Facts of the Case

This post covers ARB.P. 470/2023 before the Delhi High Court, filed by Rajesh Garg against Somanth Aggarwal and another under Section 11(6) of the Arbitration and Conciliation Act, 1996. This is an arbitration-law case, not a GST case. M/s Shree Jee Agro Impex, a partnership firm constituted in 2019 with a 50:25:25 profit-sharing ratio among the petitioner and the two respondents, owned business premises in Village Bakoli, Delhi. On 1 July 2021, respondent no. 1 entered into two lease agreements on the firm's behalf with two LLPs for units at the property, at a rent of Rs.1,75,000/- per month per unit, excluding GST and other charges. The petitioner alleged that the respondents, in collusion with the lessees, broke the lock of one unit and illegally occupied it, and that a dispute over rent payment in December 2022 led to an altercation. The petitioner invoked the arbitration clause in the partnership deed and, on the respondents' refusal to name a mutually agreed arbitrator, approached the High Court seeking appointment of an arbitrator.

Issues Involved

  1. Whether the disputes between the partners regarding the lease agreements and possession of the property were arbitrable.
  2. Whether the Court should appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Petitioner's Arguments

  • The respondents, in collusion with the lessee entities, took illegal possession of a leased unit and misbehaved when asked to pay rent or vacate.
  • The dispute arose under the arbitration clause of the partnership deed and an independent arbitrator should be appointed to adjudicate it.

Respondent's Arguments

  • While opposing some of the petitioner's factual averments, the respondents' counsel duly accepted that the dispute was arbitrable in nature and had no objection to the Court referring it to a sole arbitrator.

Court Order / Findings

  • The Court found the dispute between the partners to be arbitrable and referred it to arbitration.
  • Mr. Vishwajit Singh, Senior Advocate, was appointed as the sole arbitrator to adjudicate the disputes arising under the two lease agreements dated 1 July 2021.
  • The arbitrator was directed to ensure compliance with Section 12(1) of the Arbitration and Conciliation Act before commencing proceedings, and fees were fixed as per the Delhi International Arbitration Centre Rules, 2018.
  • Parties were directed to appear before the arbitrator within ten days, and all contentions of the parties were expressly kept open for adjudication in arbitration.

Important Clarification

There is no GST holding here at all — GST is mentioned only once, as an item excluded from the quoted monthly rent of Rs.1,75,000/- per unit. The only takeaway is procedural: this is a routine Section 11(6) order appointing an arbitrator once both sides accept that a dispute is arbitrable, with the substantive merits of the lease and possession dispute left entirely to the arbitral tribunal.

Sections Involved

  • Arbitration and Conciliation Act, 1996 — Sections 11(6) and 12(1)

Decision – In Favour of

Neither party 'won' on the merits, which were kept open for the arbitrator. The petitioner succeeded only in securing appointment of a sole arbitrator to hear the dispute — a procedural disposal, not a decision on the substance of the lease/possession dispute.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: ARB.P. 470/2023 with I.A. 7941/2023
Coram: Justice Chandra Dhari Singh
Date: 26 April 2023

Link to Download the Order

Click here to view/download the full order

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