SURESH SHAH versus HIPAD TECHNOLOGY INDIA PRIVATE LIMITED on 18 December 2020

SURESH SHAH

V.

HIPAD TECHNOLOGY INDIA PRIVATE LIMITED

(Arbitration Petition (Civil) No. 08/2020)

DECEMBER 18, 2020

[S. A. BOBDE, CJI, A. S. BOPANNA ANDV. RAMASUBRAMANIAN, JJ.]

Arbitration: Arbitrability of the dispute relating to lease/tenancy agreements/deeds when such lease is governed by theTransfer of Property Act, 1882 – Held: When the disputes arisebetween the landlord and tenant with regard to determination oflease under the TP Act, the landlord for seeking possession of theleased property in a normal circumstance is required to institute asuit in the court which has jurisdiction – However, if the parties inthe contract of lease have agreed upon the alternate mode of disputeresolution through arbitration, the landlord would be entitled toinvoke the arbitration clause and make a claim before the arbitrator– The instant case is governed by the Transfer of Property Act,petitioner-landlord while invoking the arbitration clause nominatedsole arbitrator and issued notice to the respondent-tenant –Respondent neither replied to the notice nor objected to the arbitratorproposed by the petitioner – Since dispute between the parties is tobe resolved through arbitration, the prayer made in this petition isaccepted – Petition for appointment of nominated sole arbitratorallowed – Transfer of Property Act, 1882 – ss.111, 114, 114A.

Arbitration: Arbitrability of the dispute arising under the RentAct – Held: If the eviction or tenancy is governed by a special statute,namely, the Rent Act, the premises being amenable to the provisionsof the Act would also provide statutory protection against evictionand the courts specified in the Act alone will be conferredjurisdiction to order eviction or to resolve such other disputes – Insuch proceedings under special statutes, the issue to be consideredby the jurisdictional court is not merely the terms and conditionsentered into between the landlord and tenant but also other aspectssuch as the bonafide requirement, comparative hardship etc. evenif the case for eviction is made out – In such circumstance, theCourt having jurisdiction alone can advert into all these aspects as A

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Aa statutory requirement and such cases are not arbitrable – RentControl Legislation.

Allowing the Arbitration Petition, the Court HELD: 1. A perusal of s.111 & 114, 114 A of TP Act indicatethe manner in which the determination of lease would occur, whichBalso includes determination by forfeiture due to the acts of thelessee/tenant in breaking the express condition agreed betweenthe parties or provided in law. The breach and the consequentforfeiture could also be with respect to non-payment of rent. Insuch circumstance where the lease is determined by forfeitureCand the lessor sues to eject the lessee and, if, at the hearing ofthe suit, the lessee pays or tenders to the lessor the rent in arrear,Section 114 of TP Act provides that the Court instead of passinga decree for ejectment may pass an order relieving the lesseeagainst the forfeiture due to which the lessee will be entitled tohold the property leased as if the forfeiture had not occurred.DUnder Section 114A of the TP Act, a condition for issue of noticeprior to filing suit of ejectment is provided so as to enable thelessee to remedy the breach. No doubt the said provisions providecertain protection to the lessee/tenant before being ejected fromthe leased property. The same cannot be construed as a statutoryEprotection nor as a hard and fast rule in all cases to waive theforfeiture. It is a provision enabling exercise of equitablejurisdiction in appropriate cases as a matter of discretion. [Para15][831-F-H; 832-A-B]

2. Such equitable protection does not mean that theFdisputes relating to those aspects between the landlord and thetenant is not arbitrable and that only a Court is empowered towaive the forfeiture or not in the circumstance stated in theprovision. When the disputes arise between the landlord andtenant with regard to determination of lease under the TP Act,the landlord to secure possession of the leased property in aGnormal circumstance is required to institute a suit in the Courtwhich has jurisdiction. However, if the parties in the contract oflease or in such other manner have agreed upon the alternatemode of dispute resolution through arbitration the landlord would H

be entitled to invoke the arbitration clause and make a claimbefore the Arbitrator. Even in such proceedings, if thecircumstances as contained in Section 114 and 114A of TP Actarise, it could be brought up before the Arbitrator who wouldtake note of the same and act in accordance with the law quapassing the award. [Para 16][832-E-H]

