Allowed

Ravinder Singh Arora v. Intellistay Hotels Private Limited

Telangana HC7 Oct 2020ARBAPPL/68/2018

Case brief

AI extract

What is this about?

High Court of Telangana allowed an application under Section 11 of the Arbitration and Conciliation Act to appoint an arbitrator regarding a lease dispute. The Court nominates a former Judge as sole arbitrator, disregarding the multi-arbitrator clause, and dismisses the respondent's plea for delay.

What did the court decide?

Appointment of Sri Justice P.S. Narayana, former Judge, High Court of Andhra Pradesh, as the sole Arbitrator to resolve the disputes between the parties.

Ravinder Singh Arora Vs Intellistay Hotels Private Limited — Arbitration | Telangana HC (2020)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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WEDNESDAY, THE SEVENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY

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PRESENT

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THE HONOURABLE SRI JUSTICE A. RAJASHEKER REDDY

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ARBITRATION APPLICATION NO: 68 OF 20'18

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Between:

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Ravinder Singh Arora, S/o Late Mohinder Singh Arora, Aged about 51 years, Occ-Business, resident of H.No. 1-8-55, Venkatraonagar Colony, P.G.Road, Secunderabad

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Mrs. Simran Arora, Wo Ravinder Singh Arora, Aged about 46 years, OccBusiness, resident of H.No. 1-8-55, Venkatraonagar Colony, P.G.Road, Secunderabad

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Miss. Daljeet Kaur, D/o Late Mohinder Singh Arora, Aged about 55 years, OccBusiness, All are resident of H.No. 1-8-55, Venkatraonagar Colony, P.G.Road, Secunderabad

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...Petitioners/Applicants

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AND

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lntellistay Hotels Private Limited, having its registered office at . 204, Windfall, Sahar Plaza, J.B.Nagar, Andheri Kurla Road, Andheri East, Mumbai^- 400 059 represented by its CEO and Managing Director and also at 1st Floor, Shanker Emporium, Attavar, Mangalore - 575001

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...RespondenURespondent

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Arbitration Application under Section 11 (5) and 11 (6) of the Arbitration and Conciliation Act, 1996,^praying that in the circumstances stated in the affidavit filed therewith the High Court may be pleased to appoint Arbitrator in terms of Clause No. 19.10 of the lndenture of Lease dated 16-3-201'1 , bearing Document No. 408 of2011 and lndenture of Lease daled. 27-9-2013, bearing Document No. 1795 of 2013 between the petitioners and respondent.

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This Application coming on for hearing, upon^perusing the Application and affidavit filed in support thereof, and upon hearing the arguments of Sri Kishore Rai, Advocate for the Applicants and of Sri Durga Bose Gandham, Advocate for the Respondent.

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The Court made the following: ORDER

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THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY

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Arbitration Application No.68 of 2018

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ORDER

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This application is filed under Section l1(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking to appoint an arbitrator in terms of Clause No.19.10 ol the indenture of lease dated 16.03.2011, bearing document No.408 of 2011, and Indenture of Lease dated 27.09.2013, bearing document No.1795 of 2013 between the applicants and the respondent.

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The case of the applicants is that they are the owners of the subject property, and they leased out the said property under the lease deeds dated 16.03.2011 and 27.09.2013 to the respondent for running restaurant and hotel businesses. Clause 19.10 in both the lease deeds provides for arbitration clause.

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The further case of the applicants is that the respondent committed default in payment of rents, and that he also damaged the property. That after negotiations on 09.10.2017, the respondent had handed over the termination letter, but however failed to 'settle the dues payable to the applicants, to a tune of Rs.3,79,63,149/-, and that the respondent agreed to clear the dues by 31.03.2018, but failed to pay the amount. Therefore, to resolve the disputes, the applicants got issued notice dated 19.04.2018 to the respondent, invoking the arbitration clause, and suggesting a namecl arbitrator. Though the respondent received the same, failed to respond. Therefore, the present application came to be filed.

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No counter affidavit is filed.

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Leamed counsel for the applicants reiterating the averments made in the arbitration application, sought to allow the application and to appoint a former High Court Judge to resolve the disputes between the parties.

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Sri Gandam Durga Bose, leamed counsel appearing for the respondent, submits that the respondent had already paid an amount of Rs.1,00,00,000/- (Rupees one crore

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)

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only), but due to Covid - 19 pandernic, the hospitality business, in which the respondent is involved, suffered heavy losses, and thus it could not pay the amount. However, he subrnits that if some tirne is given, the respondent will be in a position to pay the amount.

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It is to be seen that the arbitration application is of the year 2018 and the matter underwent several adjoumments and at this stage, leamed counsel for the respondent seeks some time for payment, which the leamed counsel for the applicants, has seriously opposed. ln view of these circumstances, this court is not inclined to^grant any further time, and the arbitration application is required to be disposed of in terms of the arbitration clause agreed to between the parties in the lease deeds.

