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G. Elumalai, Proprietor, M/s. GRP Constructions, Chennai v/s Raichand Daga & Another

    Arb. O.P (Com.Div.) No. 117 of 2022

    Decided On, 09 June 2022

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE M. SUNDAR

    For the Petitioner: S. Krishnasamy, Representing R. Ramachandran, Advocates. For the Respondents: T. Karunakaran, Advocate.



Judgment Text

(Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint an Arbitrator to sort out the issue between the petitioner and the respondents regarding the outstanding amount of Rs.66,28,797/- along with interest for the construction work completed by the petitioner as per the agreement dated 01.02.2017.)

1. This order will dispose of the captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity].

2. Proceedings made by this Court in the earlier listings of the captioned Arb OP on 17.03.2022, 31.03.2022 and 21.04.2022 read as follows:

Proceedings dated 17.03.2022:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 20.10.2021 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity].

2. Mr.R.Ramachandran, learned counsel for petitioner who is before this Court submits that captioned Arb OP is predicated on an 'agreement dated 01.02.2017 and described as 'Construction Agreement' between the petitioner and two respondents' [hereinafter 'primary contract' for the sake of convenience and clarity]. Learned counsel goes on to say that captioned Arb OP is particularly predicated on clauses 9 and 10 of primary contract which read as follows:

'9. Arbitration Clause In case of differences of any sort, the client and the contractor will have the rights to bring in another respectable entity each, representing each side. This will need to be done within 7 days of the difference concern before choosing the legal route by either. In case the matter is not sorted by them then the 2 chosen entity will chose a single authority acceptable to both sides to settle matters. Only after this a legal recourse needs to be taken.

10. Legal Course All legal issues will be address within Chennai jurisdiction only.'

3. Aforementioned clauses 9 and 10 of primary contract serve as an arbitration agreement between the sole petitioner and two respondents is learned counsel's say. To be noted 'arbitration agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

4. Learned counsel for petitioner submits that arbitrable disputes erupted between petitioner and respondents qua primary contract as according to the petitioner certain running bills including bills for work done outside of the agreement on the basis of instructions were not honoured. Arbitration agreement was triggered by issue of notice dated 21.09.2021 and a reply dated 04.10.2021 was sent by respondents saying that the jurisdictional police have been approached.

5. The above has necessitated the presentation of captioned Arb OP in this Court with a prayer for appointment of a sole Arbitrator is learned counsel's say.

6. Prima facie case for issue of notice made out.

7. Issue notice to respondents returnable in a fortnight i..e, returnable by 31.03.2022. Private notice permitted.

8. List on 31.03.2022.'

Proceedings dated 31.03.2022:

1. 'Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 17.03.2022.

2.Mr.R.Ramachandran, learned counsel for the sole petitioner is before this Court.

3. Mr.T.Karunakaran, learned counsel who is before this Court submits that he has entered appearance on behalf of both the respondents and requests for some time to file counter affidavit as according to him there is serious disputation about the existence of the arbitration agreement. Learned counsel submits that there is a Civil Court decree. Learned counsel requests for time to file counter affidavit and bring it on Board. Request acceded to.

List three(3) weeks hence. List on 21.04.2022.'

Proceedings dated 21.04.2022:

1. 'Mr.S.Krishnasamy, learned counsel for Mr.R.Ramachandran, counsel on record for petitioner and Mr.T.Karunakaran, learned counsel for the respondents are before this Court.

2. Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 31.03.2022.

3. This Court was informed that counter affidavit along with typed set of papers has since been filed after favouring the counsel for petitioner with advance copies. As there is a contest, this matter has to be heard out.

4. Both sides submit that it would be desirable to have the matter heard out after summer vacation. List the matter after summer vacation. List on 09.06.2022.'

3. Aforementioned proceedings are telltale qua the trajectory captioned matter has taken, the lis in a nutshell and details pertaining to arbitration agreement. The short forms, abbreviations and short references used in 17.03.2022 proceedings shall continue to be used in the instant order also for the sake of convenience and clarity.

4. In the hearing today, Mr.S.Krishnasamy, learned counsel representing Mr.R.Ramachandran, counsel on record for petitioner and Mr.T.Karunakaran, learned counsel for both the respondents are before this Court.

5. From the submissions made by learned counsel on both sides, more particularly, from the counter affidavit and typed set of papers filed by the learned counsel for respondents, it comes to light that a piquant situation which is a predicament of sorts has arisen in the case on hand. The respondents 1 and 2 arraying themselves as plaintiffs 1 and 2 respectively have filed a suit on the Original Side of this Court i.e., C.S.No.633 of 2019 arraying the aforementioned petitioner in the captioned Arb OP as lone respondent. This suit is inter alia with a prayer for claiming a little over Rs.1.11 Crores (Rs.1,11,64,469/-) together with interest and further sum of Rs.25 Lakhs towards damages. It is not necessary to dilate more on this, it would suffice to say that this suit is predicated on same primary contract and cause of action is the same arbitrable disputes for which trigger notice was issued. This suit came to be decreed ex-parte by a Hon'ble single Judge of this Court by judgment and decree dated 15.06.2021.

6. Learned counsel for the respondents submits that the sole defendant in the suit was duly served but did not go before Hon'ble single Judge and take recourse to Section 8 of A and C Act.

7. On the contrary, learned counsel for the petitioner in the captioned Arb OP submits that the suit summons were not served on the sole defendant. This Court deems it appropriate to not to express any opinion or view on this controversy, owing to the order, which this Court now proposes to pass. In other words, this controversy is left open to be decided by Hon'ble single Judge dealing with appropriate roster, if the petitioner in the captioned Arb OP chooses to go before Hon'ble Judge concerned (by way of a suitable application).

8. Other than the aforementioned controversy, there is no other disagreement regarding trajectory the matter on hand has taken. This has been captured supra. This means that there is an ex-parte decree in favour of the respondents. This Court is informed that the respondents have also launched an Execution Petition and the same is pending before this Court. It is not necessary to go into those details owing to the limited scope of a Section 11 legal drill.

9. Therefore, the only proper course to be adopted by the petitioner is now to go before the Hon'ble Jud

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ge dealing with Civil Suit roster and apply for dislodging the ex-parte decree, after which, the law will take its course depending on the outcome of the application. This course can be adopted by the petitioner, if so advised and so desired if the petitioner choses to adopt this course. Though obvious, for the purpose of specificity, it is made clear that Hon'ble single Judge dealing with Civil Suit roster will deal with the application for dislodging the ex-parte decree on its own merits and in accordance with law uninfluenced by any observation made in this order. 10. The sequitur is, captioned Arb OP being a limited legal drill under Section 11 of A and C Act is disposed of as closed preserving the rights of the petitioner in the aforesaid manner leaving open all the questions raised in the matter. There shall be no order as to costs.
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