Madras High Court
Hsbc Electronic Data Processing ... vs Ceedeeyes Software Technology ... on 30 November, 2022
Arb.O.P.(Comm.Div.) No.374 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.374 of 2022
HSBC Electronic Data Processing Indian
Private Limited,
Having its registered office at
HSBC House, Plot No.8,
HITEC City Madhapur,
Hyderabad 500 081
Rep. By its Vice-President Corporate Services Lead ... Petitioner
vs.
CEEDEEYES Software Technology Park
Private Limited
Having its registered office at
New No.42, 2nd Main Road,
Gandhi Nagar, Adyar,
Chennai-600 020. ... Respondents
PRAYER: Arbitration Original Petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, pleased to (a) Appoint an arbitrator
to adjudicate the disputes between the Petitioner and the Respondent in
terms of the Arbitration Agreement/Lease Deed dated 10.01.2017; and (b)
Direct the Respondent to pay costs.
For Petitioner : Mr.M.Narendran for
M/s.King and Partridge
1/7
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Arb.O.P.(Comm.Div.) No.374 of 2022
For Respondent : Mr.K.V.Babu for
M/s.N.Premkumar
**********
ORDER
By citing the dispute resolution clause in the lease deed dated
10.12.2017, the petitioner seeks the constitution of an arbitral tribunal to
adjudicate disputes arising out of the said lease deed.
2. The petitioner states that the lease was for a term of three years
running from 10.03.2017 to 09.03.2020. The petitioner had paid a sum of
Rs.1,16,06,000/- as aggregate security deposit and asserts that the said
security deposit was not refunded. Therefore, after issuing a lawyer's notice
dated 08.09.2021, the arbitration clause was invoked by issuing a notice
dated 05.04.2022 under Section 21 of the Arbitration and Conciliation Act
1996 (the Arbitration Act). By reply dated 29.04.2022, the respondent
refused to co-operate in the constitution of an arbitral tribunal on the ground
that the dispute raised by the petitioner is barred under the Arbitration Act.
On instructions, learned counsel for the petitioner submits that the set of
keys in the possession of the petitioner will be handed over to learned
counsel for the respondent during the course of the day.
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Arb.O.P.(Comm.Div.) No.374 of 2022
3. Learned counsel for the petitioner relies upon clause 26 of the lease
deed. The said clause 26 is set out below:
“26. ARBITRATION:
All matters of, disputes, differences, and claims
whatsoever which shall at any time arise between the parties
hereto or their respective representatives or any of them
touching or concerning this deed and all other documents in
pursuance hereof or the construction, meaning, operations or
liabilities of the parties hereto respectively or their respective
representatives or any of them under or by virtue of this deed
or otherwise or touching the subject matter hereof or arising
out of or in relation thereto shall be resolved by mutual
discussions. If such discussions are unsuccessful, the same
shall be referred to arbitration by a sole arbitrator mutually
appointed by the Parties in accordance with the provisions of
the Arbitration and Conciliation Act, 1996 for the time being in
force. Such arbitration proceedings will take place in Chennai
only. The language of the Arbitration shall be English.”
Since the Section 21 notice did not result in the constitution of the arbitral
tribunal, it is submitted that this petition is liable to be allowed.
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Arb.O.P.(Comm.Div.) No.374 of 2022
4. Learned counsel for the respondent opposes this petition primarily
on the ground that the dispute is within the scope of the Tamil Nadu
Regulation of Rights and Responsibilities of Landlords and Tenants Act
2017 (TN Act 42 of 2017). By referring to Section 11 thereof, it is submitted
that security deposits, including the refund thereof, are expressly regulated
by Section 11. Learned counsel also refers to Sections 34 and 40 and points
out that the jurisdiction of a civil court has been barred under the said
provisions. A fortiori, learned counsel submits that an arbitral tribunal
cannot exercise jurisdiction. He distinguishes the judgment of the Hon'ble
Supreme Court in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1,
by pointing out that the said judgment applies only if the dispute is
governed by the provisions of the Transfer of Property Act, 1882, and not
when the disputes are governed by provisions of a special statute. In support
of this contention, he relies upon the judgment of the Calcutta High Court in
Swaroop Sen v. Ajay Kumar Boral and another (2021) SCC OnLine Cal
2664, particularly paragraph 11 thereof, and the judgment of the Hon'ble
Supreme Court in Suresh Shah v. Hipad Technology India Private Limited
(2021) 1 SCC 529, particularly paragraph 18 thereof.
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Arb.O.P.(Comm.Div.) No.374 of 2022
5. In view of the judgment of the Hon'ble Supreme Court in Vidya
Drolia and several judgments on the scope of Section 11 which followed
the said judgment, the question that arises for consideration is whether this
dispute is manifestly non-arbitrable. For purposes of deciding a Section 11
petition, a prima facie and not an in depth review is called for. When TN
Act 42 of 2017 is examined prima facie it does not appear to be a legislation
which comprehensively deals with every facet of landlord tenant disputes.
Sub section 2 of Section 40 prima facie supports such conclusion.
6. Given the fact that the TN Act 42 of 2017 does not appear prima
facie to be comprehensive, it cannot be concluded that the present dispute is
manifestly non-arbitrable. Consequently, the objection on this ground is
rejected. However, it is open to the respondent to canvass this contention
before the arbitral tribunal.
7. For the reasons set out above, this Arb.O.P.(Com. Div.) No.374 of
022 is allowed by appointing Mr. Justice V.Parthiban, retired Judge of this
Court, No.5069, Z Block, 12th Street, Anna Nagar, Chennai-40 (mobile
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Arb.O.P.(Comm.Div.) No.374 of 2022
no.9444094401) as the sole Arbitrator. The Arbitrator is requested to enter
upon reference and adjudicate the dispute. It is open to the Arbitrator to fix
the fees and expenses in relation to the arbitral proceedings in consultation
with the parties.
30.11.2022
Index : Yes / No
Internet : Yes / No
kal
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Arb.O.P.(Comm.Div.) No.374 of 2022
SENTHILKUMAR RAMAMOORTHY,J
kal
Arb.O.P.(Comm.Div.) No.374 of 2022
30.11.2022
https://www.mhc.tn.gov.in/judis
