Aggarwal Welfare Society (Regd.) vs. Shivesh Sultania
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The petitioner, Aggarwal Welfare Society (Regd.), filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator. The dispute arose from a Lease Deed dated May 12, 2018, for a shop. The respondent, Shivesh Sultania, was liable to pay rent, Goods and Service Tax (GST), and electricity charges. The petitioner alleged that the respondent had defaulted in payment of a significant portion of the rent, GST, and electricity charges, totaling Rs. 24,70,008/-, along with 15% interest per annum. The petitioner had issued a notice under Section 21 of the Arbitration Act seeking arbitration, but the respondent denied the appointment of the proposed arbitrator, leading to the present petition.
Held
The Court found that a valid arbitration clause (Clause 24) exists in the Lease Deed and that disputes between the parties require adjudication through the arbitral mechanism. The respondent admitted the existence of disputes and did not dispute the arbitration clause. While the petitioner sought the appointment of an arbitrator, the respondent proposed mediation. Considering the nature of the disputes and the amounts involved, the Court decided to refer the parties to mediation in the first instance. If mediation fails within eight weeks of the first meeting, the matter will be referred to arbitration. Mr. Naveen Gupta was appointed as the Sole Arbitrator, to enter reference only if mediation fails. The parties are to approach the Arbitrator within two weeks of mediation finalization if it fails. All rights and contentions of the parties, including arbitrability and merits, are left open for the Arbitrator's adjudication. The petition is disposed of with these directions.
Key Issues
1. Whether a Sole Arbitrator should be appointed to adjudicate the disputes arising from the Lease Deed, as per Section 11(6) of the Arbitration and Conciliation Act, 1996? The petitioner argued that a valid arbitration clause exists in the Lease Deed and that the respondent's failure to pay rent, GST, and electricity charges constitutes a dispute necessitating arbitration. The petitioner relied on Clause 24 of the Lease Deed, which provides for dispute resolution through arbitration. The respondent did not dispute the existence of the arbitration clause or the fact that disputes exist between the parties. The respondent admitted that an arbitrator could be appointed to resolve these disputes. However, the respondent also suggested referring the matter to mediation.
Sections Cited
Section 11(6), Section 21, Section 12
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Cause title — parties, addresses and appearances
O R D E R % 22.01.2026
The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), thereby, seeking appointment of a Sole Arbitrator for adjudication of the disputes between the parties, arising out of the Lease Deed dated 12th May, 2018 (“Lease Deed”).
The parties had entered into the Lease Deed, wherein, the petitioner granted a lease in favour of the respondent in relation to the shop admeasuring 225 Sq. Feet on the Ground Floor, Front Side, at D-Block, Ashok Vihar, Phase-I, Delhi – 110052, for running a chemist shop by the respondent, under the name and style of ‘Shree Pharma’.
In pursuance to the Lease Deed, which was executed for a period of five (5) years, the respondent was liable to pay the amounts of Rs. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 11:37:56
51,87,000/- as rent, Rs. 9,33,660/- as Goods and Service Tax (“GST”) and Rs. 2,58,948/- as electricity charges, to the petitioner.
Learned counsel for the petitioner submits that the respondent has only paid an amount of Rs. 37,50,000/- and Rs. 1,59,600/- TDS refund, towards the rent payable to the petitioner. Further, the respondent has failed to pay the remaining amount along with the applicable GST and electricity charges totaling Rs. 24,70,008/-, along with 15% interest per annum.
It is further submitted that on account of the persistent defaults and non-payment by the respondent, the petitioner issued a notice dated 13th May, 2025 to the respondent, under Section 21 of the Arbitration Act and in pursuance to the arbitration clause, i.e., Clause 24 of the Lease Deed, seeking appointment of an arbitrator. However, vide reply dated 18th June, 2025, the respondent denied the appointment of the proposed arbitrator. Therefore, present petition came to be filed.
Learned counsel appearing for the respondent does not dispute the arbitration clause in the Lease Deed, and admits that there are disputes between the parties, and an arbitrator can be appointed to resolve the disputes.
This Court notes that the Lease Deed contains an arbitration clause, i.e., Clause 24, which reads as under: “xxx xxx xxx 24) That in case any dispute arises in respect of above Lease Deed, the matter shall be decided by an Arbitrator to be appointed or Nominated by Party No. 1 and Party No. 2 whose decision shall be final and binding on both parties. xxx xxx xxx”
This Court is satisfied that there exists a valid arbitration clause and there are disputes between the parties which need to be adjudicated through This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 11:37:56
arbitral mechanism.
At this stage, learned counsel appearing for the respondent submits that the matter be referred to mediation.
The aforesaid submission is opposed by learned counsel appearing for the petitioner, who submits that though the respondent had agreed for payment of due amount to the petitioner, however, the due amount has still not been paid to the petitioner.
Considering the nature of disputes between the parties and the amount involved in the dispute, this Court is of the view that in the first instance, the parties be referred to mediation, before reference to an Arbitrator.
Accordingly, considering the submissions made before this Court, the following directions are issued: i. The matter is referred to Delhi High Court Mediation and Conciliation Centre, to be listed before the mediator on 29th January, 2026. ii. In case the matter is not resolved through the process of mediation within a period of eight weeks from the first meeting with the Mediator, the present matter shall be referred and continued before the Arbitrator. iii. Mr. Naveen Gupta, Advocate, (Mob: 9312248478) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties. iv. The Arbitrator shall enter reference only if the mediation process between the parties has failed. v. The parties shall approach the Arbitrator within two (2) weeks of the finalization of the mediation process, in case the mediation process fails. vi. The remuneration of the Arbitrator shall be in terms of Schedule IV of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 11:37:56
the Arbitration Act. vii. The Arbitrator is requested to furnish a declaration in terms of Section 12 of the Arbitration Act prior to entering into the reference. In the event there is any impediment to the Arbitrator’s appointment on that count, the parties are given liberty to file an appropriate application before this Court. viii. It shall be open to the respondent to raise counter-claims, if any, in arbitration proceedings. ix. It is made clear that all the rights and contentions of the parties, including, the arbitrability of any of the claims and/or counter-claims, any other preliminary objection, as well as claims on merits of the dispute of either of the parties, are left open for adjudication by the learned Arbitrator.
Needless to state, nothing in this order shall be construed as an expression of this Court on the merits of the case.
The petition is disposed of in the aforesaid terms.
A copy of this order shall be sent to Delhi High Court Mediation and Conciliation Centre, forthwith. MINI PUSHKARNA, J JANUARY 22, 2026 ak This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 11:37:56
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