High Court of KeralaSingle Judge2022-06-24Arbitration Request disposed with provisional a...

Arbitration Request No. 105 of 2021

Case / Petition Number:AR No.105/2021

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Sathish Ninan
Judgment Date: 2022-06-24
Court Decision / Holding: AR 105/2021 disposed with provisional appointment of Sri. S. Vijayakumar as Sole Arbitrator; directions to communicate the appointment and to file a disclosure under Section 11(8) read with Section 12(1) of Act 3 of 2016; registry to place the disclosure statement for confirmation of appointment; arbitrator’s fees to be governed by Kerala High Court Rules; arbitration costs to be shared equally.
Final Disposition: Arbitration Request disposed with provisional appointment of a Sole Arbitrator (Sri. S. Vijayakumar). Directions issued for disclosure under Section 11(8) read with Section 12(1) of Act 3 of 2016; registry to confirm appointment; arbitrator’s fees to be governed by Kerala High Court Rules; costs to be shared equally.

Parties to the Case

Appellants / Petitioners

Sindhu Manikkoth
Nikhil Menon
Naina Menon

Respondents

Prashanta Majee

Legal Representation & Advocates

Counsels for Petitioners

• P. Sathisan
• Dona Augustine
• Athul Rajesh

Counsels for Respondents

• M. T. Bindhu

Case Synopsis & Summary

AR No.105 of 2021 arises from a dispute between Sindhu Manikkoth and her children (Nikhil Menon and Naina Menon) and Prashanta Majee, concerning a financial transaction in which Vinod Shridharan Menon allegedly lent Rs. 32 lakh. Annexure I contains the loan agreement, and Annexure VII a lawyer’s notice demanding payment and a willingness to arbitrate. The applicants seek the court’s intervention under Section 11 of the Arbitration and Conciliation Act, 1996 to refer the dispute to arbitration as per the agreement, since the debtor failed to repay. The respondent contests, advancing four main objections: lack of territorial jurisdiction since all transactions occurred in Mumbai; alleged violation of the Money Lenders Act; limitation; and that the entire principal amount has been repaid with only interest outstanding. The court recognizes the existence of an arbitration clause and, after considering the arguments, holds that part of the cause of action arose in Kerala (payments were made from Kerala and the debt is payable there), and thus Kerala jurisdiction applies. It notes that questions about the nature of the debt and the outstanding amount are factual and should be determined by the arbitrator under Section 16, citing Vidya Drolia and Pravin Electricals as guiding authorities. Consequently, the court disposes of the AR by nominating Sri. S. Vijayakumar as Sole Arbitrator provisionally, with procedural directions for disclosure and fee rules.

Provisions of Law Cited

Section 11 of the Arbitration and Conciliation Act, 1996Section 16 of the Arbitration and Conciliation Act, 1996Section 11(8) read with Section 12(1) of Act 3 of 2016

Legal Doctrines & Maxims

Debtor is to seek the creditor
Vidya Drolia v. Durga Trading Corporation (SC) 2020 (6) KLT 1025
Pravin Electricals Pvt. Ltd. v. Galaxy Infra and Engineering Pvt. Ltd. (SC) 2021 (2) KLT 1007

Submissions & Arguments

Contentions of Appellants / Petitioners

Applicants contend that Annexure I contains a valid arbitration clause providing that any dispute arising out of the agreement, including its termination or breach, shall be referred to arbitration if not amicably resolved within 90 days. They argue that a part of the cause of action arose in Kerala since payments were made from Kerala and the debt is payable there; hence Kerala is a proper forum and the court has territorial jurisdiction. The respondents’ objections challenge jurisdiction, the money-lending act violation, limitation, and the alleged repayment of principal. The applicants assert the debt was acknowledged through communications, and any limitation argument is unsustainable. They also contend that the nature of the transaction and the quantum of principal versus interest are factual issues to be decided by the arbitrator, not the court, citing Vidya Drolia and Pravin Electricals for the proposition that questions of arbitrability and arbitrator's powers fall within Section 16. Consequently, they seek a reference to arbitration and nominate a Sole Arbitrator, with procedural directives under the amended act, leaving substantive rights intact.

