Order 1

Order Details: Notice of Motion
Pdf Text: 1 N/M No.1642/2018 in S.C.2306/2016
IN THE BOMBAY CITY CIVIL COURT AT MUMBAI
NOTICE OF MOTION NO.1642 OF 2018
(CNR NO.MHCC010052942018)
IN
SUMMARY SUIT NO. 2306 OF 2016
1 Rent Assets Initiatives Private Limited ]
Having its office at 205, B Wing, 2nd floor, ]
Floral Deck Plaza, Off: Seepz, Andheri(E), ]
Mumbai – 400 093. ]
2 Boman Jehangir Yezdani ]
DirectorRent Assets Initiatives Pvt. Ltd. ]
Having its office at 205, B Wing, 2nd floor, ]
Floral Deck Plaza, Off: Seepz, Andheri(E), ]
Mumbai – 400 093. ].. Applicants
IN THE MATTER BETWEEN:
Namita Sinha ]
Age about 53 years, Occupation:Business, ]
203, “A” Wing, 2nd floor, Supreme City, ]
Hiranandani Gardens, Powai, ]
Mumbai 400 076. ].. Plaintiff.
V/s.
1 Rent Assets Initiatives Private Limited ]
Having its office at 205, B Wing, 2nd floor, ]
Floral Deck Plaza, Off: Seepz, Andheri(E), ]
Mumbai – 400 093. ]
2 Boman Jehangir Yezdani ]
DirectorRent Assets Initiatives Pvt. Ltd. ]
Having its office at 205, B Wing, 2nd floor, ]
Floral Deck Plaza, Off: Seepz, Andheri(E), ]
Mumbai – 400 093. ]
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3 The Commissioner of Police, ]
Mumbai. ]
4 The Senior Inspector of Police, ]
Powai Police Station, Mumbai400 076. ]
5 The Hero Finance Corporation, ]
New Delhi. ]
Represented by its Managing Director, ]
6 Saravanan ]
Branch Manager, ]
The Hero Finance Corporation, ]
Mumbai. ]..Defendants
Advocate Ms. Samruddhi for defendant nos.1 and 2.
None present for the plaintiffs.
CORAM : HER HONOUR JUDGE
MS. S.P. PONKSHE.
(C.R.NO.12)
DATE : 9th JULY 2019
ORAL ORDER
This Notice of Motion has been taken out by defendant
nos.1 and 2 for referring the present suit to the Arbitration under
section 8 of the Arbitration and Conciliation Act 1996, in view of Clause
18.2 of the Master Rental Agreement dated 24.12.2015.
2 The Director of defendant no.1 Mr. Jahangir Yezdani has
filed affidavit in support of the notice of motion. It is averred that the
present dispute between the plaintiff and defendant no.1 relates to a
Master Rent Agreement (MRA) dated 24.12.2015, which contains an
arbitration clause and all disputes and differences emanating from the
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said MRA are to be resolved by the Arbitration. The only alleged cause
of action which the plaintiff has disclosed in the present suit is in
relation to the admitted defaults by the plaintiff's Company in relation
to the MRA. The plaintiff is the Director of M/s. Leeway Logistics
Limited and started discussions with defendant no.1 Company and
defendant no.5 company to take on rent, certain equipment of
defendant no.1 company by way of a sale and rent back arrangement.,
i.e. Defendant no.1 sold certain equipments and the same were
immediately taken back on rent by the said company. Accordingly, on
24.12.2015, the MRA came to be executed between the said Company
and defendant no.1. Further he has stated clause 18.2 of the said
Master Rental Agreement
3 It is further averred that the said company was obligated to
pay defendant no.5, the monthly rent arising under the said Rental
Schedule, which was Rs.25,00,000/ for the first two months, i.e.
January and February 2016. Thereafter, a fixed sum of Rs.46,42,922/
per month, along with applicable taxes, which amount was to be paid
until December 20020. Accordingly, the said company executed an
Electronic Clearing Service mandate in favour of defendant no.5 and
started making payments to defendant no.5, in accordance with the
MRA and the said Rental Schedule.
