Kanta Bhalotia & Anr. v. M/S Real Growth Commercial Enterprises Limited

1. By way ofthese two petitions under Section 11 ofthe Arbitration and Conciliation Act, 1996 ["the Act"],the petitioners seek appointment of an arbitrator to adjudicate disputes which have arisen between the parties under agreements dated 26.04.2018. ARB.P. 152/2020& ARB.P. 153/2020 Page 1 of[5] 2022:DHC:6002 0\

2. The petitioners in ARB.P. 152/2020 are Mrs. Kanfa Bhalotia and her husband, Mr. Sushil Kumar Bhalotia. The petitioners in ARB.P. 153/2020 are Mr. Sushil Kumar Bhalotia and his son, Mr. Saurabh Bhalotia.

3. As both the agreements are substantially identical and are against thesamerespondentcompany,both thepetitions have beentaken up for hearing together.

4. The agreements in question are entitled flatbuyer agreements ai^ were entered into on 26.04.2018. Under the said agreements, th? petitioners agreed to purchase commercial spaces in a mall being developed by the respondent, on the terms and conditions contained therein.The agreements provided forresolution ofdisputes by arbitration (in Clause 36).The arbitration wasto be held in Delhi orNew Delhibya Sole Arbitrator to be appointed by the respondent. By virtue ofthe said clause,exclusivejurisdiction underthe agreements is vested in the courts in Delhi.

5. Disputes having arisen between the parties,the petitioners through legal notices dated 10.10.2019,invoked the arbitration clauses containe/^ m the said agreements and proposed the appointment ofan arbitrator. As the said notices failed to elicit a response,the petitioners have filed these petitions under Section 11 ofthe Act.

6. Notice was issued in the petitions on 25.02.2020,but the petitions remain pending for completion ofservice. The petitioners were unable to serve the respondent at the given address. Although substituted service was permitted, Mr. Amit Bhatia, learned counsel for the petitioners, subsequently informed the Court that he had been able to obtain the ARB.P. 152/2020& ARB.P. 153/2020 Page2of[5] telephone number and e-mail address of the Managing Director of the respondent- company.By an order dated 08.08.2022,he was permitted to serve the company through its Managing Director and also at the registered office of the company appearing on the database of the Ministry ofCorporate Affairs,GovernmentofIndia["MCA"].

7. An affidavit ofservice, affirmed by Mr. Bhatia, has been filed on 26.08.2022 which indicates that the respondent-company has been served at its registered e-mail addresses as also on the WhatsApp number ofits Managing Director. It is also stated therein that the extracts ofthe MCA database relating to the respondent-company have also been filed alongwith the affidavit of service, which reflects the registered office address of the company as the same address which is mentioned in the memo of parties and also the e-mail address upon which the petitions have been served by Mr. Bhatia. Additionally, the petitioners have also sought to serve at the registered office of the respondent-company by Speed Post, but the tracking record shows that service by this mode was incomplete as the addressee left without instructions.

8. Having regard to the fact that an attempt has been made to serve O therespondent-company by e-mailand attheregistered address available in the MCA database,I am ofthe view that service upon the respondent-. company is complete, particularly keeping in mind the provision of Section 12(1)read with Section 20(1)ofthe Companies Act,2013.

9. It may also be noted that a submission was made by leamed counsel for the petitioner on 11.03.2022 that the respondent has been subjected to proceedings under the Insolvency and Bankruptcy Code, 2016 ["IBC"]. However, Mr Bhatia today submits that he has clarified ARB.P. 152/2020& ARB.P. 153/2020 Page3of[5] this position, and no proceedings are pending against the respondenteompany under the IBC.

10. As the respondent has failed to enter appearanee despite serviee, the petitions are taken up for hearing.

11. In the facts and circumstances reeorded above, it prima facie appears that their exists an arbitration elause in eaeh of the agreements dated 26.04.2018 under whieh referenees are sought. Disputes having arisenbetweentheparties,the arbitrationelauses havebeen dulyinvoke^ but the constitution ofthe tribunal with the consent ofthe parties is not possible. Although the elauses provide for appointment of the arbitrator by the respondent, sueh unilateral appointment is also impermissible in view of the judgment of the Supreme Court in Perkins Eastman Architects DPC and Another vs. HSCC (India) Limited(2020) 20 SCC 760, which has been followed by several subsequent deeisions of the Supreme Court and this Court. The respondent has not entered appearanee to eontrovert any ofthe aforesaid eontentions.

12. In sueh circumstances, both the petitions are allowed and disposed ofwith thefollowing directions:- O a) The disputes between the parties are referred to the arbitration of Mr. B. B. Choudhary, retired Additional Distriet and Sessions Judge[Tel:9910384611]. b) It is made elear that the two arbitration proeeedings are independent proeeedings. However,the learned arbitrator is free to take them up for hearing together. c) The leamed arbitrator is requested to furnish a deelaration in terms ofSection 12 ofthe Act prior to entering into the referenees. ARB.p. 152/2020& ARB.P. 153/2020 Page4of[5] o ■Tiy d) The fees ofthe learned arbitrator will be determined in accordance with Schedule IV of the Act. p. SEPTEMBER[2],2022 PRATEEKJALA^,J 'Bhupi' Click here to check corrigendum, ifanv