it
answers the attributes of the decision on the merits of the
dispute between the parties or accords in conclusively
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settling a dispute which pertains to core issue. Therefore to
qualify as an award it must be with respect to an issue
which constitutes a vital aspect of the dispute. As held in
the case of Rhiti Sports the order passed by the arbitral
tribunal would have the attributes of an interim award when
same decides the matters of moment‟ or disposes of a
substantive claim raised by the parties. Accordingly, an
order passed by the Arbitral Tribunal rejecting the
application for impleadment neither decides the substantive
question of law nor touches upon the merits of the case.
The impugned order, as such, has not travelled the distance
to answer the attributes of determination of an issue.”
11 In the present case, the Ld. Arbitrator has held as
under :-
“12. Conclusion of the Tribunal
12.1 Upon examination of legal position of law
surrounding Section 23(3) of the Arbitration Act, 1996, to
my mind, the Tribunal is not necessarily required to confine
itself to the aspect of delay in making a request for
amendment / supplementation. In case, the Tribunal finds
that there is no arbitration clause at all between the parties
in the Agreement from which the dispute emanates, then the
said position cannot be ignored while adjudicating the
application under Section 23(3) of the Act, 1996. Existence
of arbitration clause relating to supplementary Statement of
Claim is sine qua non for allowing the amendment /
supplementation under Section 23(3) of the Arbitration Act,
1996.
12.2 Therefore, the Application under Section 23(3) is
dismissed for the same not maintainable in the present
Arbitration proceeding as there is no arbitration clause in
Builder Buyer Agreement dated 12.10.2018 executed
between the Claimant and Respondent no.2. Furthermore,
the claims / disputes now sought to be raised by the
Claimant by virtue of Supplementation are not arising out
of or in connection with the Tripartite Agreement dated
24.10.2018, but relate exclusively to Builder Buyer
Agreement, which ex facie does not contain arbitration
clause to enable administering of alternative dispute
resolution under the provision of the Arbitration Act, 1996.
12.3 Hence, I am unable to persuade myself to allow the
application by exercising powers bestowed under Section
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VINEETA GOYAL
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23(3) of the Arbitration and Conciliation Act, 1996 as
without any arbitration clause, the provisions of the
Arbitration Act,1996 cannot be triggered.
12.4 However, it is made clear that the present order will
not come in the way of the Claimant to avail appropriate
remedy before any other forum / court in accordance with
law. Further time spent in relation to the claims sought by
way of the present amendment / supplementation
application would not be counted towards the period of
limitation, should the claimant avail other legal remedies.”
12 From the meaningful reading of above findings of the
Tribunal, it is evident that Ld. Arbitrator has given a final finding
that the claims / disputes sought to be raised by the petitioners by
virtue of supplementation are not arising out of or in connection
with the Tripartite Agreement but related to Builders Buyers
Agreement which ex facie does not contain arbitration clause.
The Ld. Arbitrator gave a final adjudication on one of the pleas of
the petitioners which the petitioners had tried to raise that
Tripartite Agreement is an umbrella Agreement and the
Agreement to Sell is connected with the Tripartite Agreement
inextricably and the disputes raised by way of the application u/s.
23(3) of the Act of the petitioners as well as the claims can be
resolved only by reading the covenants of both the parties, what
emerges from the above findings, it does comprises a final
determination of core issue between the parties and attributes to
the decision of the foreclosing the claims with the Arbitrator.
Accordingly, in the considered opinion of this court, the impugned
order has feature of finality and as such impugned order is
Digitally
amenable to challenge u/s. 34 of the Act. signed by
VINEETA
VINEETA GOYAL
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13 Now, adverting to merits, it is useful to refer
claims/pleas filed by petitioners in original Statement of Claims
and in the application to allow supplementary claims. The
petitioners in original Statement of Claim have sought reliefs as
follows :-
“36. That in terms of the disputes in above-mentioned
paragraphs – 9 to 16. the claimants claim following reliefs
from the respondent No.1:
i. To declare that the letter dated 06.09.2019 by the
respondent no.1, was in breach of terms of tripartite
agreement / loan agreement dated 25.10.2018 & 11.10.2018
respectively.
