The court upheld its jurisdiction to appoint an arbitrator in landlord-tenant disputes based on an arbitration clause, affirming party autonomy in jurisdictional matters despite objections.

JUDGMENT

Neena Bansal Krishna, J. (Oral)--A petition under Section 11(6) of the Arbitration & Conciliation Act, 1996 has been filed on behalf of the petitioner for appointment of an arbitrator.

2. It is stated that the petitioner Company which is the absolute owner of the shop bearing No. GF 67 & 68, Ground Floor, MGF Metropolitan Mall, MG Road, Gurgaon, Haryana entered into a Lease Agreement dated 18th January, 2016 with the respondent. According to the terms of lease, the period of tenancy was six years three months four days w.e.f. 1st April, 2016 with the initial rent being Rs.8,58,400/- per month plus service tax. In terms of the clause 3.2 of the Lease Agreement, the rent was escalated by 15% after every three years. The rate of rent last payable was Rs.11,35,234/- per month plus tax as applicable. An interest free refundable security of Rs.51,50,400/- was given by the respondent at the time of entering into the lease Agreement. Since about March, 2020 after the imposition of lock down due to outbreak of COVID 19, the respondent stopped paying the rent, taxes and the maintenance charges. Even the electricity charges were not paid.

3. A Legal Notice dated 4th August, 2020 was served by the respondent refuting its liability with respect to payment of rent w.e.f. 1st April, 2020 till 10th October, 2020 and also sought refund of the security amount along with interest @ 18% per annum. It also intended to surrender the possession of the tenanted shop to the petitioner. However, whenever the petitioner contacted for taking the possession, the respondent delayed it on one pretext or the other. Due to willful breach of terms and conditions of the lease deed and non-payment of rent and charges by the respondent, the petitioner was forced to invoke arbitration Clause 21.2 of the lease deed. The clause 21.1 and 21.2 of the lease deed are reproduced as under:

"21.1 If any dispute and/or difference arises between the parties hereto during the subsistence of this agreement or thereafter, in connection with the validity, interpretation, implementation or alleged material breach of any provision of this agreement or regarding any question, parties hereto shall endevour to settle such dispute amicably through mutual negotiations.

21.2 In the event such dispute or difference is not resolved within 15 (fifteen) days of written notice of existence of such dispute, the same shall be finally settled by a sole arbitrator to be mutually appointed by the Parties. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996. (or any other act applicable at that point of time). In case parties fail to appoint a sole arbitrator, either Party may approach the Competent Court of jurisdiction at New Delhi for appointment of an arbitrator."

4. A Legal Notice dated 06th August, 2020 for invoking the arbitration was served upon the respondent, who despite service neither responded nor took any steps for the appointment of arbitrator.

5. A reply dated 08th August, 2020 was sent by the petitioner to the notice of the respondent dated 04th August, 2020. It is claimed that dues of Rs.1,02,37,340/- collectively and applicable GST apart from maintenance, electricity and other charges are recoverable from the respondent. The petitioner has thus, filed the present petition for appointment of arbitrator.

6. The respondent in its reply has taken the preliminary objection that the respondent does not carry on the business within the territorial jurisdiction of this court. It is office is situated at Mumbai, as is indicated in the memo of parties. The Agreement containing the arbitration clause was also not executed within the territorial jurisdiction of this court. The Agreement containing the arbitration clause was executed at Gurugram, Haryana. No part of cause of action arose within the territorial jurisdiction of this court. Hence, the petition is not maintainable on the grounds of jurisdiction as