Cloud Retail Solutions Pvt ... vs Thriving Kitchen Private Limited
2022 Latest Caselaw 1398 Chatt

                                                                        AFR

                HIGH COURT OF CHHATTISGARH, BILASPUR

                  Reserved for Judgment on : 23/02/2022

                   Judgment Delivered on : 17/03/2022

                        Arbitration Appeal No.73 of 2021

   1. Cloud Retail Solutions Pvt Ltd. CIN - (U7290 DL 2019 PTC359378)
       through Mr. Preetesh Suri, W-15, A/19, Western Avenue, Sainik Farms,
       New Delhi. 110062

   2. Lakshay Jain, Director Cloud Retail Solutions Pvt Ltd. W-15, A/19,
       Western Avenue, Sainik Farms, New Delhi. 110062

   3. Utsav Somani Director Cloud Retail Solutions Pvt Ltd. W-15, A/19,
       Western Avenue, Sainik Farms, New Delhi. 110062

                                                              ---- Appellants

                                   Versus

      Thriving Kitchen Pvt. Ltd.- Through authorized signatory Mr. Shashank
       Moghe S/o V.N. Moghe, Aged About 53 Years, R/o Near Sapre School,
       Budhapara, Raipur, Chhattisgarh
                                                            ---- Respondent


For Appellants                  : Mr. Kishore Bhaduri, Sr. Advocate with Mr.
                                  Sabyasachi Bhaduri and Mr. Khulesh Sahu,
                                  Advocates.
For Respondent                  : None.


D.B.- Hon'ble Shri Justice Rajendra Chandra Singh Samant & Hon'ble
                    Shri Justice Arvind Singh Chandel

                              CAV Judgment

Per R.C.S. Samant, J.

Heard.

1. This is an Appeal filed under Section 37 of the Arbitration and

Conciliation Act, 1996 (in short "the Act, 1996") against the impugned

order dated 21.10.2021 passed by the Commercial Court (District

Level), Raipur, C.G., by which the petition filed by the respondent

under Section 9 of Act, 1996 has been allowed and relief has been

granted to the respondent.

2. The subject matter in this case is the property measuring 2000 sq.ft.

situated at Surya Treasure Island, near Apollo Hospital, Junwani Road,

Surya Vihar, Smriti Nagar, Bhilai, C.G. with 5 kitchens constructed on it.

The respondent and the appellants entered into an agreement on

30.09.2021 by which the appellants were provided a property by way

of sub-lease agreement on terms and conditions as agreed. The

respondent invoked the arbitration clause and filed the application

under Section 9 of the Act, 1996 before the Commercial Court (District

Level) Raipur, C.G. pleading that the appellants had made default in

payment of lease amount which has become outstanding to the tune

of Rs.1,18,10,000/- praying for relief of attachment of the property

and attachment of the bank accounts of the appellants including other

reliefs. The learned Commercial Court has passed the order allowing

the application under Section 9 of the Act, 1996 and directing

attachment of the bank accounts of the appellants and also directed

to furnish a bank guarantee of the amount claimed by the

respondents.

3. It is submitted by the learned Senior Counsel for the appellants, that it

was agreed between the parties that before the sub-lease dated

30.09.2020 was to be made enforceable, appropriate stamping and

registration was required as per the provisions under Transfer of

Property Act, 1882. As the sub-lease was to extend beyond one year,

and the sub-lease deed was not extended or registered, therefore, the

appellant continued as tenant of month to month basis. Finding in the

impugned order that the appellant had not made any payment to the

respondent is totally false. There had been some delay in payment of

the monthly rent in December 2020. There had been a clause for dispute resolution but without pursuing the same the respondent

chose to invoke the arbitration clause of the unstamped, unregistered

sub-lease dated 30.09.2020.

4. It is submitted by the learned Senior counsel for the appellants that

the learned Commercial Court had no territorial jurisdiction to

entertain the application under Section 9 of the Act, 1996 as the Seat

of the Arbitration for the sub-lease according to the agreement was to

be Indore. It is submitted that Hon'ble Supreme Court in the case of

B.G.S. S.G.S. Soma J.V. Vs. N.H.P.C. Limited reported in (2020) 4

SCC 234, it is held very clearly regarding the place where should be

the Seat of Arbitration. Hence, the impugned order passed is without

jurisdiction, therefore, not sustainable.

