Badrinath Kakkar & Anr. vs M/S Ansal Properties And Infrastructure Limited & Anr.

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This judgment disposed of connected matters. The same reasons were delivered in the following 2 cases.

Suresh Kumar Kakkar & Anr. vs M/S Ansal Properties And Infrastructure Limited & Anr.

Badrinath Kakkar & Anr. vs M/S Ansal Properties And Infrastructure Limited & Anr.

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The petitioners, landowners who had entered into a Third Collaboration Agreement dated 14.10.2010 with M/S Ansal Properties and Infrastructure Limited for development of land in Sector 67, Gurgaon, filed petitions under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of a sole arbitrator after disputes arose concerning non-delivery of possession of allotted plots and execution of sale deeds. The respondent developer had, without the petitioners' knowledge, sold the allotted plots (C-1018 and C-1019) to third parties via sale deeds dated 10.12.2018, thereby necessitating the impleadment of subsequent purchasers as respondents.

The key legal issue considered was whether third-party purchasers/assignees (respondents 3 to 5), who were not original signatories to the Collaboration Agreement containing the arbitration clause, could nonetheless be bound by the arbitration clause, particularly given that the agreement defined 'developer' to include assignees and the third parties derived their title through the original developer. The petitioners argued, relying on Rajesh Gupta v. Mohit Lata Sunda and Shapoorji Pallonji and Co. Pvt. Ltd. v. Rattan India Power Ltd., that such parties had impliedly consented to and were bound by the arbitration agreement.

The court examined the scope of the arbitration clause under the Third Collaboration Agreement and the question of whether non-signatories claiming through a signatory party could be subjected to arbitration. The respondents 1 and 2 had already consented to arbitration by order dated 18.09.2023, and the court considered the submissions on extension of the arbitration clause to subsequent transferees and assignees who derived benefits under the agreement.

Catchwords: Arbitration · appointment of arbitrator · Section 11 Arbitration and Conciliation Act · collaboration agreement · non-signatory parties · assignees · subsequent purchasers · real estate development · Gurgaon · plot allotment · sale deed · implied consent to arbitration