Bombay High Court
Rajesh K. Shah vs Kamlesh K. Sahani on 3 November, 2017
Bench: R.D. Dhanuka
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vai
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.104 OF 2017
Mr.Rajesh K. Shah, )
of Mumbai, India Inhabitant in his capacity )
as Karta and Manager of R.K. Shah (HUF) )
carrying on business at 63/7, Vasant Bldg. )
Road No.4, Sion (East), Mumbai - 22. ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
ARBITRATION PETITION NO.105 OF 2017
Mr.Ramesh K. Shah, )
of Mumbai, Karta and Manager of )
K.V. Shah (HUF) )
Having address at 3, Bethel, Chheda )
Nagar, Chembur, Mumbai - 400 089 )
through its Constituted Attorney )
Mr.Jatin R. Shah ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
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Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
ARBITRATION PETITION NO.107 OF 2017
Smt.Bharti Haren Chheda, )
of Mumbai, India Inhabitant, residing at )
B-24, Prem Kutir, Sion (E), Mumbai - 22. )
through its Constituted Attorney )
Mr.Rajesh K. Shah ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
ARBITRATION PETITION NO.108 OF 2017
Smt.Bharti Haren Chheda, )
of Mumbai, India Inhabitant, residing at )
Jai Anand Complex, 4th Floor, Gul )
Mohar Road, Sion, Chunnabhatti (E), )
Mumbai - 400 022. ) ...Petitioner
....Versus....
M/s.Shant Snacks & Beer Bar )
Through its partner Mr.Kamlesh )
K. Sahani ,a registered Partnership firm )
carrying on business at Hotel Poonam )
657/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
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ARBITRATION PETITION NO.110 OF 2017
Smt.Bhanuben R. Shah )
through its C.A. Mr.Rakesh K. Shah )
of Mumbai, India Inhabitant, residing at )
3, Bethel, Chheda Nagar, )
Chembur Mumbai - 400 089. ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
ARBITRATION PETITION NO.111 OF 2017
Ramesh K. Shah )
of Mumbai, India Inhabitant, residing at )
3, Bethel, Chheda Nagar, )
Chembur Mumbai - 400 089. )
through its Constituted Attorney )
Mr.Rajesh K. Shah ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
WITH
ARBITRATION PETITION NO.112 OF 2017
Mr.Jatin Ramesh Shah )
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of Mumbai, India Inhabitant, residing at )
6, Dayal Bhuvan, 104, Keshavji Naik Road, )
Mumbai - 400 089. ) ...Petitioner
....Versus....
Mr.Kamlesh K. Sahani, )
carrying on business in the firm name )
and style of Kamal Enterprises as its )
Sole Proprietor, having address at C/o. )
Poonam Hotel, 629/3, Jungli Maharaj Road )
Deccan Gymkhana, Pune - 411 004. ) ...Respondent
Ms.Mamta Sadh i/b Mr.Kalpesh J. Nansi and Ms.Khan Farhana for
the Petitioner.
Mr.Suyash Gadre with Mr.Chetan Mhatre i/b Utangale & Co. for the
Respondent.
CORAM : R.D. DHANUKA, J.
DATE : 3RD NOVEMBER, 2017.
ORAL JUDGMENT :-
1. By consent of parties, facts being identical in all these
matters, were heard together and are being disposed of by a
common judgment.
2. I will summarize the facts in Arbitration Petition No.104 of
2017. By this petition filed under section 14 and 15 of the Arbitration
& Conciliation Act, 1996, (for short "the said Act") the petitioner seeks
substitution and/or appointment and/or replacement of the erstwhile
arbitrator. On 28th November, 2005, the parties filed a consent terms
in Summons for Judgment No.186 of 2005 in Summary Suit No.2042
of 2003. The parties agreed to refer the disputes in the suit to the
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sole arbitration of Shri Justice A.B. Palkar, a former Judge of this
Court. The said suit was disposed of in terms of the consent terms
filed by the parties. In view of the demise of Shri Justice A.B. Palkar,
a former Judge of this Court, by an order dated 20th November, 2009,
Shri Justice Anoop V. Mohta passed in Arbitration Petition No.685 of
2009 appointed Shri Justice S.S. Parkar, a former Judge of this Court
as sole arbitrator in place of the erstwhile arbitrator Shri Justice A.B.
Palkar, a former Judge of this Court. The said Shri Justice S.S.
