Case Note & Summary
The case involves two writ petitions filed under Article 227 of the Constitution of India challenging an arbitral award passed by the Arbitral Tribunal in a dispute between Shree Developers (petitioner in WP 342/2015) and Charles Anthony Paco and others (respondents). The dispute arose from an agreement to sell dated 15.04.2005, whereby the respondents agreed to sell a property in Goa to the petitioner for a consideration of Rs. 1,20,00,000. The petitioner paid an earnest money of Rs. 10,00,000. The respondents failed to execute the sale deed, leading the petitioner to file a suit for specific performance in 2008. The suit was referred to arbitration by consent of parties. The Arbitral Tribunal, by award dated 30.04.2015, directed specific performance of the agreement and, in the alternative, awarded damages of Rs. 1,10,00,000 with interest. The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, which was dismissed by the District Judge. Hence, the present writ petitions. The main legal issues were whether the findings of fact by the Tribunal were perverse, whether the claim was barred by limitation, and whether the award of damages was proper. The court held that the findings of fact were based on evidence and not perverse, the claim was within limitation, and the award of damages was justified. The court dismissed both writ petitions, upholding the arbitral award.
Headnote
A) Arbitration - Interference with Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - Findings of Fact - The court held that findings of fact recorded by the Arbitral Tribunal, unless perverse or based on no evidence, cannot be interfered with under Section 34 of the Act. The court found that the Tribunal's conclusion that the respondent was ready and willing to perform his part of the contract was based on evidence and not perverse. (Paras 10-15) B) Specific Relief - Specific Performance of Contract - Section 20 of Specific Relief Act, 1963 - Readiness and Willingness - The court upheld the Tribunal's finding that the respondent had always been ready and willing to perform his part of the agreement, as he had paid the earnest money and was willing to pay the balance. The court noted that the respondent had filed a suit for specific performance and had deposited the balance consideration in court. (Paras 16-20) C) Arbitration - Damages in Lieu of Specific Performance - Section 34 of Arbitration and Conciliation Act, 1996 - The court upheld the award of damages in lieu of specific performance, as the property had been sold to a third party during the pendency of the arbitration. The court found that the quantum of damages was based on the valuation report and was not excessive. (Paras 21-25) D) Limitation - Filing of Claim before Arbitrator - Limitation Act, 1963 - The court held that the claim for specific performance was not barred by limitation, as the agreement was executed in 2005 and the respondent had filed a suit in 2008, which was later referred to arbitration. The court found that the claim was within the period of limitation. (Paras 26-30)
Issue of Consideration
Whether the findings of fact recorded by the Arbitral Tribunal regarding execution of the agreement to sell, readiness and willingness of the respondent, and the award of specific performance and damages are perverse or contrary to the public policy of India so as to warrant interference under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
Both writ petitions are dismissed. The arbitral award dated 30.04.2015 and the order of the District Judge dated 30.09.2015 are upheld. No order as to costs.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 34
- Section 37
- Specific Relief Act
- 1963
- Section 20
- findings of fact
- perversity
- public policy
- interference with arbitral award
- limitation
- readiness and willingness
- specific performance
- damages in lieu of specific performance
