Sri. Ambareshappa Vs Sri Prakash Gangaram

a) Appoint an arbitrator to adjudicate the dispute between the parties in terms of clause 13 of the agreement of sale deed 29.12.2018 at Annexure-A.

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b) Pass such other orders as this Hon’ble court may deems fit under the facts and circumstances of the case in the interest of justice and equity.

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The petitioner and respondent had entered into an agreement of sale on 29.12.2018 for sale of properties as described therein in the schedule. The said agreement of sale is governed by an arbitration

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Clause in terms of Clause 13 thereof, which is reproduced hereunder for easy reference;

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13. It is mutually agreed between the Parties hereto that any dispute arising out of this Agreement of Sale over the performance of the terms and conditions agreed to herein in respect of the Schedule Property shall be referred to

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Arbitration in accordance with the Arbitration and Conciliation Act, 1996 and the place of Arbitration shall be at Bangalore.

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Contending that there are certain disputes which have arisen as regards the execution of a sale deed in terms of the agreement of sale, a notice came to be issued by the petitioner on 21 . 08.2023, invoking the arbitration Clause and nominating an arbitrator seeking concurrence from the respondent.

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The respondent replied to the same on 30.08.2023, denying the allegations made by the petitioners and stating that the respondent would execute a sale deed on as-is where-is basis within 7 days, i.e., by 31.08.2023 and called upon the petitioner to come forward for registration on 01.09.2023 at the jurisdictional Sub-registrar office.

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The petitioner, thereafter on 31.08.2023 replied to the same, stating that the obligations of the respondent in terms of Clause 5 and 6 of the agreement of sale had not been complied with. There being an existing lis between one other entity and

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the respondent, the same not having been sorted out, they called upon the respondent to satisfy the title with regard to the property and indicated that the petitioners were ready with the demand draft to make payment of the balance sale consideration.

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It was further informed that the dispute between the respondent-landowner and certain others was pending before the Principal City Civil and Sessions Court, Bangaluru and had called upon the respondent to clear the same.

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Subsequently, the petitioner filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 in A.A.No.79 of 2023, which came to be dismissed by the 16^th Additional City Civil and Sessions Court, Bangaluru vide its order dated 10.01.2024 on the grounds that the claim of the petitioner is barred by limitation. It is challenging the same, the petitioner has filed a Misc. First Appeal which is pending consideration before this Court.

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Sri.Bharath.S., learned counsel for the petitioner would submit that;

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8.1. It cannot be said that the dispute between the parties is ex-facie barred by limitation inasmuch as, though there is an agreement for sale of the property on as-is where-is basis, there is also a requirement under Clause 5 for the respondent to prove the title to the satisfaction of the purchaser and deliver the original title deeds at the time of registration and Clause 6 thereof is required to be complied with where under the respondent was to establish that there is no other person interested or having any claim in the scheduled property or portions thereof and that he has not entered into any agreement of sale to sell the scheduled property or portions thereof in favour of any other party.

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8.2. He therefore submits that, though the agreement

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is on an as-is where-is basis, it is also predicated

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on compliance with Clauses 5 and 6 of the agreement of sale. The same, not having been satisfied and having complied with, there is a requirement for the respondent to comply with the same and execute a sale deed as regards which the petitioner has always been ready to make payment of the due amounts.

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Sri.Mithun.G.A., learned counsel for the respondent submits that the matter cannot be referred to arbitration for three reasons;

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9.1. Firstly, on the ground of limitation i.e., since the agreement of sale was entered into on 29.12.2018 in terms of Clause 3 of the said agreement, the payment had to be made within six (6) months or such extended time as the parties may agree and as such, the period of six (6) months having expired in June 2019, the invocation of arbitration Clause not having been made within the period of limitation, the

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claim now made is barred by limitation. The notice has been issued for the first time on 21.08.2018.

