Bombay High Court
M/S. Amisha Buildcon Pvt. Ltd vs Jidnyasa Co-Operatvie Housing Society ... on 9 August, 2016
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
arbp82-14
vai
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
ARBITRATION PETITION NO.82 OF 2014
M/s.Amisha Buildcon Pvt. Ltd. )
A private Limited Company incorporated )
and registered under the provisions of )
Companies Act, 1956 and having its )
registered office at - )
111, Industrial Area, Sion (East) )
Mumbai - 400 022. ) ...Petitioner
....Versus....
Jidnyasa Co-operative Housing Society )
Limited, A Co-operative Housing Society )
classified as Housing Society registered )
under the provisions of the Maharashtra )
Co-operative Societies, Act, 1960 and )
having its address at - Khidkali-Desai, )
Post Padale, Taluka and district Thane )
)
AND HAVING ITS OFFICE AT )
)
Summons to be served on )
Shop No.1, Trimbakeshwar Society )
Ground Floor, Opp. Ashwini Motors, )
Edulji Road, Charai, Thane ( W) - 400 601 ) ...Respondent
Mr.A. Kumbhakoni, Senior Counsel with Mr.Shardul Singh i/b
Mr.Vaibhav Gaikwad for the Petitioner.
Mr.R.P. Mudholkar for the Respondent.
CORAM : R.D. DHANUKA, J.
RESERVED ON : 28TH JULY, 2016
PRONOUNCED ON : 9TH AUGUST, 2016
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ORAL JUDGMENT :-
1. By this petition filed under section 11(6) of the Arbitration & Conciliation Act, 1996 (for short "the Arbitration Act"), the petitioner seeks appointment of an independent person as a sole arbitrator to enter upon the reference and to adjudicate upon all the disputes and differences between the parties arising out of the Development Agreement dated 21st October, 2011 read with an undated Memorandum of Understanding. Some of the relevant facts for the purpose of deciding this arbitration petition are as under :
2. On 20th October, 2011, the petitioner and the respondent entered into a Development Agreement on the terms and conditions recored therein. It is the case of the petitioner that the said Development Agreement was duly registered with the Sub-Registrar, Thane - 2 on 21st October, 2011. The respondent also executed an irrevocable power of attorney dated 20th October, 2011 in favour of the petitioner.
3. The dispute arose between the parties. The petitioner issued a notice on 30th October, 2014 to the respondent society and invoked the arbitration agreement recorded in the said Development Agreement and also the Memorandum of Understanding executed between the parties and suggested three names of the retired Judges of this Court and called upon the respondent to give consent to the 2/8 ::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:44:35 ::: arbp82-14 appointment of any one of them as a sole arbitrator and threatened to file appropriate legal proceedings if the respondent would fail to give consent to the appointment of any one of them as a sole arbitrator.
4. On 3rd November, 2011, the respondent replied to the said notice dated 30th October, 2014 and informed the petitioner that the respondent had appointed Mr.Rajesh Mudholkar, Advocate as an arbitrator and forwarded a copy of the resolution passed by the society.
5. The petitioner filed this petition under section 11(6) of the Arbitration Act inter-alia praying for an independent arbitrator.
6. Mr.Kumbhakoni, learned senior counsel for the petitioner invited my attention to clause 30 of the Development Agreement dated 20th October, 2011 entered into between the petitioner and the respondent and also clause 18 of the undated Memorandum of Understanding and submits that the arbitration agreement is recorded in both the documents. He submits that the respondent society could not have nominated its own advocate as a sole arbitrator. He submits that since there was no consensus on the name of the arbitrator, this Court can appoint an independent arbitrator to adjudicate upon the dispute between the parties.
7. The arbitration petition is opposed by the respondent society by fling affidavit in reply and additional affidavit in reply.
3/8 ::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:44:35 :::arbp82-14 Mr.Mudholkar, learned counsel for the respondent on the other hand submits that this petition filed under section 11(6) of the Arbitration Act is not maintainable on the ground that the Development Agreement dated 20th October, 2011 and an undated Memorandum of Understanding which did not have mandate of the general body of the respondent society, cannot be relied upon by the petitioner for the purpose of appointing an arbitrator. He submits that in any event since the petitioner herein has already given up all its alleged right, title and interest in ig the Development Agreement and the Memorandum of Understanding in favour of M/s. Ajmera Habitat Private Limited, the arbitration petition for the appointment of an arbitrator is not maintainable on that ground also.