3. Insofar as eviction or tenancy relating to mattersgoverned by special statutes where the tenant enjoys statutoryprotection against eviction whereunder the Court/Forum isspecified and conferred jurisdiction under the statute alone canadjudicate such matters. Hence in such cases the dispute is non-arbitrable. If the special statutes do not apply to the premises/property and the lease/tenancy created thereunder as on the datewhen the cause of action arises to seek for eviction or such otherrelief and in such transaction if the parties are governed by anArbitration Clause; the dispute between the parties is arbitrableand there shall be no impediment whatsoever to invoke theArbitration Clause. [Para 18][833-F-G]

4. The petitioner in the instant case while invoking theArbitration Clause has proposed the name of Justice (Retired)Mukul Mudgal as the Sole Arbitrator. The respondent neitherreplied to the said notice nor objected to the Arbitrator proposedby the petitioner. In that backdrop since a dispute between theparties is to be resolved through Arbitration, the prayer made inthis petition is liable to be accepted. [Para 19][834-A-B]

Vidya Drolia & Ors. v. Durga Trading Corporation(2019) SCC online SC 358 : 2019 (3) SCR 465 – reliedon.

Booz Allen and Hamilton Inc v. SBI Home FinanceLimited and Others (2011) 5 SCC 532: [2011] 7 SCR310; Himangni Enterprises v. Kamaljeet Singh Ahluwalia(2017) 10 SCC 706:[2017] 10 SCR 139; Natraj StudiosLtd. v. Navrang Studios (1981) 1 SCC 523: [1981] 2SCR 466; Namdeo Lokman Lodhi v. Narmadabai &Others AIR 1953 SC 228:[1953] SCR 1009 – referredto.

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CIVIL ORIGINAL JURISDICTION: Arbitration Petition (Civil)No. 08 of 2020

C[Petition under Section 11(5) of Arbitration and Conciliation Act,1996 for appointment of sole Arbitrator]

Vikas Dhawan, Satyabrata Panda, Shashwat Panda, Advs. forthe appearing parties.

The Judgment of the Court was delivered byD

A.S. BOPANNA, J.

1. The petitioner has instituted this petition under Section 11(5) ofthe Arbitration and Conciliation Act, 1996 (‘Act, 1996’ for short) seekingappointment of a Sole Arbitrator for resolving the disputes that haveEarisen between the parties in relation to the Sub-Lease deed dated14.11.2018.

2. The property bearing No.154-B, Block ‘A’ Sector 63, Phase-III,NOIDA, Gautam Budh Nagar, U.P. having been initially allotted andleased by New Okhla Industrial Development Authority (‘NOIDA’ forFshort) under a Lease dated 26.03.2003 had changed hands and the leasewas ultimately transferred in favour of the petitioner under a TransferMemorandum dated 13.04.2011.

3. The petitioner thus having acquired absolute long-term leaseholdright of the land and building referred supra has Sub-Leased the same tothe respondent under the Sub- Lease Deed dated 14.11.2018. In respectGof the Sub-Lease entered into between the parties, certain disputes arestated to have arisen which is to be resolved. Since the Sub-Lease Deedprovides for resolution of the disputes through arbitration vide Clause 12thereof the petitioner invoked the same by issuing a notice dated11.12.2019, nominated the Sole Arbitrator and sought concurrence from H

the respondent. The respondent did not respond to the same. The petitioneris, therefore, before this Court seeking appointment of the Arbitrator.

4. Notice of this petition was ordered to the respondent on02.03.2020. Despite service, the respondent has not chosen to appearand oppose this petition. In that light we have heard Mr. Vikas Dhawan,learned counsel for the petitioner and perused the petition papers.

5. The parties to the petition have entered into a Sub- Lease Deeddated 14.11.2018 whereunder the terms of lease have been agreed tobetween the parties. In respect of the terms and conditions agreed underthe Sub-Lease Deed certain disputes have arisen between the parties.In the Deed the parties have agreed that the disputes arising out of thesame shall be resolved through Arbitration. The clause thereto reads ashereunder:

“12.1 All disputes, differences or disagreements arising out of, inconnection with or in relation to this Sub-Lease Deed, includingw.r.t. its interpretation, performance, termination, in the firstinstance shall be endeavored to be settled through good faith mutualdiscussions between the officials of the Sub-Lessor and the Sub-Lessee.

12.2 If no settlement can be reached through such discussionsbetween the Parties within a period of 21 (twenty one) days, thenall such unresolved disputes, differences or disagreements shallbe finally decided through arbitration, to be held in accordancewith the provisions of the Arbitration & Conciliation Act, 1996.The venue of arbitration shall be New Delhi and the language ofsuch arbitration shall be English.

