Allowed

M/S Jana Small Finance Bank Limited v. Mr Manoj Narandas Samani

Karnataka HC22 Nov 2023CMP/376/2022

Case brief

AI extract

What is this about?

The High Court allowed a petition filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator pursuant to a valid arbitration clause in a 2017 Lease Agreement, ruling that prior amicable resolution attempts were satisfied by legal notices issued by the petitioner, and appointing a retired District Judge to conduct the proceedings.

What did the court decide?

The petition was allowed, and Sri. Kukkaje Ramakrishna Bhat was appointed as the sole Arbitrator to conduct proceedings at the Arbitration and Conciliation Centre, Bengaluru.

M/S Jana Small Finance Bank Limited Vs Mr Manoj Narandas Samani — Arbitration | Karnataka HC (2023)

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF NOVEMBER, 2023 BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD CIVIL MISC. PETITION NO. 376 OF 2022

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BETWEEN:

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M/S JANA SMALL FINANCE BANK LIMITED (COMPANY) FORMERLY KNOWN AS JANALAKSHMI FINANCIAL SERVICES LIMITED) REPRESENTED BY ITS ZONAL FACILITIES MANAGER, MR LAKSHMINARAYANA BENARJI I K, S/O MR KAMESHWARA RAO K, AGED ABOUT 53 YEARS, HAVING ITS REGISTERED OFFICE AT THE FAIRWAY BUSINESS PARK, NO.10/1, 11.2 AND 12/2B OFF DOMLUR, KORAMANGALA INNER RING ROAD, NEXT TO EGL, CHALLAGHATTA, BENGALURU-560071.

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Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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…PETITIONER

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(BY SRI. MANOJ, ADVOCATE FOR SRI. MAHABALESHWAR CHITRIGEMATH., ADVOCATE) AND:

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MR MANOJ NARANDAS SAMANI

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S/O NARANDAS DWARKADAS SAMANI, AGED ABOUT 54 YEARS, R/AT 6A-605/606 WHISPERING PALMS, NEAR SHRI SI BABA TEMPLE,

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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LOKHANDWALA TOWNSHIP, KANDIVALI (E), MUMBAI-400101.

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MR SANJAY NARANADAS SAMANI S/O NARANDAS DWARAKADAS SAMANI, AGED ABOUT 50 YEARS, R/AT 6A-605/606, WHISPERING PALMS, NEAR SHRI SI BABA TEMPLE, LOKHANDWALA TOWNSHIP. KANDIVALI (E), MUMBAI-400101.

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…RESPONDENTS

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(BY SRI.AKSHAY KUMAR JAIN V.,ADVOCATE)

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THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(5) AND (6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT THE SOLE ARBITRATOR AS PER CLAUSE 38 OF THE LEASE AGREEMENT DATED 03/01/2017 AS PER ANNEXURE-B ENTERED INTO BETWEEN THE PARTIES, FOR ADJUDICATION OF DISPUTES THAT HAVE ARISEN BETWEEN THE PETITIONER AND THE RESPONDENTS.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This petition is filed for appointment of a sole Arbitrator relying upon the agreement for arbitration in the Lease Agreement dated 03.01.2017. The agreement for arbitration reads as under:

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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“The parties agree that in case of any dispute arising in respect of this Agreement, the Parties shall first endeavour to resolve it amicably. If an amicable resolution to the dispute is not possible, then the dispute shall be referred to arbitration by a sole arbitrator appointed by mutual consent the Lessee in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996 as may be amended from time to time. The decision of the sole Arbitrator so appointed shall be binding upon the Parties. The arbitration proceedings shall be held at Bangalore and conducted in the English language. Subject to the foregoing, courts in Bangalore shall have exclusive jurisdiction with regards to all matters arising out of this Agreement. The governing law of this Agreement shall be laws of the Republic of India.”

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This Lease Agreement has been rectified on 18.08.2017 but without in any manner altering the agreement for resolution of disputes by arbitration. Initially, the petitioner and the respondents have exchanged communications on termination of the Lease Agreement and the amounts payable consequent to such termination, and

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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thereafter, the petitioner has ensured that the legal notices are issued on 09.09.2021 and 10.01.2022 invoking the arbitration agreement and raising a claim for a sum of Rs.20,86,656/-.

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If the learned counsel for the petitioner relies upon the afore to contend that the petition must be allowed, the learned counsel for the respondents submit that the respondents, apart from disputing the liability to pay a sum of Rs.20,86,656/, would contend that the petition is not maintainable because the petitioner has not explored the possibility of a mediation as contemplated under the agreement for arbitration.

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It would suffice for this Court to observe that the notice issued on behalf of the petitioner must be treated as entreaties for amicable resolution, and if the respondents have not responded to such notice, at this stage they cannot be permitted to contend that the agreement for arbitration is invoked even

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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without measures being taken to resolve the dispute amicably. Hence, petition must be allowed leaving open all the questions which would generally be available to be decided in the arbitral proceedings. Therefore, the following:

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ORDER

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[a] The petition is allowed.

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[b] Sri. Kukkaje Ramakrishna Bhat, a

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retired District Judge, is appointed as the sole Arbitrator to enter reference of the dispute between the petitioner and the respondents and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Centre.

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[c] The Registry is directed to communicate this order [by E-mail] to the Arbitration and Conciliation Centre (Domestic and International), Bengaluru,

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NC: 2023:KHC:41925 CMP No. 376 of 2022

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and Sri. Kukkaje Ramakrishna Bhat, a retired District Judge, Address: No.2, 1st Cross, Judicial Layout, Sanjaynagar, RMV II Stage, Bengaluru – 560 094 [Email: [email protected]], as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.

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Sd/JUDGE

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AN/-

M/S Jana Small Finance Bank Limited v. Mr Manoj Narandas Samani

Case brief

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M/S Jana Small Finance Bank Limited v. Mr Manoj Narandas Samani

Case brief

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