Allowed

Mr. Rudra Pratap Singh v. M/S Siddharta Resorts and Foods

Karnataka HC5 Jul 2023CMP/89/2023

Case brief

AI extract

What is this about?

The High Court at Bengaluru allowed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, appointing a sole arbitrator. The Court held that the arbitration clause survived the termination of the lease deed invalidating objections regarding lost title or contract termination, permitting adjudication of claims raised by both parties.

What did the court decide?

Appointment of Hon’ble Mr. Justice B. Veerappa, Former Judge, High Court of Karnataka, as sole arbitrator to adjudicate disputes.

Mr. Rudra Pratap Singh Vs M/S Siddharta Resorts and Foods — Arbitration | Karnataka HC (2023)

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NC: 2023:KHC:23203 CMP No. 89 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF JULY, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R DEVDAS CIVIL MISC. PETITION NO. 89 OF 2023

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BETWEEN:

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MR. RUDRA PRATAP SINGH S/O MR. GAJENDRA SINGH, AGED ABOUT 43 YEARS,

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MS. SHRUTI KIRTI DEVI, D/O MR. GAJENDRA SINGH, AGED ABOUT 43 YEARS,

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BOTH PETITIONER NOS.1 AND 2 ARE R/AT 'SHREEYUM', BENGALURU PALACE COMPOUND, RAMANA MAHARISHI ROAD, BENGALURU – 560 080.

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Digitally signed by JUANITA THEJESWINI Location: HIGH COURT OF KARNATAKA

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M/S. RAJ SAFARI PRIVATE LIMITED, A COMPANY INCORPORATED UNDER

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THE PROVISION OF COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT: 'SHREEYUM', BENGALURU PALACE COMPOUND, RAMANA MAHARISHI ROAD, BENGALURU – 560 080. REPRESENTED BY MANAGING DIRECTOR, RUDRA PRATAP SING.

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…PETITIONERS

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(BY SRI. SOURABH R KURUBARAHALLI, ADVOCATE AND SRI.PAWAN KUMAR M.N., ADVOCATE)

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NC: 2023:KHC:23203 CMP No. 89 of 2023

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AND:

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M/S. SIDDHARTA RESORTS AND FOODS PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956, NO. 4/13-1, CRESCENT ROAD, BENGALURU – 560 001. REPRESENTED BY ITS MANAGING DIRECTOR, THARUNKUMAR PATHAPATI

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…RESPONDENT (BY SRI. VIJAYA SHEKARA GOWDA V., ADVOCATE)

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THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11 (5) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO I. APPOINT A SOLE ARBITRATOR TO REFER THE DISPUTES BETWEEN THE PETITIONER AND THE RESPONDENTS RAISED IN NOTICE DATED 24.12.2022 AT ANNEXURE-C AS PER CLAUSE 25 OF LEASE DEED DATED 07.07.2010 PRODUCED IN ANNEXURE-A; II. GRANT SUCH OTHER RELIEFS AS THIS HONBLE COURT DEEM FIT IN THE CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF EQUITY AND JUSTICE.

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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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R.DEVDAS J., (ORAL):

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This Civil Miscellaneous Petition is filed under Section

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11(6) of the Arbitration and Conciliation Act, 1996 seeking

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3 - NC: 2023:KHC:23203 CMP No. 89 of 2023

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appointment of a sole arbitrator to resolve the disputes between the parties herein in terms of Clause 25 of the Lease Deed dated 07.07.2010 at Annexure-A.

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The petitioners entered into a lease deed dated 07.07.2010 with the respondent-company, wherein the respondent-Company became a lessee in respect of the scheduled property. Petitioner No.3 is a confirming party in the agreement. The petitioners terminated the lease deed by issuance of a notice dated 04.06.2022 at Annexure-B. The respondent herein caused a legal notice dated 24.12.2022 to petitioners herein, raising certain demands and grievances. The respondent claimed a sum of Rs.8,26,40,196/- as charges for use and occupation of a portion of the property, which was allegedly, illegally retained by the petitioners. The respondent invoked the arbitration clause contained in Clause No.25 of the lease deed and nominated a retired district judge to arbitrate the matter. The petitioners gave a reply dated 04.01.2023 (wrongly mentioned as 04.01.2022) at Annexure-D, not

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NC: 2023:KHC:23203 CMP No. 89 of 2023

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accepting the arbitrator suggested by the respondent, while nominating another retired district judge as an arbitrator on behalf of the petitioners herein.

