JUDGMENT
D.P. Wadlma, J.
(1) By this order, I propose to dispose of (i) a petition filed u/S. 20 of the Arbitration Act (the’Act’), it being Suit No. 453-A of 1986, by Gurbaksh Singh Uppal and his wife Smt. Raj Kaur Uppal (‘Uppals’), the two petitioners against the sole respondent, Smt. Usha Malhotra, and (ii) an application, being I.A. 5831 of 1989, u/S. 34 of the Act, filed again by Uppals, the defendants in a suit (Suit No. 2354 of 1988) for specific performance of an agreement to sell filed by Usha Malhotra.
(2) The disputes between the parties concern property No. A-14/4, Vasant Vihar. The plot which measures 413 square Yards was held on perpetual leasehold basis by Uppals from a Society which had developed the colony. In fact, the society was the lessee, with the President of India as the Lesser, and the Uppals as the sub-lessees. In the petitions, Uppals say that since under the sub-lease they were required to erect a building they, with that view, entered into an agreement of construction dated 1.8.1978 with Usha Malhotra. Under this agreement, a sum of Rs. 42,000.00 was deposited by Usha Malhotra with Uppals. Certain terms of the construction agreement have then been set out in the petition. This construction agreement contained an arbitration clause, which is : ‘That in the event of any dispute arising out of this agreement whether as to interpretation of various clauses or meaning or any works or touching the rights and obligations of the parties whatsoever the matter shall be referred to an arbitrator whose decision shall be final and binding on the parties subject to the provision that the decision of the arbitrator is within frame work of and in consonance with the spirit and letter of the terms, provisions and conditions of this agreement’.
(3) Uppals say that since the disputes have arisen between the parties, these have to be referred to arbitration in terms of the aforesaid arbitration agreement. These disputes, which the Uppals claim to have arisen, are : ‘(a) Whether respondent has obtained a completion certificate from the Delhi Development Authority certifying that the building has been completed in accordance with the terms and conditions of the lease and sent intimation thereof to the petitioners ; (b) Whether the respondent has worked out and determined the cost of construction in accordance with para 3 of the agreement and intimated the same to the petitioners ; (c) Whether the respondent is liable to restore the possession of the land and the building constructed thereon, to the petitioners, on receipt of the amount of Rs. 2,50,000 plus 25% profit on the said amount and on refund of the security money of Rs. 42,000.00?
(4) After 1.8.1978, Uppals for the first time wrote a letter on 2.4.1983 requiring Usha Malhotra to intimate to them the date when the building was completed on the plot in question, and when completion certificate thereof was obtained, so as to enable Uppals to take possession of the building. Usha replied by her letter dated 9.5.1983 expressing surprise at the letter of Uppals. She said, the letter had been written by Uppals to blackmail her, and in fact, she was the owner of the property. Uppals, then, again wrote a letter dated 26/27th June 1983 requiring Usha to furnish to them the statement of actual expenses incurred by her on the construction of the building to enable Uppals to pay the same together with 25% of that amount, and, also, to refund the security deposit of Rs. 42,000 to Usha. She was asked to deliver peaceful and vacant possession of the building to Uppals. Since there was no response from Usha, Uppals filed this petition u/S. 20 of Arbitration Act.
