Kalyan Silks Trichur Private Limited v. DLF Home Developers Limited

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN MONDAY, THE 29[TH] DAY OF NOVEMBER 2021 / 8TH AGRAHAYANA, 1943** **AR NO. 16 OF 2020** ## **APPLICANT** **KALYAN SILKS TRICHUR PRIVATE LIMITED, HAVING ITS REGISTERED OFFICE AT 4/621/2, KURIACHIRA P.O., THRISSUR-680006; REPRESENTED BY ITS MANAGER AND AUTHORIZED SIGNATORY, SHRI. V.K SUBRAMANIAN.** **BY ADVS.ASWIN GOPAKUMAR ANWIN GOPAKUMAR AMAL NATH NAIK RENOY VINCENT NIRANJAN SUDHIR SMT.FEMY ANN JOHNSON** **RESPONDENT:** **DLF HOME DEVELOPERS LIMITED, HAVING ITS REGISTERED OFFICE AT DLF CENTRE, SANSAD MARG, NEW DELHI – 110001; REPRESENTED BY ITS DIRECTOR.** **BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN SMT.POOJA MENON** **THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON** **29.11.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **AR NO. 16 OF 2020** **-2-** ## **ORDER** The applicant, which is stated to be a Private Limited Company, has approached this Court invoking the jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act', for short), asserting that they had entered into an agreement for purchase of an apartment with the respondent, namely Annexure A1; but that even though they had complied with all their obligations thereunder, the respondent deliberately chose not to do so, thereby leading to several disputes having been arisen between the parties. 2. Sri.Aswin Gopakumar – learned counsel appearing for the applicant, submitted that, when disputes arose as afore, his client addressed the respondent, through Annexure A4, seeking that either their demands be met, or that the disputes be agreed to be subjected to arbitration because, as per Clause 47 of Annexure A1 Agreement, all such can be **AR NO. 16 OF 2020** **-3-** adjudicated and resolved only through such mechanism. 3. Sri.Aswin Gopakumar, thereafter, conceded that the respondent caused a reply, namely Annexure A5, agreeing that disputes can be referred to arbitration; but appointing an Arbitrator on their own in a unilateral manner, which has now forced his client to approach this Court through this Arbitration Request. 4. The afore submissions were answered by Smt.Pooja Menon – learned counsel for the respondent, saying that, as per Clause 47 of Annexure A1, it is her client who is entitled to appoint an Arbitrator and that they have done so, as is evident from Annexure A5, and which fact is admitted by the applicant also. She submitted that, therefore, nothing remains in this Arbitration Request and prayed that the Arbitrator nominated by her client be allowed to continue and complete the proceedings, as per law, without any impediment in future. 5. In reply, Sri.Aswin Gopakumar submitted that ## **AR NO. 16 OF 2020** **-4-** the nomination by the respondent of a sole Arbitrator on their own, even if sanctioned by the terms of the Agreement, goes contrary to the affirmative declarations of the Hon'ble Supreme Court in _**Perkins Eastman Architects DPC & Another v. HSCC (India) Limited**_ [AIR 2020 SC 59], which has been followed by this Court in _**Tulsi Developers India Pvt. Ltd. v. Dr.Appu Benny Thomas**_ [2021 (5) KHC 404]. 6. The learned counsel for the applicant argued that law has now been well settled, without any requirement of reinstatement, that any contract which speaks contrary to the provisions of Section 12(5) of the Act will have to be disregarded and that this Court is then enjoined to appoint an independent sole Arbitrator, as per the provisions of Section 11 of the Act. 7. I must say that I find substantial force in the afore submissions of Sri.Aswin Gopakumar because, it is admitted that, through Annexure A5, the respondent themselves have nominated an Arbitrator and ## **AR NO. 16 OF 2020** **-5-** that they have edificed this on the stipulations in Clause 47 of Annexure A1 Agreement. 8. True, the provisions in Clause 47 provided that respondent can appoint an Arbitrator; but, as rightly argued by Sri.Aswin Gopakumar, such provisions will require to be cast aside by this Court, in view of the affirmative declarations in _**Perkins Eastman**_ (supra) and going by the undoubted Scheme of the Statutory mandate under Section 12(5) of the Act. 9. Before I tread forward, I certainly must examine Clause 47 of Annexure A1 to verify whether it is a binding arbitration Agreement. The terms of the said Clause make it irrefragable that parties have contractually committed themselves to refer all their disputes, arising from the terms of the Agreement, to a sole Arbitrator; and am, therefore, of the firm view that this Court is enjoined to order this Arbitration Request, because the nomination made by the respondent cannot answer the legal requirements under Section 12(5) of the Act. ## **AR NO. 16 OF 2020** **-6-** 10. Presumably, being aware of the mind of this Court as afore, Smt.Pooja Menon – learned counsel for the respondent, submitted that if this Court is inclined to refer the disputes to an independent Arbitrator, then her client may also be left liberty to raise a counter claim and to impel all their contentions before the said Authority. It is needless to say that such liberties are always available to the respondent. Resultantly, I allow this Arbitration Request in the following manner: (a) I nominate Mrs.Justice K.Hema, 'Myna', A-2-Galaxy Winston, Chilavannur Road, Kadavanthra, Kochi - 682 020, as the sole Arbitrator, to adjudicate and resolve the disputes and differences between the parties to this case arising from and relating to Annexure A1 Agreement. ## **AR NO. 16 OF 2020** **-7-** - (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of two weeks from today and to obtain a Statement of Disclosure from her under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. (c) Once the Disclosure Statement is obtained from the learned Arbitrator the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. (d)The fees of the Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996. - (e) In order to enable the Arbitrator ## **AR NO. 16 OF 2020** **-8-** to commence the proceedings without delay, I direct the parties to mark appearance before her at 11 A.M. on 24.12.2021. **Sd/DEVAN RAMACHANDRAN JUDGE** akv **-9-** ## **AR NO. 16 OF 2020** ## **APPENDIX OF AR 16/2020** ## **PETITIONER ANNEXURES** **ANNEXURE A1 TRUE COPY OF THE AGREEMENT DATED 30.10.2008 ENTERED INTO BETWEEN THE APPLICANT AND RESPONDENT. ANNEXURE A2 TRUE COPY OF THE LEGAL LAWYERS NOTICE DATED 05.03.2014 ISSUED TO THE RESPONDENT. ANNEXURE A3 TRUE COPY OF THE DEMAND CUM INVOICE SUMMARY/FINAL STATEMENT OF ACCOUNTS ISSUED BY THE RESPONDENT COMPANY TO THE APPLICANT. ANNEXURE A4 TRUE COPY OF THE LAWYERS NOTICE DATED 27.02.2019 ISSUED TO THE RESPONDENT AND ITS DIRECTORS. ANNEXURE A5 TRUE COPY OF THE NOTICE DATED 16.04.2019 ISSUED TO THE APPLICANT. ANNEXURE A6 TRUE COPY OF THE ORDER DATED 08.11.2019 PASSED BY THE HON'BLE 2ND ADDITIONAL DISTRICT COURT, ERNAKULAM IN I.A.NO.7700/2019 IN CMA (ARB) NO.1398/2019. ANNEXURE A7 TRUE COPY OF THE OBJECTIONS DATED 30.12.2020 SUBMITTED BY THE APPLICANT BEFORE THE SOLE ARBITRATOR.**