IN THE HIGH COURT FOR THE STATES OF PUNJAB AND

HARYANA AT CHANDIGARH
ORIGINAL JURISDICTION
A.A. NO. OF 2008

IN THE MATTER OF :

M/s. K.R. Hotels Ltd. ... Petitioner/Applicant

Versus

The Managing Director,

Haryana Industrial & Infrastructure Development Corporation
Ltd. (HSIDC)
Regd. Office: C-13-14, Sector 6,
Panchkula,
Haryana-134 109. … Respondent

PETITION UNDER SECTION 11 OF THE

ARBITRATION AND CONCILIATION ACT 1996
ON BEHALF OF THE PETITIONER

To

The Hon’ble Chief Justice and his Companion Justices

of the High Court of Punjab & Haryana

The humble Petition of the

Petitioner/Applicant above-named

MOST RESPECTFULLY SHOWETH:

1. The Petitioner is a Pvt. Ltd. Company incorporated under the

Companies Act, 1956 and engaged in the business of Development of

Hotels and having its Registered Office at E-53, Prasant Vihar, Delhi-

110085. The Petition has been duly signed by Shri Ravinder Kr.

Aggarwal, Director of the Petitioner Company who is also otherwise

competent and well conversant with the facts and circumstances of the

whole case. The true copy of the Board Resolution is annexed herewith

and marked as ANNEXURE-P/1.

2. The Respondent is the Haryana Industrial & Infrastructure

Development Corporation Ltd. (hereinafter referred to as HSIIDC) which

is a State Government undertaking engaged in the enhancement of

Industrial Development activities..

3. In the year-2007, the Respondent Corporation offered a Site for

serviced apartments through public auction at Industrial State, Rai. The

Respondent also issued a brochure stating the site to be a new concept

in infrastructure Development to make the Industrial Estate as human

settlements. It was also stated that the project also contents complete

facilities including restaurants, Food Courts, Banks ATMs

Documentation Services, retail shopping, Telephone facilities fitness

Centres alongwith Serviced Apartments on Higher Floors. The true

copy of the brochure issued by the Respondent Corporation is annexed

herewith and marked as ANNEXURE-P/2.

4. The Respondent Corporation had also represented to General

Public that the land sought be auction for Serviced Apartments belongs

to the Respondent corporation is free from all kinds of encumbrances/

litigation and that the Corporation has every right to auction the said site

for Serviced Apartments.

5. The Petitioner herein express interest in the aforesaid project

coined by the Respondent and subsequently participated in an open

auction held by the Respondent Corporation for the sale of the said site.

It is relevant to state here that the Petitioner participated in auction by

following the Corporation’s above stated representation.

6. In the auction held by the Respondent Corporation, the Petitioner

herein was the highest bidder for an area measuring 6012 sq. mtrs. and

deposited a sum of Rs.3.12 crores being 10% of the total price of

Rs.31.20 crores. The said sum of Rs.3.12 crores was paid by the
Petitioner to the Respondent Corporation vide receipt No.01188 dated

1.3.2007. The true copy of the receipt dated 1.3.2007, issued by

Respondent Corporation is attached herewith and marked as

ANNEXURE-P/3.

7. The Respondent Corporation also issued an Allotment letter

dated 14.3.2007, in favour of the Petitioner allotting the site in

pursuance of the aforesaid public auction in which the Petitioner was

highest bidder. It is pertinent to mention here that as per Clause-IV of

the Allotment letter, the Petitioner herein was advised to deposit a sum

of Rs.4.68 crores within 30 days towards 25% of the price. The true

copy of the Allotment letter dated 14.3.2007, issued by Respondent

Corporation is annexed herewith and marked as ANNEXURE-P/4.

8. The Petitioner herein also requested the Respondent Corporation

for seeking some grace period of time for payment of 15% of price of

the allotted site for freehold Service Department, vide letters dated

11.4.2007 and 19.04.2007. The Petitioner was given extension by the

Respondent Corporation to deposit the requisite amount upto

13.06.2007 vide its memo dated 24.4.2007. The true copies of the

letters dated 11.4.2007 and 19.4.2007 and memo dated 24.4.2007 are

annexed herewith and marked as ANNEXURE-P/5 (Colly).

It is also pertinent to mention here that the Petitioner herein had

also made necessary arrangements to deposit the aforesaid amount

with the Respondent Corporation and in fact the Punjab National Bank

vide its letter dated 1.6.2007 had sanctioned the credit facility in favour

of the Petitioner for a sum of Rs.9.25 crores. The true copy of the letter
dated 1.06.2007 issued by the Punjab National Bank is annexed

herewith and marked as ANNEXURE-P/6.

