Calcutta High Court
Hooghly Mills Projects Limited vs Acumen (J) Marketing Private Limited on 21 January, 2025
Author: Ravi Krishan Kapur
Bench: Ravi Krishan Kapur
ODC-10
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
Ordinary Original Civil Jurisdiction
APO/76/2023
HOOGHLY MILLS PROJECTS LIMITED
VS
ACUMEN (J) MARKETING PRIVATE LIMITED
Before:
The Hon'ble Justice RAVI KRISHAN KAPUR
Date: 21st January 2025
Appearance:
Mr. Ratnanko Banerjee, Sr. Adv.
Mr. Rajarshi Dutta, Adv.
Ms. Somali Bhatterjee, Adv.
...for the appellant.
Mr. Suvasish Sengupta, Adv.
Mr. Balarko Sen, Adv.
Mr. A. Roy Chowdhury, Adv.
Mr. S. Chowdhury, Adv
...for the respondent.
.
The Court: This is an appeal under section 37 of the Arbitration and
Conciliation Act, 1996.
The petitioner assails an interim order dated 3 September, 2022 whereby the
Sole Arbitrator has stayed the arbitral proceedings pending disposal of the
proceedings being AP No.208 of 2022 and AP No.209 of 2022 before this Court.
Briefly, a group company of the petitioner, namely, Hooghly Investment Ltd.
is the owner of a commercial premises commonly known as E-Mall situated at
premises no. 6 Chittaranjan Avenue, Kolkata. The said Hooghly Investment Ltd.
had entered into a license agreement with the respondent for a commercial space
located on the ground floor of E-Mall. In fact, two separate leave and license
agreements had been executed for Unit no.1 and Unit no.2 respectively located at
the said mall by and between Hooghly Investment Ltd. and the respondent.
Simultaneously, the petitioner and one Hooghly Mills Project Ltd. had also entered
into a Facility Service Agreement and Maintenance Agreement respectively with the
respondent which were co-related with the above leave and license agreement.
2
Disputes and differences having arisen, the parties had invoked the
arbitration clause and a Sole Arbitrator had entered upon the reference.
The grievance in this appeal is directed against an interim order dated
September 3, 2022 passed by the Sole Arbitrator whereby there has been a stay of
the arbitral proceedings pending disposal of the proceedings being AP 208 of 2022
and AP 209 of 2022 respectively. The said two proceedings AP 208 of 2022 and AP
209 of 2022 respectively arise out of a final award for eviction which had been
passed against the respondent in respect of the above two premises.
On behalf of the appellant, it is contended that the Arbitrator had no
jurisdiction to stay the arbitral proceedings. On a combined reading of sections 21,
section 23 (4) and 29 (A) of the Act, there is no power which an Arbitrator has
under the Act to stay the arbitral proceedings. In fact, in view of the clear mandate
under section 23(4) of the Act, an Arbitrator is now under an obligation to
conclude the arbitral proceedings within a period of 12 months. In view of the
above, the impugned order is unsustainable and is liable to be set aside.
On behalf of the respondent it is contended that the impugned order
warrants no interference whatsoever. There being a cloud insofar as the legal
status of the respondent vis-a-vis the subject premises, there is no question of the
Arbitral Tribunal proceeding any further with the reference. An issue has also been
raised as to the legal status of the respondent whether as trespasser or tenant and
this has to be finally adjudicated upon before any further steps can be taken in the
arbitral proceedings. In view of the above, the Arbitrator was fully justified in
staying the arbitration proceedings. In support of such contention, the respondent
relies on Shyam Sel & Power Ltd. vs. Bahubali Promoters Pvt. Ltd. (2019) 2 CHN 368.
The crux of the issue raised in this appeal pertains to the power of an
Arbitrator, if any, to stay the arbitral proceedings.
3
The contention that such an order can be passed under section 17(1)(e) of
the Act which provides for an Arbitrator to pass such other interim measures of
protection as may appear to the Arbitral Tribunal to be just and convenient is
rejected. The drastic nature of the interim order which has been passed endangers
the rights of parties to the arbitration including the right to equal treatment,
unreasonable delay in concluding the arbitral proceedings and also the right to fair
hearing. In effect, the impugned order emasculates the objective of going to
arbitration.
In such circumstances, there is simply no power nor jurisdiction which the
Arbitrator had to stay its proceedings ad infinitum. It is true that an issue
pertaining to the status of the respondent vis-a-vis the subject premises is pending
in AP 208 of 2022 and AP 209 of 2022, nevertheless, this cannot be a ground to
stay the arbitral proceedings. The passing of an award in the eviction case cannot
be an impediment in pursuing the reference under the above two agreement. Such
an approach is also not commercially prudent as it fails to appreciate the
increasing liability under the above two agreements. There is also merit in the
contention on behalf of the petitioner that on a combined reading of sections 21,
23(4) and 29(A) of the Act, any order of stay of the arbitral proceedings nullifies the
very purpose and object of the Act.
On the other hand, there is no substance in the contention made on behalf
of the respondent that in view of the stand taken by the petitioner at the 4th
meeting held on 17 August 2021 or for any other reason, the arbitral proceedings
were liable to be stayed. The ultimate object of the occupier respondent in
procrastinating matters is unacceptable. The impugned order also fails to
appreciate the true scope and purport of the Maintenance Agreement and the
Facility Service Agreement.
4
The decision cited on behalf of the respondent is inapplicable and inapposite.
In that decision, the Court was dealing with a suit which had been filed
subsequent to the passing of a decree and had been stayed prior to the filing of the
second suit. The facts of the case dealt with in a claim for mesne profits after the
passing of a decree for eviction in the backdrop of section 10 of the Code of Civil
Procedure 1908 are distinguishable.
In view of the above, the appeal is allowed and the impugned order is set
aside.
It is made clear that there has been no adjudication of the underlying
disputes pending before the Arbitrator and all issues are left open insofar as the
merits of the case are concerned.
APO 76 of 2023 stands allowed.
With the above directions, APO 76 of 2023 stands disposed of.
(RAVI KRISHAN KAPUR, J.)
SK.