Contentions of Respondents

Respondent opposes on grounds of lack of territorial jurisdiction (transactions at Mumbai); alleged violation of Money Lenders Act; limitation; and full repayment of principal with only interest remaining. They contend the dispute lies in Mumbai and outside Kerala’s jurisdiction, that the key issues must be resolved with evidence, and that the petition is not maintainable under Section 11 until arbitrable issues are proven. They rely on the same law but maintain the court should not force arbitration where jurisdiction is questioned, and demand dismissal or transfer.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Vidya Drolia v. Durga Trading Corporation	2020 (6) KLT 1025 (SC)	Mentioned Only	Cited to support that questions on arbitrability and the arbitrator’s role fall within Section 16 and should be addressed by the arbitrator; the judgment does not analyze or distinguish its holdings.
Pravin Electricals Pvt. Ltd. v. Galaxy Infra and Engineering Pvt. Ltd.	2021 (2) KLT 1007 (SC)	Mentioned Only	Cited alongside Vidya Drolia to justify referral of disputes to arbitration and that such issues are to be urged before the arbitrator; no direct application of its holdings by the Kerala High Court in this order.

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Extracted Judgment Text

Exact text extracted from official judgment records.

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **FRIDAY, THE 24[TH] DAY OF JUNE 2022 / 3RD ASHADHA, 1944** **AR NO. 105 OF 2021** ## **APPLICANTS:** 1 SINDHU MANIKKOTH, AGED 44 YEARS W/O. LATE VINOD SHRIDHARAN MENON, HOUSE NO. 3/380, PTRRA NO. 144. THRIKKAKKARA P.O., CHEMBUMUKKU, KOCHI, KERALA-68202. 2 NIKHIL MENON, AGED 19 YEARS S/O. LATE VINOD SHRIDHARAN MENON, HOUSE NO. 3/380, PTRRA NO. 144. THRIKKAKKARA P.O., CHEMBUMUKKU, KOCHI, KERALA-68202. 3 NAINA MENON, AGED 15 YEARS (MINOR), D/O. LATE VINOD SHRIDHARAN MENON, HOUSE NO. 3/380, PTRRA NO. 144. THRIKKAKKARA P.O., CHEMBUMUKKU, KOCHI, KERALA68202, REPRESENTED THROUGH HER MOTHER AND NATURAL GUARDIAN SINDHU MANIKKOTH, W/O. LATE VINOD SHRIDHARAN MENON, HOUSE NO. 3/380, PTRRA NO. 144. THRIKKAKKARA P.O., CHEMBUMUKKU, KOCHI, KERALA. BY ADVS. P.SATHISAN DONA AUGUSTINE ATHUL RAJESH ## **RESPONDENT:** PRASHANTA MAJEE, AGED 53 YEARS, S/O. DR. MURALIDHAR MAJEE, 701, SHASTRI HOUSE, PLOT NO. 647, 19TH ROAD, KHAR (W(), MUMBAI, MAHARASHTRA, INDIA-400052. BY ADV M.T.BINDHU THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 24.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = Arbitration Request No.105 of 2021 = = = = = = = = = = = = = = = = = = Dated this the 24[th] day of June, 2022** ## **O R D E R** Petitioners are the wife and children of late Vinod Shridharan Menon. He had financial transaction with respondents. Annexure-I is the agreement relating to the transaction. As per Annexure-I, an amount of ` 32 lakhs was borrowed by the respondent from the said Vinod Shridharan Menon. The applicants allege that the debt was not re-paid in spite of requests. The agreement provides for resolution of disputes by arbitration. Though Annexure-VII notice was issued to the respondent demanding the amount or to co-oporate for arbitration in terms of the agreement, the notice was evaded and was returned as “unclaimed”. It is accordingly that the petitioners have approached this Court under Section 11 of the Arbitration and Conciliation Act, 1996. 2. The respondent opposes the prayer. A counter has been filed denying the averments in the AR. **A R No.105/2021** -: 2 :- 3. Heard the learned counsel for the petitioners and the learned counsel for the respondent. 4. The existence of an arbitration clause in Anneuxre-I agreement between the parties is not disputed. The relevant clause in Annexure-I agreement reads thus:- _“(i) All or any dispute, controversy, claim or disagreement arising out of or touching upon or in relation to the terms of this Agreement or its termination, breach, invalidity, including the interpretation and validity thereof and the respective rights and obligations of the Parties hereof, that cannot be amicably resolved by mutual discussion within ninety (90) calendar days of the commencement of discussions, shall be referred to Arbitration.”