4 In the circumstances, defendant no.1 reached out to
Mr. Sanjay Sinha, who had also executed the MRA on behalf of the said
Company. Thereafter, the said company made a part payment of
Rs.8,00,000/ to defendant no.5. However, the said company failed to
make the balance payment along with the applicable VAT to defendant
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no.5 and defendant no.1 respectively. Defendant no.1 continually
attempted to contact Mr. Sanjay Sinha. Upon making inquiries, it came
to the knowledge of defendant no.1 that the said company's head office
at Powai had been closed down and that Mr. Sanjay Sinha was
absconding.
5 It is further averred that in the circumstances, a notice for
nonpayment dated 15.06.2016 was addressed by defendant no.5 to the
said company. Despite the best efforts of defendant nos.1 and 5, the
said company failed to pay the outstanding payments due under the
MRA and said Rental Schedule. Such failure of the said Company to
make the outstanding payments clearly constitute a breach of the MRA.
As no response was forthcoming from the said company, defendant no.5
was constrained to terminate the MRA. Therefore, notice of termination
dated 16.08.2016 was issued to the said company. In terms of the said
notice, defendant no.5 called upon the said company to pay forthwith a
sum of Rs.23,91,24,720/ towards arrears of the monthly installments
along with penal interest and Rs.22,13,53,032/ towards liquidated
damages. Similarly, on 23.08.2016, notice of termination was also
issued by defendant no.1.
6 As the Rental Schedule had been assigned to defendant
no.5, on 15.09.2016, the advocate for defendant no.5 has issued a
notice to the said company under the Arbitration and Conciliation Act,
1996, invoking arbitration in terms of Clause 18.2 of the MRA.
Defendant no.1 also realized the fraud perpetrated by the said company
and its Directors and was also constrained to file a criminal complaint
under section 154(1) of the Criminal Procedure Code.
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7 In this background, this suit has only been filed to
somehow circumvent the criminal proceedings initiated against the
company and the plaintiff's husband, who is currently absconding and
to make infructuous any arbitration proceedings. The plaintiff has
wrongfully filed the present suit before the Court and this Court has no
jurisdiction to try and entertain the present suit. Clause 18.2 of the
MRA constitutes a valid binding and subsisting arbitration agreement
between defendant no.1 and the said company, wherein the parties
have expressly agreed to refer and all disputes in relation to the MRA
and all disputes emanating therefrom to arbitration.
8 It is exfacie evident that there is a valid and binding
Arbitration Agreement between the parties, which by virtue of section
16 of the Arbitration and Conciliation Act is an independent agreement,
which exists independently from the other terms of the MRA and which
survives even after the termination of the MRA. Despite the existence of
a valid, binding and subsisting arbitration agreement in terms of clause
18.2 of the MRA, the plaintiff has wrongfully filed the present suit
seeking purported negative reliefs in relation to the admitted defaults
by the plaintiff's company in relation to the MRA. Defendant no.1 has
pointed out paragraph nos.4, 6 and 7 of the plaint. Thus, prayed for
allowing the notice of motion.
9 Defendant nos.1 and 2 have tendered Copy of Master Rent
Agreement dated 24.12.2015. The plaintiff has not filed reply to this
notice of motion.
10 Heard the learned advocate for defendant nos.1 and 2.
Perused documents and suit plaint.
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11 The learned advocate for defendant nos.1 and 2 has placed
his reliance in Swiss Timing Limited V/s. Commonwealth Games
2010 Organising Committee reported in (2014)6 S.C.C. 677.
12 Further, he has placed his reliance in Sundaram Finance
Limited and another V/s. T. Thankam reported in (2015)14
S.C.C.444. Defendant no.1 as well as the plaintiff filed Master Rent
Agreement dated 24.12.2015. The execution of the said agreement is
not in dispute.
