A notice under Section 21 is not required for a Section 11 application, and the Consumer Forum does not have jurisdiction over counterclaims in a commercial dispute.

JUDGMENT :

Arijit Banerjee, J.:

1. This is an application under Section 11 of the Arbitration and Conciliation Act, 1996 (in short ‘the Act of 1996’), for appointment of an arbitrator for adjudication of disputes and differences that have arisen between the parties in relation to a Development Agreement dated December 15, 2006 (in short, ‘the said Agreement’) entered into by and between the parties. It is not in dispute that the said Agreement contains an arbitration clause for resolution of disputes and differences between the parties touching the said Agreement.

2. Schedule ‘F’ to the Development Agreement dated 15.12.2006 which contains the Arbitration Clause reads as follows:

“SCHEDULE ‘F’

ARBITRATION

1. All disputes and differences between the parties hereto arising out of this agreement regarding this constructing or interpretation of any of the terms and conditions herein contained or determination of any liability or touching these presents shall be referred to the arbitration and the same shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act, 1996 or any statutory enactment or modification thereunder and the Award so delivered shall be conclusive and binding on the parties hereto.

2. The Arbitrator shall have summary power.

3. The parties hereto agree and covenant with each other that they have full trust and faith in the Arbitrator and agree not to challenge and/or dispute the same in any manner whatsoever or howsoever.”

3. The respondents opposed the application primarily on two grounds. Firstly, it was argued that no notice under Section 21 of the Act of 1996 was given by the petitioner to the respondents. In the absence of such a notice, the present application is premature and not maintainable. Secondly, the respondents have filed a complaint against the petitioner before the National Consumer Forum, New Delhi, in relation to disputes arising out of the said Agreement. It was submitted that initiation of an arbitration proceeding by appointment of an arbitrator would mean that there will be parallel proceedings which ought not to be permitted. Although a third ground has been indicated in the written notes of argument filed by the respondents, i.e., the said Agreement is not registered as required under Section 17 of the Registration Act, this point was not argued when the matter was heard. In any event, this point can be rejected at the threshold since the said Agreement being of the year 2006, there was at that time no requirement for registering the said Agreement.

4. In support of his contention that for initiation of an arbitration proceeding, issuance of notice under Section 21 of the Act of 1996 is mandatory, learned Counsel appearing for the respondents has relied on several decisions. Prior to noting such decisions, it may be helpful to set out Section 21 of the Act of 1996:

“21. Commencement of arbitral proceedings.-Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”

5. Learned Counsel relied on the decision of the Delhi High Court in the case of Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd.: 2017 SCC Online Del 7228. Learned Counsel particularly relied on Paragraphs 25 and 30 of the said judgment which are set out hereunder:

“25. A plain reading of the above provision indicates that except where the parties have agreed to the contrary, the date of commencement of arbitration proceedings would be the date on which the recipient of the notice (the Petitioner herein) receives from the claimant a request for referring the dispute to arbitration. The object behind the provision is not difficult to discern. The party to the arbitration agreement against whom a claim is made, should know what the claims are. It is possible that in response to the notice, the recipient of the notice may accept some of t