Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION NO.105 OF 2017
Sahara India Commercial Corporation Ltd. ...Applicant/Petitioner
Ms. Neeta Jain a/w. Deep Thakkar i/b. M/s. Markand Gandhi &
Co., Advocates for Applicant/Petitioner.
Mr. Tejas Popat a/w. Mr. Vishesh Malviya & Mr. Raghav
Dharmadhikar i/b. M/s. Rashmikant & Partners, Advocates for
Respondent.
Context and Factual Background:
JUDGMENT
1. Commercial Arbitration Application No. 105 of 2017 is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) filed by Sahara India Commercial Corporation Ltd. (“Sahara”). This Section 11 Application seeks appointment of an arbitrator to adjudicate disputes and differences JULY 07, 2025 Aarti Palkar relating to a Memorandum of Understanding dated December 5, 1998 (“MoU”) executed between Sahara and the Respondent, Champion Engineering Works Pvt. Ltd. (“Champion”).
2. Writ Petition 8929 of 2017 impugns an order dated September 21, 2016 (“Revision Order”) passed by the Appellate Bench of the Small Causes Court at Mumbai dismissing an application seeking revision of an order dated November 30, 2012 passed by the Small Causes Court (“Original Order”). The Original Order dismissed an application filed by Sahara under Section 8 of the Arbitration Act, praying for dismissal of a suit filed by Champion seeking eviction of Sahara and payment of mesne profits in terms of the leave and license agreement between the parties.
3. The following factual matrix would be necessary to note for analysis in both the captioned proceedings:- A] The MoU, stated to be overriding and superseding all previous arrangements between the parties, contains an arbitration clause in Clause 33 (Page No.135 of the Writ Petition). In the interest of brevity, the same is not being reproduced here. Suffice it to say that this Court has territorial jurisdiction over the arbitration agreement; B] The MoU entailed consideration of a future development agreement to be executed in order to develop the properties covered therein. It provided for contribution by the respective parties. It entailed Sahara making certain payments to Champion, which would be payable upon Champion getting the properties cleared of all encroachments and trespassers in order to make available vacant possession of the properties to Sahara for their development; C] The security deposit payable under the MoU was to be utilized by Champion to obtain free and vacant possession of the properties that had then been encroached and trespassed upon. Pursuant to the same, the parties were to execute a Development Agreement in future, on the basis of which the development would take place; D] It is the case of Sahara that its funds have been used to clear the premises of encroachments, but despite reasonable drafts of the Development Agreement being provided, Champion has refrained from executing the same. Consequently, according to Sahara, disputes and differences between the parties that are amenable to arbitration have arisen. Therefore, the Court must make a reference of such disputes to arbitration without further ado; E] However, according to Champion, as dominus litis, it has chosen to pursue only an eviction pursuant to L.E.&.C. Suit No.44/56 of 2011 (“Eviction Suit”), which was filed way back on April 1, 2011, essentially seeking vacant and peaceful possession of the premises and mesne profits as set out therein. According to Champion, the choice on how to litigate and prosecute the cause of action available to it under the MoU has been consciously made, and all that is sought by Champion is a simple eviction of Sahara from the premises that Sahara has had occupation of; F] It is Champion’s case that such occupation by Sahara was in the nature of a licensee in lieu of the development envisaged under the MoU. According to Champion, Sahara has taken no steps in furtherance of the MoU, and has instead set up a fountain and a few “sets” for production of entertainment content in Champion’s premises, indicating that the conduct of Sahara was far from pursuing its interests in the contemplated development project for which the MoU was signed. Therefore, the case of Champion is that Sahara is truly not interested in the development contemplated, and it intends to use its status as a licensee, which was meant to further the objective of development of the property, and not for carrying out its other activities on the premises, which led to Champion filing the Eviction Suit under The Presidency Small Cause Courts Act, 1882 (“Small Cause Courts Act”); G] According to Champion, the subject matter of the suit being eviction of Sahara, in view of the law declared by the full Bench in Central Warehousing[1], the disputes are, on the face of it, not