Madras High Court
M/S.Sreshta Builders Private Ltd vs M/S.Vijay Foundations Private ... on 6 June, 2022
O.P.No.123 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.06.2022
CORAM
THE HON'BLE Mr.JUSTICE M.SUNDAR
O.P.No.123 of 2021
M/s.Sreshta Builders Private Ltd.,
Represented by its Director,
Mr.Sumanth Subramanian,
No.8, Luz Avenue,
Mylapore, Chennai-600 008.
... Petitioner
Vs.
1. M/s.Vijay Foundations Private Limited,
Rep. by its Managing Director Mr.R.Thiagarajan,
Having its Registered Office at
No.10, First Street, Nandanam Extension,
Nandanam, Chennai-600 035.
2. M/s.Sumanth & Co.,
Represented by its Partner,
No.108, Luz Church Road,
Mylapore, Chennai-600 004.
3. M/s.Urban Tree Infrastructures Pvt., Ltd.,
Represented by its Managing Partner,
6th Floor, Good Shepherd Square,
No.86 Kodambakkam High Road,
Nungambakkam, Chennai-600 034.
4. M/s.Vijay Plas Fabs Private Limited,
represented by its Director,
No.10, 1st Street, Nandanam Extension,
Nandanam, Chennai-600 035.
... Respondents
1/10
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O.P.No.123 of 2021
Original Petition filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 to appoint a Arbitrator(s) to decide the disputes and
differences between the petitioner and respondent in terms of Agreement of
Sale dated 30.03.2017 read with the Cancellation Agreement dated
11.09.2018.
For Petitioner : Mr.A.Abdul Hameed
instructed by Ms.Revathi Manivannan
of M/s.AAV Partners
For Respondents : Mr.P.C.Harikumar
of M/s.P.C.Harikumar Associates
for R1 & R4
R3-No Appearance
R2-Mr.A.Abdul Hameed
instructed by Ms.Revathi Manivannan
of M/s.AAV Partners
****
ORDER
Captioned 'Original Petition' ['OP'] has been presented in this Court on
23.12.2020 inter alia under Section 11(6) of 'The Arbitration and
Conciliation Act, 1996 (Act 26 of 1996)' [hereinafter 'A and C Act' for the
sake of convenience and clarity].
2. Mr.A.Abdul Hameed, learned counsel assisted by Ms.Revathi
Manivannan of M/s.AAV Partners on behalf of the petitioner and
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O.P.No.123 of 2021
Mr.P.C.Harikumar of M/s.P.C.Harikumar and Associates on behalf of
respondents 1 and 4 are before this Court. This Court is informed that
Ms.Revathi Manivannan of M/s.AAV Partners would be the counsel for
second respondent as there is no conflict between the petitioner and second
respondent. As regards the third respondent, the Company has been duly
served. Though a counsel has entered appearance and his name is shown in
the cause list, there is no representation.
3. Before proceeding further earlier proceedings dated 23.02.2022
made by this Court is of relevance and the same reads as follows:
'Ms.Anbarasi Rajendran learned counsel of M/s.AAV
Partners (Law Firm) on behalf of lone petitioner and
Mr.P.C.Harikumar, learned counsel of M/s.P.C.Harikumar and
Associates (Law Firm) on behalf of the respondents 1 and 4 are
before this Court.
2. This Court is informed that counsel for petitioner is
representing second respondent also. This is rather strange but this
Court reserves its opinion at this stage.
3. The reason is, notice sent to third respondent has been
returned unserved with postal endorsement 'Left'.
4. Third respondent has to be served, may be by resorting to
substituted modes of service.
5. List the captioned matter before learned Master for
completing service on third respondent.
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O.P.No.123 of 2021
6. Petitioner to take steps before learned Master to effect
service on third respondent.
7. Learned Master to list this matter before Court after
service on third respondent is completed/effected.
8. List before learned Master on 01.03.2022.'
4. Pursuant to aforementioned earlier proceedings, captioned OP was
listed before learned Master of this Court and learned Master of this Court
has made orders dated 26.04.2022, which read as follows:
5. Notwithstanding the above trajectory the position with regard to
third respondent is the same. Therefore, this Court has come to the
conclusion that adequate and ample opportunity has been given to third
respondent and third respondent has not come before this Court to dispute the
existence of arbitration agreement.