_ The objections of the respondent are :- (i) The entire transactions, as alleged, have taken place at Mumbai and hence, this Court does not have the territorial jurisdiction to entertain the request. (ii) The alleged transaction is in violation of the provisions of the Money Lending Act and hence the claim is unsustainable. **A R No.105/2021** -: 3 :- (iii) The claim is barred by limitation. (iv) The entire principal amount has been repaid and only the interest remains unpaid. The petitioners are claiming exorbitant interest. 5. The petitioners contend that, payment was effected to the respondent from Kerala and the debt is payable by the respondent to the applicants at Kerala; therefore the cause of action or its part thereof has arisen in Kerala hence this Court has jurisdiction to entertain the arbitration request. The debt has been acknowledged by the respondent through communications and hence the plea of limitation is without substance, it is contended. The alleged violation of the Money Lenders Act, is contended to be without substance. 6. Payment/advancement of loan constitutes part of cause of action. In paragraph 10 of the reply affidavit it is specifically pleaded that the entire money payment was effected from Kerala. That apart, the petitioners are residents in Kerala and the amount is payable at **A R No.105/2021** -: 4 :- Kerala. In the case of debts, the principle, “debtor is to seek the creditor” is often applied. The materials pursuade this Court to find that, at least part of the cause of action has arisen in Kerala. Therefore this Court has jurisdiction to entertain the arbitration request. The challenge on jurisdiction is accordingly, negatived. 7. As regards the other contentions urged, they are factual matters which require evidence, consideration of the nature of transaction etc. for determination. The applicants have pleaded that the respondent had undertaken to repay the amounts. Respondents claim to have repaid the principal amount and that only the interest portion remains. In terms of Section 16 of the Arbitration and Conciliation Act and the law laid by the Apex Court in _**Vidya Drolia v. Durga Trading Corporation (2020 (6) KLT 1025 (SC), Pravin Electricals Pvt. Ltd. v. Galaxy Infra and Engineering Pvt. Ltd. (2021 (2) KLT 1007 (SC),**_ these questions are **A R No.105/2021** -: 5 :- to be urged and agitated before the Arbitrator. 8. Thus leaving open the rights of the parties the Arbitration Request is disposed of as follows:- (a) Sri.S.Vijayakumar, Retd. District Judge, 48/425J-1, Sree Varam, Shreyas Lane, Edappally Raghavan Pillai Road, Elamakkara, Ernakulam-682026, is nominated provisionally as the Sole Arbitrator to adjudicate upon the disputes between the parties arising out of Annexure-A1 agreement. (b) A copy of this order shall be communicated to the learned Sole Arbitrator by the Advocate of the applicant within a period of one week from today. A copy of the order shall also be forwarded to the learned Sole Arbitrator by the Registry. (c) The Arbitrator is requested to forward the statement of disclosure under Section 11(8) r/w Section 12(1) of the Act 3 of 2016. - (d) The registry shall place the disclosure - statement before this Court, for confirmation of the **A R No.105/2021** -: 6 :- appointment of the Arbitrator. (e) The Arbitrator's fees shall be governed by the Kerala High Court (Fee Payable to Arbitrators) Rules, 2017. - (f) The arbitration costs and fees shall be shared equally. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF AR 105/2021** |PETITIONER ANNEXURES|| |---|---| |Annexure I|TRUE COPY OF THE AGREEMENT DATED 05/04/2014| ||BETWEEN VINOD SHRIDHARAN MENON AND OPPOSITE| ||PARTY.| |Annexure II|TRUE COPY OF THE CHEQUE NO. 703824 OF ICICI| ||BANK, ANDHERI BRANCH SIGNED BY OPPOSITE| ||PARTY.| |Annexure III|TRUE COPY OF THE CHEQUE NO. 703825 OF ICICI| ||BANK, ANDHERI BRANCH SINGED BY OPPOSITE| ||PARTY.| |Annexure IV|TRUE COPY OF THE DEATH CERTIFICATE OF MENON| ||VINOD SHRIDHARAN @ VINOD SHRIDHARAN MENON| ||DATED 21/03/2014.| |Annexure V|TRUE COPY OF THE LEGAL HEIRSHIP CERTIFICATE| ||DATED 12/09/2018 FROM KANAYANNUR TALUK.| |Annexure VI|TRUE COPY OF THE EMAIL DATED 15/02/2019| |Annexure VII|TRUE COPY OF THE LAWYER NOTICE DATED| ||07/09/2021.| |Annexure VIII|TRUE COPY OF THE POSTAL RECEIPT OF LAWYER| ||NOTICE.| |Annexure IV|TRUE COPY OF THE RETURNED ENVELOPS.| |Annexure X|TRUE COPY OF THE WILL OF VINOD SHRIDHARA| ||MENON DATED 31/12/2017.| -----