Parkar also refused to act as an arbitrator and vacated office. By an
order dated 19th December, 2014, Shri Justice S.J. Kathawalla in
Arbitration Application No.271 of 2014 along with connected matters
appointed Mr.Ashish Kamat, a counsel of this Court by consent of
parties.
3. The petitioner thereafter requested the learned arbitrator to
fix a date for holding a preliminary meeting. The date was fixed by the
learned arbitrator. The learned arbitrator however, could not remain
present on the date fixed by him. The petitioner thereafter requested
for fixing another date before the learned arbitrator vide letter dated
16th February, 2015. Learned arbitrator did not enter upon the
reference. The petitioner thereafter filed separate arbitration petitions
inter-alia praying for filling up of the vacancy arising out of the
resignation of Mr.Ashish Kamat, the erstwhile arbitrator. By an order
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dated 25th October, 2016 passed by this Court, those petitions were
disposed of with liberty to issue notices to the respondent for
appointment of an arbitrator and to file a fresh petition after expiry
period of 30 days notice period.
4. The petitioner through his advocate issued a fresh notice
on 29th November, 2016 to the respondent requesting the respondent
to appoint an arbitrator within 30 days from the date of receipt of
invoking sections 14 and 15 of the said Act.
5. The respondent vide their advocate's letter dated 27th
December, 2016, responded to the said notices and raised an issue
of limitation in respect of the claims and refused to appoint an
arbitrator. The petitioners thus filed these seven petitions invoking
sections 14 and 15 of the said Act seeking substitution and/or
appointment and/or replacement of the erstwhile arbitrator.
6. Ms.Sadh, learned counsel appearing for the petitioner
invited my attention to various orders passed by this Court in various
petitions filed by the petitioner for substitution of the arbitrator
appointed by this Court on 28th November, 2005 in Summons for
Judgment No.186 of 2005. She submits that by an order dated 28 th
November, 2005, this Court appointed Shri Justice A.B. Palkar, a
former Judge of this Court in the consent terms filed by the parties in
the Summons for Judgment. In view of the sad demise of Shri Justice
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A.B. Palkar, a former Judge of this Court, this Court by consent of
parties on 20th November, 2009 appointed Shri Justice S.S. Parkar, a
former Judge of this Court as the sole arbitrator. The said learned
arbitrator also resigned. The petitioner thereafter filed the applications
under sections 14 and 15 of the said Act which were disposed of by
an order dated 19th December, 2014, appointing Mr.Ashish Kamat, a
counsel of this Court as an arbitrator. She submits that since the
learned arbitrator has resigned, the vacancy has arisen, which is
required to be filled in by appointing a substitute arbitrator under
section 15 of the Act. She submits that the request of the petitioner
for appointment of substitute arbitrator is denied by the respondent
only on the ground that the claims made by the petitioner are barred
by law of limitation.
7. Learned counsel for the respondent on the other hand
opposed this petition on the ground of maintainability filed under
sections 14 and 15 of the said Act. It is submitted that Shri Justice
A.B. Palkar, a former Judge of this Court was appointed in Summons
for Judgment No.186 of 2005. She submits that the vacancy having
arisen in view of the resignation of Mr.Ashish Kamat, a counsel of this
Court, can be filled up only in an application under section 11 of the
said Act and not in the petition filed under sections 14 and 15 of the
said Act. In support of this submission, learned counsel placed
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reliance on an unreported judgment of the Supreme Court delivered
on 16th October, 2015 in case of Shailesh Dhairyawan vs. Mohan
Balkrishna Lulla in Civil Appeal No.8731 of 2015 an in particular
paragraph 22.
8. Ms.Sadh, learned counsel for the petitioner distinguished
the said judgment relied upon by the leaned counsel for the
respondent on the ground that in this case the arbitration agreement
was recorded in the Summons for Judgment No.186 of 2005 when
both the parties agreed to refer the disputes and differences between
the parties to a former Judge of this Court, who was appointed as a
sole arbitrator. She submits that thereafter two more appointments
came to be made by this Court substituting Shri Justice A.B. Palkar, a
former Judge of this Court, who expired, and Shri Justice S.S. Parkar,
former Judge of this Court in the arbitration petitions also filed under
section 15 of the Arbitration & Conciliation Act, 1996. She submits
that the petitioner had filed similar application however, without
issuing any notice to the respondent. The said applications however,
were withdrawn with liberty to issue a notice to the respondent. She
submits that this petitioner filed under section 15 of the said Act is
thus maintainable.