8. The next submission of the learned counsel for the respondent is that since the dispute proposed to be raised by the petitioner touches the business of the respondent society to adjudicate upon such dispute vests only with the Co-operative Court exclusively, no arbitrator can be appointed by this Court. Learned counsel also made various submissions on the merits of the claim made by the petitioner and would submit that no arbitrator can be appointed on that ground also.
9. A perusal of the record indicates that there is no dispute that the Development Agreement dated 20th October, 2011 and an 4/8 ::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:44:35 ::: arbp82-14 undated Memorandum of Understanding relied upon by the petitioner were signed by the petitioner and the respondent. There is no dispute that the arbitration agreement is recorded in both these documents and signed by both the parties. A perusal of the reply sent by the respondent to the petitioner in response to the notice dated 30th October, 2014 invoking arbitration agreements also indicates that the respondent society has not disputed the existence of an arbitration agreement and on the contrary had appointed its own advocate as a sole arbitrator. The respondent has also passed a resolution in that record, which was annexed to the reply dated 3 rd November, 2014 thereby appointing Mr.Rajesh Mudholkar, Advocate as a sole arbitrator. In my view, the arbitration agreement thus exists between the parties as recorded in the Development Agreement as well as an undated Memorandum of Understanding.
10. Insofar as the submission of the learned counsel for the respondent that the Memorandum of Understanding did not have mandate of the general body of the respondent society and thus cannot be relied upon by the petitioner is concerned, in my view, the arbitration agreement recorded therein being independent of other terms and conditions, can be still binding on the parties. Be that as it may, there is no dispute that the arbitration agreement in both the documents exists.
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11. Insofar as the submission of the learned counsel for the respondent that the petitioner has given up all its right, title and interest in the Development Agreement and in the Memorandum of Understanding in favour of M/s.Ajmera Habitat Private Limited and thus the petitioner did not have any locus to apply for the appointment of an arbitrator is concerned, a perusal of the reply to the notice issued by the respondent indicates that the respondent society itself has appointed an arbitrator and thus on this ground, this Court cannot reject the application for appointment of an arbitrator. The question as to whether the petitioner has given up all its alleged right, title and interest in the Development Agreement or in the Memorandum of Understanding or not, the said issue can be decided by the learned arbitrator on its own merits.
12. Insofar as the submission of the learned counsel for the respondent that the dispute raised by the petitioner touches the business of the respondent society and thus such dispute can be adjudicated upon only by the Co-operative Court under section 91 of the Maharashtra Co-operative Societies Act, 1961 is concerned, the issue of arbitrability of the claim when made before the learned arbitrator can be decided by the learned arbitrator. There is no statement of claim admittedly filed by the petitioner till date. In my view, under section 11(6-A) of the Arbitration Act, the Court while 6/8 ::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:44:35 ::: arbp82-14 appointing an arbitrator under section 11 has to confine to the examination of existence of an arbitration agreement. In my view, since admittedly the arbitration agreement exists between the parties, the issue of arbitrability of the claim cannot be decided by this Court and the same can be decided by the learned arbitrator as and when the statement of claim is filed by the petitioner.
13. It is made clear that this Court has not expressed any views on the legality and validity of the Development Agreement as well as an undated Memorandum of Understanding and about the claim proposed to be made by the petitioner before the learned arbitrator on merits and all such contentions are kept open.
14. In my view, since there was no consensus on the name of the learned arbitrator, the arbitration petition for the appointment of an independent arbitrator filed under section 11(6) of the Arbitration Act is maintainable.
15. I propose to appoint Shri Justice Pramod D. Kode, former Judge of this Court, having his office at 204, Vardhaman Chambers, Cawasji Patel Street, Opposite Punjabi Moti Halvai, Fort, Mumbai -
400 001, Mob. No.99691 01100 and Office No.022 2204 0976 as a sole arbitrator, who is required to file a statement of disclosure in terms of section 11(8) read with section 12(1) of the Arbitration Act before the next date.
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16. The parties are directed to convey this order to the learned proposed arbitrator with a request to file statement of disclosure in terms of section 11(8) read with section 12(1) of the Arbitration Act before the next date.
17. Place the arbitration petition on board on 18th August, 2016 for directions.
18. All parties as well as the learned proposed arbitrator to act on the authenticated copy of this order.
(R.D. DHANUKA, J.) 8/8 ::: Uploaded on - 09/08/2016 ::: Downloaded on - 10/08/2016 00:44:35 :::