12.3 The Arbitral Tribunal shall consist of a sole arbitrator to bemutually agreed by the Parties. In the event of any disagreementregarding the appointment of the sole arbitrator, the same shallonly and exclusively be appointed by the Hon’ble High Court ofDelhi at New Delhi. The arbitral award shall be final and binding.”

6. The petitioner, therefore, got issued a Notice dated 11.12.2019detailing the default committed by the respondent which gave rise to thedispute between the parties and also invoked the Arbitration Clause.The petitioner proposed the name of Justice (Retired) Mukul Mudgal asthe Sole Arbitrator and indicated that if the respondent does not agree tothe same the petitioner would seek appointment of Sole Arbitrator throughCourt. It is in that view the petitioner is before this Court.

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A7. At the outset, a perusal of the above extracted Clause indicatesthat the disputes between the parties is to be resolved through Arbitration.A further perusal of the Clause indicates that the parties have agreed tosecure appointment of the Arbitrator through the High Court of Delhi atNew Delhi. It is in that view an indication to the same effect is made inthe notice dated 11.12.2019. Though that be the position the descriptionBof the petitioner in the Sub-Lease Deed as well as in the cause title tothis petition and also the averments in the petition indicate that thepetitioner is a citizen of Kenya and habitually is a resident of Nairobi,Kenya. Thus, the petitioner being an individual who is a national of Kenyaand is habitually a resident of that country; having entered into a contractCand since disputes have arisen under the said document, the same qualifiesas an ‘International Commercial Arbitration’ as defined in Section 2(f)of Act, 1996. In such circumstance, Supreme Court is to appoint anArbitrator as provided under Section 11(6) of the Act, 1996 and not bythe High Court as stated in the contract entered into between the parties.D8. However, before considering the appointment of Arbitrator thefirst part of Clause 12 providing for arbitration needs elaboration toconsider the arbitrability of the dispute relating to lease/tenancyagreements/deeds when such lease is governed by Transfer of PropertyAct, 1882 (‘TP Act’ for short) and iron out the creases on the legalaspect. The learned counsel for the petitioner asserts that the tenancy inEthe instant case is not created under; nor is the leased/tenanted propertygoverned by a special statute where the tenant enjoys statutory protectionand as such there is no impediment for resolving the dispute througharbitration. On that aspect the position explained by the Supreme Courtin the case of Booz Allen and Hamilton Inc vs. SBI Home FinanceFLimited and Others (2011) 5 SCC 532 leaves no doubt. In order to putthe matter in perspective it would be profitable to extract para 35 and 36which reads as hereunder:

“35. The Arbitral Tribunals are private fora chosen voluntarily bythe parties to the dispute, to adjudicate their disputes in place ofGcourts and tribunals which are public fora constituted under thelaws of the country. Every civil or commercial dispute, eithercontractual or non-contractual, which can be decided by a court,is in principle capable of being adjudicated and resolved byarbitration unless the jurisdiction of the Arbitral Tribunals isexcluded either expressly or by necessary implication. AdjudicationH

of certain categories of proceedings are reserved by the legislatureexclusively for public fora as a matter of public policy. Certainother categories of cases, though not expressly reserved foradjudication by public fora (courts and tribunals), may by necessaryimplication stand excluded from the purview of private fora.Consequently, where the cause/dispute is inarbitrable, the courtwhere a suit is pending, will refuse to refer the parties to arbitration,under Section 8 of the Act, even if the parties might have agreedupon arbitration as the forum for settlement of such disputes.

36. The well-recognised examples of non- arbitrable disputes are:(i) disputes relating to rights and liabilities which give rise to orarise out of criminal offences; (ii) matrimonial disputes relating todivorce, judicial separation, restitution of conjugal rights, childcustody; (iii) guardianship matters; (iv) insolvency and winding-upmatters; (v) testamentary matters (grant of probate, letters ofadministration and succession certificate); and (vi) eviction ortenancy matters governed by special statutes where the tenantenjoys statutory protection against eviction and only the specifiedcourts are conferred jurisdiction to grant eviction or decide thedisputes.”

