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IN THE HIGH COURT OF DELHI AT NEW DELHI
Suresh Kumar Kait, J.
Sidharth Sawhney - Appellant
Versus
M/s French Bakery Pvt Ltd & Ors. - Respondents
Arbitration Petition No. 1084 of 2021
Decided On : 15-12-2021
Arbitration - Appointment of Sole Arbitrator - The court appointed a sole arbitrator to adjudicate the dispute between the parties under Section 11 of the Arbitration and Conciliation Act, 1996 read with Section 2 of the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Court, 2015.
Fact of the Case:
The petitioner sought the appointment of a sole arbitrator to adjudicate the disputes with the respondents, who were in peaceful occupation and possession of a property leased from the petitioner. The respondents defaulted in making rent and other payments, leading to the petitioner invoking the arbitration clause and filing the present petition.
Finding of the Court:
The court found that the respondents were deemed to be served, as evidenced by the documents annexed with the affidavit of service filed by the petitioner. Despite being served, the respondents did not appear before the court, indicating their lack of opposition to the petition. The court deemed it appropriate to appoint its arbitrator to adjudicate the disputes between the parties.
Issues: The issues involved the default by the respondents in making rent and other payments, the invocation of the arbitration clause by the petitioner, and the appointment of the sole arbitrator to adjudicate the disputes.
Ratio Decidendi: The court's decision was influenced by the default in payments by the respondents, the lack of opposition from the respondents, and the invocation of the arbitration clause by the petitioner, leading to the appointment of a sole arbitrator.
Final Decision: The court allowed the petition and appointed Mr. Amar Nath, DHJS (Retd.) as the sole arbitrator to adjudicate the dispute between the parties. The fee of the arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996, and the arbitrator shall ensure compliance with Section 12 of the Act before commencing the arbitration. The present petition stands disposed of.
JUDGMENT
Suresh Kumar Kait, J. - The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 read with Section 2 of the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Court, 2015 seeking appointment of sole Arbitrator to adjudicate the disputes with respondents.
2. Respondent no.1 is a private limited company and engaged in the business of patisseries/bakery retail operations. Respondent no.2 is the Managing Director of the company and respondent no.3 is the Chairman and also one of the Director of the company, however, none has appeared on behalf of the respondents.
3. As per office report from Registry, service report qua notice to respondents through courier, speed post, email, fax and Whatsapp is awaited. Further, as per the office report from the Registry, notice sent to respondent no.1 through the ordinary post is served.
4. As per the affidavit of service filed by petitioner, service upon respondents have been affected through speed post and courier as the same is evident from the documents annexed with the affidavit of service filed by learned counsel for the petitioner. Considering the aforesaid facts, it can be said that respondents are deemed to be served, but despite that respondents have preferred not to appear before this Court. It seems that respondents have nothing to oppose in the present petition.
5. As per the averments made by petitioner, petitioner is the sole and absolute owner of the property bearing no.SG-22, Galleria Shopping Mall, Phase-IV, DLF Qutab Enclave Complex, DLF City, Gurgaon admeasuring 961 sq. ft.
6. According to the petitioner, respondents approached him for taking a portion admeasuring 602 sq. ft (super area) and 421 sq. ft. (covered area) of the above-mentioned property on lease. They further requested the petitioner to let out the aforementioned portion on the monthly rental basis as they wanted to carry out their business of patisseries/bakery retail operations from the said portion. Upon the aforesaid proposal, a lease deed was executed between the parties on 20.04.2018 and petitioner let out the aforementioned portion of the premises to the respondents for a period of 6 years commencing from 01.02.2018 to 31.01.2024 out of which first 3 years shall be the lock-in-period from 01.02.2018 to 01.02.2021. Since then the respondents are in peaceful occupation and possession of the aforementioned premises.
7. Thereafter, the respondents started defaulting in making the payment of rent and other applicable charges, TDS and GST when the cheque for a sum of Rs.5,93,376/- bearing cheque no.726886 dated 04.03.2020 drawn on Yes Bank issued by the respondents to the petitioner got dishonoured and returned unpaid vide bank memo dated 05.03.2020 with remarks "Funds Insufficient". Petitioner immediately through his employee sent an email to one Mr.Raman Oberoi, authorised representative of respondents informing about the dishonour of the abovementioned cheque and requested to make payment through RTGS. However, Mr.Oberoi neither replied nor complied with the above request. Petitioner again through his employee sent email to Mr.Oberoi demanding aforementioned due payment but of no avail. As Mr.Oberoi was not responding, petitioner sent email to Mr.Oberoi asking about the issue and in response to that, Mr.Oberoi sent reply by email stating that "Our main bank is with Yes Bank and our major funds get stuck with Yes Bank, I believe the things will resolve within couple of days, till then bear with us."
8. It is submitted that on 20.03.2020, respondents made part payment of Rs.3,00,000/- to the petitioner and promised that balance payment of Rs.2,93,376/- shall be made as soon as possible. On 24.03.2020, respondent no.1 along with Chairman and Director (respondent no.3) requested for waive off rent and other charges from 22.03.2020 due to lockdown, however, petitioner refused the same. Against the payment of rent and other charges, petit
The main legal point established in the judgment is the court's authority to appoint a sole arbitrator to adjudicate disputes under the Arbitration and Conciliation Act, 1996, in cases where one part....
Court has the authority to appoint a sole Arbitrator under Section 11 of the Arbitration and Conciliation Act when parties fail to fulfill contractual obligations.
The main legal point established is the court's authority to appoint a sole arbitrator under Section 11(6) of the arbitration and Conciliation act, 1996 when the parties fail to mutually appoint one,....
The court can appoint an Arbitrator when parties fail to mutually agree, as per agreement provisions and arbitration law.
Appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 in cases of serious breach of lease terms.
The court's decision emphasizes the importance of arbitration in resolving disputes and upholding the terms of the arbitration agreement.
Court emphasized that a party's failure to respond to notices regarding breach of contract leads to the appointment of an arbitrator to resolve disputes, as stipulated by the Arbitration and Concilia....
Where a party defaults on contractual obligations and fails to contest a petition for arbitration, the court may appoint a sole arbitrator to adjudicate the dispute.
The court appointed a sole Arbitrator to resolve disputes following a consented arrangement among parties, acknowledging interlinked agreements under the Arbitration and Conciliation Act, 1996.
The court's decision was based on the deliberate non-appearance of the respondents and the petitioners' compliance with the legal requirements for appointment of a sole arbitrator.
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