Bombay High Court
Pratik Vira vs Atul Shamji Bharani on 19 June, 2025
2025:BHC-OS:9234 902-CARAPL-9695-2025 copy.docx PURTI IN THE HIGH COURT OF JUDICATURE AT BOMBAY PRASAD PARAB Digitally signed by PURTI PRASAD ORDINARY ORIGINAL CIVIL JURISDICTION PARAB Date: 2025.06.23 18:02:07 +0530 COMM. ARBITRATION APPLICATION (L) NO. 9695 OF 2025 1. Pratik Vira 2. Jayesh Vira 3. Kalpataru Advisory Services Limited 4. Vira Consultancy Services 5. Vira Realspace LLP Known as Vira Group Having address at : 24 A, Haria House, First Floor, St. Paul Street, Dadar (East), Mumbai - 400 014. ...Applicants Versus 1. Atul Shamji Bharani Office No.5, Floor-I, Plot-7, Sharda Sadan, Swami Gyanjivancas Marg, Dadar Rly. Station (East), Mumbai - 400 014. 2. Kashyap Mehta 2203, Artesia, Hind Cycle Road, T.V. Estate, Worli, Mumbai - 400 030. 26/27 A-Wing Ahuja Tower. 3. Pancharatna Realtors Private Limited 13th Floor, B-1305, Kohinoor Square, Plot No. 46, N.C. Kelkar Marg, Opp Shivsena Bhavan, Dadar (West), Mumbai - 400 028. 4. Sunshine Projects Private Limited Office No.5, Floor-I, Plot-7, Sharda Sadan, Swami Gyanjivancas Marg, Dadar Rly. Station (East), Mumbai - 400 014. 5. Sun-N-Shine Entertainers Pvt. Ltd 1120, 11th Floor, B Wing, Panchashil Plaza, Nyayamurti Sitaram Patkar Marg, Gamdevi, Grant Road, Mumbai City, Mumbai - 400 007. (6) Sunshine Technobuild Private Limited 5, Floor - 1, Plot No.7, Sharda Sadan, Page 1 of 16 June 19, 2025 ::: Uploaded on - 23/06/2025 ::: Downloaded on - 28/06/2025 08:04:42 ::: 902-CARAPL-9695-2025 copy.docx Swami Gyanjivandas Marg, Dadar Rly. Stn. Dadar (East), Mumbai - 400 014. 7. Sunshine Global Technologies Pvt. Ltd 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn. Dadar (East), Mumbai - 400 014. 8. Sunshine Tracon Private Limited 17/2, Kshetra Mitra Lane 3rd Floor, Howrah, West Bengal, India - 711 106. Also Corporate Office: 6th Floor, Sunshine Plaza, Naigaon Cross Road, Dadar East, Mumbai - 400 014. 9. Sunshine Merchants Private Limited 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 10. Sunshine Foundation 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 11. Aarts Module International Private Limited 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 12. Sunshine Infraserve Pvt. Ltd, 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 13. Navketan Premises Pvt. Ltd., 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 14. Sunshine Realcon Pvt. Ltd. 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 15. Sunshine Crown Realty LLP 5, Floor - 1, Plot No.7, Sharda Sadan, Page 2 of 16 June 19, 2025 Purti Parab ::: Uploaded on - 23/06/2025 ::: Downloaded on - 28/06/2025 08:04:42 ::: 902-CARAPL-9695-2025 copy.docx Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 16. Sunshine Housinginfra LLP 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 17. Orchid Housinginfra LLP 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 18. Sunshine Realspaces LLP 102, First Floor, A Wing, Sigma Emerald Building, Off. Anand Nagar Vishal CHSL, Santacruz (East), Mumbai 400 055. 19. Sunshine Hometown Construction LLP 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 20. Orchid Planet Realty LLP 601, Sunshine Plaza, Naigaum Cross Road, Dadar (East), Mumbai - 400 014. 21. Goldnest Spaces LLP 13th Floor, B - 1305, Kohinoor Square, Plot No. 46 N.C. Kelkar Marg, Opp. Shivsena Bhavan, Dadar (West), Mumbai - 400 028. 22. Sunshine Urbainfra LLP 5, Floor - 1, Plot No.7, Sharda Sadan, Swami Gyanjivandas Marg, Dadar Rly. Stn., Dadar (East), Mumbai - 400 014. 23. Tangerine Construction LLP Floor G-2, Plot-435, Navneet Bhavan, Baburao Parulekar Marg, Dadar (West), Mumbai - 400 028. ...Respondents Mr. Zal Andhyarijuna, Senior Advocate a/w Mr. Durgaprasad Sabnis, Mr.Hiten Lala and Mr. Yashesh Pajwani i/b Lex Firmus for the Applicants. Page 3 of 16 June 19, 2025 Purti Parab ::: Uploaded on - 23/06/2025 ::: Downloaded on - 28/06/2025 08:04:42 ::: 902-CARAPL-9695-2025 copy.docx Mr. Sanjay K. Jain a/w Mr. Hardik Jain i/b A.V.Jain Associates for Respondent No.2. Mr. Rushabh Sheth a/w Mr. Pratik Amin and Mr. Pratik Poojary i/b Pratik Amin Associates for Respondent No.21. CORAM : SOMASEKHAR SUNDARESAN, J.