9. That while the Petitioner herein was taking necessary steps for

the progress of the aforesaid project, to their utter shock in surprise,

the Petitioner herein received summons on 30.5.2007 from this Hon’ble

Court in Civil Writ Petition bearing No.7583 of 2007, whereby the said

Petition challenged the Allotment made by the Respondent Corporation

in favour of the Petitioner herein on the ground that allotted land/site

was acquired for Public purpose of setting up of a New Fruits and

Vegetables Complex and that the said land/site cannot be allotted for

the purpose of setting up of serviced apartment as coined by the

Respondent Corporation.

10. That after receiving the aforesaid summons, the Petitioner herein

intimated the Respondent Corporation vide letter dated 2.6.2007 that in

view of the aforesaid litigation pending in the Hon’ble Punjab and

Haryana High Court in respect of the allotted site, It will not be feasible

to make further payment of Rs.4.68 crores (being 25% of the total price)

to the Respondent Corporation as there are apprehension that they

may be involved in the litigation in future, which can obstruct ongoing

project. The petitioner herein also sent reminder letters dated

19.6.2007 and 29.6.2007 in this regard. The Petitioner vide the

aforesaid letters also requested to the Respondent Corporation for

redressing the grievances of the Petitioner. Infact the Petitioner also

tried to contact the Deputy General Manager of the Corporation and on

one auction was assured that the matter is in process, but subsequently

the Petitioner was not given any satisfactory response by the

Respondent Corporation inspite of the visits made to the offices of

Respondent at New Delhi, Panchkula and Kundli. The true copies of the

letters dated 2.6.2007, 19.6.2007 and 29.6.2007 are annexed herewith

and marked as ANNEXURE-P/7 (Colly).

11. That inspite of the aforesaid repeated reminders, the Respondent

Corporation failed to redress the grievances of the Petitioner and

without removing the apprehensions of the Petitioner in respect of the

pending Court litigation, the Respondent vide its letter dated 16.7.2007

asked the Petitioner Company, to deposit the balance amount of 15% of

the price i.e. Rs.4.68 crores within a period of next ten days i.e. by 31 st

July, 2007.

After receiving the aforesaid shocking response, the Petitioner herein

vide its letter dated 20.7.2007 intimated the Respondent Corporation

that the real issue raised by the Petitioner has not been redressed

properly and in view of the uncertainty of the aforesaid ongoing litigation

pending in the Hon’ble High Court, the future implementation of the

project may not been possible as the Respondent Corporation has

failed to provide any kind of satisfactory assurance to the Petitioner for

bearing the responsibility of any kind of damages to the Petitioner as

the total cost of present project is above Rs.100 crores. The true

copies of the letters dated 16.07.2007 and 20.7.2007 are annexed

herewith and marked as ANNEXURE-P/8 (Colly).

12. That inspite of getting any satisfactory redressal of the issue

raised by the Petitioner, the Respondent Corporation vide its letter

dated 2.8.2007 intimated that since the Petitioner herein has failed

deposit the remaining amount of 15% of the price of the allotted site by

31.7.2007, therefore, the site stand resumed and 10% cost of the site

deposited by the Petitioner herein has been forfeited. The true copy of
the letter dated 31.07.2007 is annexed herewith and marked as

ANNEXURE-P/9.

At this stage it is relevant to state here that the Petitioner had

already deposited a huge sum of Rs.3.12 crores, with the Respondent

and has also availed the credit facility from the Punjab National Bank,

for which huge amount towards interest is being paid by the Petitioner.

13. The Petitioner herein vide letter dated 7.8.2007 requested the

Respondent Corporation to settle the facts in issue regarding the

pending litigation but the Respondent declined the aforesaid request

vide letter dated 20.08.2007. The Petitioner vide letter dated 14.09.2007

raised the dispute in respect of the aforesaid circumstances and made

a demand for appointment of arbitrator for referring of the aforesaid

dispute regarding the allotment of the services apartment site and its

resumption and forfeiture of the earnest money deposited by the

Petitioner. The Respondent Corporation in reply to the aforesaid letter

refused to refer the aforesaid dispute to the arbitrator for adjudication

vide its letter dated 17.10.2007, by stating as follows:-

“Since you have failed to deposit the aforesaid amount

towards 15% of the price of site, the site now stands
resumed and the action being strictly as per the one
primary condition of the Allotment Letter dated 14.3.2007
issued to you in respect of the Serviced Apartment Site at
Rai, no dispute referable to the Arbitrator for adjudication,
has arisen between you and the Corporation, entitling you
to invoke the clause 20 of the Allotment Letter dated
14.3.2007. You request for appointment of Arbitrator is
therefore declined.”

