Madras High Court
M/S. Marina Holdings vs Also At on 18 February, 2021
OP.No.563 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 18.02.2021
CORAM
THE HONOURABLE Ms. JUSTICE P.T. ASHA
OP.No.563 of 2020
M/s. Marina Holdings
Represented by its partner
Mr. Rajkumar Sethupathy,
Level 7 A, Capital Towers,
555, Anna Salai,
Teynampet,
Chennai- 18
...Petitioner
Vs
N. Ramasamy,
Proprietor, Sri Thenandal Films
No.8, 80 Feet Road,
Devar Garden,
Saligramam, Chennai- 600 093.
Also at
N. Ramasamy
Proprietor Sri Thenandal Films
No.19, Saraswathi Street,
Mahalingapuram, Chennai 600 034.
... Respondent
Prayer : Original Petition filed under Section 11 (6) of the Arbitration
and Conciliation Act, 1996 praying to
a) appoint a sole arbitrator in place of the erstwhile arbitrator in
OP.No.1 of 2020 and resolve the disputes between the petitioner and
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OP.No.563 of 2020
the respondent in terms of the Agreements dated 27.03.2019 read
with Agreement dated 22.01.2018.
b) directing the respondent to pay the petitiner the costs of this
petition.
For Petitioner : Mr. Murugan
For Respondent : Mr. S. Karthikaibalan
ORDER
The petitioner has moved this Court for appointing a sole Arbitrator
in place of the erstwhile Arbitrator Mr.V. Bhiman, who had passed away on
14.10.2020.
2. The learned counsel for the petitioner would submit that the
petitioner, who is in the business of extending financial assistance, had in
the course of his business extended a loan to the respondent for the
production of one of his films. Originally an Agreement dated 18.01.2017,
was entered into between the petitioner and the respondent, in which, the
respondent had admitted receipt of the loan of Rs.10 crores. Since the
amounts had not been repaid, the agreements were renewed. However, on
31.10.2017, the respondent had only repaid a sum of Rs.2 crores 50 lakhs,
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OP.No.563 of 2020
leaving a balance of Rs.7 crores 50 lakhs. The loan amounts were originally
given by the partners in their individual capacity. Thereafter, the loan was
made over to the petitioner/firm and an agreement dated 22.01.2018 was
executed between the petitioner/firm and the respondent, wherein the
respondent had acknowledged that they are liable to pay to the tune of
Rs.7,50,00,000/- and had also undertaken to repay the same with interest at
18 % per annum. Apart from the loan, the respondent had also deposited
the title deeds of his property and a separate agreement in this regard was
entered in between the parties. Once again the respondent failed to pay the
said sum and another Agreement dated 27.03.2019 was executed,
whereunder the respondent had undertaken to repay the said amounts and
had also issued two cheques towards interest and the principle amount of
Rs.7 crores 50 lakhs. However the respondent had not honoured the
payment and the cheques were returned dishonoured.
3. The learned counsel would submit that under the Agreement
between the parties, the parties had agreed to refer the dispute to a named
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OP.No.563 of 2020
Arbitrator namely Shir V. Bhiman. Since disputes had arisen between the
parties, the petitioner had nominated Mr.V.Bhiman as the Arbitrator, after
invoking the Arbitration clause vide their notice dated 19.07.2019.
4. The learned counsel would submit that the petitioner had filed a
Claim Petition and had also filed an application under Section 17 for a
direction to the respondent to furnish security and the same was granted.
While the matter was pending, the learned Arbitrator had passed away.
5. The learned counsel would also draw the attention of this Court to
the fact that before instituting the arbitration proceeding, the petitioner had
moved petitions under Section 9 and after hearing the parties, orders had
been passed. In fact, by order dated 12.03.2020 in A.No.5210 of 2019, this
Court had granted an interim order of attachment, which was to remain in
force till three months and the petitioner was directed to initiate arbitration
proceedings, failing which the interim order was to automatically stand
vacated. Within the said time, the petitioner has moved the arbitral
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OP.No.563 of 2020
proceedings and the Claim Petition had been filed on 10.06.2020.
Therefore, this Court should appoint another person as arbitrator, in the
place of the deceased arbitrator.
6. This Petition was vehemently opposed by the respondent, who
would contend that the agreement, which was the basis for invoking
jurisdiction before this Court is an unregistered one and therefore petition
deserves to be dismissed. He would rely upon the Judgment in “Garware
Wall Ropers Ltd. vs Coastal Marine Constructions reported in [2019 9
SCC page 209]”, wherein the instrument was not properly stamped that de
hors an objection being raised in this behalf or not, the document has to be
empowered and dealt with in the manner under Section 38 of the Stamp Act.
7. He would argue that the document in question namely the
agreement dated 27.03.2019 refers to the deposit of title deeds and this
agreement which is only a sequel to the earlier agreement dated 22.01.2018,
which also refers to the memorandum of deposit of title deeds dated
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OP.No.563 of 2020
17.10.2017. Since the agreement includes a mortgage, the same has to be
compulsorily registered and therefore without the documents being so
registered, no orders can be passed in the petitions and the very initiation of
arbitral proceedings is not maintainable.
8. Heard the counsel and perused the papers.
9. From a perusal of the two agreements, it is clear that the reference
to the memorandum of deposit of title deeds in the agreement is nothing but
a narration simplicitor of the various agreements that have been entered into
between the parties. The document relates to the borrowing and the
undertaking to repay the money. The memorandum is included in another
document dated 17.07.2017 as communicated in the agreement, based on
which, the present Petition is filed. Therefore, the learned counsel for the
respondent, contention that the decision in the Judgement in Garware Wall
Ropers Ltd. vs Coastal Marine Constructions, squarely applies to the facts
of the instant case fails. That apart, the respondent has filed a Section 9
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OP.No.563 of 2020
application without raising such a defense and has also appeared before the
erstwhile arbitrator. In these circumstances, I do not find any merits in the
argument put forward on behalf of the respondent.
10. Consequently, I appoint Mr. R. Parthasarathy, Advocate, as the
Arbitrator.
11. Accordingly, it is ordered as follows:
(i) Mr. R. Parthasarathy,Advocate, #8, 8th Street, Dr. Radhakrishnan
Road, Mylapore, Chennai - 600 004, Phone no- 9840027478, email id-
[email protected], is appointed as the Arbitrator to enter upon
reference and adjudicate the disputes inter se the parties.
ii) The learned Arbitrator may, after issuing notice to the parties and
upon hearing them, pass an award as expeditiously as possible, preferably
within a period of six months from the date of receipt of the order. It is open
to the respondent to raise all legal objections as to the validity of contract.
iii) The learned Arbitrator is at liberty to fix his remuneration and
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OP.No.563 of 2020
other incidental expenses as per law.
iv) The proceedings may be conducted under the aegis of the Madras
High Court Arbitration Centre and in accordance with the Madras High
Court Arbitration Rules.
The Original Petition is, accordingly, allowed, leaving the parties to
bear their own costs.
18.02.2021
mrn
Index : Yes/No
Speaking order/non-speaking order
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OP.No.563 of 2020
To,
1. Mr. R. Parthasarathy,Advocate,
#8, 8th Street, Dr. Radhakrishnan Road,
Mylapore,
Chennai - 600 004,
Phone no- 9840027478,
email id- [email protected],
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OP.No.563 of 2020
P.T.ASHA, J.
mrn
OP.No.563 of 2020
18.02.2021
https://www.mhc.tn.gov.in/judis/
