Madras High Court
Mr.Hariharan Parasuram vs Registered Office on 30 November, 2022
Arb.O.P.(Comm.Div.) No.573 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 30.11.2022
CORAM
THE HONOURABLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
Arb.O.P.(Comm.Div.) No.573 of 2022
1.Mr.Balakrishnan Anantharaman
Son of Mr.A.Balakrishnan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.5, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
2.Mr.Krishnan Hariharan
Son of G.S.Krishna Iyer,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.7, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
3.Mr.Subramanian Ramachandran,
Son of Mr.Ramachandran Subramanian,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.9, Serene Indus Valley,
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Arb.O.P.(Comm.Div.) No.573 of 2022
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
4.Mrs.Supriya Rajmohan
Wife of Mr.Kalpathi Krishnan Rajmohan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.2, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
5.Mr.Chandra S Shekhar
Son of Mr.S.N.Sundaresan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.20, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
6.Mr.Narayanaiyer Venkiteswaran,
Son of Venkateshwararaiyar Narayananaiyar,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.38, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
7.Mrs.S.Kanammal Devi
Wife of K.R.S.Sadhashivan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
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Arb.O.P.(Comm.Div.) No.573 of 2022
Villa No.39, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
8.Mrs.Vijaya Neelakandan
Wife of K.S.Neelakandan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.42 & 43, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
9.Mr.Sekhar Venkatachalam
Son of Mr.K.Venkatachalam,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.66, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
10.Mr.Srinivasulu Narayanaswamy
Son of Srinivasalu Naidu,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.105, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
11.Mr.T.S.Ramji
Son of T.M.Subramanium,
Represented by Power Agent,
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Arb.O.P.(Comm.Div.) No.573 of 2022
Mr.Hariharan Parasuram,
Villa No.106, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
12.Mrs.Kamini Narasimhan
Wife of Lt.General S.L.Narasimhan,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.108, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
13.Deepa Murali
Wife of K.A.Murali,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.1, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010.
14.Padmavathy Rajagopal
Wife of Rajagopal Kittu,
Represented by Power Agent,
Mr.Hariharan Parasuram,
Villa No.6, Serene Indus Valley,
Off Siruvani Main Road,
PerurPachapalayam,
Coimbatore - 641 010. ... Petitioners
vs.
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Arb.O.P.(Comm.Div.) No.573 of 2022
M/s.Columbia Pacific Communities (P) Ltd.,
Formerly known as M/s.Serene Senior Care (P) Ltd.,
Represented by its Chief Executive Officer,
Corporate Office:
2999, 12th A Main Road,
HAL, 2nd Stage, Indira Nagar,
Bengaluru - 560 008.
Registered Office:
Care of Serene Adinath,
283/1, Ramakrishnan Street,
Chettiar Thottam,
Vandalur, Chennai - 600 048. ... Respondent
PRAYER: Arbitration Original Petition filed under Section 11(6)(a) & (c) of
the Arbitration and Conciliation Act, 1996 Rule 2 of the Appointment of
Arbitrators of the Madras High Court Scheme, 1996, pleased to appoint an
arbitrator for adjudication of disputes arising from and out of the Service
Agreements 26.10.2015, 28.09.2016, 14.11.2014, 06.03.2015, 02.03.2015,
23.10.2017, 20.08.2014, 12.06.2014, 02.02.2017, 18.02.2015, 16.10.2014,
02.01.2015 and 05.01.2022, 02.01.2015.
For Petitioners : Mr.Avinash Wadhwani
For Respondent : M/s.Sivakami Shanmugam Pillai
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Arb.O.P.(Comm.Div.) No.573 of 2022
**********
ORDER
About 14 Villa owners in a senior citizens' retirement home project are
the petitioners herein. Each Villa owner entered into identical service
agreements with the respondent and Kovai Senior Care Constructions (P)
Limited. The petitioners rely on the jurisdiction and dispute resolution clause
in each agreement, which is in identical terms. The said clause is set out
below:
"JURISDICTION AND DISPUTE
RESOLUTION:
i. The agreement is subject to the laws of
India and is subject to the jurisdiction of
Coimbatore Courts.
ii. In the event of dispute among the parties
or differences arising out of, or in connection with
this Agreement or with regard to performance of
any obligation hereunder by any Party, the parties
hereto shall use their best efforts to settle such
disputes or difference of opinion by mutual
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Arb.O.P.(Comm.Div.) No.573 of 2022
negotiation. Should an Agreement not be reached,
any dispute shall be referred to the Arbitration of a
single Arbitrator to be appointed only by the First
Party provided such sole Arbitrator shall not be a
person below the rank of a Retired District Judge
and who is not employed or a resident in any of the
retirement community of the First Party and such
Arbitration shall be held in accordance with the
provisions of Indian Arbitration and Conciliation
Act, 1996. All such Proceedings shall be subject to
the exclusive jurisdiction of Courts having
territorial jurisdiction over and to the extent and
as conferred under the Indian Arbitration and
Conciliation Act, 1996 and will be in the Courts at
Coimbatore."
