Delhi District Court Shri Parul Sharma vs Shri Girish Kumar Jain on 8 July, 2020 IN THE COURT OF SHRI MAN MOHAN SHARMA, DISTRICT JUDGE (COMMERCIAL COURT)­06, CENTRAL DISTRICT TIS HAZARI COURTS, DELHI IN THE MATTER OF :­ Arbitration No. 450/2018 Shri Parul Sharma S/o Sh. Satyamurti Sharma R/o 25­D, Janyug Apartment Sector­14, Rohini Delhi­110085. ....Petitioner VERSUS Shri Girish Kumar Jain S/o Late Sh. R.K. Jain R/o 7A/2, Rajpur road Civil Lines, Delhi­110054. ....Respondent no.1 Shri Amarendra Kumar Jha 228, Gajanand Block, Tis Hazari Court, Delhi­110054. ....Respondent no.2 (Sole Arbitrator) Date of Institution : 21.07.2018 Date of Reserve of Judgment : 03.07.2020 Date of Judgment : 08.07.2020 JUDGMENT 1. Under consideration is a petition under section 34 of the Arbitration and Conciliation Act, 1996 (henceforth 'the Act'). Parul Sharma vs. Girish Kumar Jain & Anr. Arbitration No. 450/2018 Page 1 of 14 Moot Questions 2. The petition raises the following pertinent questions for determination: ­ (i). Whether the petition u/s 34 of the Act challenging an award is maintainable without the petitioner ex hausting the remedy of approaching the High Court concerned for the appointment of an arbitrator u/s 11 of the Act and/or without challenging the jurisdiction of the Sole Arbitrator under section 12, 13 and 16 of the Act? (ii). If the answer to the question no. 1 is in affirma­ tive, whether the reference of dispute to the Sole Arbi­ trator, by the respondent no. 1 despite objection of the petitioner and without the expiry of 30 days from the date of notice dated 08.02.2018 is a valid reference in the light of the provision under section 11 of the Act? Brief Facts 3. The core facts of the case are not in dispute. The dispute in fact is in regard to the application of law to the said facts. 4. On 24.08.2016 the petitioner and the respondent no. 1 had entered into a lease agreement pertaining to a property known as Hotel Manali Cottage Vashisht Road, Manali, Kullu (Himachal Pradesh) Parul Sharma vs. Girish Kumar Jain & Anr. Arbitration No. 450/2018 Page 2 of 14 for a period of three years commencing from 01.09.2016 and expiring on 31.08.2019, as the Lessee and Lessor restively. The agreement contained an arbitration clause. 5. The petitioner had sent a notice dated 12.11.2017 (issued on 16.11.2017) to the respondent no. 1 raising certain disputes. The respondent no. 1 did not reply to the said notice but had sent a letter dated 08.02.2018 to the petitioner, wherein he proposed the respondent no. 2 as the sole arbitrator in the dispute and called upon the petitioner to respond within seven days. Vide his reply dated 15.02.2018, the petitioner raised objection to the appointment of respondent no. 2 as an Arbitrator. However, the respondent no. 1 made a reference for arbitration to the respondent no. 2, who took upon the reference and passed the impugned award. The petitioner had remained ex­parte in the arbitration proceedings. Stand of the Petitioner 6. The grounds pressed into service by the petitioner are: ­ (i). The appointment of Arbitrator is de­hors the law as the petitioner has never consented to his appointment. This is against the provision of Section 11 of the Act. (ii). The respondent no. 1 had sent an invalid notice as only seven days' time had been provided in the notice dated 08.02.2018, which is against the provision of Parul Sharma vs. Girish Kumar Jain & Anr. Arbitration No. 450/2018 Page 3 of 14 Section 11 of the Act. The respondent no. 2 had accepted the reference within 15 days of the dispatch of letter dated 08.02.2018 by the respondent no. 1, which is also illegal and reflects the bias of the sole Arbitrator. (iii). For want of due appointment, the respondent no. 2 had no jurisdiction to accept and proceed with the reference. Stand of the Respondent no. 1 7. The grounds pressed in service by the respondent no. 1 in