ADR, Simulation Exercise, 2021

PROBLEM FOR ARBITRATION AND CONCILIATION:
1. Amit is a reputed jewellery merchant in Chennai; he also invests in real estate

business. His friend Jay Surya is a real estate developer and he owns several
immoveable properties. They being friends and businessmen have several
financial transactions between them.
2. Of the several properties, Jay Surya owns a commercial space measuring

6,000 sq. ft in a prime locality in Bengaluru. It appears that Amit was interested
in purchasing the said property. Accordingly, an unregistered agreement of sale
dated 12.01.2019 came to be executed between Amit and Jay Surya for sale of
the property for a total consideration of Rs. 8,00,00,000/- (Rupees Eight
Crores).
3. Under the terms of the agreement of sale, a sum of Rs. 1,50,00,000/- was
required to be paid on the date of the agreement and a further sum of Rs.
1,90,00,000/- was required to be paid within a month from the execution of the
agreement. The sale transaction was required to be completed within a period of
3 months from the date of the agreement. The original title deeds and other
original documents pertaining to the property were delivered to Amit.
4. Pursuant to the terms of the agreement, Amit paid a sum of Rs. 1,50,00,000/-
by way of two cheques on 25.01.2019 and the same were encashed by Jay
Surya. Subsequently, on 03.02.2019, he paid a further sum of Rs. 1,00,00,000/-
by way of cheque. On 01.03.2019, he tendered a cheque of Rs. 90,000/- to jay
Surya towards further payment of the balance sale consideration. However, the
said cheque was not encashed by Jay Surya.
5. Amit subsequently wrote several emails and letters to Jay Surya requesting to
encash the said cheque and also to get the sale deed registered in his favour by
accepting the balance sale consideration. However, it was not of any avail as
Jay Surya gave evasive replies. Amit caused a notice dated 29.04.2019 calling
upon Jay Surya to accept the balance sale consideration which he was ready and
willing to pay and get the sale deed executed and registered in his favour.
6. At that stage, Jay Surya by way of a reply to the notice dated 29.04.2019,
denied having agreed to sell the property to Amit and along with the reply letter,
he returned the cheque of Rs. 90,000/- sent by Amit. He stated in his reply that
though it was a matter of fact that he did sign on the document, he never
intended to sell the property to Amit. He stated that the document was intended
as a security for a previous financial transaction between the parties, under
which Jay Surya was required to pay a sum of money to Amit. He also pointed
out that as a matter of fact, the date of the agreement, the amounts mentioned,
and the description of the property in the schedule were all handwritten while
the rest of the agreement was typed and printed. He further states Amit was also
due to pay him a sum of Rs. 2,50,00,000/- in relation to another business
transaction between them and it is for this reason the other cheque for Rs.
90,000/- was not encashed by him.
7. Upon receipt of the reply, Amit invoked the arbitration clause contained in
the agreement of sale and proposed the name of an arbitrator of his choice to
Jay Surya. However, Jay Surya did not reply to the communication addressed
by Amit. Subsequently, on 01.10.2019, Amit filed a petition before the High
Court of Tamil Nadu under Section 11 of the Arbitration and Conciliation Act,
1996 for appointment of an arbitrator. By an order dated 29.12.2019, the High
Court allowed the petition and appointed Sri. _______ as the arbitrator.
8. Amit has filed his claim statement before the arbitrator seeking specific
performance of the agreement of sale dated 12.01.2019 and in the alternative,
for refund of a sum of Rs. 2,50,00,000/- along with interest at 18%p.a. In reply,
Jay Surya has filed his statement of defence denying the averments. Further, by
way of a counter-claim, he has sought for a mandatory injunction directing
Amit to return the original title deeds and other original documents pertaining to
the property.
PROBLEM FOR MEDIATION AND NEGOTIATION
1. Arvind Kumar, a resident of Bengaluru is an architectural engineer an interior

