Sanjay Morey agreed to sell his 1BHK flat in Mumbai to Manoj Srivastav for fifty lakhs. Manoj paid five lakhs upfront and was to pay the balance within two months. After this, they would register the Agreement, and Manoj would move into the flat. If Manoj failed to pay the balance, the Agreement would stand canceled, and Manoj would forfeit the five lakhs.
As Manoj did not pay the balance, Sanjay looked for other buyers. However, a few months later, he received a notice from the Court. Manoj had filed a case against him, claiming that SANJAY had not fulfilled his side of the Agreement.
The case dragged on for two years. Worse, because of the pending litigation, Sanjay couldn’t find another buyer for his flat.
By the time Sanjay and Manoj settled the case, the real estate market had crashed, and Sanjay had to sell his flat for only 35 lakhs. He also ended up spending a lakh in legal fees.
If the Agreement had an Arbitration clause, the entire case could have been settled within a few months! Sanjay would not have lost money.
Disclaimer: All characters and names are fictional. This is a public interest story, produced by House Court, an online arbitration platform