arbitrable. Therefore, Champion would oppose referral of the disputes under the MoU to the Arbitral Tribunal. It is also Champion’s case that all these facts relate to the period prior to the amendments effected to the Arbitration Act in 2015 (“2015 Amendments”) – primarily, to Section 8 and Section 11 of the Arbitration Act. Consequently, this Court’s jurisdiction would not be limited by Section 11(6A) of the Arbitration Act, which took effect only on October 23, 2015. All activity involved in these proceedings, Champion would contend, occurred prior to the said date. Therefore, this Court ought not to restrict its Central Warehousing Corporation, Mumbai vs. Fortpoint Automotive Pvt. Ltd., Mumbai - 2009 SCC OnLine Bom 2023 examination merely to the existence of a formally executed arbitration agreement. Likewise, Section 8, as it existed prior to being amended by the 2015 Amendments, would need to be considered – and here too, the significant change in the law brought about by the 2015 Amendments would not automatically become applicable; H] The Original Order rejected Sahara’s Section 8 Application, accepting Champion’s contention that the subject matter of the Eviction Suit was restricted to eviction and mesne profits, which was not arbitrable in view of the law declared in Central Warehousing. The crux of the Original Order is that the MoU being the most material document, created license rights in favour of Sahara, making it clear that Sahara was permitted the license only for the development of the suit properties. Sahara was also in occupation of office premises within Champion’s properties which evidently had a monthly license fee bringing Sahara’s usage of Champion’s property within the ambit of a license and thereby, within the jurisdiction of the Small Causes Court; I] The Learned Single Judge of the Small Causes Court also stated that the precise status of the MoU and what it entails would be examined in the course of the proceedings and would be answered at the stage of the final order. The Learned Single Judge made it clear that at the stage of considering a Section 8 Application, what would be considered are the pleadings as made in the plaint by the plaintiff in comparison with the pleadings in the Section 8 Application. In doing so, the Learned Single Judge returned the finding that the disputes and differences raised in the plaint squarely fell within the ambit of the Small Causes Court, and they were not arbitrable; and J] The Revision Court did not interfere with the said findings on quite similar lines, effectively taking a view that what is to be considered at the time of dealing with the Section 8 Application is the contents of the plaint and examining the same to ascertain the subject matter of those proceedings in order to examine whether a case was made out for referral to arbitration under Section 8 of the Arbitration Act.
4. A few other facts would be relevant. It is seen from the record that by a letter dated August 13, 2004 (“August 2004 Notice”), Sahara had called upon Champion to comply with all the obligations under the MoU including finalizing of the Development Agreement within a period of 15 days, failing which legal proceedings would be taken for specific performance of the MoU. The August 2004 Notice explicitly stated that no further meeting on the basis of issues raised by Champion would serve any purpose, and it would be futile to have any further discussions with Champion. Contentions of Parties:
5. According to Mr. Tejas Popat, Learned Advocate representing Champion, the August 2004 Notice would indicate that the cause of action arose on this very date since Sahara was explicit in its understanding of the position that it was in, and had given an ultimatum to Champion to sign the Development Agreement as proposed, failing which proceedings would follow.
6. Since it is Sahara that is asserting the existence of an arbitration agreement, this letter, according to Mr. Popat is the invocation notice under Section 21 of the Arbitration Act, and any pursuit of proceedings must have regard to the factual position obtaining as early as August 13,
2004. Consequently, the contention of Champion is that an invocation notice issued on May 10, 2014 (“May 2014 Notice”), proposing the name of a Learned Retired Judge of the Supreme Court as an arbitrator, ten years later, constitutes an act of ever-greening the limitation period. It is now settled law that merely by issuing newer and newer invocation notices, the period of limitation for approaching a Section 11 Court cannot be reset. Therefore, the contention is that the Section 11 proceedings are also hopelessly time barred, quite apart from pursuit of the cause of action being time barred.
