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CDJ 2026 MHC 364
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| Court : High Court of Judicature at Madras |
| Case No : Arbitration O.P.(Com. Div.). No. 472 of 2022 |
| Judges: THE HONOURABLE MR. JUSTICE N. ANAND VENKATESH |
| Parties : Bennett Property Holdings Company Ltd., (formerly, Artha Real Estate Corporation Limited), Rep. by its Authorized Signatory, Bangalore Versus Iswaryalaxmi Properties Private Ltd., Rep. by its Managing Director D.L. Madhusudan, Chennai |
| Appearing Advocates : For the Petitioner: K. Venkataraman, M/s. Tatva Legal Chennai, Advocates. For the Respondent: Dhakshayini Reddy, Suneetha, Advocates. |
| Date of Judgment : 21-01-2026 |
| Head Note :- |
Arbitration and Conciliation Act, 1996 – Section 34 – Challenge to Arbitral Award – Marketing Agreement – Margin/Commission Claim – Petitioner challenged arbitral award rejecting claim for commission arising from marketing of residential units – Dispute centered on difference between prices mentioned in booking forms and those reflected in construction agreements and registered sale deeds for nine units – Petitioner relied on booking forms to claim higher margin, while respondent relied on registered documents showing lower sale price.
Court Held – Petition dismissed – Arbitral award upheld – Arbitrator rightly preferred construction agreements and registered sale deeds over booking forms which lacked respondent’s endorsement and were not proved by examining customers – Petitioner failed to establish that higher price mentioned in booking forms was accepted by customers or confirmed by respondent as required under agreement – Court cannot re-appreciate evidence under Section 34 of the Arbitration and Conciliation Act where the arbitrator’s view is a plausible view based on record.
[Paras 24, 26, 27, 29, 32]
Cases Cited:
Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49
Ssangyong Engineering & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131
Keywords: Arbitration – Section 34 – Scope of Judicial Review – Marketing Agreement – Commission Claim – Booking Forms vs Registered Sale Deeds – Burden of Proof – Plausible View of Arbitrator
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| Summary :- |
1. Statutes / Acts / Rules / Orders / Regulations, and Sections Mentioned:
- Section 34 of the Arbitration and Conciliation Act, 1996
- Arbitration and Conciliation Act, 1996
- Section 101 of the Indian Evidence Act
2. Catch Words:
Arbitration, Section 34, award, limitation, burden of proof, evidence, award set‑aside, petition, marketing agreement, margin, indemnity, interest, costs.
3. Summary:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award that rejected both its claim for unpaid margins on nine residential units and the respondent’s counter‑claim. The dispute centred on the price at which the nine units were sold – whether the petitioner was entitled to the margin based on booking forms showing prices above the roof price, or whether the registered sale deeds reflecting lower prices prevailed. The arbitrator held that the petitioner failed to prove the authenticity of the booking forms and the respondent failed to prove the contrary, consequently relying on the registered sale deeds and rejecting both claims. The Court affirmed the arbitrator’s reasoning, held that re‑appraisal of evidence was beyond Section 34, and dismissed the petition.
4. Conclusion:
Petition Dismissed |
| Judgment :- |
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(Prayer: PETITION under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the arbitral award dated 23.3.2019 passed by the Arbitrator and grant cost of the present petition.)
1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Act) challenging the award passed by the learned Arbitrator dated 23.3.2019 rejecting the claim made by the petitioner.
2. Heard both.
3. The case of the petitioner is as follows:
(i) The petitioner is the claimant before the learned Arbitrator and they filed the claim petition on the ground that they are in the business of marketing of residential apartment projects of various property developers in India. The respondent approached the petitioner to market one of their projects at Kilpauk, Chennai. They entered into a marketing agreement dated 09.12.2010 for marketing the residential units in the said project.
(ii) As per the agreement, the petitioner was entrusted with the responsibility of procuring customers to purchase the units and the petitioner was expected to act as a bridge between the respondent and the prospective customers. During the subsistence of the agreement, by a business transfer agreement dated 03.2.2011, the business of M/s.Artha Financial Services Limited was transferred to M/s.Bennett Coleman and Company Limited as a going concern including the marketing agreement dated 09.12.2010 that was entered into with the respondent. Ultimately, the said M/s.Artha Financial Services Limited was rechristened as M/s.Artha Real Estate Corporation Limited with effect from 13.6.2014.