5. Reliance has been placed on the judgments in the case of Hindustan

Construction Co. Ltd. Vs. N.H.P.C. Ltd. reported in (2020) 4 SCC 310,

Brahmani River Pellets Ltd. Vs. Kamachi Industries Ltd. reported in

(2020) 5 SCC 462, Indus Mobile Distribution (P) Ltd. Vs. Datawind

Innovations (P) Ltd. reported in (2017) 7 SCC 678, Balapreetham

Guest House Pvt. Ltd. Vs. Mypreferred Transformation and

Hospitality Pvt. Ltd. reported in 2021 SCC OnLine Mad 1126, Arvind

Constructions Co. (P) Ltd. Vs. Kalinga Mining Corporation reported

in (2007) 6 SCC 798, Adhunik Steels Ltd. Vs. Orissa Manganese and

Minerals (P) Ltd. reported in (2007) 7 SCC 125, Ramesh Chandra

Sankla Vs. Vikram Cement reported in (2008) 14 SCC 58, Modi

Rubber Ltd. Vs. Guardian International Corporation reported in

2007 SCC OnLine Del 502 and Ajay Singh Vs. Kal Airways Private

Limited and Others reported in 2017 SCC OnLine Del 8934.

6. The respondent party though served with notice has not given

appearance and neither is represented by any counsel.

7. Considered on the submissions. The first submission regarding the

non-operability of the conditions of the sub-lease deed on account of

no-registration is taken into consideration. The copy of sub-lease deed

is filed along with the petition. On perusal of the terms and conditions

of the lease deed, it appears that this deed required registration and

also payment of some stamp duty for the same, but all the same it is

an unregistered lease deed. It may not have the value as purported

under the law, but even then this is an agreement between the parties

and as stated in the Appeal itself that the appellant had continued on

tenancy of month to month basis. Such an unregistered lease deed can

be made use of for collateral purposes, therefore, the terms of the

agreement other than the agreement for vesting of right over the

immovable property, shall continue to have its efficacy on the strength

of the agreement between the parties. Therefore, the impugned order

is not fit to be challenged on this ground.

8. The other ground raised by the appellant on the point of jurisdiction of

the learned Commercial Court needs examination. Clause 15 of the

Sub-lease agreement provides for dispute resolution. Clause 15.1 and

Clause 15.4 are relevant for the purpose of decision on this Appeal,

which are as follows:-

"15.1 If a dispute, difference, claim or controversy arises in connection with the interpretation or implementation of this Agreement or the performance of any obligation hereunder (each a "Dispute") it shall first be amicably resolved and failing amicable resolution within 30 days of commencement, the Parties shall refer the difference or dispute shall be referred to an be finally settled by to arbitration. The Parties agree that arbitration shall be conducted under the Arbitration and Conciliation Act, 1996 as amended from time to time the venue and seat of arbitration shall be Indore. The language of the arbitration shall be English.

15.4 The validity, interpretation, implementation and all matters in respect to the subject matter of this Agreement shall be subject to exclusive jurisdiction of the Courts in Raipur and shall be governed by and construed in accordance with the laws in India."

9. On careful reading of the Clause 15.1, it would be seen, that this clause provides for the arbitration to be conducted under the provisions of

the Act, 1996 for which the Seat of Arbitration shall be Indore. On

further close scrutiny of Clause 15.4, it reveals that on the questions as

to validity, interpretation, implementation and to matters subject to

this agreement shall be subject to exclusive jurisdiction of the Court in

Raipur. Section 9 of the Act, 1996 is titled as interim measures etc. by

Court. The provisions under Section 9 of the Act, 1996 is as follows:-

"9. Interim measures, etc. by Court.--A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:--

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it."

10. on taking into consideration, the provisions under Section 9 of the

Act, 1996, it clearly shows that in the matter of implementation and

other matters relating to the agreement, the Court in Raipur shall have

the jurisdiction to deal with the same. The exercise of power by the

Commercial Court under Section 9 of the Act, 1996 is not similar to the

exercise of power for arbitrating on the dispute between the parties.

Exercise of Section 9 of the Act, 1996 is clearly apart from the

arbitration proceeding and the arbitration proceedings are strictly

conducted according to the provisions in Chapter 5 and Chapter 6 of

the Act, 1996. Hence, in such a case, the ratio laid down by the

Supreme Court in the case of B.G.S. S.G.S. Soma J.V. (Supra) and the

other citations, on which the appellant has placed reliance, are clearly

not applicable. The learned Commercial Court has exercised

jurisdiction vested in it in accordance with the clause 15.4 of the sub-

lease agreement between the parties. Hence, on the basis of this

finding, we are of the view that this Appeal is without any merit, which

is dismissed.

11. Accordingly, the petition stands disposed off.

         Sd/-                                                   Sd/-
  (R.C.S. Samant)                                         (Arvind Singh Chandel)
         Judge                                                  Judge




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