9. Notwithstanding the same, there is a deflection from the settledposition due to certain observations contained in the decision of theSupreme Court in the case of Himangni Enterprises vs. KamaljeetSingh Ahluwalia (2017) 10 SCC 706. In the facts therein the landlordhad filed a civil suit against the tenant for eviction. In the said suit thetenant filed an application under Section 8 of Act, 1996 seeking referenceto arbitration since the parties were governed by an arbitrationagreement. The Civil Court had dismissed the application and that orderwas upheld by the High Court. The Supreme Court while deciding thesame, though relied on the decision in the case of Natraj Studios (P) Ltd.vs. Navrang Studios (1981) 1 SCC 523 wherein the issue arose in respectof premises governed under the Bombay Rents, Hotel and LodgingHouses Rates Control Act, 1947 (Special Statute) and the case of BoozAllen (supra) wherein it was clearly indicated that non arbitrability is inrespect of tenancy governed by special statutes, still upheld the orderrejecting the application under Section 8 of Act, 1996 seeking referenceto arbitration.

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A10. The observations contained in para 23 and 24 of HimangniEnterprises (supra) has brought within its sweep the non-arbitrabilityof disputes relating to the lease/tenancy governed under TP Act. Thesaid observations read as hereunder:

“23. The learned counsel for the appellant, however, argued thatBthe provisions of the Delhi Rent Act, 1995 are not applicable tothe premises by virtue of Section 3(1)(c) of the Act and hence,the law laid down in the aforementioned two cases [Natraj Studios(P) Ltd. v. Navrang Studios, (1981) 1 SCC 523] , [Booz Allen &Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 :(2011) 2 SCC (Civ) 781] would not apply. We do not agree.

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24. The Delhi Rent Act, which deals with the cases relating torent and eviction of the premises, is a special Act. Though itcontains a provision (Section 3) by virtue of it, the provisions ofthe Act do not apply to certain premises but that does not meanthat the Arbitration Act, ipso facto, would be applicable to suchDpremises conferring jurisdiction on the arbitrator to decide theeviction/rent disputes. In such a situation, the rights of the partiesand the demised premises would be governed by the Transfer ofProperty Act and the civil suit would be triable by the civil courtand not by the arbitrator. In other words, though by virtue ofESection 3 of the Act, the provisions of the Act are not applicableto certain premises but no sooner the exemption is withdrawn orceased to have its application to a particular premise, the Actbecomes applicable to such premises. In this view of the matter, itcannot be contended that the provisions of the Arbitration Actwould, therefore, apply to such premises.”F

11. The said observations are made by a Bench of two Hon’bleJudges without detailed reference to the scope of the provisions or themanner of right and protection available to lessees/tenants under TP Actso as to exclude arbitration. In that light, another Bench of two Hon’bleJudges speaking through R.F. Nariman J., in the case of Vidya DroliaG& Ors. vs. Durga Trading Corporation (2019) SCC online SC 358noticed that Natraj Studios (supra) had dealt with tenancy under RentAct and Booz Allen (supra) had made reference to special statutes andhad not stated with respect to non-arbitrability of cases arising under TPAct. In that regard having noted the provision contained in Section 111,H114 and 114A of TP Act had in para 16 concluded as follows:

“16. In fact, a close reading of Section 114 would show that therights of landlord and tenant are balanced by the aforesaidprovision. This is because where a lease of immoveable propertyhas determined by forfeiture for non-payment of rent, and at thehearing of the suit, the lessee pays or tenders to the lessor therent in arrears, together with interest thereon and his full costswithin 15 days, the Court in its discretion may relieve the lesseeagainst the forfeiture. This shows two things - one that thelandlord's interest is secured not only by the deposit of rent inarrears but also interest thereon and full costs of the suit. Theoption given, of course, is that security may also be given butwhat is important is that the Court is given a discretion in makinga decree for ejectment if this is done. The discretion may beexercised in favour of the tenant or it may not. This itself showsthat Section 114 cannot be said to be a provision conceived forrelief of tenants as a class as a matter of public policy. The samegoes for Section 114A. Here again, a lessee is given oneopportunity to remedy breach of an express condition, providedsuch condition is capable of remedy. However, the exceptioncontained in this section shows that it is a very limited right that isgiven to a tenant, as this would not apply to assigning, sub- letting,parting with the possession, or disposing of the property leased, oreven to an express condition relating to forfeiture in case ofnon-payment of rent. Thus, it is clear that every one of the groundsstated in Section 111, whether read with Section 114 and/or 114A,are grounds which can be raised before an arbitrator to decide asto whether a lease has or has not determined.”

