BEFORE SRI SABYASACHI CHAUDHURY,

LEARNED SOLE ARBITRATOR

WRITTEN NOTES OF ARGUMENT ON BEHALF OF THE

1. THE CASE OF THE CLAIMANTS:-

The Claimants initiated the proceeding claiming for a relief essentially

in the nature of Specific Performance of the contract between the

parties namely the Agreement for Sale dated September 2, 2002.

Such Statement of Claim was filed on August 8, 2015. However, after

about a year, the Claimants sought to amend the Statement of Claim

on March 8, 2016.

The amendment was allowed to the extent that the proposed

amendment was treated as Additional/Supplemental Statement of

Claim as recorded in the order dated March 24, 2017.

Due to the change in stance of the claimants the Learned Arbitrator

by the order dated March 24, 2017 left the issue whether the

amendment is inconsistent and contradictory nature or is

consequential and/or clarificatory nature to be ascertained after trail.

The claimants in Paragraph 18 of the Statement of Claim has alleged

that the respondents have defrauded the claimants and have alleged

that :-

i) Misrepresentation regarding area of the property to be 117

Cottahs;

ii) Did not disclose about encumbrances at the property;

iii) No steps taken by the respondents to make the property

habitable or built upon enabling construction thereon.

The claimants claim in its Additional Statement of Claim a larger area

and reduction of area allotted to the respondents i.e from the 35% for

reimbursement of the alleged expenses incurred by them at the rate

of Rs.550 per square feet.

Although the purported fraud was pleaded in the Statement of Claim

filed in August 2015 the claim for reduction of the respondents’

allotment has been made for the first time in the Additional

Statement of claim in March 2016.

2. THE CASE OF THE RESPONDENTS:-

The respondents have filed their Additional Counter Statement

wherein the Respondents have maintained the same stand as in the

original Counter Statement and has claimed Rs.62,43,25,000/-

towards loss and damages suffered by the respondents.

Apart from a counter claimant for a sum of Rs.62,43,25,000/-

towards loss and damages suffered by the respondents, the

respondents have also claimed for an Award declaring that the

agreement dated 2nd September, 2002 entered between the claimants

and respondents is no longer subsisting binding upon the parties and

consequently unenforceable in law.

As agreed between the parties under Clause 7.4 of the agreement

dated 2nd September, 2002, the agreement remained in force for 5

years from the date of issuance of Certificate of Sale by the Debt

Recovery Tribunal, Kolkata on 10th May, 2005 i.e. till 9th May, 2010

when the Claimants were required to give the area consideration to

the Chanda family.

Therefore the agreement lapsed with the efflux of time on 9 th May,

2010 and no reliefs as prayed for by the Claimants can be granted on

the basis of the said agreement.

In the event the claimants had handed over constructed area to the

respondents within the time the respondents’ allocation of 35% would

have fetched an amount not less than Rs.30 crores.

Due to the breach committed by the claimants , the Respondents

have suffered loss of such amount. Therefore the respondents are

entitled to market value of 64,865 sq.ft area being the 35% owners’

allocation.
 4

The sum claimed by the respondents i.e. Rs.32,43,25,000/- is on the

basis of the prevailing market value of the said 64,865 sq.ft area in

2010 being the year in which the Claimants were required to

handover possession of the constructed area of the respondents’

allocation.

The respondents are also entitled to and have claimed 18 % interest

from the date of breach till date of filing of the Counter Claim and has

prayed for interim interest at the rate of 18% until realisation of the

sum of Rs. 62,43,25,000/-.

The rising price of the property is a relevant factor to decide whether

the delay to perform the claimants’ part of the contract would

disentitle the relief of specific performance to the claimants.

3. RESPONDENTS’ ANSWER TO THE CASE OF THE

3.1. Misrepresentation regarding area of the property 117

It is the case of the claimants that the respondents had

misrepresented the total area of the premises at 25-26 (formerly

numbered 109], Jyotish Roy Road, Kolkata-700 053 was 117 Cottahs

(refer to paragraph 13 of the Affidavit of Evidence, Volume I, C.W.-1].

It is also the case of the claimants that the available area is

actually found to be only 94 Cottahs in or about __________, where after

a further area of approximately 2 Cottahs were required to be gifted to

the Kolkata Municipal Corporation for road alignment/widening (refer to

paragraph 26 of the Affidavit of Evidence, Volume I, C.W.-1].

It is the case of the claimants in paragraph 11 of the Statement of

Claim and paragraph 14 of the Supplementary Statement of Claim that

area “actual physical measurement and verification, the land has been

found to be only 94 Cottahs”. However, no date has been mentioned as

to when such physical measurement had been carried out. The

claimants have also failed to disclose any documents showing that the

said premises is 94 Cottahs whereas from the various documents

disclosed by the respondents in this proceeding, it would appear that the

premises was always known to be of 117 Cottahs and such fact was

known and accepted by the claimants.