ii. To award damages to the tune of INR 14 lacs for a
breach by a unilateral modification in the contract without
the consent of the parties of the Tripartite agreement dated
24.10.2018 along with interest of 18% from 06.09.2019 and
pendente lite, and;
iii. To award damages to the tune of INR 4 lacs for ruining
of credit score of the claimants which resultantly led to
rejection of a top up loan for a different property owing to
which the claimants had to sell off their-another property to
make-up for their deficit monies for finance along with
interest of 18% from 06.09.2019 and pendente lite, and;
iv. Direct the respondent no. I to refund the extra interest
collected by the respondent no.1 from loan A/c no.
xxxxxxxxxxxxxxx816, to the claimants and respondent
no.2, in terms of modification of BPLR from 17.75 % to
18.10% from 06.09.2019, and;
v. Cost of litigation may also be awarded in favour of the
claimants
vi. Pass any other/further orders) as this Hon’ble Arbitral
Tribunal may deem fit and proper in the interest of justice.
14. It may be noted that in the original Statement of
Claim, the petitioners are seeking reliefs being aggrieved by the
fact that respondent no.1 unilaterally and arbitrarily increased
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by VINEETA
GOYAL
VINEETA Date:
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BPLR from 17.75% to 18.10%. In the said Statement of claim,
there is no averment with regard to the Agreement to Sell dated
12.10.2018.
15. In the application, to allow supplementary Statement
of Claim, the petitioners sought to add reliefs against respondent
no.2 as under :-
“RELIEF
18. That in terms of the disputes in above-mentioned
paragraphs, the claimants claim following reliefs from the
respondent No.2:
i. To direct the respondent no.2 to pay a sum of
Rs.1,16,805.03
as interest from 11.10.2023 till the completion and final
delivery of the project, @10.85% on Rs. 32,99,577, payable
each month by the respondent no.2 to the claimants, for
every month of delay since 11.10.2023 till the handing over
of the possession of the said apartment for residential usage
of the claimant, and;
ii. To award and direct the respondent no.2 to pay the
claimants a sum of Rs. 1,80,000/- (Rs.30,000 x 6 months of
loss on profitability) as compensation on account of loss on
profitability and the loss on rental income from 11.10.2023
till the date of filing of the supplementary claim i.e.,
09.03.2024, incurred by the claimants owing to the delay in
the delivery of the project by the respondent no.2, and;
iii. To award and direct the respondent no.2 to pay the
claimants Rs. 30,000/- as monthly compensation (on delay
after 09.03.2024) on account of loss on profitability and the
loss on rental income from 09.03.2024 till the date of
completion of the project by respondent no.2, and;
iv. Any other compensation on account of mental agony
suffered by the claimants owing to the delay in performance
of the agreement to sell dated 12.10.2018 by the respondent
no.2, and;
v. Cost of litigation may also be awarded in favour of the
claimants.”
Digitally signed
VINEETA by VINEETA
GOYAL
GOYAL Date: 2025.04.19
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16 It may be noted that claims raised in supplementary
Statement of Claim by petitioners are on different foundation and
reliefs are being sought against respondent no.2. The claims are
premised on account of breach of covenants of handing over the
possession of flat in terms of Clause 7.1 of Agreement to Sell.
Section 33 of the Agreement to Sell entered into between
petitioners and respondent no.2 provides that all or any disputes
arising out of or touching upon or relating to the terms and
conditions of this agreement, including the interpretation and
validity of the terms thereof and the respective rights and
obligations of the parties, shall be settled amicably with mutual
discussions by holding three meetings mutually recorded, failing
which same may be settled through the adjudicating officer
appointed under the Act. Agreement to Sell also provides
definition of Act means the Real Estate (Regulation and
Development) Act, 2016.
17. This shows that in this Agreement, there is no
arbitration clause. Further, a conjoint reading of above clause
along with definition explicitly spells that in case of dispute arose
between the parties, the said dispute will be adjudicated by
adjudicating authority appointed under the Act meaning thereby
Real Estate (Regulation and Development) Act, 2016 not by an
arbitration.
