M/S. Amisha Buildcon Pvt. Ltd vs Jidnyasa Co-Operatvie Housing ...
2016 Latest Caselaw 4560 Bom

                                                                  arbp82-14

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      CIVIL APPELLATE JURISDICTION




                                                     
                     ARBITRATION PETITION NO.82 OF 2014


      M/s.Amisha Buildcon Pvt. Ltd.              )




                                                    
      A private Limited Company incorporated     )
      and registered under the provisions of     )
      Companies Act, 1956 and having its         )
      registered office at -                     )




                                               
      111, Industrial Area, Sion (East)          )
      Mumbai - 400 022.                          )         ...Petitioner

                  ....Versus....
                                    
      Jidnyasa Co-operative Housing Society     )
                                   
      Limited, A Co-operative Housing Society   )
      classified as Housing Society registered  )
      under the provisions of the Maharashtra   )
      Co-operative Societies, Act, 1960 and     )
          

      having its address at - Khidkali-Desai,   )
      Post Padale, Taluka and district Thane    )
       



                                                )
      AND HAVING ITS OFFICE AT                  )
                                                )
      Summons to be served on                   )
      Shop No.1, Trimbakeshwar Society          )





      Ground Floor, Opp. Ashwini Motors,        )
      Edulji Road, Charai, Thane ( W) - 400 601 )          ...Respondent


      Mr.A. Kumbhakoni, Senior Counsel with Mr.Shardul Singh i/b





      Mr.Vaibhav Gaikwad for the Petitioner.

      Mr.R.P. Mudholkar for the Respondent.

                             CORAM         : R.D. DHANUKA, J.

RESERVED ON : 28TH JULY, 2016 PRONOUNCED ON : 9TH AUGUST, 2016

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ORAL JUDGMENT :-

1. By this petition filed under section 11(6) of the Arbitration &

Conciliation Act, 1996 (for short "the Arbitration Act"), the petitioner

seeks appointment of an independent person as a sole arbitrator to

enter upon the reference and to adjudicate upon all the disputes and

differences between the parties arising out of the Development

Agreement dated 21st October, 2011 read with an undated

Memorandum of Understanding. Some of the relevant facts for the

purpose of deciding this arbitration petition are as under :

2. On 20th October, 2011, the petitioner and the respondent

entered into a Development Agreement on the terms and conditions

recored therein. It is the case of the petitioner that the said

Development Agreement was duly registered with the Sub-Registrar,

Thane - 2 on 21st October, 2011. The respondent also executed an

irrevocable power of attorney dated 20th October, 2011 in favour of

the petitioner.

3. The dispute arose between the parties. The petitioner

issued a notice on 30th October, 2014 to the respondent society and

invoked the arbitration agreement recorded in the said Development

Agreement and also the Memorandum of Understanding executed

between the parties and suggested three names of the retired Judges

of this Court and called upon the respondent to give consent to the

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appointment of any one of them as a sole arbitrator and threatened to

file appropriate legal proceedings if the respondent would fail to give

consent to the appointment of any one of them as a sole arbitrator.

4. On 3rd November, 2011, the respondent replied to the said

notice dated 30th October, 2014 and informed the petitioner that the

respondent had appointed Mr.Rajesh Mudholkar, Advocate as an

arbitrator and forwarded a copy of the resolution passed by the

society.

5.

The petitioner filed this petition under section 11(6) of the

Arbitration Act inter-alia praying for an independent arbitrator.

6. Mr.Kumbhakoni, learned senior counsel for the petitioner

invited my attention to clause 30 of the Development Agreement

dated 20th October, 2011 entered into between the petitioner and the

respondent and also clause 18 of the undated Memorandum of

Understanding and submits that the arbitration agreement is recorded

in both the documents. He submits that the respondent society could

not have nominated its own advocate as a sole arbitrator. He submits

that since there was no consensus on the name of the arbitrator, this

Court can appoint an independent arbitrator to adjudicate upon the

dispute between the parties.

7. The arbitration petition is opposed by the respondent

society by fling affidavit in reply and additional affidavit in reply.

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Mr.Mudholkar, learned counsel for the respondent on the other hand

submits that this petition filed under section 11(6) of the Arbitration

Act is not maintainable on the ground that the Development

Agreement dated 20th October, 2011 and an undated Memorandum

of Understanding which did not have mandate of the general body of

the respondent society, cannot be relied upon by the petitioner for the

purpose of appointing an arbitrator. He submits that in any event

since the petitioner herein has already given up all its alleged right,

title and interest in ig the Development Agreement and the

Memorandum of Understanding in favour of M/s. Ajmera Habitat

Private Limited, the arbitration petition for the appointment of an

arbitrator is not maintainable on that ground also.

