Global Agri System Pvt Ltd vs Bimla Sachdev
2012 Latest Caselaw 939 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             Date of Judgment: 10.02.2012.

+     C.R.P. 22/2012


GLOBAL AGRI SYSTEM PVT LTD               ..... Petitioner
                 Through   Mr.Sandeep Sethi, Sr.Adv. with
                           Mr. Harunesh Tandon, Adv.

                   versus


BIMLA SACHDEV                                     ..... Respondent
                            Through    Mr. Vikas Mehta, Adv.



      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

1 Order impugned before this Court is the order dated 28.01.2012

whereby the two applications filed by the defendant i.e. the first

application under Section 8 of the Arbitration and Conciliation Act,

1996 (hereinafter referred to as the 'said Act') and the second

application under Order 7 Rule 11 of the Code of Civil Procedure

(hereinafter referred to as the 'Code') had been dismissed.

2 Record shows that the present suit is a suit for possession, mesne

profits and damages filed by the plaintiff against the sole defendant; suit

premises are property No. K-13A, Hauz Khas Enclave, New Delhi

which had been let out to the defendant in terms of a registered lease

deed dated 13.03.2006. Contention of the plaintiff is that Clause 20 of

the said lease deed contains an arbitration clause and in terms thereof,

the disputes having arisen between the parties in view of the mandate of

Section 8 of the said Act they had to be referred for arbitration.

3 Relevant would it be at this stage to reproduce the arbitration

clause which is a part of the lease deed and which reads herein as

under:-

"If there should be a dispute among the parties or any of them arising out of or relating to this agreement, they will attempt in good faith to resolve the dispute promptly through discussions. If the dispute cannot be resolved through negotiation, then it may be referred to arbitration by a single arbitrator appointed jointly by the parties. This arbitration agreement and the proceedings thereunder shall be governed by (Indian) Arbitration and Conciliation Act, 1996 or any statutory amendment or reenactment thereof. The venue of arbitration shall be New Delhi, India."

4 Learned counsel for the respondent while refuting the prayer

sought for by the plaintiff has placed reliance upon a judgment of the

Apex Court reported in AIR 2000 SC 1379 Wellington Associates Ltd.

Vs. Mr. Kirit Mehta to support his submission that the word 'may' as

appearing in the present arbitration clause in fact has been construed in

the similar circumstances in the judgment of Wellington Associates

(Supra) as a directory condition and distinct from the word 'shall' and as

such by applying the ratio of the aforenoted judgment, there was no

mandate upon the Court for reference of disputes to arbitration.

5 Learned counsel for the petitioner has refuted this submission; it

is not denied that there were twin clauses which were the subject matter

of dispute in the case of Wellington Associates and the Court had noted

that the preceding clause 4 which when read with the subsequent clause

5 had led to the conclusion that the word 'may' is only directory and not

mandatory.

6 The arbitration clause which is a part of this lease deed has been

noted. Tenor of this clause clearly stipulates that if there is any dispute

between the parties relating to this agreement, attempt in good faith to

resolve this dispute from a discussion would be made; further an

alternate of negotiations is also contained in the said clause; as a third

condition, the parties may refer their dispute to a single arbitrator to be

jointly appointed by the parties. The word 'may' appearing herein as

also giving an option to both the parties to get an arbitrator appointed

jointly largely deciphers the intent of the parties which in the instant

case is not a mandate upon the parties to refer their dispute to an

arbitrator; in the eventuality that the parties cannot settle their dispute by

discussion or by negotiations, they as an alternate 'may' i.e. as a third

alternate given to the parties to get their disputes settled through the

forum of arbitration and the word may having been supplanted by the

sentence that the parties will get arbitrator jointly appointed in fact

shows that the parties have to view this is an option only and not

mandatorily go for arbitration.

7 In fact a similar situation had arisen in the case of B. Gopal Das

Vs. Kota Straw Board MANU/RH/0064/1971. In that case the clause

read as follows:-

"That in case of any dispute arising between us, the matter may be referred to arbitrator mutually agreed upon and acceptable to you and us."

8 In this case, it was held that a fresh consent for arbitration was

necessary; the clause in the present case is in fact clearer and more

happily worded; thus it cannot be said that the parties had agreed to

mandatorily opt for arbitration in case of a dispute between the parties.

The trial Court had rightly noted this clause to be vague and not binding.

9 The prayer made in the application under Section 8 of the said

Act has also been perused. It seeks a prayer for dismissal of the suit and

not for a reference to arbitration. That apart, the conduct of the petitioner

is also relevant. Learned counsel for the respondent has pointed out that

the rent has not been paid by the tenant/petitioner since March, 2008 and

inspite of specific directions of the trial Court dated 02.12.2010 and

15.12.2010, rent was not paid; in fact the order of 15.12.2010

specifically postulates that the arrears of rent be cleared within a period

of three weeks. It is not in dispute that the clearance has not been

effected till date. \

10 The petitioner has thus not come to the Court with clean hands.

Dismissal of the application under Section 8 of the said Act in this

scenario calls for no interference.

11 The second application under Order 7 Rule 11 of the Code was

also rightly dismissed. Contention before this Court has been that the

Court did not have the pecuniary jurisdiction to deal with the present

suit as the mesne profits have been claimed for an amount of `16 lacs

which were not within the pecuniary jurisdiction of the Civil Judge; this

submission now urged does not form a part of the pleadings of the

application under Order 7 Rule 11 of the Code; in fact the averments

made in the said application are largely the defences sought to be set up

by the defendant which cannot be adhered to while dealing with an

application under Order 7 Rule 11 of the Code. It is a well settled

position of law that the averments made in the plaint alone have to be

looked into to decide an application under Order 7 Rule 11 of the Code.

The averments made in the plaint clearly disclose a cause of action qua

the plaintiff and against the defendant. Dismissal of application under

Order 7 Rule 11 of the Code also calls for no interference.

12    Petition is without any merit. Dismissed.



                                             INDERMEET KAUR, J
FEBRUARY 10, 2012
A