Madras High Court
Mrs.T.Sundaravel (Deceased) vs M/S.Maneck Jewels Private ... on 10 August, 2022
Arb.O.P(Com.Div) No.303 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 10.08.2022
CORAM
THE HON'BLE Mr.JUSTICE M.SUNDAR
Arb.O.P(Com.Div) No.303 of 2021
1. Mrs.T.Sundaravel (Deceased)
W/o.Late.Thirunavukkarasu
2. S.T.Gauthaman
S/o.Late.Thirunavukkarasu
(second petitioner is brought on record as legal heir of
the deceased sole petitioner as per order dated 28.06.2022
made in A.No.2151 of 2022) ... Petitioner
Vs.
M/s.Maneck Jewels Private LImited,
Rep. by its Director Mr.Kunal Dhiresh Maneck
No.80 1st Floor, Cathedral Road, Chennai-600 086.
Or
Door No.1 & 3, Kasthuri Estate 2nd Street,
SWARUP'S ESTATE, Chennai-600 018.
... Respondent
Prayer:- Arbitration Original Petition filed under Section 11(5) of The
Arbitration and Conciliation Act, 1996 praying to appoint a Sole Arbitrator to
decide the disputes and differences between the petitioner and the respondent
in terms of the Registered Lease Deed dated 02.05.2014, registered as
Document No.461 of 2014 on the file of Sub Registrar, Joint I, Chennai
Central.
For Petitioner : Mr.P.C.Harikumar
of M/s.P.C.Harikumar & Associates
For Respondent : Mr.Uttam Joseph Cheriyan
****
1/10
https://www.mhc.tn.gov.in/judis
Arb.O.P(Com.Div) No.303 of 2021
ORDER
Mr.P.C.Harikumar of M/s.P.C.Harikumar & Associates [Law Firm] on
behalf of petitioner and Mr.Uttam Joseph Cheriyan, learned counsel for sole
respondent are before this Court.
2. Captioned Arb OP has been presented in this Court on 13.12.2021
under Section 11(5) of The Arbitration and Conciliation Act, 1996 (Act 26 of
1996)' [hereinafter 'A and C Act' for the sake of brevity, convenience and
clarity] with a prayer for appointment of a sole Arbitrator qua a registered
'LEASE DEED dated 02.05.2014 [registered as Document No.461 of 2014 in
the office of Sub Registrar, Chennai Central Joint I]' (hereinafter 'primary
contract' for the sake of convenience and clarity). The demised property qua
primary contract as can be culled out from the Lease Deed is as follows:
'SCHEDULE OF THE PROPERTY
The Land and building of the premises situated at Old No.57 (New
No.80) Cathedral Road, FIRST FLOOR, Chennai 600 086,
MYLAPORE VILLAGE, MYLAPORE-TRIPLICANE TALUK,
CHENNAI DISTRICT, comprised in Survey No.1246/1 part of
T.S.No.5598 measuring to an extent of about 2725 Sq Feet of carpet
area with THREE PHASE ELECTRICITY CONNECTION,
Mylapore Village, Mylapore Triplicane Taluk, Chennai District
situated within the Registration District of Chennai and sub-
Registration District of Joint-I Central Chennai.'
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3. It is submitted that Clause 5 of Part-III (captioned OTHER
PROVISIONS) of primary contract is the arbitration clause. Clause 5 of Part-
III of primary contract reads as follows:
'5. In the event of any dispute or difference arising between the
LESSOR and the LESSEE hereto concerning or relating to the
liability or obligation on the part of any of the parties hereto, they
shall resolve the same by negotiations in the event that no
resolutions are reached by negotiation the same shall be referred to
the Sole Arbitrator. The award passed by them shall be final and
biding on both the parties. All provisions of the Arbitration and
Conciliation Act, 1996 and any statutory modifications thereof for
the time being in force shall apply accordingly. The arbitration
shall be conducted in CHENNAI ONLY.'
4. It is necessary to read Clause 5 along with Clause 6, which reads as
follows:
'6. The jurisdiction of courts shall be invoked only in the events that
all negotiations and arbitration attempts fail. The jurisdiction of the
courts shall be at Chennai only.'
5. Aforementioned Clauses 5 and 6 serve as an arbitration agreement
between the parties i.e., arbitration agreement within the meaning of Section
2(1)(b) read with Section 7 of A and C Act is the common say of both sides.
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Arb.O.P(Com.Div) No.303 of 2021
6. A legal drill under Section 11 of A and C Act should perambulate
within the statutory perimeter sketched by sub-section (6A) thereat i.e., it will
be confined to the examination of existence of arbitration agreement. In the
case on hand, as the existence of arbitration agreement is not subjected to
disputation or disagreement, that legal requirement stands satisfied in favour
of appointment of an Arbitrator.
7. Two other facets of a Section 11 legal drill have been put in place by
way of judicial pronouncements and they are N.N.Global and Nortel
principles. To be noted, N.N.Global principle is vide N.N.Global Mercantile
Pvt. Ltd., Vs. Indo Unique Flame Ltd., and others reported in 2021 SCC
OnLine SC 13. N.N.Global principle pertains to arbitration clause in an
agreement which is insufficiently stamped/unstamped or not registered when
it is compulsorily registrable. Nortel principle [Bharat Sanchar Nigam
Limited and another Vs. Nortel Networks India Private Limited reported in
(2021) 5 SCC 738] pertains to a plea of lis being ex facie barred by limitation.
These issues do not arise in the case on hand.
