Point of law: Constitution of Arbitral Tribunal - Court has no jurisdiction to entertain an application under Section 9(1) of the Act, pending adjudication before this Court prior to constitution of Arbitral Tribunal, is no longer res integra.

ORDER :

Petitioner No.1 is a Partnership Firm, having its partners, petitioners No.2 to 5 and one more partner namely Rajesh Prahlad Rakesh, who was not partner at the time of execution of agreement with respondent, a sole proprietorship concern of Mr. Purav Chitalia.

2. Present petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), seeking following relief(s):-

“A The account being maintained by the respondent with ICICI Bank Dharamshala be order to be attached bearing number 050005001145 under name of Nibbana.

B. A receiver be appointed to maintain the affairs of the property and to secure the account’s so that the same may not be tampered with at any given point of time.

C. Any other order which this honourable court may feel just an appropriate in the facts and circumstances of the case be also passed in favour of the conditioner.”

3. Petitioners-firm has a Resort in the name and style of M/s Anandini Village Resorts in two different parts known as Anandini Village Resorts-I, consisting of Hotel alongwith open space in the shape of lawn and parking and Anandini Village Resorts-II, having four different built up structures adjacent to main Hotel structures.

4. For running Hotel and the aforesaid Resorts, petitioners entered into an agreement dated 23.8.2016 with respondent, whereby a lease was created in favour of the respondent by the petitioners. The said agreement was replaced by the agreement dated 3.7.2017 and lastly registered Lease Deed dated 21.5.2019 was executed between the parties having Arbitration Clause qua resolution of disputes arising thereto between the parties. As per Lease Deed, respondent had agreed to pay lease amount of Rs.1,40,16,000/- per annum to the petitioners-firm and the respondent was permitted to pay lease amount time to time on behalf of the petitioner towards expenditure for completion of interior work of the Hotel as documented in the worksheet prepared by the parties.

5. Petitioners have raised loan for construction of aforesaid Resorts by creating charge on the part of the property by mortgaging the same with the Bank.

6. It was also agreed between the parties that in case respondent is unable to pay monthly rent amount, then petitioners-firm shall be comfortable to adjust the amount required to be paid by the petitioners under the worksheet against the monthly rent payable by the respondent and in case the petitioners-firm, due to unavoidable circumstances, defaults to pay any installment to the bank, it may request the respondent to directly pay the lease amount or any part thereof to the bank.

7. Possession of the Resorts was handed over to the respondent from 1.1.2019 and the Hotel started running in April, 2019.

8. A dispute arose between the parties alleging defaults, breach and various acts of omission and commission on the part of each other leading to issuing of legal notice(s) and reply(ies) thereto and ultimately respondent had issued a letter, nominating an Arbitrator for resolution of dispute with a request to petitioners to nominate second Arbitrator so as to enable the Arbitrators, so nominated, to commence the arbitration proceedings, after nominating third Arbitrator with consent.

9. Respondent had filed an application under Section 9 of the Act in the Court of learned District Judge, Kangra at Dharamshala, which was decided on 9.10.2020, restraining the petitioners from trespassing or causing any hindrance in the property in question, and also from interfering in peaceful possession of the respondent which was disputed by the petitioners and the respondent was also directed to pay the lease amount strictly in accordance with the Lease Agreement/ Memorandum of Understanding. The interim order was to remain in force for a period of 90 days from the date of order i.e. 9.10.2020.

10. For not nominating an Arbitrator by the petitioners, process of constitution of Arbitral Tribunal, as provided under the Lease Deed, c