The main legal point established is that the existence of a live dispute and the validity of the arbitration clause are crucial factors in appointing an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

JUDGMENT :

1. In this petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Karamsad Urban Cooperative Bank Ltd. (in liquidation) has approached this Court with a prayer that an independent and impartial person be appointed as a sole arbitrator to decide the dispute between the parties.

2. Facts in brief are that the petitioner bank owned certain buildings which they wanted to give on rent. The respondent no.2 – Post Master invited tenders on 25.04.1969 for requirement of accommodation at Karamsad Village for a post office including a residential house for the post master. The petitioner was one of the bidders. The bid of the petitioner was found acceptable and therefore, a lease agreement was entered into between the petitioner-bank and the Senior Superintendent of Post, Kheda Division, Nadiad, (now Anand). The lease agreement commenced from 01.07.1969 with a monthly rent of Rs.200/- for a period of five years expiring on 30.06.1974.

3. The case of the bank is that on 05.03.1974 before the expiry of lease, the petitioners demanded increase of rent of Rs.200/- to 300/- which was not paid but the respondents continued to occupy the premises. On 03.08.1979, the petitioner bank refused to accept the monthly rent and issued a notice on 21.07.1981 for the respondents to vacate the premises. Verbal communications were exchanged, according to the petitioner for increase of rent. On a joint meeting in February, 1992 between the petitioners and the respondents, it was agreed that the rent would be payable at the rate of Rs.3/- per square feet per month amounting to Rs.5544/- per month from 01.03.1992. According to the petitioners, the respondents continued to default and therefore a legal notice was sent on 23.09.1999. On 09.07.2019, the petitioner received a letter dated 02.07.2019 from the respondents to renew the lease. On 25.07.2019 the petitioners informed that since the bank has gone into liquidation, the respondents should vacate the premises, unless they would want to initiate arbitration in accordance with the arbitration clause on the lease agreement. On 23.01.2020, the premises was handed over by the respondents to the petitioner bank, however, since there was a continued default of payment of outstanding dues of Rs.1,31,44,016/- of lease rent from 1979 to 1992, the respondents were served a legal notice from the petitioner on 06.02.2020, asking for arrears of rent and also inviting the respondents to appoint an independent arbitrator. Since no response was received from the respondents, the present Arbitration Petition under Section 11(6) of the Act has been filed.

4. An affidavit in reply has been filed by the respondents opposing the petition on the ground of delay. A rejoinder has been filed explaining the conduct of the respondents and disputing that the petition under Section 11(6) be dismissed on the ground of delay.

5. Mr.Premal Rachh learned counsel for the petitioner would submit as under:

A. Inviting the attention to the lease agreement of 1969, Mr.Rachh submitted that unequivocally and undisputedly, there was an arbitration clause in the lease agreement. Once there was an arbitration clause in the lease agreement, which is undisputed, the only consideration that should weigh with this Court is to appoint an arbitrator in accordance with the provisions of Section 11(6) of the Act without entering into the disputes with regard to the limitation that has been placed by the respondents.

B. Even otherwise, Mr.Rachh would submit that it is evident from the communication dated 02.07.2019 (Annexure-I page, 36) of the petition itself that the post office i.e. the respondents themselves intended to renew the lease agreement. A reference thereto has been made and therefore there was continued cause of action and there was no delay in raising the dispute and requesting for appointing of an arbitr