7. Ms. Neeta Jain, Learned Advocate representing Sahara would contend that evidently Clause 33 of the MoU contains an arbitration clause and the Small Causes Court ought to have referred the disputes to arbitration. It was not for the Small Causes Court to ignore that the disputes between the parties have a wider context, Ms. Jain would contend, also pointing out that the MoU had been preceded by earlier memoranda of understanding, specifically those executed on January 1, 1993 and March 26, 1993, the last of which had referred to the premises as “demised premises” and not as “licensed premises”. She would contend that Sahara had been put in possession first on the basis of the memorandum of understanding dated March 26, 1993, which treated the premises as “demised premises”. Ms. Jain would contend that Sahara had indicated in 1998 that it was willing to vacate the premises and be repaid the security deposit that it had given, but it was Champion that did not refund the deposit. The MoU in question is a product of negotiations after such disagreements were resolved between the parties but the historical background cannot be ignored.
8. In a nutshell, Sahara’s contention is that the relationship between the parties is not one of licensor and licensee but that of being parties to a development agreement. In that context, the arbitration agreement in Clause 33 would need to be appreciated. Thereafter, the hurdles to the development had been removed by settling with the parties who had to be vacated from the premises, using the money that had been given by Sahara, Ms. Jain would contend, adding that it was Champion that refused to execute the draft of the development agreement and has instead chosen to paint the agreement to pursue a development agreement, discernible between the parties, as a license agreement and filed the Eviction Suit. Ms. Jain would request this Court to exercise its extraordinary writ jurisdiction to quash and set aside the Revision Order and the Original Order, and exercise its jurisdiction as a Section 11 Court to appoint an arbitral tribunal. Analysis and Findings:
9. Both the captioned proceedings were clubbed and specially assigned to this Court by an administrative decision of the Hon’ble The Chief Justice. The matters were clubbed and the Learned Advocates for the parties were heard. Having considered the record of both the Writ Petition and the Section 11 Application with their assistance, it becomes apparent that the two issues that need to be considered are: (i) whether the Revision Order read with the Original Order took a correct view on the Section 8 Application; and (ii) whether any dispute and difference amenable to arbitration should be referred to arbitration in disposal of the Section 11 Application. Section 8 Application:
10. It is indeed true that the MoU had been preceded by other memoranda of understanding. There were disagreements between the parties all along and they kept negotiating with each other. The parties indeed intended to jointly develop the property belonging to Champion. Such engagement commenced in 1992 and went on until the execution of the MoU. In 1998, the parties consciously engaged with each other to reduce to writing the terms and conditions on which they would work with each other. That MoU is the subject matter of the Eviction Suit and thereby the Writ Petition, and indeed the subject matter of the arbitration agreement and thereby the Section 11 Application.
11. In neither of these sets of proceedings can this Court pronounce upon the merits of the respective contentions of the parties – the Writ Petition and the Section 11 Application can only deal with the nature of the jurisdiction and the related contentions i.e. whether the Small Causes Court did not have jurisdiction and ought to have referred the parties to arbitration; and whether this Court ought to refer the parties to arbitration. Any observation made in this judgement is only in aid of answering these questions, and I hasten to state upfront that no observation made in this judgement is meant to be an expression of an opinion on the merits of the matter. I have to be mindful of the fact that the Eviction Suit is well underway, and the parties have had to engage in those proceedings during the pendency of the proceedings in this Court.
12. A plain reading of some of the provisions of the MoU would be in order. Clause 10 of the MoU records that Sahara has its office premises on the very same property and is liable to pay “monthly compensation” of Rs. 7.79 lakhs. Clause 11 provides that Sahara may continue its occupation of the respective offices until completion of the development or until the construction requires the portion occupied by it to lead to the occupation not being possible. Indeed, the rest of the MoU would indicate that the parties had intended to redevelop the properties covered by the MoU. Champion was to provide vacant possession for the redevelopment in nine months or within a mutually agreed extended time, failing which Champion would be liable to pay interest at 18% per annum on the interest free security deposit of Rs.
3.58 crores. Clause 33 indeed provides for arbitration by a Sole Arbitrator.
