Swaran Singh v. M/s Mahindra & Mahindra Financial Services Ltd.

: Mr. Rakesh Thakur, Advocate. For the Respondents : Mr. G.C. Gupta, Senior Advocate with Ms. Meera Devi, Advocate. G.S. Sandhawalia, Chief Justice (Oral). The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) for appointment of an Arbitrator on behalf of the respondent under arbitration agreement contained in sub clause 23 of the rent/lease agreement dated 20.11.2012.

#2. Notice dated 29.08.2022 (Annexure P-5) was sent to the respondents regarding the dispute in issue claiming the rental amount of Rs.82,416/- and damages of Rs.15,00,000/- on account of the agreement dated 20.11.2012 inter se the parties.

#3. A perusal of the same would go on to show that there was a rent/lease agreement as such for a period of nine years 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 and the building had been modified and constructed as per the requirement in the year 2012 and petitioner has spent about Rs.5,00,000/- to Rs.6,00,000/- on the same. The possession had been taken firstly and then vacated and rent had not been paid.

#4. In such circumstances, the notice as such had been sent to the respondents to pay and clear entire outstanding rent dues amounting to Rs.82,416/- and damages to the tune of Rs.15,00,000/- and in case the payment is not paid, then the matter may be referred to Arbitration.

#5. The stand of the respondent as such was only on account of the fact that this Court would have no jurisdiction and the place of Arbitration shall be at Mumbai.

#6. On 11.07.2025, the following order was passed:- “Since apparently, Clause 23(1) cannot be acted upon by the respondents then they would have no right as such to appoint the Arbitrator in view of the law laid down in Perkins Eastman Architects DPC vs. HSCC (India) Pvt. Ltd. (2020) 20 SCC 760. Regarding the place of Arbitration, it is pointed out that the property was leased within the jurisdiction of this Court and therefore fixing the place of Arbitration in Mumbai would be onerous. The outstanding amount of non-payment of rent is only Rs.82,416 for three months, apart from the damages which are sought as such of Rs.15,00,000/-. Notice. Ms. Meera Devi, Advocate, appears and accepts service of notice on behalf of the respondents. To come up on 22.08.2025.” 3

#7. Resultantly, the matter has now been taken up, keeping in view the fact that the parties as such have agreed that the matter has to be settled by way of arbitration, in view of Clause 23 of the ‘Act’. A perusal of Clauses 22 and 23 of the ‘Act’ would go on to show that the parties have agreed to settle the dispute by way of an Arbitrator. The said Clauses reads as under:- “22. Dispute Resolution All disputes, differences & questions of any nature which may at any time arise between the parties to this Agreement or her respective representative and assigns or any of them out of the construction of or concerning anything contained in or arising out of this agreement or as to the rights, duties or liabilities under it of the parties to it respectively or her respective representative shall be subject to the non-exclusive jurisdiction of the courts at (Mumbai).

#23. Arbitration. Any dispute, difference controversy or claims arising out of or relating to this Agreement or any breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996. 1) The arbitration tribunal shall be composed of sole arbitrator to be appointed by the LESSEE. 2) The place of arbitration shall be Mumbai and any award made whether interim or final, shall be deemed for all purposes between the Parties to be made, in Mumbai. 3) The arbitration proceedings shall be conducted in the English language and any award or awards shall be rendered in English. The procedural law of the arbitration shall be Indian law. 4) The award of the arbitrator shall be final and conclusive and binding upon the Parties, and the Parties shall be entitled (but not obliged) to enter 4 judgment thereon in any one or more of the courts having jurisdiction. 5) Each Party shall bear the expenses of the arbitrator appointed by it, and the Parties shall share all the other expenses equally.”

#8. As noticed, the objection as such on the issue of jurisdiction cannot be sustained, keeping in view the fact that the cause of action had arisen wholly within the jurisidiction of this Court and the property is situated here and the lease as such was for the usage of the said building situated within the jurisdiction of this Court. The fixing as such of jurisdiction at Mumbai would be totally onerous condition imposed and cannot be sustained.

#9. Reliance can also be placed upon the judgment of the Apex Court in Central Inland Water Transport Corporation Vs. Brojo Nath Ganguly & Another (1986) 3 SCC 156 to this context that such onerous conditions imposed are liable to be struck-down.

#10. Resultantly, the application is allowed and Mr. Gobind Korla, learned Additional Advocate General present in the Court is appointed as an Arbitrator (Mobile No.8894010999) to adjudicate the dispute between the parties, after his disclosure in writing is obtained in terms of Section 11(8) 5 of the Act and only after receipt thereof, his appointment, as an Arbitrator, shall come into force.

#11. On his giving consent to arbitrate the dispute between the parties as an Arbitrator, Mr. Gobind Korla, learned Additional Advocate General shall enter into reference, and shall pass an award in accordance with law.

#12. Copy of this order be furnished to the learned counsel for the parties and also be furnished to the learned Arbitrator. The learned Arbitrator so appointed shall be entitled to fee as per stipulation contained in 4th Schedule appended to the Arbitration and Conciliation Act, 1996.

#13. Accordingly, the application is disposed off alongwith pending miscellaneous application(s), if any. (G.S. Sandhawalia) Chief Justice (munish thakur) 31st October, 2025