Madras High Court
T. Sivashankar vs Gtl Infrastructure Limited on 15 April, 2021
O.P.No.550 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15/4/2021
CORAM
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
Original Petition No.550 of 2020
1. T. Sivashankar
Partner
M/s. SAS Industries
New No.11, Old No.25
CP Ramasamy Road
Alwarpet
Chennai 600 018.
2. Sharavanashankar
Partner
M/s. SAS Industries
New No.11, Old No.25
CP Ramasamy Road
Alwarpet
Chennai 600 018.
3. S. Anusaya
Partner
M/s. SAS Industries
New No.11, Old No.25
CP Ramasamy Road
Alwarpet
Chennai 600 018. ... Petitioners
Vs
1/10
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
GTL Infrastructure Limited
Global Vision Electronic Sadan
II MIDC TTC Industrial Arwa
Mahape
Navi Mumbai 400 710 ... Respondent
(formerly known as Chennai Network
Infrastructure Ltd)
Prayer: Original Petition filed under Section 11(4) of the Arbitration and
Conciliation Act, 1996, to appoint an Arbitrator, on behalf of the petitioner
and to resolve the disputes that have arisen between the petitioner and
respondent.
For Petitioners : Mr.V. Suresh
for M/s. Shivakumar & Suresh
For Respondent : Mr.C.Sakthimanikandan
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ORDER
This Original Petition has been filed to appoint an Arbitrator, on
behalf of the petitioners, to resolve the disputes that have arisen between
the petitioners and respondent.
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
2. Heard Mr.V.Suresh, learned counsel for the petitioners and
Mr.C.Sakthimanikandan, learned counsel for the respondent through video
conferencing.
3. The learned counsel appearing for the petitioners submitted that a
license agreement, dated 24/12/2014 was entered into between the
petitioners and respondent. The main contention put forth by the applicants
is that after entering into agreement, the respondent failed to perform his
part of the license and in view of the same, the matter has been referred for
arbitration, as per Clause 13 of the agreement. It is the contention of the
respondent that lease agreement and amenities agreement were entered into
between the parties in the year 2005 with an option for renewal, as provided
for in the lease agreement. It is the submission of the respondent that the
lease deed and license agreement have to be read in conjunction and treated
as a whole for adjudicatory purposes and the said defects have to be cured
and the lease deed having not been properly stamped, the present petition
for appointment of arbitrator is not maintainable, as the whole gamut of
facts is covered by the principle agreement dated 23rd March 2009.
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
4. While it is the stand of the petitioner that there is a clause in the
agreement, which provides for referring the matter for arbitration by
appointing an Arbitrator, however, it is resisted by the respondent
submitting that the Agreement is insufficiently stamped and cannot be
enforced.
5. In a similar issue, this Court, in O.P.No.961 of 2019 (1.
M.Kamalakannan and another Vs. GTL Infrastructure Limited, Chennai),
has held as follows:-
“9(iv) Learned counsel for respondent drew
the attention of this Court to the judgment of
Hon'ble Supreme Court in Garware case (Garware
Wall Ropes Limited Vs. Coastal Marine
Constructions and Engineering Limited reported
in (2019) 9 SCC 209). The most relevant and
instructive paragraph in Garware is Paragraph 22
and the same reads as follows:
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
'22. When an arbitration clause is
contained “in a contract”, it is significant
that the agreement only becomes a
contract if it is enforceable by law. We
have seen how under the Stamp Act, an
agreement does not become a contract,
namely, that it is not enforceable in law,
unless it is duly stamped. Therefore, even
a plain reading of Section 11(6-A), when
read with Section 7(2) of the 1996 Act
and Section 2(h) of the Contract Act,
would make it clear that an arbitration
clause in an agreement would not exist
when it is not enforceable by law. This is
also an indicator that SMA Tea Estates
has, in no manner, been touched by the
amendment of Section 11(6-A).
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
9(v) While Garware principle read in the
context of Duro Felguera as well as Mayavati
Trading principles makes it clear that the question
regarding an instrument being duly stamped (when
there is an arbitration agreement (arbitration
agreement within the meaning of Section 7 of A and
C Act) in the form of a covenant in an instrument)
clearly falls within the contours of sub-section 6-A
of Section 11. In the light of facts of this case,
Garware principle does not help the respondent as
the petitioners have restricted instant OP to be one
predicated on clause 16 of said licence agreement,
which is not compulsorily registrable and which is
undisputedly sufficiently stamped. As already
alluded to supra, Section 17 of the Registration Act
and entry 5(j) of Schedule I of Indian Stamp Act
makes this position very clear.
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
9(vi) Now that Garware principle does not
help the respondent in the instant case owing to the
peculiar facts and circumstances of case on hand,
this Court shall follow Duro Felguera principle
reiterated by Hon'ble Supreme Court in Mayavati
Trading case law, which has already been alluded to
supra.
9(vii) There is one other aspect of the matter
(though not projected) which this Court reminds
itself about and that question pertains to an
arbitration clause in a lease deed or in other words,
the question as to whether arbitration agreement qua
a lease or in other words whether disputes arising
out of a lease deed are arbitrable is one which a
larger Bench of Hon'ble Supreme Court is in seizin
of, as Himangni case (Himangni Enterprises Vs.
Kamaljeet Singh Ahluwalia reported in (2017) 10
SCC 706) has been referred to a larger Bench vide
Vidya Drolia & Ors. Vs.Durga Trading
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
Corporation reported in 2019 SCConline SC 358.
However, in the instant case, as the petitioners have
abridged the scope of instant OP to one predicated
on an arbitration clause in said licence agreement
alone and not the lease deed, it may not be
necessary to advert to these aspects of the matter
any further detail in this order.
9(viii) This Court, therefore, proceeds to
appoint Mr.M.SenthilKumaran, Advocate, Flat
No.A, Jayam Villa, No.11, East Circular Road,
Mandaveli, Chennai-28 (Mobile No.7550111110)
as sole arbitrator to enter upon reference qua said
licence agreement i.e., licence agreement dated
16.04.2015 and decide the arbitrable issues between
the parties and pass an award. While entering upon
reference and conducting arbitration, learned sole
arbitrator shall bear in mind the observations made
by this Court in this order.
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
Instant OP disposed of on above terms.”
6. In view of the above cited judgment, this Court, therefore,
proceeds to appoint Mr.J.Krishnamoorthy, District Judge (Retd), 2 D, First
Floor, “Nutech Krishna”, No.37, Soundararajan Street, T. Nagar, Chennai
600 017 (Mobile No.94420 92363) as sole arbitrator to enter upon reference
qua said licence agreement i.e., licence agreement dated 24/12/2014 and
decide the arbitrable issues between the parties and pass an award. While
entering upon reference and conducting arbitration, lease sole arbitrator
shall bear in mind the observations made by this Court, in this order.
7. Instant Original Petition is disposed of on the above terms.
15/4/2021
Speaking Order / Non-speaking Order
Index : Yes / No
Internet : Yes
Note: Registry is directed to communicate this order to
Mr.J.Krishnamoorthy, District Judge (Retd), 2 D, First Floor, “Nutech
Krishna”, No.37, Soundararajan Street, T. Nagar, Chennai 600 017 (Mobile
No.94420 92363) forthwith.
https://www.mhc.tn.gov.in/judis/
O.P.No.550 of 2020
N.SATHISH KUMAR, J
Original Petition No.550 of 2020
15/4/2021
https://www.mhc.tn.gov.in/judis/