13. By a letter dated November 26, 1999, Sahara issued a letter to Champion calling for various confirmations and indicated that the full security deposit would be released only after various milestones indicated by Sahara were completed. By a letter dated December 15, 1999, Champion wrote to Sahara confirming that Sahara had only paid a sum of Rs. 1 crore until then, with another sum of Rs. 8 lakh having been deposited with a solicitor firm for settling disputes with one of the occupants who was running a canteen. The balance Rs. 2.[5] crores were said to be due and Champion indicated that Sahara refusing to pay the entire amount, by contending that various milestones needed to be completed, was not a facet provided for in the MoU.
14. Eventually, the August 2004 Notice was issued by Sahara. This notice clearly spelt out Sahara’s direction to Champion to perform the MoU by executing a draft of the Development Agreement, failing which Sahara would be “compelled to take up legal proceedings for specific performance and other proceedings both civil and criminal”. The parties continued to trade notices and correspondence and eventually on September 8, 2006, Champion called upon Sahara to vacate the premises, recording that the monthly compensation payable by Sahara too had not been paid since November 2003, and also withdrawing the power of attorney issued to Sahara for the redevelopment.
15. With this backdrop, the Plaint in the Eviction Suit needs to be examined. It does not suppress the character of the bargain having been that of recording an intent to develop the property along with its terms. The Plaint indicates that Sahara was a licensee and was already in occupation of premises on the property and was given a right to develop on the terms set out in the MoU, with the parties having an entitlement to 70,000 square feet of developed area each. The respective obligations of the MoU are pleaded and it has been pointed out that for eight years no work has been commenced by Sahara, and instead Sahara was using the premises as if it was its own without commencing the development work. Against such backdrop, it is pleaded that Sahara’s rights were merely that of a licensee given access and a right to develop with attendant obligations, which were not being complied with. Therefore, framing the relationship as that of a licensor and licensee, Champion sought to reclaim possession as a licensor, recovery of the compensation amount and mesne profits.
16. Sahara filed a written statement as indeed the Section 8 Application, pointing out various non-compliances by Champion. Sahara claimed that the MoU in its true interpretation was one of an agreement to transfer immovable properties and rights and interest in immovable properties and could not be regarded as a license agreement. In a nutshell, the contention was that the disputes ought to be referred to arbitration in terms of Clause 33 of the MoU.
17. The Original Order has examined these contentions. The Learned Small Causes Court found that Sahara had been in occupation for purposes of development. The crux of the findings is that the occupation of the premises by Sahara was because of Champion permitting Sahara to come in for development with a monthly compensation for the use of the office premises pending development. The Learned Judge found that the MoU contained a specific clause for payment of compensation and prima facie, if Sahara was not a licensee, there would be no question of compensation being payable to Champion. The Learned Judge held that at the preliminary stage it would not be possible, on an examination of the Plaint, to hold that the subject matter of the suit, as formulated by Champion, was subject matter of arbitration in view of the law declared by a Full Bench of this Court in Central Warehousing. The Revision Order agreed with this position and did not find any reason to correct any error in exercise of the revision jurisdiction.
18. The Original Order and the Revision Application preceded the 2015 Amendments. Prior to the amendment, Section 8 of the Arbitration Act, provided that a judicial authority shall refer to arbitration on an application made by a party in the proceedings brought before it, if the subject of the matter brought before it was subject matter of an arbitration agreement. Section 11 of the Arbitration Act, prior to amendment, provided for referral of parties to arbitration if any party to it or an institution charged with the task, failed to constitute an arbitration agreement.
19. In the 2015 Amendments, Section 8 was amended to provide that the referral to arbitration ought to be effected notwithstanding any judgment of any Court including the Supreme Court unless it finds prima facie that no arbitration agreement exists. In the same set of amendments, Section 11(6A) was introduced to provide that the Section
20. According to Champion, the August 2004 Notice is an invocation notice while according to Sahara, the May 2014 Notice is the invocation notice. Both precede the 2015 Amendments. However, Section 87 of the Arbitration Act which had stipulated that the 2015 Amendments shall not apply to arbitration proceedings that commenced prior to the 2015 Amendments has been struck down as unconstitutional in the case of HCC[2]. Although the judgement in HCC related to the 2015 Hindustan Construction Company Ltd. Vs. Union of India – AIR 2020 Supreme Amendments removing the automatic stay when a challenge under Section 34 is filed, Section 87 is no longer on the statute book.