The true copies of the letters dated 07.08.2007, 20.8.2007 and

17.10.2007 are annexed herewith as ANNEXURE-P/10 (Colly).

14. That the Petitioner vide letter dated 18.02.2008 demanded from

the Respondent Corporation that the case file regarding the aforesaid
project be re-opened and to set aside the order of resumption of the

aforesaid site by the Respondent and if not possible then the earnest

money amount of sum of Rs.3.12 crores may be refunded otherwise

previous request for appointment of Arbitrator for proper adjudication of

the dispute in respect of serviced Apartment site at Rai, be allowed.

The true copy of the letter dated 18.2.2008 is annexed herewith and

marked as ANNEXURE-P/11.

15. In the aforesaid circumstances, it is evident that disputes have

arisen between the Petitioner herein and the Respondent Corporation

to the following effect:-

(i) Whether the Petitioner herein justified in withholding the deposit

of 15% of the price towards second installment till the disposal
of the Writ Petition before the Hon’ble High Court.

(ii) Whether Petitioner herein is entitled to be granted further time

for deposit of 15% of the price.

(iii) Whether Respondent Corporation was justified in not disclosing

the pendency of the litigation to the Petitioner herein.

(iv) Whether the Petitioner herein is entitled to receive back the

earnest money of 10% already deposited with interest at a
reasonable rate.

(v) Any other dispute which may arise in the facts and
circumstances of the case regarding non-compliance of the
terms of allotments.

16. For the purpose of protection of interest of the Petitioner herein

and in view of the disputes as stated above having arisen and in

reference to the Arbitration Clause 20 of the Allotment Letter dated

14.3.2007 issued by the Respondent Corporation, which reads as

follows:-

Clause-20. ARBITRATION:

“All disputes and differences arising out of or in any way

touching or concerning this allotment whatsoever shall be
referred to the sole arbitration of the MD, HSIIDC or any other
officer appointed by him. It will not be an objection to such
appointment that the arbitrator so appointed is a Government
servant or officer of the HSIIDC that he had to deal with the
 matter to which this allotment relates in the course of his duties
as such Government servant or officer as the case may be, he
has expressed his views on all or any of the matters in dispute
or difference. The decision of such arbitrator shall be final and
binding on the concerned parties.”

17. The Petitioner herein decided to invoke the Arbitration Clause

as envisaged in the Allotment letter dated 14.3.2007, seeking to appoint

an Arbitrator and hence, sent a notice for Arbitration dated 26.03.2008,

calling upon the Respondent Corporation to convey their willingness to

accept the Sole Arbitrator within a period of 30 days from the receipt of

the notice. The true copy of the notice for Arbitration dated 26.3.2008 is

annexed herewith and marked as ANNEXURE-P/12.

18. In reply to the aforesaid notice for Arbitration dated 26.3.2008,

the Respondent Corporation vide its reply letter dated 15.4.2008

reiterated their same old stand and stated that no dispute referable to

the Arbitration in terms of the Allotment letter dated 14.3.2007 has

arisen between the Respondent Corporation and the Petitioner and

thereby the Respondent Corporation failed to appoint the Arbitrator. It

is worthwhile to mention here that the Respondent Corporation

completely failed to abide by the Arbitration Clause contained in the

Allotment letter dated 14.3.2007, executed between the Petitioner

herein and the Respondent Corporation. The Respondent has also

failed to set aside the order of resumption of the aforesaid site and also

failed to refund the huge amount of Rs.3.12 crores paid by the

Petitioner towards the earnest money. The true copy of the reply letter

dated 15.4.2008 is annexed herewith and marked as ANNEXURE-

P/13.

19. Being aggrieved by the aforesaid Arbitrary conduct and as a

result of such failure on the part the Respondent Corporation to convey

their acceptance as to the appointment of the Sole Arbitrator proposed

by the Petitioner herein in the notice for Arbitration dated 26.3.2007, the

Petitioner herein is constrained to approach this Hon’ble Court for the

appointment of an Arbitrator under Section 11 (6) of the Arbitration and

Conciliation Act., 1996.

PRAYER

In view of the aforesaid circumstances, it is most respectfully

prayed that this Hon’ble Court may graciously be pleased to:

[a] appoint any or such other person as may be deemed

appropriate to be the Sole Arbitrator under Section 11 (6) of

the Arbitration and conciliation Act., 1996 pursuant to the

allotment letter dated 14.3.2007 executed between parties to

resolve the disputes that have arisen between the Petitioner

herein and the Respondent as set;

[b] refer to the disputes as set out in detail herein above or such

other disputes or claim as this Hon’ble Court deem fit and

proper to the Sole Arbitrator for the adjudication;

[c] pass such other and further order or orders as this Hon’ble

Court may deem fit and proper in the facts and circumstances

of the present case.