DATE : JUNE 19, 2025 Oral Judgment :
1. This Application has been filed under Section 11 of the
Arbitration and Conciliation Act, 1996 ( “the Act”), seeking reference of
disputes and differences between the parties under Memorandum of
Settlement dated October 31, 2018 (” MOS”) to arbitration. The Applicants
and the Respondents are parties who have executed the MOS after
participating in the mediation at the Supreme Court’s mediation centre. It
is the case of the Applicants that on the very same day, the parties also
executed a side letter titled as Letter of Agreement ( “LOA”) which, on the
face of it, is signed by the very same parties.
2. The LOA records that all terms and conditions of the MOS stand
incorporated in it, and would govern it, and that the LOA would constitute
an integral part of the MOS. The parties have also presented a joint
application to the Supreme Court about the MOS since the settlement had
been arrived at pursuant to the intervention of mediation center in the
Supreme Court. They did not present the LOA to the Supreme Court, and it
is evidently a side letter.
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3. The case of the Applicants is that the parties have executed the
MOS and the LOA, and they have consciously chosen to keep certain
additional features in the LOA also executed by the parties, but they jointly
agreed to keep it on the side.
4. Most of the Respondents constitute the ‘Sunshine Group’ while
the Applicants constitute the ‘Vira Group’. There are certain respondents
who belong to neither group but are party to the MOS and the LOA.
5. The arbitration agreement is contained in Clause 17 of the MOS
(found at Page No.61 of the Application). In the interest of brevity, the
arbitration agreement is not being extracted here. Suffice it to say that this
matter falls within the jurisdiction of this Court.
6. Learned Counsel for the Respondents comprising the Sunshine
Group has made submissions at a great length, as to why this Court ought
to dismiss this Application and not refer the parties to arbitration. His first
contention is that the invocation of arbitration under the LOA could never
be considered since it does not independently contain an arbitration clause.
He would cite case law to point out that a mere reference to another
agreement would be inadequate to constitute an arbitration agreement and
there should be an explicit reference to the arbitration clause, specifically
stating that it was being incorporated, for the conscious consent to arbitrate
to manifest itself.
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7. The second objection on behalf of the Respondents comprising
the Sunshine Group is that the LOA itself does not exist. According to him,
while on the face of it the LOA is signed by the Respondents represented by
him, he would allege that the signatures are forged.
8. The third objection is that even if the LOA exists, it does not have
an arbitration clause in it. Therefore, even if the existence of LOA is proven
the existence of an arbitration agreement is not proven. Therefore, it would
not be possible to refer disputes and differences arising out of the LOA to
arbitration, since the sine qua non of existence of the arbitration agreement
under Section 11(6A) of the Act is not met.
9. Towards this end, he would rely upon the decision of the
Supreme Court in NBCC (India) Limited1 and the reliance placed therein on
M.R. Engineers2.
10. Learned Counsel for Respondent No. 21, a Respondent said to
not form part of the Sunshine Group, would make different a submission.
He would submit that arbitration agreement contains the requirement of
conciliation and that conciliation efforts have not been undertaken.
