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TMI Blog2008 (10) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. Hari Aney, S.C. Tamhane, S.U. Kamdar and Satish Shah for the Appellant. D.D. Madon, D.H. Mehta, S. Pathak, Pravin Samdhani, S. Kathawala and Ms. Sandya Tolat for the Respondent JUDGMENT Dr. S. Radhakrishnan, J. - Both the above appeal and the arbitration application have been referred to us for final disposal by the Hon'ble the Chief Justice. 2. The above appeal arises out of a judgment and order dated 27 August, 2007 passed by the learned Single Judge dismissing the arbitration petition filed under section 9 of the Arbitration and Conciliation Act, 1996 (for the sake of brevity 'the said Act') and the above Arbitration Application No. 43 of 2008 has been filed for the purpose of appointment of an arbitrator as per the provisions of section 11 of the said Act. 3. The entire controversy in both the above appeal as well as the 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, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 7 August, 2007, the arbitration petition came to be filed under section 9 of the said Act for an injunction pending the arbitration. In the said proceedings, on 17 August, 2007, Mr. Haria filed an affidavit stating that the respondents had misrepresented and had taken a letter dated 17 July, 2007, as if the original MoU was in his possession and stated that the same was not in his possession. On the very same day, the respondent No. 1 also filed an affidavit denying any agreement between Everest Construction Co. and the petitioners, however, in the said affidavit, it is admitted by the respondent No. 1 that the Rajesh Builders group had paid him Rs. 2.81 crores but the same was only by way of a friendly loan. On 23 August, 2007, the respondent No. 1 had filed an affidavit giving details of payments made. On 27 August, 2007, Mr. Haria had filed a further affidavit slating 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact the learned Single Judge ought to have granted necessary reliefs under section 9 of the Act. Mr. Aney, the learned senior counsel strongly contended that the aforesaid original MoU was duly executed on a stamp paper of Rs. 100 on 8 November, 2004 and both the parties had kept it with the learned arbitrator, Mr. Haria, in safe custody. Mr. Aney contended that merely because the learned arbitrator had himself misplaced the original MoU, it does not mean that there is no MoU between the Ravilal Dedhia group and Rajesh Builders group. Mr. Aney also contended that there is no dispute that his clients had paid total sum of Rs. 2.81 crores to the said Ravilal Nanji Dedhia. Therefore, Mr. Aney contended that the said amount was utilised by Ravilal Nanji Dedhia group to remove various obstacles as mentioned in clause 2 of the MoU. Therefore, Mr. Aney stated that now after utilising the said 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. ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank) of November, 2004. Similarly, at the end of said document also it does not indicate that the same was signed by any of the parties. Mr. Madon also contended that the Dedhia group did not have a copy of this document. Mr. Madon, the learned senior counsel, pointed out that even though the aforesaid MoU was drafted by Mr. Haria the same is not averred by him in both the affidavits filed by him. 15. Mr. Madon also pointed out that the aforesaid sum of Rs. 2.81 crores had been advanced as a loan by the appellants to Ravilal Nanji Dedhia individually and out of the said amount a sum of Rs. 1.5 crore has been returned back to the appellants as far back as on 5 May, 2006. Mr. Madon also produced before us all the tax returns as well as the profit and loss business loss accounts which clearly indicate that the entire amount of Rs. 2.81 crores was received by Ravilal Nanji Dedhia as and by way of a loan 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge in the case of Charu Trading Company (P) Ltd. v Saimangai Investrade Ltd. in Arbitration Petition No. 479 of 2001 dated 17-9-2001, wherein the learned Single Judge had categorically held that the courts can intervene only in those cases provided by the Act and in respect of the same where there is an arbitral agreement in terms of section-7 of the Act. 18. Mr. Madon also referred to another judgment of the learned Single Judge in the case of Pramod Chimanbai Patel v Lalit Constructions [2002] 4 ALL MR 345, wherein the learned Single Judge had clearly held that unless and until the document is signed by both the parties, there cannot be any arbitration agreement, as per section 7 of the Act. The learned Single Judge had taken a view that both the parties have to sign the agreement, failing which there cannot be any agreement which can be acted upon and treated as an arbitration agreement. 19. Under the aforesaid facts and circumstances of the case, Mr. Madon stated that the judgment and order passed by the learned Single Judge is fully justifiable and this court ought to dismiss the above appeal. Mr. Madon also referred to the judgment of the Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat only Mr. Ravilal Nanji Dedhia could sign on behalf of the entire group and, similarly, Rajesh Raghavji Patel could sign on behalf of the entire Rajesh Builders group. The purported agreement should indicate as to who are the members of the group and who had authorized the aforesaid Ravilal Nanji Dedhia to sign on behalf of the entire group and also who had authorised Rajesh Raghavji Patel to sign on behalf of the entire Rajesh Builders group. Hence, Mr. Samdani contended that, in the instant case, there is no established arbitration agreement as contemplated under the provisions of section 7 of the Act. In that behalf, Mr. Samdani referred to and relied upon a judgment of the learned Single Judge in the case of Jeweltouch (India) (P) Ltd. v Naheed Hafeez Quaraishi (Patrawala) [2008] 3 Mh. LJ 54 and also another judgment of the learned Single Judge in the case of Shaw Wallace Distilleries Ltd. v Kamal Wineries in Arbitration Petition No. 131 of 2003 decided on 9 June, 2003, wherein the learned Single Judge had categorically held that there has to be a finding recorded that there exists an arbitration agreement between the parties which is necessary for making an interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her referred to and relied upon a decision of the Hon'ble Supreme Court in the case of Aurohill Global Commodities Ltd. v Maharashtra STC Ltd. [2007] 7 SCC 120 to contend that whether the contract is non est or otherwise can be decided by the arbitrator and only on that ground, the arbitration application ought not be dismissed. 25. Mr. Kamdar, the learned counsel further sought to contend that the learned arbitrator could go into the issue whether there is an arbitration agreement or not and this court need not go into the same. In that behalf, Mr. Kamdar, referred to and relied upon a judgment of the learned Single Judge in Smt. Satya Kailashchandra Sahn v. Vidarbha Distillers, Nagpur AIR 1998 Bom 210 and another judgment of Delhi High Court in the case of Jansatta Shakari Awas Samiti Ltd. v Organic India [2006] 1 Raj. 124 (Del.). 26. Both the learned senior counsel, Mr. Madon and Mr. Samdani, repeated and reiterated the very same arguments which were advanced in the above appeal, mainly to contend that when there is no clear material before this court to justify that the MoU was duly executed by both the parties and, as the same is absent, there is no arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly indicate from the record as to the time and place where the aforesaid purported MoU was executed and who had all signed the same. 31. Under the aforesaid facts and circumstances of the case, it is explicitly clear that the appellants have failed to establish that there is a valid arbitration agreement duly executed by the parties so as to invoke relief under section 9 of the Act as well as relief under section 11(6) of the Act. 32. In view thereof, under these circumstances, there is no error or illegality in the order dated 27 August, 2007, passed by the learned Single Judge and the appeal is totally devoid of merits. Hence, the same stands dismissed with costs. 33. Since, the appellants have totally failed to establish that there is an arbitration agreement dated 8 November, 2004, entered into between the parties, there is no question of invoking jurisdiction under section 11(6) of the Act for the purpose of appointment of an arbitrator. Hence, the said application also stands dismissed with costs. 34. After the above judgment was pronounced, Mr. Shah, the learned counsel for the appellant sought stay of this order for a period of six weeks.. Mr. Samdhani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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