2. The petitioners state that a dispute arose between the petitioners and
the respondent herein with regard to the fixation of service charges.
Therefore, an e-mail of 01.02.2021 was addressed to the respondent. Since
the said e-mail did not elicit an appropriate response, a subsequent e-mail of
25.03.2021 was issued. By such e-mail, which was jointly issued on behalf
of the 14 petitioners, the arbitration clause was invoked and the name of a
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Arb.O.P.(Comm.Div.) No.573 of 2022
retired Judge of this Court was proposed as arbitrator. By reply dated
06.04.2021, the respondent objected to the proposed arbitral proceedings and
contended that it is a non-existent dispute. Hence, this petition.
3. Learned counsel for the petitioner submits that the service
agreements are standard form contracts containing identical dispute resolution
clauses. He also points out that one Villa owner initiated arbitral proceedings
pursuant to an earlier order of this Court and that such arbitral proceedings
are underway. Since the respondent herein took the position that any orders
passed therein would be binding only on parties thereto, he states that the
present petition has been instituted. He points out that the communication
dated 01.02.2021 did not result in a conciliated resolution of the dispute and
therefore this petition is sustainable.
4. These contentions are refuted by learned counsel for the respondent.
Learned counsel submits that the complex consists of 82 fully constructed
Villas. Out of the 82 Villa owners, about 67 are not parties to the pending
arbitral proceedings or to this petition. As a service provider, learned counsel
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Arb.O.P.(Comm.Div.) No.573 of 2022
submits that service charges should be fixed uniformly for all 82 Villas. Such
fixation is not possible unless all 82 Villa owners are joined as parties to
proceedings. In this connection, learned counsel relies upon the judgment of
the Supreme Court in Vidya Drolia and others -vs- Durga Trading
Corporation (2021)2 SCC 1 and contends that disputes having effect on third
parties, i.e. erga omnes effect, are not arbitrable. Therefore, she submits that
the dispute should be resolved through the residents welfare association or by
joining all Villa owners as parties.
5. The undisputed position is that arbitral proceedings are only binding
as between the parties thereto. Consequently, any orders passed by the
arbitral tribunal will not be binding on Villa owners who are not parties to the
arbitral proceedings. As a corollary, it will be open to such non party Villa
owners to raise grievances in respect of service charges fixed by the
respondent, whether such service charges are fixed pursuant to orders of the
arbitral tribunal or otherwise. Since the service agreements with such Villa
owners also contain identical arbitration clauses, it will be open to such non
party Villa owners to raise disputes and seek resolution through arbitration.
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Arb.O.P.(Comm.Div.) No.573 of 2022
The above situation, however does not mean that the orders of the arbitral
tribunal have erga omnes effect.
6. On perusal of the service agreements, it is clear that all the
agreements are in identical terms. The dispute resolution clause in the said
agreements is also identical. All the petitioners have a common grievance
with respect to the fixation of service charges by the respondent. In these
circumstances, there is no legal impediment to the constitution of a common
arbitral tribunal for the resolution of the dispute arising out of the separate
service agreements. Without doubt, it is also appropriate to consolidate such
proceedings. The arbitral tribunal was previously constituted under orders of
this Court to adjudicate the dispute raised by one Villa owner. It would be
appropriate that the learned arbitrator in the said matter is appointed to
adjudicate the dispute raised by the petitioners herein also.
7. Subject to the observations contained in the preceding paragraphs,
this petition is allowed by appointing Mr.Karthik Rajan, Advocate, Haji
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Arb.O.P.(Comm.Div.) No.573 of 2022
S.Madhar Sha & Sons Building, 2nd Floor, No.148, Moore Street, Chennai
600 001, Mobile No.944473830, as the sole arbitrator. The sole arbitrator is
called upon to enter upon reference and adjudicate the dispute. If
appropriate, this dispute may be consolidated with the dispute which is
already pending before learned arbitrator. In such event, learned arbitrator
may issue appropriate directions with regard to pleadings and the
continuation of proceedings.
30.11.2022
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Index : Yes / No
Internet : Yes / No
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Arb.O.P.(Comm.Div.) No.573 of 2022
SENTHILKUMAR RAMAMOORTHY,J
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Arb.O.P.(Comm.Div.) No.573 of 2022
30.11.2022
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