delhi high court

Delhi High Court: In a petition filed by Hughes Communications India Private Limited (petitioner) under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to challenge the impugned Award dated 04-10-2018 to the extent that the registered Agreement dated 23-03-2001 for sale of immovable property has been held to be determinable in nature and therefore not enforceable. Chandra Dhari Singh, J., held that after consideration of the material on record, including the impugned Arbitral Award, and submissions on behalf of the parties, there is no finding or conclusion reached by the learned Arbitrator which warrants interference of this Court.

The background of the case is that on 3-06-1997, the respondent was allotted land in Electronic City, Gurgaon, Haryana admeasuring 1000 sq. meters by Haryana Urban Development Authority (HUDA) and the petitioner on 17-03-1999 issued a letter offering the plot on lease to the petitioner. Between 20-02-1999 to 06-12-1999, various letters/mails were sent by the respondent to the petitioner for letting out the plot with entitlement to the petitioner to construct a building thereon, and with an option to purchase the plot subject to permission of law.

However, on 27-07-2006, upon the expiry of six years of the term, the petitioner in writing elected and exercised the option vested and granted to it to purchase the property and offered to pay the agreed pre-determined sale consideration. The petitioner asked the respondent to discharge its obligation to convey the title vide various emails, and upon failure to discharge its obligation, the petitioner invoked Arbitration. Thus, the impugned award was passed assailing which present petition was filed.

The issue under consideration is whether the registered agreement dated 23.03.2001 for the sale of immovable property has rightly held to be “determinable in nature therefore not enforceable”, and hence the dismissal of the claim of the petitioner for specific enforcement of the agreement of sale of immovable property was just and proper.

The Court further noted that while adjudicating a challenge under Section 34 of the Arbitration Act, the Courts must limit themselves to examining the Award itself and not the facts of the case. A Court shall not conduct a roving enquiry into the facts and evidence of the matter, and neither shall the Court sit in appeal against the Award of the Arbitrator.

On a bare perusal of the impugned Arbitral Award, the Court opined that the Sole Arbitrator has correctly deduced its findings while passing the Arbitral Award and has correctly interpreted the terms of the agreement. Section 14(1) of the Act prior to amendment, clearly delineates the contracts which cannot be specifically enforced, and under Section 14(1)(c), specific performance cannot be granted in a contract that is determinable in nature. Thus, the findings of the arbitrator on the question of the agreement being determinable do not suffer from any illegality whatsoever.

The Court held that the present case does not warrant the interference of the present Court, as the grounds stated by the petitioner do not meet the scope of Section 34. Accordingly, with reference to the precedents and the impugned Arbitral Award, the Petitioner cannot have the benefit of the “ground of patent illegality” to assail the impugned Arbitral Award under Section 34 of the Act, 1996.

[Hughes Communications India Private Limited v Imaging Solutions Pvt Ltd., 2023 SCC OnLine Del 2351, decided on 26-04-2023]

Advocates who appeared in this case :

Mr. Arvind K. Nigam, Senior Advocate with Mr. Dharmesh Mishra and Mr. Prateek Luthra, Advocates for the Petitioner;

Mr. Varun Kumar, Advocate for the Defendants;

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