(5) Then, Usha filed a suit for specific performance. She says that Uppals always intended to sell their plot, and for that purpose earlier entered into an agreement for sale with Mr. K.L. Khanna, of Rohtak Road for a consideration of Rs. 41,000.00. She said, at that time various documents including an agreement to sell, general power of attorney, agreement for construction. Wills and undated repudiation letter were written. Since that transaction fell through, an agreement to sell the plot was entered into with Usha by Uppals. The consideration agreed was Rs. 42,000.00. She says, various documents were again written with sole purpose of transferring the ownership of leasehold rights of the plot in favor of Usha and all these documents were executed in order to get over the restriction in the perpetual lease deed to the transfer of the plot and till it was constructed upon. Brief description of the documents, which were executed, and which have been admitted by Uppals are as under : 1. An agreement for sale dated 1.8.1978 showing that since Uppals were not in a position to construct a building on the suit plot, therefore, they agreed to sell the same to Usha for a consideration of Rs. 42,000.00. Usha was given possession of the plot and she was authorized to construct a building thereon at her own cost. Uppals, then, did not have any claim, title or interest in the plot and agreed to execute the sale deed. Mr. Harish Narang, brother of Usha, was appointed as a General and Special Attorney of Uppals, to perform various acts and deeds and things in connection with the transfer of the plot and the building constructed thereon on behalf of Uppals to Usha. It was specifically mentioned that in case Uppals violated the terms and conditions of the agreement, or would revoke the power of attorney in favor of Harish Narang, then, Usha could get the transaction enforced through a Court of law by specific performance; (2) An affidavit dated 1.8.1978 by Uppals that the suit plot was free from all encumbrances ; (3) A Will dated 1.8.1978 executed by Raj Kaur, bequeathing all her rights in the suit plot in favor of Usha, including the construction thereon ; (4) A Will dated 1.8.1978 by Gurbaksh Singh Uppal also bequeathing all his rights in the suit plot and the construction made thereon in favor of Usha ; (5) ; General power of attorney dated 1.8.1978 executed by Uppals appointing Harish Narang as their lawful attorney ; (6) Agreement for construction dated 1,8,1978 ; (7) Letter dated 15.7.1981 from Uppals to Usha; (8) Letter dated nil addressed by Uppals to the Deputy Director (Co-operative), Delhi Development Authority, seeking sale permission respecting the suit plot; and (9) Form No. Viii under the Urban Land (Ceiling & Regulation) Act, 1976, signed by Uppals with the date July 1979 with annexures I and II.
(6) The Wills and the general power of attorney were presented to the Sub-Registrar, New Delhi on 2.8 1978 and were duly got registered. The letter dated 15.7.1981 from Uppals to Usha states that with reference a notice from Usha regarding payment of Rs. 3,54,500.00 respecting the property/plot in question, Uppals were having no means to arrange the payment and were not interested in purchasing the building constructed on the plot. They, therefore, told Usha that as per the terms and conditions of the construction agreement dated 1.8.1978 she was now the full owner of the construction made on the suit plot, and the plot in consideration of the security amount of Rs. 42,000.00 already received by Uppals from Usha. Uppals further reiterated that they had no claim,. title or interest in the said plot and also the construction made thereon.
(7) I recorded the statement of both the Uppals. Raj Kaur Uppal said that she was living with her husband, a retired Superintendent of Police in Chandigarh, he having retired sometime in 1972 or 1973. She said, she was the owner of the Chandigarh house, All her children with ages from 48 to 55 were married and settled. No one was residing in Delhi. When asked how did she know Usha, she said, she did not know her personally. She said, she had no idea if her husband also knew Usha. She said, Usha was introduced to their family by some friend whose name she did not know. She said she had heard Usha was a building contractor, though she herself did not know whether Usha was a housewife or a building contractor. She had no idea as to how much time it took to construct the building. During the construction she never visited Delhi. She said, she did visit once or twice Delhi during the construction on the suit plot with her husband. She, however, could not give the date, year or month when she might have visited the plot at the time of construction thereon. She said, after 1.8.1978 she never wrote any letter to Usha. She also did not know if she executed any will in favor of Usha. Nor did she know anything about the will executed by her husband. She said, she did not enter into any agreement to sell the Vasant Vihar property to Usha. She said, her husband was in know of the things.
(8) In his statement, Gurbakash Singh Uppal admitted execution of all the documents mentioned aforesaid. He said, she was introduced to him by one Gandhi, a property dealer, who had since died. He said she was not a building contractor, but her husband was. He did not know the initials of her husband. He said, he met him only once in the year 1982 or 1983 in the Hotel Oberoi Inter Continental when, he said, disputes arose over the construction agreement. He said, Mr. Malhotra, husband of Usha, worked in Kuwait, but he did not himself see any work executed by Mr. Malhotra. He also could not tell the dates when he would have visited the suit plot during the period of construction. He never corresponded with Usha. He said, he, however, did write a letter to her brother Harish Narang, but, that was on 2.4.1983. When asked what was the necessity for him and his wife to execute a will in favor of Usha, when they were having their own children, his answer was,’it was done on the guidance of the property dealer’. Mr Uppal said that he did not know K.L. Khanna, though he admitted that his signatures appeared as a witness on various documents.
