M/s. Galaxy Properties Private Limited vs M/s. Puravankara Limited

M/s. Galaxy Properties Pvt. Ltd. (herein after referred to as Petitioner/Operational Creditor) was incorporated on 26.10.2006 under the Companies Act, 1956 bearing CIN: U70101TN2006PTC061376. Its main of object of the Company are to carry on the business in Real estate.

M/s. Puravankara Limited (herein after referred as Respondent/Corporate Debtor) was incorporated on 03.06.1986 under the Companies Act, 1956 bearing CIN: L45200KA1986PLC051571. Its Authorized Share Capital is Rs.160,00,00,000/- (Rupees One Hundred and Sixty Crores only) and Paid-up Capital of Rs.118,57,48,430/- (Rupees One Hundred and Eighteen Crores Fifty-Seven Lakhs Forty-Eight Thousand Four Hundred and Thirty only). Its main objects of the Company are to look after to buy lands and to develop the same.

Since both the parties are interested to do their respective business and thus entered into Memorandum of Understanding dated (22^nd) November 2006 by incorporating various terms and conditions. Subsequently, the said Memo was amended vide Memo dated 22.11.2007.

Subsequently, dispute arose between the parties regarding rights and obligations of the parties arose under the said Memo's. Accordingly, the Petitioner invoked Arbitration available under Clause 12 of Memorandum of Understanding dated 22.11.2006. Accordingly, Arbitral Tribunal came to be constituted by appointing Justice J. Kanakaraj, as Sole Arbitrator. The Arbitral Tribunal, after entering reference, passed an Award dated 22.12.2016, whereby it categorically held in respect of Issue No. 2 that "...the MoUs dated 22.11.2006 and 22.11.2007 were abandoned or put an end to by mutual consent of both the parties and the evidence clearly supports this decision and the question of finding fault with either of the parties does not therefore arise..." The Tribunal further held that the Respondent were "...not in a position to buy back the shares of NDPL and VDPL. Therefore, there is no use (Applicant) complaining that under Section 65 of the Contract Act, that the Respondent are bound to restore the advantage gained by them under the MoUs." Further, the Arbitral Tribunal held that the Applicant was never ready with the investors and was not in a position to pay the share value of NDPL and VDPL, and rightly rejected the main prayer sought for by the Respondent for retransferring the lands under NDPL and VDPL. Subsequently, Arbitrator passed an Order dated 22^nd February, 2017 by correcting computational errors.

Aggrieved by the said Award, the Respondent has filed OP No.433 of 2017 and A.No.3477 of 2017 before the Hon'ble High Court of Judicature at Madras, U/s. 34 of Arbitration and Conciliation Act, 1996, which are ordered by dated 20.02.2018 by the direction the Petitioner therein/ Respondent herein to pay a sum of Rs.4,12,25,893/- to Galaxy Properties Pvt. Ltd., Petitioner herein with interest @ 12% p.a. from the date of Award till date of realization. Aggrieved by the said order, both the parties have preferred Appeals, before the Hon'ble High Court of Judicature at Madras, under Order XXXVI Rule 1 Original side rules read with clause 15 fo Letters patent vide Original side Appeal Nos. (OSA) 81 and 94 of 2018 and C.M.P.No.5997 of 2018, which were disposed of by Common judgment dated 01.02.2019 by inter-alia setting aside the order passed by Single Judge and thus confirmed the Original Award passed by Sole Arbitrator by modifying the rate of interest @ 12% p.a. to 8% p.a.

Aggrieved by the said order dated 01.02.2019, the Respondent preferred SLP Nos. (C) 13547-13548 of 2019, before the Hon'ble Supreme Court, which came to dismissed, vide Orders dated 05.07.2019, and thus the issue became final having confirmed final order dated 01.02.2019 passed by the Hon'ble High Court of Madras. Aggrieved by this order, the Respondent has preferred a Review Petition (C) No(s). 2451-2452 of 2019, which was dismissed by an order dated 27th November, 2019.