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
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18. Perusal of impugned order shows that Ld. Arbitrator
considered the application of the petitioners and hold that in the
original Statement of Claim, the reliefs are sought against
respondent no.1 which is financial institution engaged in funding
loan, on the other hand, in the supplementary Statement of Claim,
reliefs are sought, are directed against respondent no.2 in relation
to handing over possession of flat purchased in terms of Builder
Buyer Agreement. Therefore, the facts and claims /disputes raised
in the original claim are completely unrelated and divorced from
the facts and claims/reliefs on the basis of which, the
Supplementary Statement of Claim is preferred. Further, the Ld.
Arbitrator while dealing and rejecting with the issue of Builder
Buyer Agreement is subservient to the Tripartite Agreement, the
later being main/umbrella agreement returned the findings as
under:-
“11. REASONS AND FINDINGS OF THE TRIBUNAL
11.11 I cannot agree with the said submission for multiple
reasons. First, Builder Buyer Agreement is earlier in time
than the Tripartite Agreement and was entered in to for the
specific purpose of drawing out the covenants for
sale/purchase of the flat in the Project “Raheja Vanya”
which was being developed by the Respondent No. 2.
Under the said Builder Buyer Agreement, there is no
obligation on the home buyer to purchase a flat through the
method of financing on loan. Thus, the subsequent
Agreement in the present case is Tripartite Agreement, and
not Builder Buyer Agreement. Therefore, it is not logical to
hold that the Tripartite Agreement becomes an Umbrella
Agreement, when it is subsequent executed. Second,
Builder Buyer Agreement and Tripartite Agreement have
been entered for different purposes. While the former is in
the nature of agreement to sell, the latter is for availing loan
for financing the sale/purchase of the flat. The parties are
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also not common in the both the Agreements. Moreover,
Respondent No. 1 which is financial institution has no role
whatsoever in the execution of the Builder Buyer
Agreement and breach of any covenants of such agreement.
Third, there is no reference, specific or implied, of the
Builder Buyer Agreement in the Tripartite Agreement and
vice-versa. Assuming that the Tripartite Agreement was the
Umbrella Agreement, in that case as well there is no further
specific reference of arbitration clause contained in the said
Tripartite Agreement to be adopted by the parties as
modicum of resolution of disputes in the Builder Buyer
Agreement. It is not the case of the Claimants in the
Application that Tripartite Agreement is a standard form
contract and specific reference is not required. The settled
position of law in relation to doctrine of incorporation of
arbitration clause by reference was amplified in M.R.
Engineers and Contractors Pvt. Ltd. v. Som Datt Builders
Ltd, reported at (2009) 7 SCC 696, wherein it has been held
that for an arbitration clause existing in another document
to be incorporated by reference, there has to be a clear
intention of the parties to incorporate the arbitration clause
in the contract. There has to be a specific reference to
incorporate the arbitration clause in a contract. The only
exception to the aforesaid position as provided in MR
Engineers (supra) is where the contract provides that the
standard form of terms and conditions of an independent
trade or professional institution shall apply to the contract.
In such contracts, the terms including the arbitration clause
are deemed to be incorporated by a mere reference. It is
also to be seen that the arbitration clause contained in
another document is applicable to the dispute between the
parties to the contract. In the present case, contrary to the
case set up by the Claimants, the Builder Buyer Agreement,
envisages resolution of disputes under the RERA Act,
exclusively, and thus, in my limited view, ousts other
remedies available to either party. There is no doubt in the
intention of parties to which forbade resort to any other
adversarial form of litigation, except taking legal remedies
under the RERA Act. The proposition canvassed by the
Claimants’ Counsel that RERA Act is in addition to other
remedies would not hold water in the present case, as the
parties in Clause 33 Builder Buyer Agreement have pre-
elected the legal remedy out of the options available to
them. Fourthly, the submission that the Builder Buyer
Agreement and Tripartite Agreement are inextricably
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:28:01 +0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 33 of 39
connected in their body and spirit is also not correct. The
purpose of both the agreements are quite different and
distinct as stated above. It is further not the case of the
Claimant that for adjudication of disputes raised in the
Supplementary Statement of Claim, holistic reading of
covenants of Builder Buyer Agreement and Tripartite
Agreement are required.