Therefore, he would contend, the invocation of arbitration is premature.
11. Having heard Learned Counsel for the parties, at length
disproportionate with the requirement for a Section 11 Application (only to
1
NBCC (India) Limited Vs. Zillion Infraprojects Private Limited, (2024) 7 SCC 174
2
M.R. Engineers & Contractors (P) Ltd. vs. Som Datt Builders Ltd. – (2009) 7 SCC 696
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assuage any feeling that the vehement and strong objections are not
permitted to be ventilated), I am afraid none of these objections warrant
rejection of this Application.
12. The objections squarely relate to merits of the case, which
squarely fall in the domain of the Arbitral Tribunal. On the face of the
record, the LOA exists and the very same parties who have executed the
MOS have executed the LOA. The existence of the LOA is being denied first
on the premise that the signatures are forged. Thereafter, the absence of a
separate arbitration clause in the LOA is sought to be relied on to contend
that disputes under the LOA are not arbitrable. While the LOA indeed
draws reference and purports to incorporate all provisions of the MOS into
it and also purports to supplement the MOS, the arbitration clause is not
explicitly reiterated in the LOA.
13. On the face of it, the LOA purports to supplement the MOS
signed by the very same parties on the very same day. For whatever
commercial reasons, the parties in their wisdom, chose to keep the bargain
contained in the LOA out of the scope of the official MOS presented in their
application to the Supreme Court, but it is for the Arbitral Tribunal to
consider the interplay between these two instruments and determine
whether the LOA forms an integral part of the MOA or the other way
around.
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14. There is no quarrel that an arbitration agreement is contained in
the MOS. That arbitration agreement exists. The LOA purports to
supplement the MOS. If on considering evidence, the Arbitral Tribunal
concludes that the LOA is merely an insertion into the MOS, then the
arbitration agreement that governs the MOS would govern the rights and
obligations inserted into the MOS through the LOA. If the Arbitral Tribunal
concludes that the LOA and the MOS are two distinct instruments, one not
merging into the other, then the contention that the arbitration agreement
does not exist insofar as disputes relating to the rights and obligations
introduced through the LOA, would gain ground.
15. On the face of the record, an arbitration agreement exists in the
MOS. On the face of the record, the LOA is an integral part of the MOS and
is executed by the very same parties on the very same day. Denial of
execution of the LOA is a matter of evidence and existential substance,
which falls in the domain of the Arbitral Tribunal. On the face of it, the
parties intended the LOA to be an appendage to the MOS and therefore it
would only be fair to grant liberty to the parties to convince the Arbitral
Tribunal about their respective stands insofar as the bundle of rights and
obligations introduced through the LOA is concerned and make
submissions about coverage by arbitration by appropriate application under
Section 16 of the Act.
16. The reference to arbitration being made hereby is to the MOS,
which has an admitted arbitration agreement. Whether the MOS includes
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the LOA is a mixed question of fact and law, on which the parties would
need to address the Arbitral Tribunal. If the MOS, upon appreciation of
evidence, is held by the Arbitral Tribunal to include the LOA it would follow
that the Arbitral Tribunal will consider the disputes and differences raised
under the MOS as supplemented by the LOA. If the Arbitral Tribunal
arrives at a view that the LOA is not an integral part of the MOS the
consequences would follow in the arbitration proceedings.
17. None of these issues raised at this stage falls within the
jurisdiction of this Court under Section 11 of the Act. Indeed, the legislature
has made an explicit intervention in Section 11(6A) of the Act, confining the
scope of jurisdiction of this Court to “examination” of the existence of an
arbitration agreement. The conscious choice of legislature is that this Court
must not “adjudicate” these matters but must “examine” i.e. inspect the
record and examine if the arbitration agreement exists.
18. Paragraph No. 151 in the Interplay Judgement3 squarely states
that the interpretation of Section 11(6) had a long and chequered history in
that Court, particularly in respect of the nature of the function of the Court.
The judgment goes on to articulate the varying levels of intervention
effected by that Court while considering Section 11, and eventually squarely
and explicitly posits that the scope of the jurisdiction of Section 11 Court
must strictly be followed in terms of Section 11(6A) of the Act and in no
other manner.