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9.2. Secondly, he submits that with the sale of the

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property being on an as-is, where-is basis, there is no other obligation which is required to be complied with by the respondent. As such, the claim of the petitioner that there is compliance to be made is contrary to the terms of the agreement, the respondent having agreed to execute the sale deed on an as-is, where-is basis. The petitioner has not come forward by 31.08.2023 to register the same. Now, no specific performance can be granted in terms of Clause C of Section 16 of the Specific Relief Act, 1963.

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9.3. Lastly, he submits that, by relying further on Clause 8 of the agreement, if the petitioner failed to purchase the property within a

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reasonable period of time, the purchaser shall not have the right to enforce Clause 8 of the agreement.

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Heard Sri.Bharath.S., learned counsel appearing for the petitioner and Sri.Mithun.G.A., learned counsel appearing for respondents and perused papers.

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The points that would arise for determination are;

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1. Whether the claim made by the petitioner can ex-facie be said to be barred by limitation?

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2. Whether ex-facie it can be said that the petitioner would not be entitled to the relief of specific performance, if an arbitrator were to be appointed in the matter?

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3. What order?

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I answer above points are as under;

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Answer to point No.1: Whether the claim made by the petitioner can ex-facie be said to be barred by limitation?

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13.1. Insofar as limitation is concerned, the

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limitation being a mixed question of fact and law, it is normally required to be left to the

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arbitrator to decide on the aspect of limitation. The only area where this Court, while exerting powers under Section 11, intercedes insofar as the law of limitation is concerned is where the claim made is ex facie barred by limitation.

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13.2.In the present case, the submission of Sri.Mithun.G.A., learned counsel for the respondent, is that the agreement being executed on 29.12.2018, the payment being required to be made within six (6) months in

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terms of Clause 3 thereof, notice having been issued on 21.08.2023 for the first time, is ex facie barred by limitation.

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13.3.The aspect of limitation is inextricably linked to

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time being essence of the contract, since the reference now made by the learned counsel for

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respondents is that the payment had to be made within six (6) months' time. Whether the period of six (6) months which is fixed is for

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payment and subsequent thereto the rights of the petitioner would stand extinguished would depend on whether the said clause makes time the essence of the contract or not.

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13.4.To determine whether time is the essence of the contract, evidence will have to be led, since the same is a mixed question of law and fact. Only once that is determined, the question of limitation, which is a mixed question and fact in law, can be determined.

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13.5.Therefore, in the present case, I am of the considered opinion that ex-facie it cannot be said that the claim made by the petitioner is barred by limitation. Moreso, in view of the decision of the Hon’ble Apex Court as regards extension of limitation in Cognizance for

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Extension of Limitation, In re¹ , more

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1 (2022) 3 SCC 117

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particularly Para 5 thereof, which is reproduced hereunder for easy reference;

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5. Taking into consideration the arguments advanced by the learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of MA No. 21 of 2022 with the following directions:

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5.2. Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1-32022.

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5.1. The order dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801] is restored and in continuation of the subsequent orders dated 8-32021 [Cognizance for Extension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3 SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S) 50] , 27-4-2021 [Cognizance for Extension of Limitation, In re, (2021) 17 SCC 231 : 2021 SCC OnLine SC 373] and 23-9-2021 [Cognizance for Extension of Limitation, In re, 2021 SCC OnLine SC 947] , it is directed that the period from 153-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.

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5.3. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2-2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-32022. In the event the actual balance period of limitation remaining, with effect from 1-3-2022 is greater than 90 days, that longer period shall apply.

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5.4. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand

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excluded in computing the periods prescribed under Sections 23(4) and 29-A of the Arbitration and Conciliation Act, 1996, Section 12-A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

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13.6.In terms of the aforesaid decision, it is clear that the period between 15.03.2020 and 20.08.2022 i.e., the COVID period had been

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excluded. If this were to be taken into consideration in the present matter, the agreement said to be executed on 29.12.2018 without taking into consideration time being of essence, the time period for limitation would have to be three years calculated from the date of refusal to perform the obligation in the agreement of sale in terms of Article 54 of the Limitation Act.