11.12 Tribunal also finds the vehement reliance of
Claimant’s counsel on the observation contained in Para 27-
30 of the judgment dated 22.08.2023 in Arb P 1317 of 2022
( Amit Guglani & Anr. Vs. L&T Housing Finance & Anr.‘,
2023:DHC:5979) rendered between the same parties to be
misconceived. The point raised by the Claimant misses the
central issue before the Hon’ble Delhi High Court as
captured in Para 14 of the said judgment. The Ld Single
Judge explicitly records that “the first issue that this Court
is required to examine is whether the dispute arising under
the Loan Agreement is integrally connected with the
Tripartite Agreement. Necessity of resolving this
conundrum arises on account of the preliminary objection
taken by Respondent No.l that under the Loan Agreement,
the exclusive jurisdiction to decide the disputes lies with
the Courts at Kolkata. Therefore, if the Court comes to a
conclusion that the Petitioners cannot invoke the
Arbitration Clause under the Tripartite Agreement, this
Court will lack the territorial jurisdiction to entertain this
petition.”
11.13 In light of the issue raised, the Hon’ble Delhi High
Court in Para 26 held that a holistic and conjoint reading of
the Tripartite and Loan Agreements respectively shows that
at the time of entering the Tripartite Agreement, there was
consensus ad idem on the terms and conditions contained
therein which comprehensively, in my view, encompass the
conditions of payment of loan under the Loan Agreement,
including EMIs and interest rates etc. and there is an
overlap. Non-payment of increased BPLR may amount to
breach of the Tripartite Agreement whereunder the unit of
the Petitioners has been mortgaged in favour of the lender
and thus both the Agreements are inseparable and
interconnected.
11.14 The observations of the Hon’ble Delhi High Court in
aforesaid judgment dated 22.08.2023 are ostensibly
confined to the Tripartite and Loan Agreement, that is, the
two agreements before it, which related to funding of the
loan to the Claimants on certain terms, albeit, the purpose
Digitally signed
by VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:28:08 +0530OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 34 of 39
of the loan was to purchase the flat from Respondent No. 2.
There is no reference of the Builder Buyer Agreement in
entire judgment and hence, it cannot be concluded that the
Tripartite Agreement was the main/umbrella even in
relation to the Builder Buyer Agreement.
11.15 For all the above reasons, I hold that the Builder
Buyer Agreement cannot be construed as ancillary or
intricately linked/connected to the Tripartite Agreement. I
further hold that there is no valid and subsisting arbitration
clause between the parties in terms of Section 7(5) of the
Arbitration Act, 1996 in the Builder Buyer Agreement.”
19 From the above findings of the Ld. Arbitrator, it is
evident that allegations in the supplementary Statement of Claim
primarily concern the terms of Agreement to Sell dated
12.10.2018. The genesis of the transaction in the said Agreement
to Sell contains the recitals about allotment of subject flat in
residential project of respondent no.2, definitions, terms etc.
Clause 33 of Agreement to Sell as extracted above, the Dispute
Resolution Clause specifies that parties agreed to resolve the
dispute through the adjudication authority appointed under the
Act. This indicates that the parties have pre-elected the legal
remedy out of options available to them. This clause contains an
inbuilt mechanism for adjudication of disputes arising between the
petitioners and respondent no.2. Meaning thereby, this clause
unambiguously conveys the intention that disputes arising out of
Agreement to Sell would be governing only to parties and there is
no arbitration clause. This intention of parties cannot be rewritten
by reading it in conjunction with arbitration clause contained in
Tripartite Agreement so as to enlarge its scope. Digitally
signed by
VINEETA
VINEETA GOYAL
GOYAL Date:
2025.04.19
17:28:15
+0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 35 of 39
20 In case of M R Engineers and Contractors Private
Limited vs Som Datt Builders Limited, (2009) 7 SCC 696 : (2009)
3 SCC (Civ) 271 (supra), Hon’ble Supreme Court was analyzing a
question where the PWD had entrusted the work under a contract
to the respondent which contained an Arbitration Clause. The
respondent in turn had hired the appellant as a sub-contractor to
execute the work. Disputes arose between the parties and the
appellant filed an application under Section 11 of the Act invoking
the Arbitration Clause incorporated in the main contract between
the PWD and the respondent. Hon’ble Supreme Court held:
“We will give a few instances of incorporation and mere
reference to explain the position (illustrative and not
exhaustive). If a contract refers to a document and provides
that the said document shall form part and parcel of the
contract, or that all terms and conditions of the said
document shall be read or treated as a part of the contract,
or that the contract will be governed by the provisions of
the said document, or that the terms and conditions of the
said document shall be incorporated into the contract, the
terms and conditions of the document in entirety will get
bodily lifted and incorporated into the contract. When there
is such incorporation of the terms and conditions of a
document, every term of such document (except to the
extent it is inconsistent with any specific provision in the
contract) will apply to the contract. If the document so
incorporated contains a provision for settlement of disputes
by arbitration, the said arbitration clause also will apply to
the contract.”