3
In Re: Interplay Between Arbitration Agreements under the Arbitration and
Conciliation Act, 1996 and Stamp Act, 1899 – (2024) 6 SCC 1
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19. In Paragraph No.165 of Interplay Judgment, the Supreme Court
specifically uses the following statement :
“Similarly, the validity of an arbitration agreement, in view of Section
7, should be restricted to the requirement of formal validity such as the
requirement that the agreement be in writing. This interpretation also
gives true effect to the doctrine of competence by leaving the issue of
substantive existence and validity of an arbitration agreement to be
decided by Arbitral Tribunal under Section 16. We accordingly, clarify
the position of law laid down in Vidya Drolia in the context of Section 8
and Section 1 of the Arbitration Act”.
[Emphasis Supplied]
20. A plain reading of the foregoing would show that the
examination of validity of an arbitration agreement should be restricted to
checking the formal and valid existence i.e. as to whether the agreement is
in writing. In the facts of the present case, both the MOS and indeed the
LOA formally exist in writing and are formally signed by all the respective
parties. Whether LOA is an integral part of the MOS and thereby whether
its contents fall within the scope of the arbitration agreement, is a question
of evidence that the Arbitral Tribunal must examine.
21. Learned Counsel for the Respondents comprising the Sunshine
Group would submit that all these observations in the Interplay Judgment
cannot be read in this manner. He would contend that all that this
judgment did was to see if the scope of reference under Section 8 of the Act
and Section 11 of the Act are identical in nature. I am unable to agree with
this. A judgment should be read for the issues that are decided. Faced with
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the Section 11 Courts delving deep into every facet of law connected to
formation of contracts (including adequacy of stamp duty), the Supreme
Court constituted a seven-judge bench to deal with this issue and that led to
the judgment. This bigger context and purpose of formation of that bench
cannot be lost sight of.
22. The principles of interpretation of statute are completely
different from the principles of interpretation of judgments. The Supreme
Court has taken pains to list out the journey of the law under Section 11 of
the Act and has squarely articulated that Section 11 Court must not step
outside the scope of Section 11(6A) of the Act.
23. Consequently, the reliance upon NBCC (India) Limited, which
was rendered prior in time to the Interplay Judgment is of no assistance to
the Respondents comprising the Sunshine Group.
24. That apart, even a plain reading of the NBCC (India) Limited
judgment would show that in that case a separate document called a “Letter
of Intent” contained an explicit clause that provided for jurisdiction over all
disputes as belonging to Civil Courts having jurisdiction in Delhi alone. The
Court was called upon to compare the Letter of Intent with another
agreement which contained an arbitration clause. In that context, the
Supreme Court ruled that unless the reference to the arbitration clause was
explicitly reiterated in the second instrument under which the arbitration is
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sought to be incorporated, the arbitration agreement would not exist.
Therefore, the decision in NBCC (India) Limited is not something that
would be of any assistance to the Respondents in this case in the context of
the jurisdiction now being exercised in these proceedings.
25. As regards reliance upon M.R. Engineers, there can be no quarrel
with the articulation on how to read the scope and intent of Section 7(5) of
the Act. None of these can be quarreled with. Even in the facts of this case,
whether incorporation of the arbitration clause in a document executed
later in time is necessary, if the parties to the two documents are identically
the same and in fact purport to supplement the very document that they
have executed with an arbitration clause, is a matter of evidence, for which
only the Arbitral Tribunal has power to examine the record to form a view.
Therefore, even the ruling in M.R. Engineers would be of no assistance to
the Respondents in asking for this Application to be rejected.
26. As regards, the objections made on behalf of Respondent No.21,
it is now trite law that when a pre-arbitration conciliation procedure is
stipulated, it must also be seen whether after invocation of arbitration, the
other parties raising objection to pre-arbitration conciliation not having
taken place, made any contributory steps to attempting conciliation. In the
pre-arbitration conciliation provision, the parties have to engage and
articulate potential consideration. It is seen that the invocation was done
way back on December 7, 2024. When asked what Respondent No.21 took
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to participate in conciliation efforts, the response was that it was not the
Respondents’ to attempt conciliation but it was for the Applicants to pursue
it. This stand itself would indicate that the conciliation is illusory and the
contention is only being made to postpone consideration of this
Application.
