The court emphasized the importance of demonstrating the denial or repudiation by the other party when invoking the provisions under section 11(6) of the AC Act. It also highlighted the need to consider the validity of the arbitration clause, scope of the dispute, and arbitrability before exercising the powers under the AC Act.

JUDGMENT :

M/s Reach Global has approached this Court through its partner Lalit Prakash for appointment of an Arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 (in short, AC Act).

2. Briefly stated, the applicant entered into Development Agreement dated 28th July 2020 for developing a piece of land admeasuring about 17 Kathas comprised under Mauza-Kokar within Thana Sadar (Thana No. 197), corresponding to Holding No. 874/A within Ward No. 8 of the district-Ranchi. The aforesaid Development Agreement contains a clause for arbitration under Article IX which deals with legal procedures. Sub-clause 4 to Article IX provided that the parties had agreed that all dispute between the land owner and the developer shall be referred to sole arbitrator in accordance with the provisions of the AC Act. According to the applicant, some dispute arose with the land owners on account of which it became necessary for it to invoke the aforesaid arbitration clause for resolution of the dispute through arbitration. The applicant has therefore issued letter dated 18th January 2022 to each of the respondents separately putting them on notice that on account of their failure to adhere to the terms of the Development Agreement it has suffered the anticipated loss which has been assessed at Rs.4,10,98,860/-.

3. The scheme of the AC Act indicates that existence of a dispute between the parties is the jurisdictional fact only upon pleading of which the provisions under the AC Act can be resorted to. A dispute shall arise only when there is a claim made by one party which has been denied or repudiated by the other. Therefore, merely raising a claim is not sufficient for invoking the provisions under section 11(6) of the AC Act unless it is demonstrated before the Court that by not responding to the written notice by the aggrieved party the other party has shown his denial. In “Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority” (1988) 2 SCC 338 the Honb'le Supreme Court has held that in the matters of commercial transaction it is necessary that there should be a claim raised by one party and a specific denial made by the other. Other important issues which need to be considered by the Court before the powers under section 11(6) of the AC Act are exercised are: (i) whether there is a valid arbitration clause, (ii) whether the dispute falls within the scope of the arbitration clause and (iii) whether the dispute is arbitrable.

4. Notice by the applicant to the respondents is extracted hereinbelow :

From,

M/s. Reach Gobal, a partnership firm working in the name and style of “Ayushman Construction” through its partner Lalit Prakash R/o Flat No. 202, Aparna Apartment, P.S. Sadar, P.O. Bariyatu, Cheshire Home Road, Bandhgari, Ranchi, having its office at C/o Ayushman Construciton, Neel Ratan Street, Upper Bazar, Ranchi.

To,

(1) Rajeev Ranjan, Resident of Lohia Park, Kokar, Police Station Sadar, District, Ranchi.

(2) Sanjeev Suman Resident of Lohia Park, Kokar, Police Station Sadar, District, Ranchi.

(3) Sanjay Sundaram”

Resident of Lohia Park, Kokar, Police Station Sadar, District, Ranchi.

Subject:-Invocation of Arbitration Clause in terms of Article IX-Legal Procedure, clause (4) of the development agreement dated 28th July, 2020

Dear Sir,

You all are aware that development agreement dated 28th July, 2020 was entered between us for development of land measuring 17 Katha, Mouza Kokar, Thana Sadar, Thana no. 197, Holding no. 874/A, ward no. 8. District, Ranchi.

Rajeev Ranjan by virtue of family arrangement being seized, possessed and the absolute owner of 5 Katha of Land in Khata No. 95 & 188, Plot No. 718-H in Mouza Kokar purchased by her mother Late Krishna Yadav vide Deed No. 5950 dated 11.06.1989 from one Veena Devi Lohiya through her Power of Attorney Holder Vijay Kumar Lohia, registered before the office of the sub registrar Ranch