21. Under the amended Section 8 of the Arbitration Act, unless the Section 8 Court comes to a prima facie view that the arbitration agreement does not exist, it must refer the matter to arbitration. For doing so, the Section 8 Court must examine the subject matter of the proceedings before it and compare that with the subject matter of the arbitration agreement. The prayers in the Plaint on which the Eviction Suit is filed are for recovery of possession of the property in question; recovery of compensation contracted for such use; mesne profits and liquidated damages for non-return of the occupied premises. This is clearly a subject matter where, notwithstanding the existence of an arbitration agreement, in view of Section 41 of the Small Cause Courts Act, the dispute is not arbitrable. This is the basis on which the Original Order and the Revision Order have held that the Section 8 Application cannot be allowed.
22. Even after the 2015 Amendments, if the Section 8 Court comes to a prima facie finding that the arbitration agreement does not exist, it is not required to refer the parties to arbitration. Towards this end, for comparing the subject matter of the dispute before it, the Section 8 Court is required to compare the subject matter of the proceedings before it and the subject matter of the arbitration agreement. Since the law declared in Central Warehousing by the Learned Full Bench of this Court is emphatic in its terms that litigation for recovery of licensed premises cannot be pursued in arbitration and has to exclusively go to the Small Causes Court, no fault can be found with the Original Order. The Revision Order too recites the same judgement in its refusal to revise the Original Order.
23. Both Advocates have referred to Sukanya Holdings[3] to interpret the true scope of Section 8 of the Arbitration Act. It is another matter that the 2015 Amendments have been held to have had Sukanya Holdings in mind for introducing a non-obstante provision in Section 8 to override judgments of any Court including the Supreme Court.
24. However, across case law relating to Section 8 proceedings, the standard test that the Court must apply is to examine if there is an arbitration agreement; whether a party to that agreement has brought proceedings before the Court; and whether the subject matter of the action brought before the Court is the subject matter of the arbitration agreement; and another party applies for referral to arbitration under Section 8, before filing the first statement on the substance of the dispute. Sukanya Holdings (P) Ltd. Vs. Jayesh Pandya – (2003) 5 SCC 531
25. Reference in this regard may be made to the ruling of the Supreme Court in Anand Gajapathi Raju[4] – this is not a principle that has been changed by the 2015 Amendments. The standard to be applied under Section 11 of the Arbitration Act was made even narrower by introducing Section 11(6A) to restrict the scope of review by using the phrase “confine to the examination of the existence of an arbitration agreement”. However, to define the scope of the Section 8 Court’s review, the very same 2015 Amendments used the phrase “unless it finds that prima facie no valid arbitration agreement exists”, which necessitates returning a prima facie “finding”. To return such a finding, “the Court before which an action is brought” must compare the pleadings in the action brought and the content of the arbitration agreement and apply its mind to return such a finding.
26. That the Section 8 Application must be filed before the first statement on the subject matter of the dispute would indicate that the Section 8 Court rightly compared the contents of the Plaint and the contents of Clause 33 and then applied Central Warehousing to hold that it formed a prima facie view that the arbitration agreement cannot be said to be in existence insofar as it relates to recovery of possession
27. In my opinion, no fault can be found with the Original Order or with the Revision Order, for taking a view that the parties could not be summarily referred to arbitration. I agree with Mr. Popat that as dominus litis, it is Champion’s prerogative to choose how to fashion its pursuit of action. It has done so by restricting it to the usage of the premises and compensation therefor. It has prima facie shown that the interest of Sahara is not higher than that of a licensee, with such license right being in furtherance of the proposed development of property. The Small Causes Court has not shut out a contrary view altogether. It would still be open to Sahara, in the course of the proceedings, to prove that its right is not that of a licensee.