FILED BY:

M.F. Humayunisa/Kumar Dushyant Singh

FOR INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI – 110001

April 28th, 2008

 IN THE HIGH COURT FOR THE STATES OF PUNJAB AND

HARYANA AT CHANDIGARH

ORIGINAL JURISDICTION

A.A. NO. OF 2008

IN THE MATTER OF :

M/s. K.R. Hotels Ltd. ... Petitioner/Applicant

Versus

The Managing Director,

Haryana Industrial &
Infrastructure Development Corporation
Ltd. (HSIDC) … Respondent

AFFIDAVIT

I, Ravinder K. Aggarwal, aged about ____years, Director of the

Petitioner Company having their office at E-53, Parshant Vihar, Delhi-
110085, do hereby solemnly declare and state as under:

1. That I am the Director of the Petitioner Company and as such

well aware of the facts and circumstances of the present case
from the records and am competent to swear to this affidavit on
behalf of the Petitioner Company.

2. That the contents of the above Petition under Section 11 of the

Arbitration and Conciliation Act. 1996 are true and correct to my
knowledge and as per the information received from the records
of the Petitioner Company and believed to be true.

DEPONENT
VERIFICATION:

Verified at New Delhi on this the th day of April, 2008 that the contents
of the above Affidavit are true and correct to the best of my knowledge
and belief and that nothing false has been stated therein or material
concealed therefrom.

D E P O N E NT
 IN THE HIGH COURT FOR THE STATES OF PUNJAB AND

HARYANA AT CHANDIGARH

ORIGINAL JURISDICTION

A.A. NO. OF 2008

MEMO OF PARTIES

IN THE MATTER OF :

M/s. K.R. Hotels Ltd.

Regd. Office: E-53, Prasant Vihar,
Delhi-110085 ... Petitioner/Applicant

Versus

The Managing Director,

Haryana Industrial & Infrastructure Development Corporation
Ltd. (HSIDC)
Regd. Office: C-13-14, Sector 6,
Panchkula,
Haryana-134 109. … Respondent

FILED BY:

M.F. Humayunisa/Kumar Dushyant Singh

FOR INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI – 110001

April 28th, 2008

 IN THE HIGH COURT FOR THE STATES OF PUNJAB AND

HARYANA AT CHANDIGARH

ORIGINAL JURISDICTION

A.A. NO. OF 2008

IN THE MATTER OF :

M/s. K.R. Hotels Ltd. ... Petitioner/Applicant

Versus

The Managing Director,

Haryana Industrial &
Infrastructure Development Corporation
Ltd. (HSIDC) … Respondent

INDEX

SL. PARTICULARS PAGES

NO.
1. Urgent Application A

2. Memo of Parties C

3. Petition Under Section 11 of the Arbitration and

conciliation Act 1996 on behalf of the Petitioner
with Affidavit.

4. ANNEXURE-P/1
True copy of the Board Resolution.

5. ANNEXURE-P/2
True copy of the brochure issued by the
Respondent Corporation.

6. ANNEXURE-P/3
True copy of the receipt dated 1.3.2007, issued
by Respondent Corporation.

7. ANNEXURE-P/4
True copy of the allotment letter dated
14.3.2007, issued by Respondent Corporation.

8. ANNEXURE-P/5 (Colly)
True copies of the letters dated 11.4.2007 and
19.4.2007 and memo dated 24.4.2007.

9. ANNEXURE-P/6
True copy of the letters dated 1.06.2007 issued
 by the Punjab National Bank.

10. ANNEXURE-P/7 (Colly).

True copies of the letters dated 2.6.2007,
19.6.2007 and 29.6.2007.

11. ANNEXURE-P/8 (Colly).

True copies of the letters dated 16.07.2007 and
20.7.2007.

12. ANNEXURE-P/9
True copy of the letter dated 31.07.2007.

13. ANNEXURE-P/10 (Colly).

True copies of the letters dated 07.08.2007,
20.8.2007 and 17.10.2007.

14. ANNEXURE-P/11
True copy of the letter dated 18.2.2008.

15. ANNEXURE-P/12
True copy of the notice for Arbitration dated
26.3.2008.

16. Vakalatnama D

FILED BY:

M.F. Humayunisa/Kumar Dushyant Singh

FOR INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI – 110001

April 28th, 2008