(iii) The said M/s.Bennett Coleman and Company Limited, which demerged its real estate division in favour of M/s.Bennett Property Holdings Company Limited, transferred the marketing agreement dated 09.12.2010 to this entity and the said entity, in turn, transferred the business to the said M/s.Artha Real Estate Corporation Limited, which included the marketing agreement dated 09.12.2010.
(iv) As per the agreement, the petitioner was expected to sell 30 units out of 40 units and the petitioner was able to successfully market 25 units of the project and raised invoices for an eligible margin, etc. After adjusting the payment made as per the agreement, the petitioner made a claim for a total sum of Rs.54,61,333/- towards the principal amount and also the penal interest at the rate of 18% on the delayed payment, which worked out to Rs.25,07,192/-.
(v) The petitioner sent a letter dated 12.11.2015 demanding payment of the said amount and it was also followed by a legal notice dated 24.12.2015. On receipt of the same, the respondent sent a reply denying all the claims made by the petitioner. In view of the same, the petitioner invoked the arbitration clause and O.P.No.265 of 2016 was filed before this Court. Pursuant to that, this Court, by order dated 29.4.2016, constituted the Arbitral Tribunal consisting of a sole Arbitrator.
(vi) The petitioner filed the claim statement by making a claim for a total sum of Rs.79,68,525/- along with interest at the rate of 18% per annum from the date of the claim statement till the date of realization and also claimed costs.
(vii) Before the learned Arbitrator, the respondent filed a statement of defence and took the following stand:
(a) As per the marketing agreement, the base price was fixed at Rs.6,250/- per sq.ft., at which the apartment should be sold and the roof price was fixed at Rs.6,599/- per sq.ft. As per the agreement, the base price should be the absolute share of the respondent and the difference between the base price and the roof price should be the absolute share of the petitioner. In the event of the selling the units for more than Rs.6,599/- per sq.ft., 70% of such difference should be the share of the respondent and 30% should be the share of the petitioner.
(b) In the light of the above agreement, the petitioner was expected to sell 30 units whereas they were able to sell only 25 units. Many apartments were sold below the base price of Rs.6,250/- per sq.ft., and the petitioner was expected to make good the loss in the subsequent sales. The petitioner made an unreasonable claim without providing any details and later, issued a legal notice, to which, the respondent gave a reply by denying the claim.
(c) The respondent also made a counter claim for a sum of Rs.9,48,887/-, which was said to have been wrongly paid to the petitioner. Apart from that, the respondent also made a claim towards damages. In total, the respondent made a counter claim of Rs.2,70,92,928/- along with interest and also separately another sum of Rs.10 lakhs towards damages/loss.
(viii) To the statement of defence filed by the respondent, a rejoinder was filed by the petitioner and a reply to the rejoinder was filed by the respondent.
(ix) On considering the pleadings, the learned Arbitrator framed the following issues:
“1. Whether the claimant is entitled to all or any of the claims made in the claim statement?
2. Whether the respondent is entitled to all or any of the claims made in the counter claim?
3. Whether the claimant/respondent is entitled to any interest and if so, what is the rate of interest?
4. Whether the claimant/respondent is entitled to any cost and if so, what is the cost?
5. Whether the claims made by the claimant/ respondent are barred by limitation?
6. To what other relief the claimant/ respondent is entitled to?”
(x) On the side of the petitioner/claimant, C.W.1 was examined and Ex.C.1 to Ex.C.19 were marked. On the side of the respondent, R.W.1 was examined and Ex.R.1 to Ex.R.48 were marked.
(xi) On considering the pleadings, the evidence on record and the facts and circumstances of the case, by the impugned award dated 23.3.2019, the learned Arbitrator rejected the claim made by the petitioner and the counter claim made by the respondent. Aggrieved by the rejection of the claim made by the petitioner, the above original petition has been filed before this Court by the petitioner assailing the impugned award.
