Awaz Builders Pvt. Ltd. vs Union Of India (Uoi) And Ors.
2004 Latest Caselaw 899 Del

JUDGMENT

R.C. Jain, J.

1. This is an application under Sections 11(6) and 45 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act'') seeking appointment of an independent Arbitrator to adjudicate and decide certain disputes, which have arisen between the parties.

2. According to the averments made in the petition, the petitioner is one of the owners of the property, second floor of 16/15, W.E.A. Karol Bagh, New Delhi; respondents Nos. 3 and 4 are the other owners of the said property. The said property was let out to respondents Nos.1 and 2 and the respondents occupied the same and they were lastly paying the rent @ Rs.1,30,065/- per month apart from electricity and water charges. It is alleged that as per the agreement between the parties, respondents Nos. 1 and 2 were required to continue as tenants in the premises uptill 30.06.01, but they handed over the keys of the premises to the petitioner on 18.12.1998 in the Court before the expiry of the lease term. According to the petitioner, the respondents Nos. 1 and 2 are liable to pay arrears of rent w.e.f. 1.10.1997 till 18.12.1998 and balance maintenance charges etc. The petitioner has detailed out the claims in para-8(k) of the petition. It is alleged that the lease agreement between the parties contained an arbitration agreement in clause (23), which reads as under:-

''Should any dispute or difference arise out concerning the subject matter of these presents or any convenant clause or thing herein contain or otherwise arising out of this lease, the same shall be referred to an Arbitrator to be appointed by the Government of India and the decision of such Arbitrator shall be conclusive and binding on the parties thereto. The provisions of the Arbitration and Conciliation Act, 1996 or any statutory modifications thereof for the time being in force shall apply to such arbitration.''

3.The petitioner has alleged that in terms of the said arbitration clause, the Arbitrator was to be appointed by the Union of India. The petitioner served a notice dated 3.6.2002 upon respondents Nos.1 and 2 seeking appointment of an Arbitrator, but the respondents failed to appoint an Arbitrator, hence this petition.

4. The petition was opposed on behalf of respondents Nos. 1 and 2 and a reply has been filed. The existence of lease agreement containing above-referred arbitration clause is not disputed on behalf of the respondents Nos.1 and 2. It is also not disputed that keys of the tenanted premises were handed over by the petitioner to respondents Nos.3 and 4, but it is denied that the petitioner is entitled to any amount claimed by him on various counts.

5. I have heard learned counsel for the parties and given my thoughtful consideration. In the case in hand, the parties have accepted the existence of an arbitration agreement between the parties for settlement of the disputes through mechanism of arbitration. However, the only ground on which the respondents opposed the appointment of Arbitrator is that there exists no dispute between the parties as per the petitioner's own showing that the premises have already been restored to the petitioner and respondents Nos.3 and 4 and consequently, there is no dispute between the parties. In the opinion of this Court, while considering an application under Section 11(6), the Court will not go into the said question because the powers of this Court is limited under Section 11 of the Act, as has been held by a Constitution Bench of the Supreme Court in the case of Konkan Railway Corporation Ltd. and Another Vs. Rani Construction Pvt. Ltd., . This controversy would squarely fall in the ambit of Section 16 of the Act. However, prima facie there appears to be subsisting disputes between the parties because respondents Nos.1 and 2 have denied their liability to pay any amount to the petitioner. On the face of this position, the present petition deserves to be allowed and an Arbitrator needs to be appointed.

6. In the result, this application under Section 11(6) of the Arbitration Act is allowed and Mr. M.S. Rohilla, Advocate (Retd. Additional District Judge) is hereby appointed as the Arbitrator to settle the disputes, as referred to in the petition. The Arbitrator shall enter upon the reference and shall render Award as expeditiously as may be practicable, preferably within four months from the date of entering the reference. His remuneration is fixed at Rs. 30,000/-, to be born by the parties, i.e., half of the remuneration shall be paid by the petitioner and respondents Nos. 3 and 4 and the remaining half by respondents Nos.1 and 2. Parties are directed to appear before the learned Arbitrator on 23.9.2004 at 11.00 a.m.

7. Copies of the order be given dusty to the counsel for the parties.