Documents tendered by the respondents in support of 117

Cottahs:-

i] Terms of Settlement (Exhibit “R-1”].

ii] Schedule to the Terms of Settlement ( Exhibit “R-1” B. (refer

to question Nos. 37 – 40 of C. W.- I].[not found]

iii] Photocopy of the Title Deed (Exhibit “R-3”] (refer to question

Nos. 67 to 70. of C. W.-1].

iv] Assessment Report/Inspection Book of Kolkata Municipal

Corporation (Exhibit “R-4”] (refer to question Nos. 75 – 77 of C. W. 1;

question No. 59 of R.W.-1. [not found]

v] Survey report by the claimants (Exhibit “R-9”] (refer to

question No. 205 of C.W.-1, Question No. 59 of R.W.-1. [not found]

vi] UCO Bank’s documents (Exhibit MFI], Exhibit “R-10”] (refer

to question No. 71, C.W-1, paragraph 5 of Affidavit of Evidence at page

8.

vii] RTI application and reply (Exhibit “R-17”].

viii] Order dated 1st April, 2005 (Exhibit “R-2”] (refer to question

No. 62 of C.W.- 1]. [not found]

The claimants’ witness Mr. Vivek Kathotia has deposed in answer

to question No. 61 that in 2005, the claimant company were aware of the

measurement of the land, drawn in _____ which was the subject matter

of Agreement dated 2nd September, 2002. Further in answer to question

No. 77, the claimants’ witness has deposed in the affirmative that as on

January, 2006, the area of the premises was recorded in the records of

the Kolkata Municipal Corporation as 117 Cottahs. In order to counter

the stand taken by the respondents, the claimants sought to adduce

evidence through one Mr. Vijay Kumar Dutta, Surveyor/ Engineer, who

was claimed to have surveyed the said premises in the year 2008.

However, upon cross-examination it transpired that the documents and

the drawings relied upon by the claimants were actually prepared by one

Mr. Kallyal Dutta who is no more and that C.W.-2 had no role to play in

preparation of the drawings (refer to answer to question Nos. 18, 19 and

2 of C.W-2. He has also deposed that the measurement was recorded in

a Measurement Book, which was with his brother and he does not know

where it is now. He further adduced that the very document at pages 28-

29 of its affidavit (Affidavit of Evidence of C.W.-1] are not the documents

that he recalls to have signed (Question Nos. 30-31 of C.W.-2]. Therefore

the documents tendered by the claimants cannot be relied upon or

looked into by the Learned Arbitrator.

3.2. Did not disclose about encumbrances (refer to paragraphs

13 to 16 of the Statement of Claim]. It is the case of the

claimants that it was the obligation of the respondents to

forthwith get the premises freed of all encumbrances

including the persons in occupation. There was no

encumbrances at the time of entering into the Agreement

dated 2nd September, 2002 styled as “Memorandum of

Understanding” whereunder it was agreed that upon

payment of the deposit with the Bank, the claimants would

develop the said property and the respondents would be

entitled to 35% of the area sanctioned by the Kolkata

Municipal Corporation as and by way of balance

consideration of sale in favour of the claimants in the

constructed building subject to deduction of necessary

statutory obligation, tax, outgoing in respect of the said

premises. In addition to the aforesaid, the parties specifically

agreed in Clause 7.4 of the said Agreement that “....area

consideration shall be given to Chanda Family within a

period of 5 years from the date of sale certificate being

granted by the said Tribunal in favour of the Fort Group

subject to force majeure”. Even at the time of execution of

the said Agreement or of the issuance of sale certificate

pursuant to the Terms of Settlement filed before the Debts

Recovery Tribunal, there was no encumbrance in the said

property in as much as nothing was recorded in the said

documents.

Documents tendered by the respondents in support of the fact

that there was no encumbrances in the said property:-

i] Terms of Settlement (Exhibit “R-1”] (refer to question No. 92

of C.W.-1].

ii] Order dated April 13, 2005 (Exhibit “R-6”] (refer to question

No. 97 of C.W.-1]. [not found]

iii] Order dated May 2, 2005 (Exhibit “R-7”] (refer to question

No. 112 of C.W.-1]. [not found]

iv] Order dated April 1, 2005 (Exhibit “R-2”] (refer to question

No. 62 of C.W.-1]. [not found]

The claimants’ first witness has deposed during cross-examination

that the encumbrances happened during the tenure of the Learned

Receiver (refer to question Nos. 89, 90-97, 115 of C.W.-1]. On perusal of

the order dated April 13, 2005, May 2, 2005 and April 1, 2005, it would

be evident that the claimants was required to take appropriate steps for

clearing of the encumbrances. The Terms of Settlement being part

Exhibit No. R-1 records in Clause 7 that “For removal of encroachment

that have occurred during the period the Receiver was in possession of

the said property, the Receiver shall take necessary help from the police

and other concerned authorities”. In the order dated 2 nd May, 2005 being

Exhibit “R-7”, it is recorded that “A specific order is passed for delivery of

possession to the purchaser by the Receiver appointed by the Tribunal.

