ORDER
Petitioner has sought for exercising power under S.11(6) of the Arbitration Act for appointment of an Arbitrator in pursuance to the agreement of lease dated 31.5.1996 and also the agreement dated 12.3.1997
Petitioner is a company registered under the Companies Act. Respondents are the Trustees of Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram & Other Charities. It appears in connection with the development of property, the Trust represented by the President, Secretary and other office bearers has entered into a lease agreement dated 12.3.1997 with the petitioner's company, in order to lease out the property on a long term i.e, for a period of thirty eight years and as a matter of obligation on the Part of the petitioner developer, he had to evict the tenants in several premises who were in occupation of the property and thereafter, to proceed with the construction activity with various other conditions. During March 2010 i.e, nearly after 13-14 years the task was accomplished by evicting the tenants from the premises. The possession of the premises is with the respondent Trust. Immediately after eviction of the tenants, the respondents came out with a suit for injunction alleging violation of various terms of the agreement and thereby, sought to obtain a permanent injunction.
In this regard, the contentions taken are - when already the mater is pending before the civil court, there is no scope for appointment of an arbitrator; petitioner also Participated in the proceedings by filing a written statement; the conduct of the petitioner amounts to waiver of his right of Participation; the agreement is insufficiently stamped and also as per S.8 of the Arbitration Act, application is not filed. Accordingly, it is contended that the appointment of an Arbitrator invoking the provisions of the Arbitration & Conciliation Act does not arise. In support of her contention, counsel representing the respondents has relied on the following decisions.
• Tiruvenibai & v. Lilabai - AIR 1959 SC 620
• Food Corpn. Of India v. Babulal Agarwal - AIR 2004 SC 2926
• K. Amarnath v. Smt. Putamma - ILR 1999 KAR 4634
• V. Mopurappa v. K. Ramaswamy Gramani - AIR 1934 Mad 418
• Karta Ram v. State of Punjab - AIR 1966 P & H 365
• Brij Nandan Singh v. Jarauna Prasad Sahu - AIR 1958 Pat 589
• KGN Enterprises v. Ashraf Ali - ILR 2011 KAR 3183
• Sultan Ali Mulla Rasoolji v. Tayeb Pir Mohammed - AIR 1930 Bombay 210
• H.V Rajan v. C.N Gopal - AIR 1975 SC 261
• State of Maharashtra v. Atur India Pvt. Ltd. - (1994) 2 SCC 497
• Ramjoo Mohammed v. Hari Das Mullick - AIR 1925 Cal 1087
• Ganapathy Jyothi Kumbhar v. Jaya Singh Ram Aba Saheb - AIR 1956 Bombay 749
On the other hand, it is the contention of the petitioners' counsel that clause 36 of the Agreement provides for arbitration and that there is an understanding that after accomplishing the work of evicting the tenants themselves, further work would be taken up. At the time of execution as per clause 34 of the very agreement itself, petitioner is supposed to pay the stamp duty and thereafter, the lease deed has to be got registered and possession taken by way of long term lease.
It would be relevant to extract clauses 34 and 35 of the Agreement which reads:
Clause 34: The stamp duty, registration and other incidental legal expenses for the completion of the lease deed shall be borne by the lessee alone.
Clause 36: Further, if there is any difference of opinion during the subsistence of this lease such difference shall be refened to the arbitration of two arbitrators and each Party shall appoint an arbitrator in accordance with the Arbitration Act, 1940 or any statutory modifications thereof. However, a reference to arbitration shall not have the effect of annulling or suspending any of the terms and conditions contained herein and each of the Parties shall in so far as practicable discharge their duties towards the other.
Referring to these clauses, petitioners' counsel submitted, neither the petitioner has surrendered his right before the civil court nor made any other claim before the civil court contrary to the contention taken by the respondents and also, making an application under S.8 of the Arbitration Act does not arise.
As could be seen, the agreement is for developing the property immediately after the property is made vacant by evicting the tenants. Thereafter, of course whether to include or exclude the period spent on eviction to calculate the thirty eight years period would be arrived at, at the time of registration. However, for the time being, as submitted by the petitioners' counsel, question of filing an application as per S.8 of the Arbitration & Conciliation Act does not arise. More over, he has not made a counter claim. Further more, what is noted is, the agreement provides that at the first instance, property has to be made vacant so as to take possession. In the circumstances, question of payment of stamp duty does not arise unless possession of the property is taken over by the petitioner. At the time of registration and taking possession of the property, question of paying stamp duty arises. So far as surrender by way of waiver also wonld not arise as it is stated by the respondents in the suit filed by them that the possession would be handed over immediately after the schedule property becomes vacant. On the ground that there is breach of terms of the contract and also in stead of handing over possession of the property as per the original terms, the respondents started agitating on other aspects.
Be that as it may, on going through the terms of the agreement, this Court is of the view that the matter requires to be dealt by the Arbitrator to be appointed. Justice L Sreenivasa Reddy, former Judge of the High Court is appointed as Arbitrator to conduct arbitration proceedings at the Arbitration Centre, Bangalore, as per the Arbitration & Conciliation Act, 1996 r/w the Arbitration Central Rules. Parties are directed to appear before the Arbitration Centre on 19 December, 2014. All contentions are left open to be urged. Registry to intimate the same to the Arbitration Centre, Bangalore.
Petition is disposed of.