The Commercial Court retains jurisdiction to adjudicate disputes if the relevant agreements are deemed separate and not interconnected, despite the existence of an arbitration clause in one agreement.

JUDGMENT :

J. Sreenivas Rao, J.

This appeal under Section 13 of the COMMERCIAL COURTS ACT , 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 has been filed against the order dated 10.06.2024 passed in C.O.S.No.31 of 2021 by the Commercial Court in the Cadre of District Judge for Trial and Disposal of Commercial Disputes at Hyderabad, (for short, ‘Commercial Court’) by which the application filed by appellant/defendant No.1 seeking rejection of the plaint under Section 8 of the Arbitration and Conciliation Act, 1996 read with Order VII Rule 11(a) & (b) read with Section 151 of Code of Civil Procedure, 1908 (C.P.C.) was dismissed.

2. Heard Sri G. Vidya Sagar, learned Senior Counsel representing Sri Sai Prasen Gundavaram, learned counsel for the appellant, and Sri Sunil B. Ganu, learned Senior Counsel representing Ms. Manjari S. Ganu, learned counsel for respondent No.1.

3. The appellant herein is defendant No.1 and respondent No.1 herein is the plaintiff in C.O.S.No.31 of 2021. For the sake of convenience, the parties shall be referred to in this order as per their ranking in C.O.S.No.31 of 2021.

4. BRIEF FACTS:

i) The plaintiff is a company registered under the Companies Act, 1956 and it had entered into an operational lease agreement dated 16.10.2019 with defendant No.1 company in respect of 30 nos. of Volvo FMX 460 33 Cu.M Coad Body Tippers and the said operational lease agreement was executed at Gurugram, Haryana. The defendant No.1 defaulted in payment of monthly lease rental of the Volvo Tippers from the 1^st month itself and failed to pay the rents from November, 2019 to August, 2020. Subsequent thereto, the plaintiff and defendant No.1 have entered into Memorandum of Understanding (MOU) in furtherance of the operational lease agreement on 05.01.2020, whereby the original operational lease agreement was modified/revised.

As per MOU, defendant No.1 was agreed to pay the rents from 20.01.2020 along with interest @ 13% p.a. as against the rate of 18% p.a. as per the operational lease agreement dated 16.10.2019. Despite repeated demands, defendant No.1 did not perform any part of the obligations. Thereafter, defendant Nos.1 to 3 approached the plaintiff in the month of February 2020 stating that defendant No.1 was independently awarded works of contract in Odisha and proposed joint venture with the plaintiff and offered to share 50% of the profits in the revenue accrued and also to refund the working capital to the plaintiff and accordingly, the plaintiff and defendant No.1 entered into joint venture agreement dated 21.02.2020. According to the said joint venture agreement, the plaintiff is allowed to withdraw an amount of Rs.3 lakhs every month from the month of January 2020. However, defendant No.1 did not perform any part of the obligations as agreed and the joint venture agreement dated 21.02.2020 was never acted upon. As defendant No.1 failed to pay the rents from November, 2019 to August, 2020, the plaintiff filed C.O.S.No.31 of 2021 seeking a direction to the defendants to jointly and severally pay an amount of Rs.10,93,05,243/- in respect of the Lease Agreement dated 16.10.2019 along with future interest @ 13% per annum from the date of suit till realisation and sought another relief directing defendant No.1 to pay an amount of Rs.33,41,069/- being amounts refundable by them towards initial capital investment and other expenses in respect of the joint venture agreement dated 21.02.2020 along with future interest @ 13% per annum from the date of suit till realisation.

ii) In the said suit, defendant No.1 filed an application in I.A.No.73 of 2022 under Sect