12. Further, with specific reference to the consideration in thecase of Natraj Studios (supra) and Booz Allen (supra) it was observedin para 24 of Vidya Drolia (supra) as follows:

“24. A perusal of both the aforesaid judgments, therefore, showsthat a Transfer of Property Act situation between a landlord andtenant is very far removed from the situation in either Natraj Studios(supra) or in sub-paragraph (vi) of paragraph 36 of Booz Allen(supra). We are, therefore, of the respectful view that the questioninvolved in a Transfer of Property Act situation cannot possiblybe said to have been answered by the two decisions of this Court,as has been stated in paragraph 18 of the said judgment.”

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A13. In the reference made to a larger bench in the case of VidyaDrolia (supra) several aspects arose for consideration which has beenadverted to therein. However, the only issue for our consideration is asto whether in the instant case the dispute arising under the lease beinggoverned under the TP Act is arbitrable.B14. To arrive at our conclusion, we have taken note of the provisionscontained in Section 111, 114 and 114A of the TP Act which read ashereunder:

“111. Determination of lease.— A lease of immovable property,determines—C

(a) by efflux of the time limited thereby; (b)where such time is limited conditionally on the happening ofsome event—by the happening of such event;

(c) where the interest of the lessor in the property terminatesDon, or his power to dispose of the same extends only to, thehappening of any event—by the happening of such event; (d)in case the interests of the lessee and the lessor in the wholeof the property become vested at the same time in one personin the same right; E(e)by express surrender; that is to say, in case the lessee yieldsup his interest under the lease to the lessor, by mutualagreement between them; (f)by implied surrender; (g)by forfeiture, that is to say, (1) in case the lessee breaks anFexpress condition which provides that on breach thereof thelessor may re-enter; or (2) in case the lessee renounces hischaracter as such by setting up a title in a third person or byclaiming title in himself; or (3) the lessee is adjudicated aninsolvent and the lease provides that the lessor may re-enterGon the happening of such event; and in any of these casesthe lessor or his transferee gives notice in writing to the lesseeof his intention to determine the lease; (h)on the expiration of a notice to determine the lease, or toquit, or of intention to quit, the property leased, duly given byHone party to the other.”

“114. Relief against forfeiture for non- payment of rent.—Where a lease of immovable property has been determined byforfeiture for non-payment of rent, and the lessor sues to ejectthe lessee, if, at the hearing of the suit, the lessee pays or tendersto the lessor the rent in arrear, together with interest thereon andhis full costs of the suit, or gives such security as the Court thinkssufficient for making such payment within fifteen days, the Courtmay, in lieu of making a decree for ejectment, pass an orderrelieving the lessee against the forfeiture; and thereupon the lesseeshall hold the property leased as if the forfeiture had not occurred.

114A. Relief against forfeiture in certain other cases.—Where a lease of immovable property has been determined byforfeiture for a breach of an express condition which providesthat on breach thereof the lessor may re-enter, no suit for ejectmentshall lie unless and until the lessor has served on the lessee anotice in writing—

(a) specifying the particular breach complained of; and (b)if the breach is capable of remedy, requiring the lessee toremedy the breach; and the lessee fails, within a reasonable time from the date of theservice of the notice, to remedy the breach, if it is capable ofremedy.

Nothing in this section shall apply to an express condition againstassigning, under- letting, parting with the possession, or disposing,of the property leased, or to an express condition relating toforfeiture in case of non-payment of rent.”

15. A perusal of the provisions indicate the manner in which thedetermination of lease would occur, which also includes determinationby forfeiture due to the acts of the lessee/tenant in breaking the expresscondition agreed between the parties or provided in law. The breach andthe consequent forfeiture could also be with respect to non- payment ofrent. In such circumstance where the lease is determined by forfeitureand the lessor sues to eject the lessee and, if, at the hearing of the suit,the lessee pays or tenders to the lessor the rent in arrear, Section 114 ofTP Act provides that the Court instead of passing a decree for ejectmentmay pass an order relieving the lessee against the forfeiture due to whichthe lessee will be entitled to hold the property leased as if the forfeiture A

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Ahad not occurred. Under Section 114A of the TP Act a condition forissue of notice prior to filing suit of ejectment is provided so as to enablethe lessee to remedy the breach. No doubt the said provisions providecertain protection to the lessee/tenant before being ejected from theleased property. In our considered view, the same cannot be construedas a statutory protection nor as a hard and fast rule in all cases to waiveBthe forfeiture. It is a provision enabling exercise of equitable jurisdictionin appropriate cases as a matter of discretion. This position has beenadverted to by the Supreme Court in one of its earliest decision in thecase of Namdeo Lokman Lodhi vs. Narmadabai & Others (AIR1953 SC 228) as under:C“….. The argument of Mr. Daphtary that there was no realdiscretion in the court and relief could not be refused except incases where third party interests intervene is completely negativedby the decision of the House of Lords in Hyman v. Rose.”