27. Even in this context, the Supreme Court has clearly declared the
law in SBI General4, where it was held that the Section 11 Court must not get
into whether a party had discharged another under the contract containing
the arbitration clause. That activity falls in the domain of the arbitral
tribunal. By the same token, the contention about pre-arbitration
procedures is a matter that can be raised before the Arbitral Tribunal.
28. In these circumstances, I am satisfied that no useful purpose
would be served by keeping this Application pending any further, it
deserves to be allowed since the existence of the arbitration agreement in
the MOS is writ large on the face of record and is in fact not even denied.
Whether the LOA forms an integral part of the MOS is a matter left to the
Arbitral Tribunal to decide. The Applicants shall be at liberty to address the
Arbitral Tribunal as to whether the LOA truly supplements the MOS and is
an integral part of the same. The Respondents are at liberty to to address
the Arbitral Tribunal as to why the LOA is an independent contract,
necessitating a separate arbitration agreement and that the parties intended
4
SBI General Insurance Co. Ltd. Vs. Krish Spinning – 2024 SCC OnLine SC 1754
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one bundle of rights and obligations to be covered by arbitration and
another bundle not to be so covered. The Arbitral Tribunal shall have
liberty to decide this issue in such sequence as it finds appropriate. If it
comes a view that the LOA is an integral part of the MOS (as it purports to
be), it is for the Arbitral Tribunal to decide whether to deal with the LOA.
Needless to say, that the Respondents are at liberty to take out an
application under Section 16 of the Act insofar as it relates to the scope of
jurisdiction covering the LOA.
29. With the aforesaid directions, taking into account the inputs
from the officers of the Court on the identity of the arbitrator, this
Application is finally disposed of in the following terms:-
A] Justice (Retired) Shri. Akil Kureshi, a Former Judge of
this Court is hereby appointed as the Sole Arbitrator to
adjudicate upon the disputes and differences between the
parties;
Address : 617, Raheja Chambers, Nariman Point, Mumbai. E mail : [email protected] B] A copy of this Order will be communicated to the
Learned Sole Arbitrator by the Advocate for the Applicants
within a period of one week from the date on which this order
is uploaded on the website of this Court. The Applicants shall
provide the contact and communication particulars of the
parties to the Arbitral Tribunal along with a copy of this Order;
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902-CARAPL-9695-2025 copy.docxC] The Learned Sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
with Section 12(1) of the Act to the Advocate for the Applicants
so as to enable them to file the same in the Registry of this
Court. The Registry of this Court shall retain the said
Statement on the file of this Application and a copy of the same
shall be furnished by the Advocate for the Applicants to the
Respondents;
D] The parties shall appear before the Learned Sole
Arbitrator on such date and at such place as indicated, to
obtain appropriate directions with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc. At
such meeting, the parties shall provide a valid and functional
email address along with mobile and landline numbers of the
respective Advocates of the parties to the Arbitral Tribunal.
Communications to such email addresses shall constitute valid
service of correspondence in connection with the arbitration;
E] All arbitral costs and fees of the Arbitral Tribunal shall
be borne by the parties equally in the first instance, and shall
be subject to any final Award that may be passed by the
Tribunal in relation to costs.
30. Commercial Arbitration Petition No. 270 of 2024 is a Petition
under Section 9 of the Act. The Section 9 Petition is converted into an
Application under Section 17 of the Act for consideration by the Arbitral
Tribunal. Any pleadings that the parties desire to make in relation to the
Section 9 Petition may be made before the Arbitral Tribunal where the
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proceedings would continue in the form of proceedings under Section 17 of
the Act.
31. Both the proceedings are finally disposed of in the aforesaid
terms.
32. Needless to say, nothing contained in this order is an expression
of an opinion on merits of the matter or the relative strength of the parties.
All issues on merits are expressly kept open to be agitated before the
arbitral tribunal appointed hereby.
33. All actions required to be taken pursuant to this order shall be
taken upon receipt of a downloaded copy as available on this Court’s
website.
[ SOMASEKHAR SUNDARESAN, J.]
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