28. On the face of the record, nothing in the MoU is an agreement to acquire immovable property, instead it is an agreement to develop land that would give rise to immovable properties in the future. It must also be remembered that the MoU is not a registered document for it to convey title to immovable property.
29. Be that as it may, the Learned Small Causes Court is fully seized of these facts and must conduct trial of the same, uninfluenced by any observations in this order. Suffice it to say, the view taken by the Learned Judge in the Original Order which has been endorsed in the Revision Order is an eminently plausible view and in the exercise of the extraordinary writ jurisdiction under Article 227 of the Constitution of India, no palpably perverse outcome, warranting intervention in the matter is apparent to me.
30. Therefore, the Writ Petition is dismissed. Section 11 Application:
31. As regards the Section 11 Application, the sheer efflux of time cannot be lost sight of. The parties knew where they stood way back in 2004, and yet no further steps were taken then by Sahara to initiate arbitration or to assert the enforcement of rights under the MoU by resorting to arbitration.
32. It is Sahara’s contention that the August 2004 Notice cannot be regarded as an invocation notice, as is claimed by Champion. The August 2024 Notice contains an emphatic assertion by Sahara that no useful purpose would be left in negotiating further and calling for an execution of the draft development agreement in 15 days, failing which all legal action would follow. Ms. Jain is right in her contention that the right to apply to the Section 11 Court would expire only three years after the right to approach the Section 11 Court commenced. This is the law declared in Arif Azim[5]. That would be 30 days after the invocation notice since the recipient of an invocation notice has 30 days to respond to the choice of arbitrator.
33. However, for that proposition to work, one would need to hold that the May 2014 Notice (issued on May 10, 2014) is indeed the real invocation notice, and not the August 2004 Notice (issued on August 13, 2004. The Section 11 Application was affirmed on May 25, 2017. This is a fortnight after the expiry of three years since the purported invocation notice i.e. within three years after the expiry of 30 days from the invocation notice. This requires one to positively examine the August 2004 Notice and the May 2014 Notice and the law governing the interplay between Section 8 and Section 11 of the Arbitration Act.
34. Before analysing the contents of the aforesaid two notices, there is another facet of the matter to be borne in mind. The first statement on the substance of the Eviction Suit and the Section 8 Application appear to have been made on August 26, 2011. By filing the Section 8 Application, the intent to arbitrate was explicitly expressed by Sahara. Arif Azim Company Ltd. Vs. Aptech Ltd. – (2024) 5 SCC 313 Even if one were to treat the August 2004 Notice as a mere threat to arbitrate, by filing the Section 8 Application in August 2011, it was evident that Sahara had expressed its manifest intent to arbitrate. However, the Section 11 Application would be affirmed only on May 25, 2017, nearly six years later.
35. It is in this context that the provisions of Section 8(3) of the Arbitration Act must also be noticed – it provides as follows: (3) Notwithstanding that an application has been made under subsection (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. [Emphasis Supplied]
36. This provision has always been on the statute book and was not amended. The intention behind this provision is that the party filing an application under Section 8 expresses a manifest intent to arbitrate and is therefore expected to arbitrate. Therefore, by a non-obstante provision, it is stipulated that the arbitration may be commenced, or continued (if already commenced), and even completed, with an award being made, regardless of the pendency of the application under Section 8 of the Arbitration Act.
37. The factual position in this case is stark. Sahara filed the Section
8 Application in August 2011 and did not purport to invoke until May 2014 – one and half years after the Section 8 Application was rejected. Thereafter, Sahara did not bother to file the Section 11 Application until May 2017, which is nearly seven years after the Section 8 Application was filed.
38. Mr. Popat would canvas the position that I must apply Section 11 of the Arbitration Act as it stood before the 2015 Amendments because even the May 2014 Notice, which is purported to be the invocation notice, was issued before the 2015 Amendments. However, in view of Section 87 of the Arbitration Act having been struck down (although in the context of Section 34), and the Section 11 Application having been filed in May 2017, the law now declared in interpretation of Section 11(6A) of the Arbitration Act cannot be brushed aside. I do not intend to base my decision on such a division of the law before and after the 2015 Amendments – in my opinion, in the facts of this case, it is not necessary to declare any such proposition of law.