4. This Court has carefully considered the submissions of the learned counsel on either side and perused the materials available on record and more particularly the impugned award.
5. On considering the submissions made on either side, the dispute is confined to only 9 units out of 25 units and predominantly only two issues arise for consideration in the present case. They are:
(i) Whether the learned Master went wrong in condoning the delay of 126 days in representing the petition filed under Section 34 of the Act? And
(ii) Whether the learned Arbitrator did not properly appreciate the terms of the agreement and failed to award the difference of price between the booking forms and the base price for the 9 units and whether the learned Arbitrator failed to consider the evidence available on record and provide sufficient reason while rejecting the claim?
6. This Court will first take up the second issue for consideration and deal with the same on merits and in the event of this Court is not able to sustain the award passed by the learned Arbitrator, this Court will consider the first issue pertaining to the delay in representation of the papers on the part of the petitioner. In other words, having kept this petition pending for more than three years, this Court will rather focus its attention on the merits of the case instead of finding an easy route of dealing with the delay.
7. It is not in dispute that as per the marketing agreement dated 09.12.2010, the petitioner was designated as the Marketing Associate and was expected to market the apartments promoted by the respondent. As per the agreement, the petitioner was expected to find out customers for the purchase of the residential units and thereby act as a bridge between the customers and the respondent.
8. For easy understanding, the relevant clauses in the agreement are extracted as hereunder:
“The terms of this offer and acceptance shall commence on the date hereof and shall continue for a period of 180 days. The Marketing Associate shall source all booking advances from prospective customers and also facilitate the execution of the sale agreement between the builder/owner and the customer by collecting 15% of the basic cost of the property from the customer within 180 days.
Further, the Marketing Associate shall also assist the builder/owner in the registration of the booked property in favour of the customers solicited within a reasonable span of time subjecting to clearances from major banks and financial institutions, who lend loans to the customers solicited by the Marketing Associate. The Marketing Associate shall be eligible for the stipulated margin for all those cases where the sale agreement has been completed within 180 days time, nevertheless the same shall be paid by the builder/owner to the Marketing Associate only upon successful completion of the registration of the properties booked and handing over the residential units to such customers.
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It is agreed by both the parties that the base Price will be Rs.6,250/- Per Sq.Ft. and the roof price will be Rs.6,599/- per Sq.Ft. and the Marketing Associate can sell the residential units fixing the rate according to the prevailing market conditions. The Marketing Associate shall take a written confirmation from the builder/owner in case of the selling price being greater than the roof price. The roof price denotes the maximum price at which the property shall be sold by the Marketing Associate. The base price shall be the absolute share of the builder/owner and the difference/ margin between the base price and the roof price fixed by the Marketing Associate shall be absolutely enjoyed by the Marketing Associate. The Marketing Associate reserves the right to sell the property at any price beyond Rs.6,250/- per Sq.ft. (base price) subjecting to a maximum of Rs.6,599/- per Sq.Ft. (roof price) and the difference between the base price and the selling price shall be absolutely enjoyed by the Marketing Associate.
It is agreed by both the parties that when the selling price remains less than Rs.6,599/- per Sq.Ft. (roof price), subjecting to a minimum of Rs.6,250/- per Sq.Ft. (base price), the difference amount is the sole margin for the Marketing Associate. In the event of the property being sold more than the roof price of Rs.6,599/- per Sq.Ft., then the difference over and above of Rs.6,599/- per Sq.Ft. will be shared in the ratio of 70:30 by the builder/owner and the Marketing Associate respectively with 70 being the share of the builder/ owner and 30 being the share of the Marketing Associate.
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The Marketing Associate hereby agrees to initially launch the project at a Price of Rs.6,699/- per Sq.Ft. by clearly highlighting a discount of Rs.100/- per Sq.Ft. with a net selling price of Rs.6,599/- per Sq.Ft. equivalent to the roof price quoted above for all early bookings. The Marketing Associate is at liberty to sell the property at any price subjecting to the minimum being the base price of Rs.6,250/- per Sq.Ft., after getting a written confirmation from the builder/owner.
