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Chauhan Jewellers Limited vs Tirupati Buildings And Office Private ... on 2 March, 2022

Author: C .Hari Shankar

Bench: C.Hari Shankar

                         $~4
                         *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                         +     ARB.P. 913/2021
                               CHAUHAN JEWELLERS LIMITED            ..... Petitioner
                                           Through     Mr. Adhitya Srinivasan, Mr.
                                           Kartikeya Jaiswal, Advs.

                                                    versus

                               TIRUPATI BUILDINGS AND
                               OFFICE PRIVATE LIMITED            ..... Respondent
                                             Through  Mr. Ajay Sharma, Adv.

                               CORAM:
                               HON'BLE MR. JUSTICE C.HARI SHANKAR

                                             ORDER(ORAL)

                         %                     02.03.2022

                         C .HARI SHANKAR, J.

1. This petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("the 1996 Act") seeks reference of the disputes between the parties to arbitration. Mr. Ajay Sharma, learned counsel for the respondent, on instructions, submits that he has no objection if the dispute is referred to arbitration.

2. The dispute appears to arise from a Builders Buyer Agreement dated 2nd June, 2015. The petition complains that the petitioner has not been able to enjoy peaceful and uninterrupted possession of the plot allotted to the petitioner under the said agreement and had suffered losses. It is further alleged that, in violation of the said agreement, the respondent entered into a separate Lease Agreement Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI ARB.P. 913/2021 Page 1 of 4 Signing Date:04.03.2022 16:19 with a third party company. The petitioner has also assailed the demand having been raised on the petitioner by the maintenance company. These, inter alia, constitutes the acts of the respondent, with which the petitioner is aggrieved.

3. It appears that the respondent had earlier appointed a sole arbitrator who, without seeking consent of the petitioner and that, by an order dated 2nd March, 2020, the learned sole arbitrator, so appointed, recused from the proceedings as the appointment was unilateral.

4. The agreement between the parties contains the following arbitration clause:

"That in case of any dispute arising out of or touching upon orconcerning anything contained in this agreement or even thetermination thereof, including the inte1pretation and validity of anyterm, and the respective rights and obligations of the parties shall besettled amicably by mutual discussion failing which shall be settledthrough arbitration only. The arbitration proceedings shall begoverned by the Arbitration and Conciliation Act, 1996. Thearbitration proceedings shall be held at an appropriate location inDelhi by a sole arbitrator who shall be appointed by the builder andwhose decision shall be final and binding upon the parties. The buyerhere by confirms that it shall have no objection to this appointmenteven if the person so appointed as the arbitrator is an employee oradvocate of the builder or otherwise connected with the builder andthe buyer confirms that notwithstanding such arelationship/connection, the buyer shall have no doubts as to theindependence or impartiality of the said arbitrator. All disputes shallbe subject to the jurisdiction of courts at Delhi only."

5. Prima facie, the dispute is arbitrable.

6. The arbitration clause envisages appointment of an arbitrator by one of the parties to the agreement. This is not permissible in view of Section 12(5) of the 1996 Act1, read with the judgments of the Supreme Court in Bharat Broadband Network Ltd. v. United Telecoms Ltd.2, Perkins Eastman Architects DPCv. HSCC (India) Ltd.3, and Haryana Space Application Centre v. Pan India Consultants Pvt. Ltd4.

7. On 15th January, 2021, the petitioner invoked the aforesaid arbitration clause and wrote to the respondent for appointment of an arbitrator. The respondent not having responded, the petitioner has approached this Court under Section 11(6) of the 1996 Act.

8. It is stated that the claim amount is in the region of ₹ 3-4 crores, in view of the acquiescence, by Mr. Sharma, learned counsel for the respondent, to the appointment of an arbitrator to arbitrate on the disputes between the parties, this Court appoints Mr. Amit Chadha (Cell: 9911116613) as the arbitrator to arbitrate on the disputes between the parties.

9. The learned arbitrator would also be entitled to charge fees in accordance with the Fourth Schedule to the 1996 Act or otherwise 1 Section 12(5): Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.

(2019) 5 SCC 755 3 2019 SCC Online SC 1517 4 Signature Not Verified 2021 3 SCC 103 Digitally Signed By:SUNIL SINGH NEGI ARB.P. 913/2021 Page 3 of 4 Signing Date:04.03.2022 16:19 fixed by the learned arbitrator in consultation with the parties.

10. The learned arbitrator is also directed to furnish the requisite disclosure under Section 12(2) of the 1996 Act within a week of entering on reference.

11. This Court clarifies that it does not express any opinion on one way or the other on the merits of the disputes between the parties. All questions of fact and in law are left open for agitation before the learned arbitrator.

12. The petition stands allowed of in the aforesaid terms with no order as to costs.

C.HARI SHANKAR, J MARCH 2, 2022 r.bararia Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI ARB.P. 913/2021 Page 4 of 4 Signing Date:04.03.2022 16:19