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There is no dispute with regard to execution of the lease deeds in question and clause 19.10 in both the lease deeds provides for arbitration. Since the arbihation clauses in both the lease deeds is identical, for ready reference, the clause in the lease deed dated 16.3.201 l, is extracted as under for ready reference:

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"Clause 19.10 Arbitration and Dispute Resolution:

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. The parties shall atternpt to settle any disputes or differences in relation to or arising out of or touching this agreement or the validity, interpretation, construction, perfonnance, breach or enforceability of this agreement (collectively disputes), by way of negotiation. To this end, each of the parties shall use reasonable endeavors to consult or negotiate with the other party in good faith, and in recognizing the parties mutual interests, attempt to reach ajust and equitable settlement satisfactory to both parties.

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Arbitral Tribunal and Conduct of Proceedings'. If the parties are unable to settle the disputes by negotiation within 30 (hirty) days frorn the date on which negotiations are initiated, the Disputes shall be refened to and finally resolved by arbitration under the Arbitration and Conciliation Act, 1996. In this regards the parties irrevocably agree that:

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Constitutiotx of Arbitration Tribunal'. The arbitration tribunal shall consist of the following 3 (three) arbitrators, each of whom shall be an Advocate having a standing of more than of 20 years:

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(a) Lessors Appointee: 1(one) arbitrator to be appointed by the Lessor.

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(b) Lessee Appointee: 1(one) arbitrator to be appointed by the Lessee.

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(c) Chairman: The Chairman of the Arbitration tribunal, to be jointly appointed by the other 2(two) arbitrators appointed as above.

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Place: The place ofarbitration shall be Hyderabad only.

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Language: The language ofthe arbitration shall be English."

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From the above it is clear that the parties have agreed to resolve the disputes arising out of the lease deeds through arbitration and accordingly procedure has been prescribed.

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Coming to the facts ol the case, the grievance of the applicants is that the respondent has committed default in payment of rents and after negotiations, respondent agreed to pay an amount of Rs.3,79,63,1491- by 31.03.2018, but it failed to pay the amount, and, therefore, they issued notice dated 19.04.2018 invoking the arbitration clause, and though the said notice was received by the respondent, it failed to give any reply giving consent. Therefore, the present application is filed.

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On the other hand, the case of the respondent, as submitted by its counsel, is that it had paid an amount of Rs. i,00,00,000/- (Rupees one crore), but due to prevailing Covid -^{19 pandemic,the hospitalitybusiness, in which it is involved,suffered heavylosses,} therefore, it could not pay the amount and that if some time is granted, it will be in a position to pay the amount. For this proposal, the applicants are not agreeable.

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For the foregoing reasons and as there is no dispute with regard to existence of the arbitration agreement, this court is inclined to allow the arbitration application.

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Though in the arbitration clauses, both the parties have agreed for a procedure for appointing three arbitrators, the leamed counsel appearing on their behali on instructions, submitted that this court may appoint a sole arbitrator.

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The arbitration application is allowed.

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Sri Justice P.S.Narayana, former Judge, of the erstwhile High Court of Andhra Pradesh, is nominated as arbitrator to resolve the disputes between the parties arising out of the lease deeds dated 16.03.2011 ard 27.09.2013, and pass an award in accordance with law.

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The leamed Arbitrator is entitled to fees as per the rates specified in the Fourth Sclredule to the Act of 1996, inserted by Act 3 of2016 with effect from 23-10-2015, which shall be bome by both parties in equal shares.

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Interlocutory applications, pending, if any, shall stand closed. No order as to

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costs

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It is made clear that all the issues are left open to be agitated before the leamed Arbitrator and it is also made clear that this court has not expressed any opinion with regard to merits of the claims of both the parties, and it is for the arbitrator to decide the same in accordance with law.

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Sd/- M. SHANTI^VARDHINI JOINT REGISTRAR

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,TRUE COPY//

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SECTION^OFFICER

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To 1. The Hon,ble^{Sri JusticeP. S. Narayana'FormerJudge of Erstwh|le High} Court of A.p.,^{Fyo. pfoi No.127, NjvanirmanNagar, Road No.71, Jubilee} iirr.,'ivo"tuouo -^go iay^{specialMessenger),(Along with a copyof} petition, affidavit and^{material papers enclos^ed)}

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b;; ci^{to sri Kishore Rai, Advocate (OPUC)}

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a. o;; cc^{to stl Gandham Durga Bose' Advocate (OPUC)}

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Two CD CoPies

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MNIK

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\ ^;,-

HIGH COURT

AARJ

DATED: 0711012020

ORDER

ARBAPPLN,NO.6S OF 2018

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ALLOWING THE ARBITRATION APPLICATION

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Ravinder Singh Arora v. Intellistay Hotels Private Limited

Case brief

What is this about?

What did the court decide?

Ravinder Singh Arora v. Intellistay Hotels Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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