It is agreed that the Marketing Associates shall exclusively be entitled to fix the sale price at their choice at any level above the offer prices subject to the written confirmation from the builder/owner and procure sales for the project. In case of any breach of this condition, whereby if the Owner fixes any sale price above or below the sale price fixed by the Marketing Associates, then the owners will be entitled to indemnify the Marketing Associates, by paying the commission/margin money at the rate of the sale price fixed by the Marketing Associates.
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The builder shall release payments of the eligible margin to the Marketing Associate in the following manner:
50% of the eligible margin upon registration of the property in favour of the customer
25% of the eligible margin upon payment of 75% of the cost of the property by the customer to the builder/owner.
The Final 25% of the eligible margin shall be released upon payment of 100% of the cost of property by the customer to the builder/owner.
This agreement shall be valid till such time all dues are paid to the Marketing Associate by the builder/owner.
The Marketing Associate shall complete the bookings and complete the execution of the sale agreement between the builder/owner and the customers after collecting 15% of the basic cost of the property from the customers in favour of the owners of the schedule property within a period of 180 days from the date of signing of this agreement.
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GENERAL TERMS AND CONDITIONS:
The builder/owner shall alone be held responsible for any dispute in the title of the schedule property, approvals of the lay out and lapses, if any. The responsibility of the Marketing Associate rests only with procuring sale of the property and ends once the registration of the said sites are completed to each individual prospective buyers as far as the land component are concerned.”
9. A conjoint reading of all the above clauses along with the schedule would show that the petitioner has to market 30 residential units for the respondent. The base price of one unit should be Rs.6,250/- per sq.ft., and the roof price should be at Rs.6,599/- per sq.ft. If the unit is marketed by the petitioner on the base price of Rs.6,250/- per sq.ft., the respondent should take the absolute share. If the unit is marketed by the petitioner at any price beyond Rs.6,250/- per sq.ft., and Rs.6,599/- per sq.ft., the difference between the base price and the roof price would be absolutely enjoyed by the petitioner.
10. In other words, the petitioner would be entitled to the entire share of such difference amount. If the unit is sold at a price more than the roof price, the petitioner should take a written confirmation from the respondent and the difference of price over and above Rs.6,599/- per sq.ft., would be shared in the ratio of 30:70 between the petitioner and the respondent. The petitioner would be entitled to the margin amount fixed under the agreement on marketing the residential units within 180 days from the date of execution of the marketing agreement.
11. In terms of the marketing agreement, the respondent should release the eligible margin to the petitioner in the following manner:
“50% of the eligible margin upon registration of the units in favour of the customers;
25% of the eligible margin upon receipt of 75% of the costs of the residential units by the respondent from the customers; and
the balance 25% of the eligible margin should be paid to the petitioner upon receipt of 100% of the costs of the property by the respondent from the customers.
12. It is also seen from the agreement that the responsibility of the petitioner starts from the time they procure sale and it ends once the registration is completed in so far as the land component is concerned. This is to ensure that the rate, at which, the unit is booked by a customer initially finds place in the sale deed when it is registered in favour of the customer.
13. In the event of the respondent selling the unit below the price fixed by the petitioner, the respondent has to indemnify the petitioner by paying the commission/margin money at the rate of the sale price fixed by the petitioner.
14. It is the admitted case of the petitioner that 50% of the eligible margin has already been received for all the 25 units that were sold. Out of the second tranche of 25% of the eligible margin, 80% out of the same was received and the balance 20% was not paid. In so far as the last tranche of 25% of the eligible margin is concerned, no amount was paid to the petitioner. Thus, the petitioner made a claim for a sum of Rs.54,61,333/- towards the outstanding amount and a sum of Rs.25,07,192/- towards penal interest at the rate of 18% per annum and in total, a sum of Rs.72,60,135/- and including interest at the rate of 18% per annum, a total claim of Rs.79,68,525/- was claimed with interest from the date of filing of the claim petition.