13 The plaintiff is the promoter of the Company Leeway
Logistics Limited and she has filed the suit being promoter of the said
company. Admittedly, Master Rent Agreement has been executed
between the company of the plaintiff and defendant no.1. It is
contended by defendant no.1 that in the event of dispute between the
parties arising out of or in connection with the interpretation or
implementation of the Master Rent Agreement dated 24.12.2015, same
would be resolved by the parties by referring dispute to the arbitration.
Perused paragraph no.7 of the plaint. The plaintiff herself pleaded the
contract between the plaintiff and defendant no.1, which contains
clause of arbitration. The reliefs sought by the plaintiff in the suit are
subject matter of the said arbitration agreement.
14 The learned advocate for defendant nos.1 and 2 has drawn
my attention towards clause 18.2 of the said Mater Rent Agreement. It
reads as;
“In the event any dispute or difference (hereinafter
referred to as the “Dispute”) arises out of or in
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connection with the interpretation or implementation
of the Master Rent Agreement, out of or in connection
with the breach, or alleged breach of this Agreement
between RA and Renter, both of them shall attempt in
the first instance to resolve the dispute by friendly
consultations. If the dispute is not resolved by friendly
consultations within 30(Thirty) dys after either of
them informs the other in writing of the existence of
the dispute, then either of these parties may refer the
dispute for resolution by arbitration. Such arbitration
shall be governed by the provisions of the Arbitration
and Conciliation Act of 1996 or any statutory re
enactment or modification for the time being in force.
Either party shall be entitled to apply to the competent
courts for interim or interlocutory relief in respect of
such arbitration. The arbitration shall be held at
Mumbai in the following manner;
(a) All proceedings in any such arbitration shall be
conducted in English.
(b) There shall be a sole arbitrator, who shall be fluent
in English. Such sole arbitrator shall be appointed by
mutual consent between the parties.
(c) The arbitration award made by the sole arbitrator
shall be final and binding on the parties and the
parties agree to be bound thereby and to act
accordingly. The award shall be enforceable in any
competent court of law.
(d) The award shall be in writing.
(e) The sole arbitrator may (but shall not be required
to) award to the party that substantially prevails on
merits, its costs and reasonable expenses (including
reasonable fees of its counsel).
(f) When any dispute is under arbitration, except for
the matters under dispute the parties shall continue to
exercise their remaining respective rights and fulfil
their remaining respective obligations under this
Agreement during the pendency of the arbitration
proceedings.”
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15 Thus, in the present case in hands, in view of compliance of
section 8 of the Arbitration and Conciliation Act, it is for the Civil Court
to refer the dispute to the Arbitration, in view of suit subject agreement.
Therefore, it is just and proper to refer the dispute to the Arbitration.
Hence, notice of motion is to be allowed. With this I proceed to pass
following order:
ORDER
Notice of Motion No. 1642 of 2018 is hereby allowed in terms of
prayer clause (a) and (b).
2 The parties to the suit be referred to the Arbitration.
3 The parties to the suit are directed to make compliance for
appointment of Arbitrator, in view of section 11 of Arbitration and
Conciliation Act, 1996.
4 Notice of Motion No.1642 of 2018 stands disposed of accordingly.
(S. P. PONKSHE)
Judge,
Date: 09/07/2019. City Civil Court,
Gr. Bombay.
Dictated on : 09/07/2019
Transcribed on : 15/07/2019
Signed on : 18/07/2019
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
18/07/2019 At 4.35 p.m. MRS. SUPRIYA S.PAWAR
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
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Name of the Judge (With Court
Room No.)
HHJ MS. S. P. PONKSHE
(C.R.NO.12)
Date of pronouncement of
Judgment/Order
09.07.2019
Judgment/Order signed by P.O. on 18.07.2019
Judgment/Order uploaded on 18.07.2019
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
17/02/2017 At 5.37 p.m. MRS. SUPRIYA S. PAWAR
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court
Room No.)
HHJ MS. S. P. PONKSHE
(C.R.NO.27)
Date of pronouncement of
Judgment/Order
13.02.2017
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Judgment/Order signed by P.O. on 17/02/2017
Judgment/Order uploaded on 17/02/2017
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