8. The next submission of the learned counsel for the

respondent is that since the dispute proposed to be raised by the

petitioner touches the business of the respondent society to

adjudicate upon such dispute vests only with the Co-operative Court

exclusively, no arbitrator can be appointed by this Court. Learned

counsel also made various submissions on the merits of the claim

made by the petitioner and would submit that no arbitrator can be

appointed on that ground also.

9. A perusal of the record indicates that there is no dispute

that the Development Agreement dated 20th October, 2011 and an

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undated Memorandum of Understanding relied upon by the petitioner

were signed by the petitioner and the respondent. There is no dispute

that the arbitration agreement is recorded in both these documents

and signed by both the parties. A perusal of the reply sent by the

respondent to the petitioner in response to the notice dated 30th

October, 2014 invoking arbitration agreements also indicates that the

respondent society has not disputed the existence of an arbitration

agreement and on the contrary had appointed its own advocate as a

sole arbitrator. The respondent has also passed a resolution in that

record, which was annexed to the reply dated 3 rd November, 2014

thereby appointing Mr.Rajesh Mudholkar, Advocate as a sole

arbitrator. In my view, the arbitration agreement thus exists between

the parties as recorded in the Development Agreement as well as an

undated Memorandum of Understanding.

10. Insofar as the submission of the learned counsel for the

respondent that the Memorandum of Understanding did not have

mandate of the general body of the respondent society and thus

cannot be relied upon by the petitioner is concerned, in my view, the

arbitration agreement recorded therein being independent of other

terms and conditions, can be still binding on the parties. Be that as it

may, there is no dispute that the arbitration agreement in both the

documents exists.

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11. Insofar as the submission of the learned counsel for the

respondent that the petitioner has given up all its right, title and

interest in the Development Agreement and in the Memorandum of

Understanding in favour of M/s.Ajmera Habitat Private Limited and

thus the petitioner did not have any locus to apply for the appointment

of an arbitrator is concerned, a perusal of the reply to the notice

issued by the respondent indicates that the respondent society itself

has appointed an arbitrator and thus on this ground, this Court cannot

reject the application for appointment of an arbitrator. The question as

to whether the petitioner has given up all its alleged right, title and

interest in the Development Agreement or in the Memorandum of

Understanding or not, the said issue can be decided by the learned

arbitrator on its own merits.

12. Insofar as the submission of the learned counsel for the

respondent that the dispute raised by the petitioner touches the

business of the respondent society and thus such dispute can be

adjudicated upon only by the Co-operative Court under section 91 of

the Maharashtra Co-operative Societies Act, 1961 is concerned, the

issue of arbitrability of the claim when made before the learned

arbitrator can be decided by the learned arbitrator. There is no

statement of claim admittedly filed by the petitioner till date. In my

view, under section 11(6-A) of the Arbitration Act, the Court while

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appointing an arbitrator under section 11 has to confine to the

examination of existence of an arbitration agreement. In my view,

since admittedly the arbitration agreement exists between the parties,

the issue of arbitrability of the claim cannot be decided by this Court

and the same can be decided by the learned arbitrator as and when

the statement of claim is filed by the petitioner.

13. It is made clear that this Court has not expressed any

views on the legality and validity of the Development Agreement as

well as an undated Memorandum of Understanding and about the

claim proposed to be made by the petitioner before the learned

arbitrator on merits and all such contentions are kept open.

14. In my view, since there was no consensus on the name of

the learned arbitrator, the arbitration petition for the appointment of an

independent arbitrator filed under section 11(6) of the Arbitration Act

is maintainable.

15. I propose to appoint Shri Justice Pramod D. Kode, former

Judge of this Court, having his office at 204, Vardhaman Chambers,

Cawasji Patel Street, Opposite Punjabi Moti Halvai, Fort, Mumbai -

400 001, Mob. No.99691 01100 and Office No.022 2204 0976 as a

sole arbitrator, who is required to file a statement of disclosure in

terms of section 11(8) read with section 12(1) of the Arbitration Act

before the next date.

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16. The parties are directed to convey this order to the learned

proposed arbitrator with a request to file statement of disclosure in

terms of section 11(8) read with section 12(1) of the Arbitration Act

before the next date.

17. Place the arbitration petition on board on 18th August, 2016

for directions.

18. All parties as well as the learned proposed arbitrator to act

on the authenticated copy of this order.

(R.D. DHANUKA, J.)