21 The principle which emerges from the provisions of
Section 7(5) is elucidated in paragraph 19 of the judgment, which
is extracted below:
“Sub-section (5) of Section 7 merely reiterates these well-
Digitally signed
by VINEETA
VINEETA GOYAL
Date:
GOYAL 2025.04.19
17:28:24
+0530OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 36 of 39
settled principles of construction of contracts. It makes it
clear that where there is a reference to a document in a
contract, and the reference shows that the document was
not intended to be incorporated in entirety, then the
reference will not make the arbitration clause in the
document, a part of the contract, unless there is a special
reference to the arbitration clause so as to make it
applicable.”
22 The approach of composite Arbitration was under
consideration of the Hon’ble Delhi High Court in Libra
Automotives Private Limited vs. BMW India Private Limited and
Another, 2019 SCC OnLine Del 9073, and under the
circumstances where parties entered into number of contracts the
following was held:-
22. The Court while exercising its power under Section 11
of the Act, cannot recast the terms of the Contract and
direct the parties to go for a composite arbitration contrary
to the procedure prescribed under the arbitration clause
provided in distinct arbitration agreements. The overlapping
of the issues does not mean that the arbitration proceedings
under the two respective contracts cannot commence and
continue independently. Fundamental feature of an
arbitration agreement is that there is an understanding
between the parties to adopt alternate mechanism for the
adjudication of the future disputes that arise between them.
The law does not prescribe any standard form of arbitration
agreement and the parties are free to agree upon a
procedure and designate the private forum where the parties
would like to go in case the disputes and differences arise
between them. Thus, there is to be consensus ad-idem
between the parties regarding the choice of the forum.
23 In yet another case, Hon’ble Delhi High Court in
Huawei Telecommunications (India) Co. Pvt. Ltd. Vs BSNL &
anr., Neutral Citation No-2020:DHC:1416, ARB.P.-591/2019
Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:28:33
+0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 37 of 39
dated 27.02.2020, has held that Arbitration Agreement between
one contract cannot be incorporated into another contract, unless
there is a clear intention of the parties to do so while entering into
a second agreement.
24 Reverting to the case in hand, appropriately guided
by judgments (supra) and applying to the facts of this case, there
is no infirmity in the impugned order passed by ld. Arbitrator. Ld.
Arbitrator was right in observing that Builder Buyer Agreement
cannot be construed as ancillary or intricately linked to Tripartite
Agreement and there is no subsisting arbitration clause between
the parties in terms of Section 5 of the Act in the Agreement.
25 Further, it is no more res integra that arbitration
proceedings emanates from the contract, there must be an
arbitration clause, which must be invoked by the parties to the
contract. The requisite condition of invoking of arbitration clause
being mandatory has been held in number of cases. In the case in
hand, there was not even a whisper about any dispute arising out
of Agreement to Sell in the notice sent by the petitioners u/s. 21 of
the Act to the respondents. Therefore, at no point of time,
conditions of Section 21 of the Act have been complied with.
26 In view of above discussion, there is no infirmity in
the impugned order passed by ld. Arbitrator. Accordingly, the
present petition is dismissed. Digitally signed
by VINEETA
GOYAL
VINEETA Date:
GOYAL 2025.04.19
17:28:41
+0530
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 38 of 39
Parties are left to bear their own cost.
File be consigned to record room.
Digitally signed
VINEETA by VINEETA
GOYAL
GOYAL Date: 2025.04.19
17:28:51 +0530
Pronounced in the open Court (VINEETA GOYAL)
on this 19th April, 2025 District Judge (Commercial-03)
Patiala House, New Delhi
OMP (Comm) No.186/24 Amit Guglani & Anr. Vs. L & T Housing Finance Ltd. & Anr. Page 39 of 39
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