Thakur Mahesh Raj Singh vs. M/S. Think And Learn Private Limited, A Private Limited Company

Facts

The applicants, owners of commercial property, filed an Arbitration Application under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator. The dispute arose from a lease deed dated 08.06.2022 with the respondent, M/s. Think and Learn Private Limited, who is the tenant. The applicants claimed that the respondent delayed rent payments and failed to pay arrears of rent, TDS rents, GST amounts, and pending bills, totaling Rs. 43,84,766/-. Clause 22.1 of the lease deed stipulated arbitration for dispute resolution. The applicants had previously sent a notice dated 23.07.2024 under Section 21 of the Act, to which the respondent did not reply. Personal notice of the application was served on the respondent, but they did not appear or engage counsel.

Held

The Court held that it had the power to appoint a sole arbitrator under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996, as a dispute had arisen between the parties concerning the lease deed, including alleged arrears of rent, TDS, and GST amounts. The Court found that the respondent had been duly served with notice of the application, evidenced by the returned notice and their subsequent non-appearance. As there was no contest from the respondent, the Court proceeded to allow the application. The Court appointed Sri M. Shanta Raju, District Judge (Retired), as the sole Arbitrator to adjudicate the claims and disputes between the parties and pass an award in accordance with law. The parties were granted liberty to raise all factual and legal grounds. The Arbitrator's fees would be as per the Fourth Schedule to the Act, borne equally by both parties. No order as to costs was made.

Key Issues

1. Whether the Court has the power to appoint a sole arbitrator under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996, when a dispute arises from a lease deed involving arrears of rent, TDS, and GST amounts. 2. Whether the respondent has been duly served with notice of the arbitration application, justifying proceeding ex-parte. Petitioner's Arguments: The petitioners argued that a dispute existed as per the lease deed, necessitating arbitration. They contended that the respondent's failure to pay rent, TDS, and GST, as detailed in their notice, constituted a breach of the lease agreement. They also asserted that proper procedure was followed for serving notice on the respondent, and their non-appearance indicated no contest. They relied on Clause 22.1 of the lease deed for arbitration. Revenue/State's Arguments: No arguments were recorded for the revenue or state as they were not parties to this application.