Madhya Pradesh High Court
Mohd. Suhail Khan vs M/S. Sagar Automobiles Pvt. Ltd. on 12 June, 2023
Author: Anand Pathak
1
IN THE HIGH COURT OF MADHYA PRADESH
AT J A B A L P U R
BEFORE
HON'BLE SHRI JUSTICE ANAND PATHAK
ARBITRATION CASE No. 121 OF 2017
BETWEEN:-
1 MOHD. SUHAIL KHAN S/O- LATE M.I. KHAN, R/O-
D-44, B.D.A, KOH-E-FIZA, BHOPAL (MADHYA
PRADESH)
2 QUMAR SUHAIL W/O- M.S. KHAN, R/O- D-44, B.D.A,
KOH-E-FIZA, BHOPAL (MADHYA PRADESH)
..... APPLICANTS
(BY SHRI SATYAM AGRAWAL - ADVOCATE)
AND
1 MS/ SAGAR AUTOMOBILES PVT. LTD THROUGH
SHRI YAHYA KHAN SHIRANI, DIRECTOR, R/O-
DEWAS NAKA, A.B. ROAD, INDORE (MADHYA
PRADESH)
2 SHRI YAHYA KHAN SHIRANI, DIRECTOR, M/S
SAGAR AUTOMOBILES PVT. LTD. R/O- DEWAS
NAKA, A.B. ROAD, INDORE (MADHYA PRADESH),
R/O- B-100, HOUSING BOARD COLONY, KOH-E-
FIZA, BHOPAL (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI KAPIL DUGGAL - ADVCOATE)
Reserved on : 05/01/2023
Pronounced on : 12/06/2023
This application having been heard and reserved for order coming
2
on for pronouncement this day, this Court passed the following:
ORDER
The present application has been preferred by the applicants under
Section 11(6) of the Arbitration and Conciliation Act, 1966 (hereinafter
referred as "Act") for appointment of Arbitrator / Arbitral Tribunal for
settlement of dispute.
2. Precisely stated facts of the case are that the applicants are the
landlords/licencors and respondents are the tenants/licencees. As
submitted, an agreement executed between the parties on 10.02.2012 by
way of transfer of lease of the property of landlord for a term of six
months subject to certain conditions under the contract. Photocopy of the
lease and licence agreement was referred as Annexure A/1.
3. It is the submission of the learned counsel for the applicants that as
per agreement tenants/licencees had to pay a sum of Rs.1,00,000/- as
advance on the 7th day of every calendar month. It appears that licencee
vacated the leased premises in March, 2014 allegedly without giving
three months' notice. Therefore, on 31.11.2015 a legal notice was issued
on behalf of the applicants to the respondents for non-payment of
outstanding rent. Later on, vide notice dated 17.04.2017 another legal
notice was issued for the same prayer and thereafter, this application has
been preferred under Section 11(6) of the Act for appointment of
Arbitrator. Later on, alongwith application under Section 11(6) of the Act,
an application vide I.A. No.18759/2017 was filed for exemption from
filing of certified copy of the agreement.
4. It is further submitted that dispute erupted between the parties
regarding non-payment of leased rent. Therefore, Arbitrator be appointed
for dispute resolution.
5. Learned counsel for the respondents vehemently opposed the
prayer and termed it as misconceived application. It is the submission of
learned counsel for the respondents that no such lease agreement was
ever executed between the two. Instead of producing original copy of the
agreement, applicants are trying to take undue advantage of a document
filed in photocopy so that a dispute can be created and Arbitrator be
appointed on false pretext. No such agreement was ever executed
between the parties and if any agreement existed ever then it was the duty
of the applicants to produce it in original.
6. It is further submitted that the case is of tenancy and the same is
barred by the judgment of Apex Court in the case N.N. Global
Mercantile Vs. Indo Unique Flame Limited and others reported in
(2021) 4 SCC 379, therefore, he prayed for dismissal of this application.
7. Heard the learned counsel for the parties and perused the
documents appended thereto.
8. This is a case where applicants as landlord are trying to resort to
the application under Section 11(6) of the Act for appointment of
Arbitrator for dispute resolution.
9. Applicants have filed photocopy of the lease and licencee
agreement and moved an application vide I.A. No.18759/2017 to
demonstrate that original copy lies with the tenant, therefore, tenant be
directed to produce in original but tenant has specifically denied from
existence of such agreement and raised the doubt about the plea of
landlord that the such document in original lies with the landlord and not
with the tenant. In absence of any valid agreement prima facie scope of
interference constricts.
10. Section 11(6) and 11(6)-A of the Act is reiterated as under for ready
reference:-
"11(6) Where, under an appointment procedure agreed
upon by the parties,-
(a) a party fails to act as required under
that procedure; or
(b) the parties, or the two appointed
arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails
to perform any function entrusted to him or
it under that procedure,
[the appointment shall be made, on an application of the
party, by the arbitral institution designated by the
Supreme Court, in case of international commercial
arbitration, or by the High Court, in case of arbitrations
other than international commercial arbitration, as the
case may be] to take the necessary measure, unless the
agreement on the appointment procedure provided other
means for securing the appointment."
11(6)-A. The Supreme Court or, as the case may be, the
High Court, while considering any application under
sub-section (4) or sub-section (5) or sub-section (6),
shall, notwithstanding any judgment, decree or order of
any Court confine to the examination of the existence of
an arbitration agreement."