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Learned counsel for the petitioners submits that

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the respondent filed a petition invoking Section 9 of the Arbitration and Conciliation Act, 1996, before the Commercial Court at Chamarajanagara. During the course of the proceedings before the Commercial Court, an observation was made by the Commercial Court that since there is an arbitration clause contained in the lease deed, the aggrieved parties have to seek the appointment of an arbitrator. Consequently, this civil miscellaneous petition has been filed by the petitioners seeking the appointment of a sole arbitrator in terms of Clause 25 of the lease deed to resolve the disputes arising between the parties in the contract.

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Learned counsel for the respondent, on the other hand, seeks to submit that the petitioners have sold the property in question in favour of a third party, and

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5 - NC: 2023:KHC:23203 CMP No. 89 of 2023

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therefore, the petitioners have no locus-standi to file this civil miscellaneous petition invoking the arbitration clause contained in the lease deed dated 07.07.2010. It is submitted that these relevant facts have not been stated by the petitioners in the petition.

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Having heard the learned counsel for the petitioners, learned counsel for the respondent and on perusing the petition papers, this Court finds that an objection is sought to be raised at the hands of the respondent that some third parties have been inducted into the third petitioner, M/S.Raj Safari Private Limited, a company registered under the Companies Act, 1956, and the fact that the property has been sold to the third parties is not disclosed in the petition and for the same reasons since the petitioners are no longer the owners of the schedule property, they have no locus-standi to invoke the arbitration clause contained in the lease deed. It is furthermore, sought to be submitted that when admittedly, the petitioners terminated the lease deed on

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NC: 2023:KHC:23203 CMP No. 89 of 2023

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04.06.2022, the lease deed is no more in existence and therefore, the arbitration clause could not have been invoked by the petitioners.

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Both of these arguments cannot be accepted,

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since the law is well settled that even if the contract is terminated, the arbitration clause contained in the contract continues to be in existence to enable the resolution of the disputes that arose between the parties under the contract. Reference may be made to the following decisions of the Hon'ble Supreme Court;

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i) Branch Manager, Magma Leasing & Finance Limited And Another Vs. Potluri Madhavilata And Another, (2009) 10 SCC 103 and

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ii) National Agricultural Coop. Marketing Federation India Ltd., Vs. Grains Trading Ltd., (2007) 5 SCC 692.

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The other contentions of the respondent that

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the petitioners have lost the title to the property in question and therefore, they have no locus-standi to

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invoke the arbitration clause is also not acceptable, for the reason that if the disputes have arisen prior to termination of the contract and the resolution of such disputes arises out of the contract, the petitioners will have all the rights to have the disputes resolved in terms of the arbitration

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clause. Even otherwise, all these contentions may be raised by the respondent before the arbitrator. For the foregoing reasons, this Court is of the considered opinion that the petitioners have made out a case for the appointment of an arbitrator in terms of the arbitration

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clause contained in the lease dated 07.07.2010 at Annexure-A. Since, the respondent has also raised certain claims against the petitioners, the respondent is also permitted to raise a claim before the arbitrator. Consequently, this Court proceeds to pass the following :

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ORDER

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(a) The petition is allowed appointing Hon’ble Mr.Justice B.Veerappa, Former Judge, High Court of Karnataka, as the sole arbitrator to enter reference of the

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NC: 2023:KHC:23203 CMP No. 89 of 2023

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disputes between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre.

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(b) All contentions inter se parties are left open for adjudication in the arbitration proceedings.

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(c) The office is directed to communicate this order to the Arbitration and Conciliation Centre and to Hon’ble Mr.Justice B.Veerappa, Former Judge, High Court of Karnataka, as required under the Arbitration and Conciliation Centre Rules, 2012.

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Sd/JUDGE

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Mr. Rudra Pratap Singh v. M/S Siddharta Resorts and Foods

Case brief

What is this about?

What did the court decide?

Mr. Rudra Pratap Singh v. M/S Siddharta Resorts and Foods

Case brief

What is this about?

What did the court decide?

What the court decided

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