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O.P.No.123 of 2021
6. A legal drill under Section 11 of A and C Act should perambulate
within the statutory perimeter of sub-section (6A) of Section 11 of A and C
Act. Sub-section (6A) of Section 11 reads as follows:
'(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.'
7. Aforementioned sub-section (6A) of Section 11 of A and C Act
came up for consideration before Hon'ble Supreme Court in M/s.Duro
Felguera S.A. Vs M/s. Gangavaram Port Limited reported in 2017 (9) SCC
729 and Mayavati Trading Pvt. Ltd vs Pradyuat Deb Burman reported in
(2019) 8 SCC 714. Relevant paragraphs in these two case laws are
paragraphs Nos.47, 59 in Duro Felguera principle and paragraph 10 in
Mayavati Trading principle, which read as follows
'Paragraphs 47 and 59 of Duro Felguera case law:
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
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O.P.No.123 of 2021
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.'
'Paragraph 10 of Mayavati Trading case law:
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)
8. It may not be necessary to dilate any further as there is no
disputation or disagreement between the parties before this Court about the
existence of arbitration agreements between the parties. Though the
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O.P.No.123 of 2021
captioned OP is predicated on an Agreement of Sale dated 30.03.2017 and
Cancellation Agreement dated 11.09.2018, this Court is informed that there
are two other sets of agreements. One set is, agreements constituted by
agreement dated 02.10.2006 and 21.10.2010. The second set is constituted
by 29.11.2013 and 27.03.2015. Therefore, aforementioned 30.03.2017 and
11.09.2018 will be the third set of contract. Both the learned counsel very
fairly submit that the entire matter pertains to development of contiguous
parcels of land and therefore, it would be desirable that one Arbitrator is
appointed qua three sets of contracts. Owing to this consensus it may not be
necessary to dilate qua factual matrix or the arbitrable disputes that have
erupted. Suffice to say that three sets of contracts essentially pertain to join
development of two contiguous parcels of land and arbitrable disputes have
arisen from the same.
9. It is also deemed appropriate to mention that both sides have agreed
on the sole Arbitrator also before this Court [obviously third respondent is
not before this Court, but there is no impediment as third respondent has not
come before this Court and dispute the existence of arbitration agreement].
10. Before writing the operative portion appointing the sole Arbitrator
in the light of Duro Felguera line of authorities, it is deemed appropriate to
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O.P.No.123 of 2021
make it clear that by this common order, three Arbitral Tribunals are
constituted qua aforementioned three sets of contracts, but all three Arbitral
Tribunal shall stand constituted by the same sole Arbitrator.
11. By consent, Hon'ble Mr.Justice R.Balasubramanian (Retd.), Former
Judge of this Court residing at No.5, Tiger Varadachari 1st Road, Kalakshetra
Colony, Besant Nagar, Adyar, Chennai - 600 090 (Ph: 24465599,
Mob:9444353535) is appointed as sole Arbitrator. Hon'ble Sole Arbitrator is
requested to enter upon reference, adjudicate the arbitrable disputes that have
arisen between the parties qua aforementioned three sets of contracts
simultaneously, jointly or together in any manner that is deemed appropriate
at the discretion of Hon'ble Arbitrator. It is made clear that this is an
observation to ensure that possible anomalies are eliminated. The 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.
Captioned OP ordered in the aforesaid manner. There shall be no order
as to costs.
06.06.2022
kmi
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O.P.No.123 of 2021
Note: The Registry is directed to communicate this order to Hon'ble
Mr.Justice R.Balasubramanian (Retd.), Former Judge of this Court at
No.5, Tiger Varadachari 1st Road, Kalakshetra Colony, Besant Nagar,
Adyar, Chennai - 600 090 (Ph: 24465599, Mob:9444353535) forthwith.
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O.P.No.123 of 2021
M.SUNDAR.J.,
kmi
O.P.No.123 of 2021
06.06.2022
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