11. The said section has been discussed by the Apex Court in the case
of Duro Felguera, S.A. Vs. Gangavaram Port Limited reported in
(2017) 9 SCC 729 in paragraph 48 which is reads as under:-
"11(6)-A. The Supreme Court or, as the case may be,
the High Court, while considering any application
under sub-section (4) or sub-section (5) or sub-section
(6), shall, notwithstanding any judgment, decree or
order of any Court confine to the examination of the
existence of an arbitration agreement." (emphasis
supplied)
From a reading of Section 11(6-A), the intention of the
legislature is crystal clear i.e. the court should and need
only look into one aspect - the existence of an
arbitration agreement. What are the factors for deciding
as to whether there is an arbitration agreement is the
next question. The resolution to that is simple - it needs
to be seen if the agreement contains a clause which
provides for arbitration pertaining to the disputes which
have arisen between the parties to the agreement."
12. In the present case, no arbitration agreement exists. Respondents
have categorically denied their signatures on the alleged photocopy of the
agreement placed on record. Therefore, in absence of any arbitration
agreement, parties cannot be forced to enter into arbitration because this
would come against the very concept of dispute resolution through
arbitration.
13. Even otherwise, in the case of N.N. Global Mercantile (Supra)
has been relied upon by the respondents, the eviction or tenancy matters
governed by the special statutes are disputed which are not arbitrable.
"40. In our view, all civil or commercial disputes, either
contractual or non-contractual, which can be adjudicated
upon by a civil court, in principle, can be adjudicated and
resolved through arbitration, unless it is excluded either
expressly by statute, or by necessary implication. The
Arbitration and Conciliation Act, 1996 does not exclude
any category of disputes as being non-arbitrable. Section
2(3) of the Arbitration Act however recognizes that certain
categories of disputes by law may not be submitted to
arbitration. In all jurisdictions, certain categories of
disputes are reserved by the legislature, as a matter of
public policy, to be adjudicated by a court of law, since
they lie in the realm of public law.
41. Traditionally, disputes relating to rights in rem are
required to be adjudicated by courts and / or statutory
tribunals. A right in rem is a right exercisable against the
world at large. Actions in rem refer to actions which
create a legal status such as citizenship, divorce,
testamentary and probate issues, etc. A lis in rem is not
arbitrable by a private tribunal constituted by the consent
of parties. Actions in personam determine the rights and
interests of parties to the subject-matter of the dispute,
which are arbitrable.
42. The broad categories of disputes which are
considered to be non-arbitrable are penal offences which
are visited with criminal sanction offences pertaining to
bribery/corruption; matrimonial disputes relating to
divorce, judicial separation, restitution of conjugal rights,
child custody and guardianship matter, which pertain to
the status of a person; testamentary matters which pertain
to disputes relating to the validity of a will, grant of
probate, letters of administration, succession, which
pertain to the status of a person, and are adjudicated by
civil courts.
43. Certain categories of disputes such as consumer
disputes; insolvency and bankruptcy proceedings;
oppression and mismanagement, or winding up of a
company; disputes relating to trusts, and beneficiaries of
a trust are governed by special enactments.
44. This Court in Booz Allen & Hamilton Inc. Vs. SBI
Home Finance Ltd. Has recognized some examples of
disputes which are not arbitrable, and held that : (SCC
pp. 546-47, para 36)
"36. The well-recognized examples of non-arbitrable
disputes are : (i) disputes relating to rights and liabilities
which give rise to arise out of criminal offences; (ii)
matrimonial disputes relating to divorce, judicial
separation, restitution of conjugal rights, child custody;
(iii) guardianship matters; (iv) insolvency and winding -
up matters; (v) testamentary matters (grant of probate,
letters of administration and succession certificate); and
(vi) eviction or tenancy matters governed by special
statutes where the tenant enjoys statutory protection
against eviction and only the specified courts are
conferred jurisdiction to grant eviction or decide the
disputes."
14. Although recently Apex Court in the case of Intercontinental
Hotels Group (India) Private Limited and another Vs. Waterline
Hotels Private Limited reported in (2022) 7 SCC 662 has referred the
judgment passed in N.N. Global Mercantile (supra) Constitution Bench
of Five Judges but it is in respect of Section 35 of the Stamp Act, 1899
and it's applicability over the agreement. Besides that, in the case of
Indian Oil Corporation Limited Vs. NCC Limited reported in (2023) 2
SCC 539, Apex Court has further held that court under the limited
jurisdiction under Section 11(6) of the Act can look beyond the bare
existence of arbitration clause to cut the deadwood. Here, the very
existence of agreement is doubtful.
15. In view of the above discussion, no case is made out for
interference. Therefore, prayer of the applicants for appointment of
Arbitrator is misconceived. Resultantly, application is hereby dismissed.
(ANAND PATHAK)
JUDGE
Vishal
VISHAL Digitally signed by VISHAL UPADHYAY
DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH GWALIOR,
ou=HIGH COURT OF MADHYA PRADESH BENCH GWALIOR,
2.5.4.20=5d5050008f4c040023a64cb030d9c80d25cbf5f3eb4f56fa86
UPADHYAY
4a20db4fbe3d3e, postalCode=474001, st=Madhya Pradesh,
serialNumber=637E939E833627AE8CC13D85E5F2383A287E83C6CD
FA6347A00E482772314FE9, cn=VISHAL UPADHYAY
Date: 2023.06.13 19:00:20 +05'30'