15. The specific case of the petitioner is that 9 units were booked in favour of 9 customers with the following rates:
| S.No. | Customer Name | Booking Form Price (Claimant and Customer) (Rs./Sq.Ft.) | | 1 | Lakshman Aram | 7400 | | 2 | Mahendra Goel | 6699 | | 3 | Anand Prakash Daga | 7399 | | 4 | Rahul Gupta | 7300 | | 5 | Sunitha Dugar | 7450 | | 6 | Sachin B.Khimji | 7099 | | 7 | LRG Properties Pvt.Ltd | 6999 | | 8 | Anitha & Rajesh Kumar | 6699 | | 9 | Mahendra Kumar Agarwal | 6699 |
To substantiate the above claim, the petitioner relied upon the booking forms, which were marked as Ex.C.16 series.
16. Per contra, the specific case of the respondent is that each of the units that was sold in favour of the above 9 customers is reflected both in the construction agreement and in the respective sale deeds and it was sold for a price lesser than the base price as follows:
| S.No. | Customer Name | Alleged Price in the Agreements (Claimant and Customer) (Rs./Sq.Ft.) | | 1 | Lakshman Aram | 4380 | | 2 | Mahendra Goel | 5200 | | 3 | Anand Prakash Daga | 4380 | | 4 | Rahul Gupta | 4320 | | 5 | Sunitha Dugar | 5800 | | 6 | Sachin B.Khimji | 4192 | | 7 | LRG Properties Pvt.Ltd | 4140 | | 8 | Anitha & Rajesh Kumar | 3952 | | 9 | Mahendra Kumar Agarwal | 3953 |
17. On the side of the petitioner, it was submitted that the booking forms pertaining to the 9 units bear the signatures of the respective customers and that however, the respondent has not substantiated that those signatures were forged and that they were fabricated documents. According to the petitioner, apart from that, it defies prudent business sense to sell the unit below the base price since the petitioner would not be entitled to any commission in such an event as per the marketing agreement. Further, the customers in question were also repeat customers, who had purchased the other units in the same project and the unit price that was fixed by the petitioner was admitted by the respondent for those units and there is no reason to deny the same in so far as the remaining 9 units are concerned.
18. It was further submitted on the side of the petitioner that if, ultimately, the respondent has chosen to sell at a price below the price fixed by the petitioner, in such an event, as per the agreement, the respondent must indemnify the petitioner by paying the commission/ margin money at the rate of the sale price fixed by the petitioner.
19. Per contra, the respondent had taken a stand that as per the agreement, if at all the petitioner fixed a rate above the roof price i.e. above Rs.6,599/- per sq.ft., the petitioner must get the written confirmation from the respondent, that admittedly, no such confirmation was received from the respondent and that even the booking form did not bear the signature of the respondent. It was further submitted that curiously, this booking form did not even form part of the claim statement and it suddenly surfaced when the rejoinder was filed by the petitioner and that it was a created document for the purpose of this proceeding. According to the respondent, the ultimate agreement and the sale deed clearly reflected the rate per sq.ft., as they were registered documents and therefore, it carried more weight than the booking form relied upon by the petitioner. Hence, the actual rate that was paid by the customer while purchasing the unit got authenticated in the registered document, which alone could be taken to be the final rate paid by the customer.
20. The learned counsel on either side heavily relied upon some of the answers that were given by the witnesses on either side during cross examination.
21. This Court must first see as to how the learned Arbitrator dealt with this issue in the light of the rival claims made by the parties. The reasoning given by the learned Arbitrator on this issue is found from paragraphs 31 to 36 of the impugned award. The learned Arbitrator has taken into consideration the fact that the booking form did not bear the signature of the respondent, that a sale deed, which was a registered document, would carry more weightage when pitted against the booking form and that therefore, the price as mentioned in the sale deed would have to be taken into account to decide the final price, at which, the 9 units were sold in favour of the customers.
22. The learned Arbitrator has also considered the ground taken by the respondent that the booking form was a forged and concocted document and the stand taken by the petitioner that the respondent had chosen to sell the unit for a lesser price than the base price and has gone into the legal issue of burden of proof by relying upon Section 101 of the Indian Evidence Act. The learned Arbitrator has rendered a finding that the petitioner, who was questioning the price, at which, the unit was sold in favour of the customer, was expected to prove and establish that the respondent had wantonly quoted a lesser price in the construction agreement and the sale deeds and that in the same way, the burden of proof was upon the respondent to prove and establish that the booking forms (Ex.C.16 series) were concocted documents.
