Karnataka High Court
Royal Orchid Associated vs Shanti Hospitality on 5 June, 2023
Author: R Devdas
Bench: R Devdas
-1-
CMP No. 121 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JUNE, 2023
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
CIVIL MISC. PETITION NO. 121 OF 2022
BETWEEN:
ROYAL ORCHID ASSOCIATED
HOTELS PRIVATE LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
NO.1, GOLF AVENUE, KODIHALLI
OFF AIRPORT ROAD
BENGALURU-560008
REPRESENTED HEREIN BY
ITS AUTHORISED SIGNATORY
MR AMIT JAISWAL
...PETITIONER
Digitally signed
by JUANITA (BY SRI. SUNDARA RAMAN M V., ADVOCATE)
THEJESWINI
Location: HIGH AND:
COURT OF
KARNATAKA
1. SHANTI HOSPITALITY
A PARTNERSHIP FIRM
HAVING ITS OFFICE AT
NO.5 GROUND FLOOR MARUTI MANDIR
RATNAGIRI
MAHARASHTRA-415612
REPRESENTED HEREIN BY ONE OF ITS PARTNERS
VIJAY OSWAL
-2-
CMP No. 121 of 2022
2. VIJAY OSWAL
PARTNER OF SHANTI HOSPITALITY
HAVING OFFICE AT
NO.5 GROUND FLOOR MARUTI MANDIR
RATNAGIRI, MAHARASHTRA-415612.
...RESPONDENTS
(BY SRI. SHAHBAAZ HUSAIN.,ADVOCATE R1;
SRI. KARTHIKEYA YADAV, ADVOCATE FOR R2)
THIS CIVIL MISC. PETITION IS FILED UNDER
SEC.11(6) OF THE ARBITRATION AND
CONCILIATION ACT 1996 R/W RULE 2 OF THE
APPOINTMENT OF ARBITRATORS BY THE CHIEF
JUSTICE OF KARNATAKA HIGH COURT SCHEME,
1996, PRAYING A) APPOINT, A SOLE ARBITRATOR
AS THIS HON'BLE COURT MAY DEEM FIT, AND
REFER THE DISPUTES BETWEEN THE PARTIES TO
ARBITRATION UNDER THE HOTEL OPERATION
AGREEMENT DATED 11/03/2020 AT ANNEXURE-B;
B) DIRECT RESPONDENTS TO PAY THE COSTS OF
THESE PROCEEDINGS.
THIS PETITION, COMING ON FOR
ADMISSION, THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
R.DEVDAS J., (ORAL):
This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation -3- CMP No. 121 of 2022 Act, 1996 seeking appointment of a sole arbitrator to resolve the dispute and difference between the parties herein in terms of the Hotel Operation Agreement dated 11.03.2020 at Annexure-B.
2. Statement of objections of both the respondents have been filed. It is sought to be contended on behalf of the first respondent, a partnership firm, that although its name is found in the Hotel Operation Agreement at Annexure-B, nevertheless it is said to have been signed by the second respondent, who is not a partner of the partnership firm. Similarly, the second respondent too contends that he is not a partner of the first respondent - partnership firm and that the signatures contained in the agreement are not his.
3. Having regard to these two contentions, it is sought to be contended on behalf of the respondents that when the respondents are not parties to the agreement, they should not be referred to arbitration. -4- CMP No. 121 of 2022 In that regard, the learned counsels seek to place reliance on the following decisions:
1) Sukanya Holdings vs. Jayesh Pandya, (2003)5 SCC 531,
2) S.N.Prasad Hitech Industries (Bihar) Limited vs. Monnet Finance Limited and others (2011)1 SCC 320,
3) Vidya Drolia vs. Durga Trading Cor.Ltd., (2019)20 SCC 406,
4) Union of India vs. Kishorilal Gupta and Others, (1960)1 SCR 493,
5) Damodar Valley Corporation vs. K.K.Kar, (1974)1 SCC 141.
4. Both the learned counsels appearing on behalf of the respondents vehemently contend that since both the respondents are disputing that they are not parties to the agreement, this Court should not refer them for -5- CMP No. 121 of 2022 arbitration. It is their contention that unless the respondents are parties to the agreement, they cannot be referred to arbitration having regard to the judgments of the Hon'ble Supreme Court referred to hereinabove.
5. Per contra, the learned counsel for the petitioner submits that the stand sought to be taken by the respondents now before this Court is contrary to the material available on record. The learned counsel for the petitioner has also filed a memo along with certain documents in support of his contention that there have been various communications between the parties which have started immediately after the agreement was entered into. It is pointed out that all the partners or atleast three partners in the partnership firm have been in constant touch with the petitioner. They have communicated and it cannot be now disputed by the respondents that the agreement was not entered into by the first respondent - partnership firm and that the said agreement though contains the name and address -6- CMP No. 121 of 2022 of the firm, nevertheless, it has not been entered into by an authorized person or a partner. Therefore, the agreement itself is void ab initio and it cannot be looked into by this court. The learned counsel submits that such an argument cannot be accepted by this Court while considering a petition under Section 11 of the Arbitration and Conciliation Act, 1996. The learned counsel therefore submits that with the material available on record, it is clear that the parties have entered into an agreement and the agreement contains arbitration clause which has been invoked by the petitioner.
6. Having heard the learned counsels and on perusing the petition, this Court finds that the stand sought to be taken by the respondents now before this Court denying execution of the agreement cannot be countenanced nor can it be considered by this Court since these are matters that can be decided only after permitting the parties to adduce evidence. These disputed questions can be raised before the Arbitral -7- CMP No. 121 of 2022 Tribunal and the Tribunal is duty bound to consider the contentions sought to be raised by the respondents. The judgments sought to be cited by the learned counsels for the respondents do not apply to the facts and circumstances of this case.
7. Consequently, this Court proceeds to pass the following:
ORDER
(a) The petition is allowed appointing Sri D.Vishweshwara Bhat, retired District Judge, as the sole arbitrator to enter reference of the disputes between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according -8- CMP No. 121 of 2022 to the Rules governing the said Arbitration Centre.
(b) All contentions inter se parties are left open for adjudication in the arbitration proceedings.
(c) The office is directed to
communicate this order to the
Arbitration and Conciliation Centre and to Sri D.Vishweshwara Bhat, retired District Judge, as required under the Arbitration and Conciliation Centre Rules, 2012.
Sd/-
JUDGE NV