(9) It is the admitted case that original documents of title were also handed over by Uppals to Usha and that she constructed the building with her own funds and till April 1983 every thing was quiet when Uppals staked their claim to the building and the plot. Usha has contended that Uppals became dishonest after the prices of the properties in Delhi shot up and they issued notice and tiled the present proceedings u/S. 20 of the Act to blackmail her.
(10) It is a matter of common knowledge that in Delhi due to various restrictions imposed on the owners of plots held by them on perpetual leasehold basis, they devise methods to dispose of their plots by entering into various documents like in the present case. The construction agreement is not to be read in isolation. 1 find, when the Uppals filed the present petition u/S. 20 of the Act, they withheld material information from the Court. They said nothing except the construction agreement. After written statement was filed, they, in their replication, admitted execution of various documents mentioned above. They said that agreement to sell was no doubt executed by the parties on 1.8.1978 itself, but said that the parties immediately thereafter discussed the matter the same day and in view of the fact that such a contract was forbidden by law, decided to execute the construction agreement superseding the agreement to sell. This cannot be true. They have been then unable to explain the execution of the wills and the general power of attorney which was presented for registration on 2.8.1978. They have woefully failed to explain their letter dated 15.7.1981. If the stand that the agreement to sell was superseded with the construction agreement is to be believed, they have no answer to the execution of other documents. Prima facie, it does appear to me that the parties agreed to the sale of the plot in question by Uppals to Usha. Otherwise, it is difficult for Uppals to explain the delay as to why for five years after the construction agreement dated 1.8.1978 till April 1983 they kept quiet, and particularly when Usha was not in any construction business.
(11) Uppals have also taken a stand that if agreement to sell is allowed to prevail it will be contrary to law and would be against the provisions of she Delhi Development Act and the provisions of bye-laws of the society, which had developed the colony and that such a transaction was opposed to public policy and was hit by S. 23. of the Contract Act, and further that the agreement to sell could not amount to transfer and give any right to Usha and it could not be enforced by her. Uppals have also said that some of the documents being affidavit for land ceiling, affidavit that plot was free from all encumbrances, affidavit of non-transfer by Uppals to their children and power of attorney favoring Harish Narang were executed only with a view to enable Usha to construct the building on the suit plot. This again cannot be true. In the replication they denied even the execution of the will by them favoring Usha and so also their letter dated 15.1.1981. This letter, Usha had contended, was postdated and executed at one and the same time when various documents were executed on 1.8.1978. Uppals have also not given any explanation as to why they did not cancel all the documents like will, etc. all this period.
(12) I am of the view that the suit, being Suit No.2354 of 1988, is comprehensive enough to decide all the controversies between the parties. Taking into account, the nature of the disputes raised, a Court of law appears to be the best forum. I do not think that the disputes raised under the construction agreement only can be adjudicated upon in isolation. The basic question is if the construction agreement is independent or it forms part of the transaction for sale of the plot with building constructed thereon, which was constructed with the exclusive funds of Usha. In the suit for specific performance of the agreement to sell, contraction agreement would be a mere piece of evidence to show the completion of transaction of sale of plot and the building constructed thereon. Dispute sought to be raised in application u/S. 34 of the Act are not the same as those in the suit. The application merely refers to construction agreement and the proceedings u/S. 20 of the Act. That way, then application itself does not fulfilll the requirements of S. 34 of the Act, as the suit refers to the agreement to sell.
(13) There also appears to be no reason why there should be two proceedings, one u/S. 20 of the Act limited to the construction agreement and the other, the suit for specific performance which, to my mind, is comprehensive in nature. The petition u/S. 20 of the Act appears to be rather mala-fide full of suppression of material facts and advancing a claim against the admitted document.
(14) In this view of the matter, Usha Malhotra has shown sufficient cause as to why disputes mentioned in the petition in u/S. 20 of the Act should not be referred to arbitration and, has further shown sufficient cause as to why proceedings in suit No. 453-A of 1986 be not stayed, on the application filed u/S. 34 of Act by Uppals. Accordingly the petition u/S. 20 of the Act (Suit No. 453- A of 1986) and the application u/S. 34 of the Act, being I.A.No. 2831 of 1989 in Suit No. 2354 1988, are dismissed with costs. Counsels fee Rs. 1,000.00.