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13.7.Firstly, there is nothing which has been placed

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on record, indicating a refusal on the part of the

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respondent to perform their obligation. Thus, the question of fixing the commencement of the limitation period with reference to Article 54 is not available on record before this Court.

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13.8.Insofar as the contentions of the learned

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counsel for the respondent, as regards a sixmonth period being fixed for payment of the monies, as aforeindicated, the same is a question of fact which would be required to be determined by the Trial Court. Even otherwise, if the six (6) months period is excluded and if it were to be considered that the proceedings had to be initiated within three years from the date of the agreement of sale, the period from 15.3.2020 to 20.08.2022 being excluded, the notice issued on 21.08.2023 cannot be ex-facie beyond the period of limitation.

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13.9. Hence, I answer point No.1 by holding that

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in the present case, it cannot be said that

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the claim made by the petitioner is exfacie beyond the period of limitation.

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Answer to point No.2; Whether ex-facie it can be said that the petitioner would not be entitled to the relief of specific performance, if an arbitrator were to be appointed in the matter?

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14.1. The contentions of Sri.Mithun.G.A., learned

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counsel for respondents, even if the matter were to be referred to an arbitrator, relief of specific performance cannot be granted in terms of Clause C of section 16 of the Specific Relief Act, 1963. Inasmuch as in the reply notice, the respondent had categorically indicated that the sale being on as-is where-is basis, if the petitioner were to come forward and make payment by 31.08.2023, the petitioner would register the sale being on 01.09.2023 at the jurisdictional Sub-registrar Office.

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14.2.This aspect has been relied upon by him to contend that since the petitioner did not come forward on 31.08.2023, he cannot seek for specific performance.

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14.3.The notice which had been issued by the petitioner, more particularly in paragraph 7, clearly and categorically indicates that the petitioner had called upon the respondents to perform their obligation under the agreement and execute the sale deed. Whereas, in the reply, the respondent contended that there are no obligations to be performed and he was ready to execute the sale deed on as-is whereis basis. Therefore, the claim made by the respondent is not in consonance with the demand made by the petitioner.

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14.4.Now, the same being juxtaposed with the agreement of sale deed, though in the recitals, it is stated that the sale is made on as-is

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where-is basis, Clause 5 requires the seller to prove the title to the satisfaction of the purchaser and Clause 6 requires that the seller establish that there is no other person who is interested in having any right on the said property.

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14.5.The contention of the petitioner being that there

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is a civil suit which is pending before the trial Court, the requirement of either Clause 5 or Clause 6 cannot be said to be complied with

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and the reply which has been issued by a respondent to execute a sale on as-is where-is basis cannot be said to satisfy the requirement of Clause (C) of Section 16 to deny the petitioner of a right for specific performance agreement.

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14.6.Hence, I answer point No.2 by holding that ex-

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facie it cannot be said that Clause (C) of Section 16 could be abstracted thereby

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requiring the denial of specific performance to the petitioner.

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15. Anwer to point No.3: What order?

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15.1.In that view of the matter, I pass the following;

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ORDER

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i. CMP is allowed .

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ii. Shri Justice Anand Byra Reddy , former

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Judge of this Court is appointed as a sole arbitrator to arbitrate the dispute between the parties under the aegis of the Arbitration Centre attached to this Court.

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iii. Registry is directed to forward a copy of this order to the Director, Arbitration & Conciliation Centre for doing the needful.

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iv. Since the order is passed in the presence of both the counsels, the counsels are directed to appear before the Director, Arbitration &

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Conciliation Centre without requirement of any notice at 2.30 p.m. on 11.12.2025.

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v. All contentions are kept open.

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vi. Original and/or certified copies, if produced, are directed to be returned to the respective parties who have produced/them by following due procedure.

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SD/(SURAJ GOVINDARAJ) JUDGE

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SR List No.: 1 Sl No.: 26

Sri. Ambareshappa v. Sri Prakash Gangaram

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Sri. Ambareshappa v. Sri Prakash Gangaram

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