designer who provides interior designing services to several property
developers. Over the last several years, Ms. Surya Pvt. Ltd., a real estate
development and construction company has been engaging the services of
Arvind Kumar for several of its residential and commercial real estate projects.
2. The company undertook a project by name “Surya Gardenia” in the year
2016 for the construction and development of nine residential towers. The
company was faced with several hurdles for undertaking the project, including
litigation with regard to the land over which the project was proposed to be
constructed. Despite being faced with challenging circumstances, the company
went ahead with the project and nearly completed its construction in the year
2019.
3. The company had engaged the services of Arvind Kumar for carrying out
interior designing works for several flats. The company issued twenty separate
work orders in favour of Arvind Kumar during the year 2019 pertaining to
twenty different houses, in all amounting to Rs. 50,00,000/- (Rupees fifty
Lakhs) to be paid to him by the company upon completion of the work.
4. In the month of April 2020, Arvind Kumar successfully completed the works
assigned to him under the work orders, to the satisfaction of the company and
its customers. However, the company delayed payment of amounts due to him.
After much deliberation, the company paid a sum of Rs. 14,00,000/- (Rupees
fourteen Lakhs) in multiple instalments.
5. Arvind Kumar started demanding payment of the balance amount of Rs.

36,00,000/- and the company did not pay heed to his demands at all. When he
threatened legal action against the company, the company issued twenty
different cheques in favour of Arvind Kumar, all dated 29.10.2020, each of Rs.
1,80,000/- purportedly towards each of the twenty work orders.
6. On presenting the cheques for encashment on the same day, all of the cheques
were dishonoured for insufficiency of funds, as per the endorsement of the bank
dated 02.11.2020. Immediately, Arvind Kumar got served upon the company a
legal notice dated 07.11.2020 as required under Section 138 of the Negotiable
Instruments Act, 1881 regarding the dishonour of the tweny cheques.
7. The company did not reply to Arvind Kumar’s notice. On 09.12.2020, he

presented a complaint before the jurisdictional Magistrate under Section 200 of
the Code of Criminal Procedure, 1973 against the company and its authorised
signatory who signed the cheques with regard to the dishonour of the twenty
cheques issued by the company. The Magistrate took cognisance of the offence,
recorded the sworn statement of Arvind Kumar and issued summons to the
company and its authorised signatory.
8. The company immediately moved the High Court of Karnataka under Section
482 of the Code of Criminal Procedure, 1973 for quashing the complaint and
prosecution against the company and its officials on the ground that a single
complaint based upon a single demand notice under S. 138, NI Act could not
have been instituted by Arvind Kumar in respect of twenty different cheques.
9. The company’s contention before the High Court is that each of the cheques
pertains to a separate transaction and work order. Hence, a single
comprehensive complaint is not maintainable and it prejudices the rights of the
accused.
10. The company realises that it is bound to pay Arvind Kumar having engaged
his services and having got the work completed by him. However, the company
is presently undergoing a financial crisis due to some of its projects not having
taken off and other market conditions. The company is willing to pay Arvind
Kumar a maximum sum of Rs. 14,00,000/- (Rupees Fourteen Lakhs) towards
full and final settlement. Arvind Kumar also apprehends that it may be difficult
for him to recover the money from the company through civil action, in case his
complaint gets quashed by the High Court.
11. The matter is now set down for mediation, the same having been referred to
by the High Court since the respective advocates for the parties submitted their
willingness before the High Court to explore the possibility of settlement
through mediation.

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PROBLEM FOR ARBITRATION AND CONCILIATION:

1. Amit is a reputed jewellery merchant in Chennai; he also invests in real estate

2. Of the several properties, Jay Surya owns a commercial space measuring

PROBLEM FOR MEDIATION AND NEGOTIATION

1. Arvind Kumar, a resident of Bengaluru is an architectural engineer an interior

5. Arvind Kumar started demanding payment of the balance amount of Rs.

7. The company did not reply to Arvind Kumar’s notice. On 09.12.2020, he

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