“…..With great respect we think that the observations cited aboveDcontain sound principles of law. We are, therefore, unable to accedeto the contention of Mr. Daphtary that though section 114 of theTransfer of Property Act confers a discretion on the court, thatdiscretion except in cases where third party interests intervenemust always be exercised in favour of the tenant irrespective ofEthe conduct of the tenant.”

16. Such equitable protection does not mean that the disputesrelating to those aspects between the landlord and the tenant is notarbitrable and that only a Court is empowered to waive the forfeiture ornot in the circumstance stated in the provision. In our view, when theFdisputes arise between the landlord and tenant with regard todetermination of lease under the TP Act, the landlord to secure possessionof the leased property in a normal circumstance is required to institute asuit in the Court which has jurisdiction. However, if the parties in thecontract of lease or in such other manner have agreed upon the alternatemode of dispute resolution through arbitration the landlord would beGentitled to invoke the arbitration clause and make a claim before thelearned Arbitrator. Even in such proceedings, if the circumstances ascontained in Section 114 and 114A of TP Act arise, it could be broughtup before the learned Arbitrator who would take note of the same andact in accordance with the law qua passing the award. In other words, ifHin the arbitration proceedings the landlord has sought for an award of ejectment on the ground that the lease has been forfeited since the tenanthas failed to pay the rent and breached the express condition for paymentof rent or such other breach and in such proceedings the tenant pays ortenders the rent to the lessor or remedies such other breach, it would beopen for the Arbitrator to take note of Section 114, 114A of TP Act andpass appropriate award in the nature as a Court would have consideredthat aspect while exercising the discretion.

17. On the other hand, the disputes arising under the Rent Actswill have to be looked at from a different view point and therefore notarbitrable in those cases. This is for the reason that notwithstanding theterms and conditions entered into between the landlord and tenant toregulate the tenancy, if the eviction or tenancy is governed by a specialstatute, namely, the Rent Act the premises being amenable to theprovisions of the Act would also provide statutory protection againsteviction and the courts specified in the Act alone will be conferredjurisdiction to order eviction or to resolve such other disputes. In suchproceedings under special statutes the issue to be considered by thejurisdictional court is not merely the terms and conditions entered intobetween the landlord and tenant but also other aspects such as thebonafide requirement, comparative hardship etc. even if the case foreviction is made out. In such circumstance, the Court having jurisdictionalone can advert into all these aspects as a statutory requirement and,therefore, such cases are not arbitrable. As indicated above, the same isnot the position in matters relating to the lease/tenancy which are notgoverned under the special statutes but under the TP Act.

18. In the backdrop of the above discussion, we are of theconsidered view that insofar as eviction or tenancy relating to mattersgoverned by special statutes where the tenant enjoys statutory protectionagainst eviction whereunder the Court/Forum is specified and conferredjurisdiction under the statute alone can adjudicate such matters. Hencein such cases the dispute is non-arbitrable. If the special statutes do notapply to the premises/property and the lease/tenancy created thereunderas on the date when the cause of action arises to seek for eviction orsuch other relief and in such transaction if the parties are governed byan Arbitration Clause; the dispute between the parties is arbitrable andthere shall be no impediment whatsoever to invoke the Arbitration Clause.This view is fortified by the opinion expressed by the Co-ordinate Benchwhile answering the reference made in the case of Vidya Drolia whereinthe view taken in Himangni Enterprises is overruled.

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A19. As noted above, the petitioner in the instant case while invokingthe Arbitration Clause has proposed the name of Justice (Retired) MukulMudgal as the Sole Arbitrator. The respondent neither replied to the saidnotice nor objected to the Arbitrator proposed by the petitioner. In thatbackdrop since a dispute between the parties is to be resolved throughArbitration, the prayer made in this petition is liable to be accepted.B

20. In the result, the petition is allowed. Shri Justice (Retired)Mukul Mudgal, former Chief Justice of Punjab and Haryana High Courtis appointed as the Sole Arbitrator to resolve the dispute between theparties. The arbitral fee shall be payable as provided under the FourthSchedule to Act, 1996. There shall be no order as to costs in this petition.

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Devika Gujral

Arbitration Petition allowed

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