The order is also passed on police assistance.” The order dated 13 th

April, 2005 being Exhibit “R-6” also records that “ ........ for the delivery

of the possession including the police assistance, if any, required”. It was

incumbent upon the claimants to take appropriate steps for clearing the

encumbrances by the Receiver with the police assistance which the

claimants chose not to. In answer to question Nos. 98 – 121, the C.W.-1

has deposed that no steps had been taken by the claimants pursuant to

the said order. The respondents submit that the encumbrance happened

during the tenure of the Learned Receiver or before and is not known to

the respondents. (refer to paragraph Nos. 2, 21, 22-26 of the Affidavit of

Evidence of R.W.-1. It is pertinent to mention that the report of the

Receiver prepared in the course of his visit of the property on 30 th April,

2005 (Exhibit No. ____] will show that the possession of the property was

handed over to the claimants on that area except certain encroached

portion. Since April 30, 2005, the claimants did not take any steps for

removal of the encroachment as per order of the Learned Debts Recovery

Tribunal-II, Kolkata. In this context, refer to question Nos. 20-21, 41-47,

60-63, 74, 85, 87, 88, 90,91 of R.W.1.

3.3. No steps taken by the respondents to make the property

habitable or built upon enabling the claimants to make construction

thereon.

It is the case of the claimants that the respondents have not

taken any steps to make the property habitable or enabling the

claimants to make construction thereon pursuant to the Agreement

dated 2nd September, 2002. The claimants have tendered the following

documents in support of the contention:-

i) Ext 5- Plaint of Ratish (pg 33-48 of A/E CW1) [not found]

ii) Ext 6 – Deed of release ( pg 49-59 A/E CW1 ; Q 67 , 117, 211-

217, 153 CW1) [not found]

iii) Ext 7- Letter of possession (pg 60-62 A/E CW1) [ Q 150, 153-

154 CW 1] [not found]

iv) Ext 8- Affidavit of Ratish (pg 63-71 A/E CW1)[Q 150, 158-168,

171 CW1] [not found]

Ext 6, 7 and 8 are not proved therefore cannot be looked into

by the Learned Arbitrator. Original of Ext 8 is not with the

claimants (Q 171 CW1) and inspection for the same as such

was not given to the respondents.

v) Ext 10- Mutation Certificate (pg 6-21 A/E; Q 218 CW1 ) [not

found]

vi) Ext 11- Receipt of KMC taxes ( pg 22-53 A/E) [Q 231-238 CW1]

[not found]
 11

vii) Ext 12 – No objection certificate (pg 54 A/E ) [Q 239-242 CW1]

[not found]

viii) Ext 13- Conversion certificate 16 Nos. (pg 55-86 A/E) [not

found]

ix) Ext 14- Letter by KMC (pg 87 A/E CW1) [not found]

x) Ext 15- Newspaper article (pg 88 A/E)

When questions were put to CW1 regarding the steps taken by

the claimants with respect to the agreement CW1 has deposed

that he will check up and answer.

a) Steps after survey – Q 128-136

b) Steps after 5.1.2006- Q 137-146

c) 5 years from Sale certificate – Q 147-149 , Q 149- will check

up and answer

3.4. Claimants’ entitlement to larger area and reduction of area

allotted to the respondents for reimbursement of expenses incurred by

them (paragraphs 17-19 of Affidavit of Evidence of C.W.-1]

There is no proof of expenses incurred by the claimants, if at

all, towards “all statutory obligations, taxes, and outgoings in respect of

the premises .....” (Clause 6.2]. In paragraph 17 of the Affidavit of

Evidence of C.W.-1, it is alleged that Rs.31 lacs has been incurred

towards payment to one Ratish Chanda and Rs.26 lacs has been

incurred towards payment to one Somenath Bhattacharya. However, the

contents of the said documents relied upon by the claimants have not
 12

been proved. In any event, the claimants could have used police force to

remove the encroachment, pursuant to the order passed by the Learned

Debts Recovery Tribunal, Kolkata. In this context, reference may be

made to the answers given by C.W.-1 to question Nos. 153-156, 163-

180, 168-173. When asked about documents in support of the

claimants’ purported expenses CW1 avoided and said he is not carrying

his file. (Q 183 CW1)

On the other hand the Respondents’ witness (RW1) in answer to

question nos. 64-73,75-81, 85-89, 92-116 in cross examination by the

claimants’ Advocate regarding obligations of the respondents has stated

that the claimants were duly authorised to take steps for development of

the property and refered to the Power of Attorney.