9. A perusal of the record indicates that the parties have
arrived at an arbitration agreement by filing consent terms dated 28 th
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November, 2005 in Summons for Judgment No.186 of 2005. The
disputes and differences were referred to arbitration. The said
Summary Suit No.2042 of 2003 was disposed of in terms of the
consent terms.
10. In view of the demise of Shri Justice A.B. Palkar, a former
Judge of this Court, this Court filled up the said vacancy by
appointing Shri Justice S.S. Parkar, a former Judge of this Court as a
sole arbitrator. Shri Justice S.S. Parkar, a former Judge of this Court
also resigned. The vacancy arising out of that resignation was
thereafter filled in by this Court by consent of parties by appointing
Mr.Ashish Kamat, a counsel of this Court by an order dated 19 th
December, 2014. Mr.Ashish Kamat, a counsel of this Court also
resigned and thus the vacancy arose.
11. Under section 15 of the said Act, a Court is empowered to
substitute the arbitrator if the mandate of the arbitrator is terminated
because of his withdrawal from the office for any reason or pursuant
to the agreement of the parties. In this case Mr.Ashish Kamat, a
counsel of this Court, who was appointed in substitution of Shri
Justice S.S. Parkar, a former Judge of this Court, withdrew from his
office. Section 15(2) of the Arbitration & Conciliation Act, 1996 would
attract to the facts of this case.
12. Insofar as the issue raised by the learned counsel for the
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respondent that this petition is not maintainable under sections 14
and 15 of the said Act and the petition could have been filed under
section 11 of the said Act is concerned, this issue is dealt with by the
Supreme Court in case of Yashwith Constructions (P) Ltd. vs.
Simplex Concrete Piles India Ltd (2006) 6 SCC 204. The said
judgment of the Supreme Court is adverted by the Supreme Court in
the later judgment in case of Shailesh Dhairyawan (supra). The
Supreme Court in the said judgment Yashwith Constructions (P)
Ltd. has construed section 15(3) and also 11(6) of the said Act. It is
held by the Supreme Court that there was no failure on the part of the
party concerned as per the arbitration agreement, to fulfill his
obligation in terms of section 11 of the said Act so as to attract the
jurisdiction of the Chief Justice under section 11(6) of the said Act for
appointing a substitute arbitrator. It is further held that section 11(6) of
the said Act has application only when a party or the person
concerned had failed to act in terms of the arbitration agreement.
Section 11(6) of the said Act can be attracted where under an
appointment procedure agreed upon by the parties contemplated in
section 11(2) read with 11(4) of the said Act, a party fails to act as
required under that procedure or the parties or the two appointed
arbitrators, fail to reach an agreement expected of them under that
procedure.
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13. In the facts of this case, admittedly the parties had agreed
to refer the disputes and differences to arbitration of Shri Justice A.B.
Palkar, a former Judge of this Court in Summons for Judgment
No.186 of 2005. In the said arbitration agreement, no other procedure
was agreed upon by the parties for appointment of a substitute
arbitrator. The judgment of the Supreme Court in case of Yashwith
Constructions (P) Ltd. (supra) thus would squarely apply to the
facts of this Court and would assist the case of the petitioner and not
the respondent. In my view, the argument of the learned counsel for
the respondent is contrary to the principles of law laid down by the
Supreme Court in the said judgment.
14. Be that as it may, the earlier applications filed by the
petitioner for substitution of an arbitrator were also under section 15
of the said Act. These petitions are thus maintainable under section
14 read with 15 of the said Act.
15. The erstwhile arbitrator having withdrawn from the office,
the substitute arbitrator in place of erstwhile arbitrator will have to be
made by this Court in this application under section 15 of the said
Act. There is thus no merit in the submission made by the learned
counsel for the respondent.
16. I therefore, pass the following order :-
a). Shri A.J. Dholakia, a former Principal District Judge and a
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former Charity Commissioner having his address at c/o Room No.56,
High Court Law Library, 3rd Floor, High Court, Bombay is appointed in
all the seven petitions as a sole arbitrator in place of erstwhile
arbitrator Mr.Ashish Kamat, a counsel of this Court, who has
withdrawn from the office. The arbitration petitions are disposed of in
aforesaid terms.
b). No order as to costs.
(R.D. DHANUKA, J.)