23. The learned Arbitrator has found that both the petitioner/ claimant as well as the respondent failed to establish their respective stand and did not discharge their burden of proof, that either of the parties could have examined the customers, whose names were found in the booking forms/construction agreement/sale deeds and that both did not choose to examine them for reasons best known to them. The learned Arbitrator, placed in such a situation, had to decide the issue as between the booking forms on the one side and the construction agreement/sale deeds on the other. No amount of answers or explanation by the witnesses on either side can dislodge what is available in these documents.
24. Hence, the learned Arbitrator has decided to rely upon the construction agreement/sale deeds, which were registered documents and placed some weightage on these documents rather than the booking forms in order to determine the price, at which, the 9 units were sold in favour of the respective customers. This view taken by the learned Arbitrator is certainly a possible view/plausible view.
25. The agreement provides that in the event of the petitioner booking the unit for a price greater than the roof price, the petitioner is expected to get the written confirmation from the respondent. Admittedly, there was no written confirmation from the respondent or the original owner of the property. Hence, the booking forms relied upon by the petitioner contained only the signatures of the respective customers. But, none of those customers was examined by the petitioner. If, at least, those booking forms contained some semblance of a written endorsement from the respondent, the petitioner could have made out a case to the effect that a higher rate was fixed by the petitioner, that the respondent had chosen to sell the unit below the base price and that as per the agreement, the respondent must indemnify the petitioner by paying the commission/margin money at the rate of the sale price fixed by the petitioner.
26. Unfortunately, except for the ipse dixit of the petitioner and the signatures found in the booking forms, which were not established by examining any of the customers, there was no material available in favour of the petitioner to establish that the rate found in those booking forms was the rate accepted by the respective customers. In view of the same, the learned Arbitrator is perfectly right in relying upon the construction agreement and the sale deeds to decide on the actual price that was paid by the customers for those 9 units.
27. In the case in hand, the obligation of the petitioner does not come to an end by merely filling up the booking forms. The agreement makes it clear that this responsibility ends only on the registration of the respective unit in favour of the prospective buyers as far as land component is concerned. It is an admitted case that there is no discrepancy between the rates mentioned in the construction agreement and the ultimate sale deed, which was registered. Since the obligation of the petitioner extends from the filling up of the booking forms till the ultimate registration of the sale deed pertaining to the land, the petitioner cannot be permitted to wash off their hands with respect to the construction agreement and the sale deeds and merely rely upon the booking forms.
28. The petitioner could have easily established the case by at least examining one or two customers out of the 9 customers to establish the rate at which the price was fixed for those units. This crucial step ought to have been taken since the booking form does not contain the acknowledgement of the respondent and the rate of all the 9 units mentioned in the booking forms exceeds the roof price. However, the petitioner has not received the written confirmation from the respondent as mandated under the agreement.
29. It may be possible for this Court to take a different view based on the overall materials and come to a different conclusion than what was reached by the learned Arbitrator. But, that will result in reappreciation of evidence and will go beyond the scope of Section 34 of the Act. Such a course of action will go against the principles of law as enunciated by the Hon’ble Apex Court in the decisions in Associate Builders Vs. Delhi Development Authority [reported in 2015 (3) SCC 49] and Ssangyong Engineering & Construction Co. Ltd. Vs. NHAI [reported in 2019 (15) SCC 131]. In the light of the above discussions, the second issue taken up for consideration first is held against the petitioner.
30. The application of mind on the part of the learned Arbitrator while dealing with this issue is also apparent from the fact that the counter claim made by the respondent on the very same set of facts also came to be rejected by the learned Arbitrator.
31. In view of the above finding rendered for the second issue, it is not necessary for this Court to independently deal with the first issue since it will only be an unwarranted academic exercise.
32. Accordingly, the above original petition stands dismissed. No costs.
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