8. As regards the prayer which is intended to be made before Arbitral
Tribunal, learned counsel for petitioner on instructions submits that it would
only be a money claim and there would be no claim regarding possession. In
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Arb.O.P(Com.Div) No.303 of 2021
other words, it is submitted that the claim would be within four corners of
Vidya Drolia principle being principle laid down by Hon'ble Supreme Court
in Vidya Drolia & Ors. Vs.Durga Trading Corporation reported in 2019
SCC OnLine SC 358. To be noted, the principle is to the effect that
possession from a tenant/lessee cannot be sought when the tenancy/lease is
governed by a special Statute.
9. It is submitted that the primary contract is operating and in the
course of operation of primary contract, arbitrable disputes inter alia
touching upon rent payable have arisen and this has led to the arbitration
clause being triggered. To be noted, this is not an exhaustive adumbration of
re-arbitrable disputes, it is only a thumbnail sketch of arbitrable disputes that
have erupted between the parties, which has necessitated the invocation of
arbitration clause between the parties. This Court is also informed that the
respondent who is a Lessee qua primary contract is now in possession of the
demised property and the lease is subsisting. This submission is also
recorded.
10. Before writing the operative portion of this order, this Court deems
it appropriate to advert to aforementioned sub-section (6A) of Section 11 of
A and C Act, which reads as follows:
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Arb.O.P(Com.Div) No.303 of 2021
'(6A) 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. Aforementioned sub-section (6A) of Section 11 of A and C Act
came up for consideration before Hon'ble Supreme Court in oft quoted
Mayavati case law i.e., Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman
reported in (2019) 8 SCC 714. Relevant paragraph is paragraph 10 and the
same reads as follows:
'10. This being the position, it is clear that the law prior to the
2015 Amendment that has been laid down by this Court, which would
have included going into whether accord and satisfaction has taken
place, has now been legislatively overruled. This being the position, it is
difficult to agree with the reasoning contained in the aforesaid judgments,
as Section 11(6-A) is confined to the examination of the existence of an
arbitration agreement and is to be understood in the narrow sense as has
been laid down in the judgment in Duro Felguera SA.'
(underlining made by this Court to supply
emphasis and highlight)
12. Mayavati case law (particularly, paragraph 10 which has been
extracted and reproduced supra) takes this Court to Duro Felguera case law
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Arb.O.P(Com.Div) No.303 of 2021
i.e., Duro Felguera S.A. Vs Gangavaram Port Limited reported in 2017 (9)
SCC 729, relevant paragraphs are paragraphs Nos.47, 59, which read as
follows:
'47. What is the effect of the change introduced by the
Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter
referred to as "the 2015 Amendment") with particular reference to
Section 11(6) and the newly added Section 11(6-A) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as
"the 1996 Act") is the crucial question arising for consideration in
this case.
59. The scope of the power under Section 11(6) of the 1996 Act
was considerably wide in view of the decisions in SBP and Co. and
Boghara Polyfab. This position continued till the amendment brought
about in 2015. After the amendment, all that the Courts need to see is
whether an arbitration agreement exists – nothing more, nothing less.
The legislative policy and purpose is essentially to minimize the
Courts intervention at the stage of appointing the arbitrator and this
intention as incorporated in Section 11(6-A) ought to be respected.'
13. In the light of the narrative thus far, this Court proceeds to appoint
a sole Arbitrator making it clear that all questions arising out of primary
contract (to the extent permissible vide Vidya Drolia principle alluded to
supra in this order) are left open to be raised before Hon'ble Arbitrator.
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Arb.O.P(Com.Div) No.303 of 2021
14. Hon'ble Mr.Justice K.N.Basha (Retd.), Former Judge of this Court
residing at Dr.Ambedkar Road, (Old ICF Link Road), North Thirumalai
Nagar, Villivakkam, Chennai-600 049, Mobile: 94444 54545,
email:[email protected] is appointed as sole Arbitrator. Hon'ble
Arbitrator is requested to enter upon reference qua primary contract being
registered Lease Deed dated 02.05.2014, adjudicate upon the arbitrable
disputes that have arisen between the parties and render an award by holding
sittings in the 'Madras High Court Arbitration Centre under the aegis of this
Court' (MHCAC) as per Madras High Court Arbitration Proceedings Rules
2017 and fee of Hon'ble Arbitrator shall be in accordance with the Madras
High Court Arbitration Centre (MHCAC) (Administrative Cost and
Arbitrator's Fees) Rules 2017.
15. Captioned Arb.OP is disposed of in the aforesaid manner. There
shall be no order as to costs.
10.08.2022
kmi
Index : Yes/No
Speaking/Non-speaking order
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Arb.O.P(Com.Div) No.303 of 2021
Note: The Registry is directed to communicate this order forthwith
To
1. Hon'ble Mr.Justice K.N.Basha (Retd.),
Former Judge of Madras High Court
Dr.Ambedkar Road, (Old ICF Link Road),
North Thirumalai Nagar,
Villivakkam, Chennai-600 049.
Mobile: 94444 54545, email:[email protected]
2. The Director,
Tamil Nadu Mediation and Conciliation
Centre-cum-Ex-Officio Member,
Madras High Court Arbitration Centre,
Chennai - 104.
https://www.mhc.tn.gov.in/judis
Arb.O.P(Com.Div) No.303 of 2021
M.SUNDAR, J
kmi
Arb.O.P(Com.Div) No.303 of 2021
10.08.2022
https://www.mhc.tn.gov.in/judis