39. Despite Sahara having filed the Section 8 Application in August 2011, the purported invocation notice would be issued only in May
2014. The Section 8 Application was rejected on November 30, 2012. Sahara presented the revision application on March 6, 2013 and even until this stage, chose to do nothing about arbitration although Section 8(3) permitted it to commence, continue and conclude arbitration.
40. Sahara purported to issue an invocation notice on May 10, 2014, whose contents are similar to the contents of the August 2004 Notice – essentially asking for the draft Development Agreement to be executed by Champion. It is trite law that the objective of an invocation notice is to put the counterparty to notice about the precise nature of the dispute sought to be referred to arbitration. The May 2014 Notice does not say anything new as compared with the August 2004 Notice. The only addition was to name a proposed arbitrator.
41. The Revision Order came to be passed on September 21, 2016 but the Section 11 Application was filed only in May 2017. On the basis of the aforesaid factual matrix, despite expressing an explicit intent to arbitrate at the least by August 2011 by filing the Section 8 Application (if not by the August 2004 Notice), the May 2014 Notice simply seeks the same action as sought in August 2004. In my opinion, Sahara appears to have simply attempted to keep presenting a dead cause as remaining alive.
42. Ordinarily, in an application filed purely under Section 11 of the Arbitration Act, the jurisdiction would be restricted to examining the existence of an arbitration agreement. However, I cann0t ignore the fact that in the current matter, due to the matters being specially assigned specifically by clubbing both the Writ Petition and the Section
11 Application to be heard concurrently as a means of efficient administration of justice, my jurisdiction is not restricted solely to the provisions of Section 11 of the Arbitration Act. The writ jurisdiction impugns a decision under Section 8 of the Arbitration Act while the Section 11 Application too does not distinguish between the claims in the Eviction Suit and the rest – it proceeds on the premise that the Eviction Suit is not maintainable.
43. The factual matrix here is truly an extraordinary one and in view of both jurisdictions (the writ jurisdiction as well as the arbitration jurisdiction) being exercised jointly, I cannot treat these clubbed proceedings in a disjointed manner despite hearing them together, and without taking judicial notice of what has weighed with me in dealing with the Writ Petition.
44. It is apparent that Sahara, by the August 2004 Notice had made it abundantly clear that no further steps were at all necessary for discussion between the parties, and that the MOU lent itself to specific performance as it stood. However, the second invocation, purportedly effected literally a decade later, and nearly three years after the Section
8 Application, appears to be an attempt to ever-green the limitation period to be able to pursue a Section 11 Application after yet another three years. Considering the identical nature of the contents between the August 2004 Notice and the May 2014 Notice, and in exercise of the concurrent jurisdiction in the peculiar facts of this case, I am inclined to accept the contention that the August 2004 Notice was not a mere threat but explicitly a notice to litigate with the cause of action being clearly articulated therein. The gradual and repeated iterations appear to be a contrivance and a device to keep the pot boiling and prolong the uncertainty at a threshold stage, for a matter that is already 20 years old. Merely repeating the same content ten years later would not give rise to a new and “real” invocation notice.
45. Therefore, I am of the view that the Section 11 Application is hopelessly time-barred and deserves to be disposed of without making a reference to arbitration.
46. Consequently, both the Writ Petition and the Section 11 Application are finally disposed of in the aforesaid terms. Any interim applications connected to the same shall also stand finally disposed of.
47. I am informed that the proceedings have continued before the Small Causes Court even while the Revision Application and the Writ Petition have run their course. Nothing in this judgement is an expression of an opinion on merits. The final arguments in the suit are said to be underway. The Learned Small Causes Court is requested to deal with each of the facets that it deferred for the final hearing without being influenced by the observations made in this order.
48. All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this Court’s website. [SOMASEKHAR SUNDARESAN, J.]