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2022 Supreme(Mad) 2053
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
G. Elumalai - Appellant
Versus
Raichand Daga & Another - Respondent
Arb. O.P (Com.Div.) No. 117 of 2022
Decided On : 09-06-2022
For the Petitioner:S. Krishnasamy, Representing R. Ramachandran, Advocates. For the Respondents:T. Karunakaran, Advocate.
The court emphasized the importance of seeking redressal through the appropriate legal channels, preserving the rights of the petitioner while disposing of the limited legal drill under Section 11 of the Arbitration and Conciliation Act, 1996.
Headnote:
Arbitration - Construction Agreement - Arbitration and Conciliation Act, 1996 (Act No.26 of 1996) - Section 11
Fact of the Case:
The petitioner filed an Arbitration Original Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator to resolve a dispute regarding the outstanding amount for construction work completed as per the agreement dated 01.02.2017.
Finding of the Court:
The court found that a suit had been filed by the respondents against the petitioner on the same primary contract and cause of action, resulting in an ex-parte decree in favor of the respondents. The court directed the petitioner to seek redressal before the Hon'ble Judge dealing with the Civil Suit roster to dislodge the ex-parte decree.
Issues: The issues revolved around the existence of the arbitration agreement, the ex-parte decree in favor of the respondents, and the appropriate course of action for the petitioner.
Ratio Decidendi: The court decided that the limited legal drill under Section 11 of the Arbitration and Conciliation Act, 1996, was disposed of as closed, preserving the rights of the petitioner to seek redressal for the ex-parte decree through the appropriate legal channels.
Final Decision: The Arbitration Original Petition was disposed of as closed, with the petitioner directed to seek redressal before the Hon'ble Judge dealing with the Civil Suit roster to address the ex-parte decree.
JUDGMENT
(Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint an Arbitrator to sort out the issue between the petitioner and the respondents regarding the outstanding amount of Rs.66,28,797/- along with interest for the construction work completed by the petitioner as per the agreement dated 01.02.2017.)
1. This order will dispose of the captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity].
2. Proceedings made by this Court in the earlier listings of the captioned Arb OP on 17.03.2022, 31.03.2022 and 21.04.2022 read as follows:
Proceedings dated 17.03.2022:
'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 20.10.2021 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity].
2. Mr.R.Ramachandran, learned counsel for petitioner who is before this Court submits that captioned Arb OP is predicated on an 'agreement dated 01.02.2017 and described as 'Construction Agreement' between the petitioner and two respondents' [hereinafter 'primary contract' for the sake of convenience and clarity]. Learned counsel goes on to say that captioned Arb OP is particularly predicated on clauses 9 and 10 of primary contract which read as follows:
9. Arbitration Clause
In case of differences of any sort, the client and the contractor will have the rights to bring in another respectable entity each, representing each side. This will need to be done within 7 days of the difference concern before choosing the legal route by either. In case the matter is not sorted by them then the 2 chosen entity will chose a single authority acceptable to both sides to settle matters. Only after this a legal recourse needs to be taken.
10. Legal Course
All legal issues will be address within Chennai jurisdiction only.'
3. Aforementioned clauses 9 and 10 of primary contract serve as an arbitration agreement between the sole petitioner and two respondents is learned counsel's say. To be noted 'arbitration agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.
4. Learned counsel for petitioner submits that arbitrable disputes erupted between petitioner and respondents qua primary contract as according to the petitioner certain running bills including bills for work done outside of the agreement on the basis of instructions were not honoured. Arbitration agreement was triggered by issue of notice dated 21.09.2021 and a reply dated 04.10.2021 was sent by respondents saying that the jurisdictional police have been approached.
5. The above has necessitated the presentation of captioned Arb OP in this Court with a prayer for appointment of a sole Arbitrator is learned counsel's say.
6. Prima facie case for issue of notice made out.
7. Issue notice to respondents returnable in a fortnight i..e, returnable by 31.03.2022. Private notice permitted.
8. List on 31.03.2022.'
Proceedings dated 31.03.2022:
1. 'Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 17.03.2022.
2.Mr.R.Ramachandran, learned counsel for the sole petitioner is before this Court.
3. Mr.T.Karunakaran, learned counsel who is before this Court submits that he has entered appearance on behalf of both the respondents and requests for some time to file counter affidavit as according to him there is serious disputation about the existence of the arbitration agreement. Learned counsel submits that there is a Civil Court decree. Learned counsel requests for time to file counter affidavit and bring it on Board. Request acceded to.
List three(3) weeks hence. List on 21.04.2022.'
Proceedings dated 21.04.2022:
1. 'Mr.S.Krishnasamy, learned counsel for Mr.R.Ramachandran, counsel on record fo
