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Calcutta High Court
Srei Equipment Finance Limited vs M/S. Contemporary News Pvt. Ltd on 27 August, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 10
ORDER SHEET
AP-COM/449/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
SREI EQUIPMENT FINANCE LIMITED
VS
M/S. CONTEMPORARY NEWS PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 27th August, 2025.
Appearance:
Mr. Swatarup Banerjee, Adv.
Mr. Sariful Haque, Adv.
Mr. Subhankar Chakraborty, Adv.
Mr. Saptarshi Bhattacharjee, Adv.
Ms. Harshita Nath, Adv.
...for the petitioner
Mr. Rishav Banerjee, Adv.
Mr. Ritoban Sarkar, Adv.
Mr. Sudarshan Dutta, Adv.
Mr. Dwaipayan Ghosh, Adv.
...for the respondent
The Court:
1. This is an application for appointment of an arbitrator. The dispute
arises from the Agreement for Right to Usage dated January 24, 2018.
Article XXVII, is the arbitration clause, which is quoted below for
convenience:
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“Article XXVII – Dispute resolution
a) This Agreement shall be governed by the Laws of India and
Courts at New Delhi alone shall have jurisdiction to entertain
and try all actions, suits and proceedings arising out of these
presents.
b) In the event of any claim, dispute or difference arising out of
or in connection with the interpretation or implementation of
this Agreement, or out of or in connection with any breach, or
alleged breach of this Agreement (hereinafter referred to as the
“Dispute”) between the Parties hereto, then the Parties hereby
agree to refer such Dispute to arbitration. The arbitration
proceedings shall be governed by the Arbitration and
Conciliation Act of 1996 or any statutory modification or re-
enactment thereof for the time being in force (hereinafter
referred to as the “Arbitration Act“). The arbitration shall be
held at Kolkata in the following manner:
(i) All proceedings in any such arbitration shall be
conducted in English.
(ii) The Parties agree that in the event of any Dispute
that remains unresolved, either Party may, by
written notice served upon the other, require the
matter to be referred for resolution to independent
3arbitrators. In such a case, both the parties would
jointly select one common arbitrator. If the parties
fail to appoint the common arbitrator within 30
(Thirty) days of the notice for arbitration, both the
parties should appoint one arbitrator each and the
two arbitrators so appointed would appoint a third
arbitrator, who shall be the presiding officer of the
Arbital Tribunal. The Parties shall co-operate to
facilitate the Arbitral Tribunal delivering their
decision within 30 (Thirty) business days of
commencement of the arbitration process.
(iii) The cost of arbitration proceedings shall be borne
by both the Parties equally.
(iv) 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.
(v) The provisions of this Section shall survive the
termination / expiry of the Agreement.”
2. Mr. Swatarup Banerjee submits that, by a Business Transfer
Agreement, all rights, title and interest arising from the said agreement
had been transferred by Srei Infrastructure Finance Limited (SIFL) to
the petitioner (SREI).
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3. SIFL had paid a security deposit for use of the land of the respondent
situated at Tangra, Kolkata – 700 015 of Rs.8 crores. The same was an
interest free refundable security deposit. The agreement was
determined sometime in March, 2020, by the petitioner. It is
submitted that, only a part of the security deposit had been refunded
by the respondent. The balance amount of Rs.6,25,00,000/- remained
unpaid. By letters dated July 15, 2020 and December 20, 2020, the
petitioner requested refund of the balance. By a letter dated January
2, 2021, the respondent requested the petitioner for additional time
upto July/August, 2021, to repay the balance security deposit of
Rs.6.25 crores against cancellation of the usage agreement. The
reason assigned was that the business of the respondent had slowed
down due to the global pandemic. By another letter dated February
24, 2021, a reminder was sent to the respondent for the refund.
Similar request was made in June, 2022 as well. Thereafter, the
arbitration clause was invoked accordingly by the petitioner. Thus, the
application has been filed before this Court for appointment of an
arbitrator and settlement of the dispute with regard to non-refund of
the balance security deposit.
4. Mr. Rishav Banerjee, learned advocate for the respondent submits that
there was no subsisting agreement between the petitioner and the
respondent. The respondent was not a privy to the Business Transfer
Agreement. The rights and liabilities arising out of the Agreement for
Right to Usage dated January 24, 2018, had not been transferred to
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the petitioner. The Business Transfer Agreement did not provide so.
The respondent was in the dark about the Business Transfer
Agreement. Moreover, the partial refund of the security deposit was
made to SIFL and if the bank statements were produced, it would be
evident that the petitioner had not received the refund.
5. The next contention of Mr. Rishav Banerjee is that, the claim is barred
by limitation, inasmuch as, the agreement was terminated sometime in
March, 2020 and refund of part of the security deposit was made in
April 24, 2020. Even if the date of the letter by which the respondent
had approached the petitioner for extension of time to repay the
amount is taken as the date of accrual of cause of action, the period of
three years expired sometime in January, 2025. If the advantage of the
order of the Hon’ble Apex Court with regard to exclusion of time in
initiating proceedings under the Arbitration and Conciliation Act, 1996,
during the covid pandemic is made applicable, the period of limitation
expired in March, 2025. The last contention of Mr. Banerjee is that,
the agreement has a forum selection clause and parties agreed that
Courts at New Delhi will have jurisdiction to entertain and try all
action, suits and proceedings arising out of the said agreement. The
subsequent clause which provides that the arbitration shall be held at
Kolkata will be subservient to the forum selection clause, as the forum
selection clause is the preceding clause. It is also submitted that the
decision of a Co-ordinate Bench in the matter of Commercial Division
Bowlopedia Restaurants India Limited vs. Devyani International Limited
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reported at 2021 SCC Online Cal 103 : (2021) 1 Cal LT 138, shall be
applicable in the case as the agreement provides the seat as also a
forum and there is a conflict.
6. Considered the rival contentions of the parties. First and foremost, the
letter dated January 2, 2021, fairly indicates that the petitioner had
been approached by the respondent seeking extension of time upto
July/August, 2021, to enable it to refund the security deposit. The
reason assigned for not being able to refund the money at the relevant
time was the closure of business due to the covid pandemic. The letter
itself indicates that the respondent had acknowledged the right of the
petitioner to claim the refund.
7. Mr. Rishav Banerjee’s contention that the rights and liabilities of SIFL
arising from the Agreement for Usage had not been transferred to the
petitioner is not, prima facie, available from the records. The issues are
triable. It appears from the records that, by a letter dated March 29,
2020, the petitioner had requested the respondent to cancel the Usage
agreement. In the same document, the acknowledgement of the
respondent is available which reads as follows:-
“We accept and confirm all the terms as stated above
and agree for unconditional cancellation of the
Agreement with no claim and/or demand on Srei
Equipment Finance Limited. We will also Refund the
Security Deposit amount of Rs.6,25,00,000/-(Rupees Six
Crores Twenty Five Lacs) without any deductions.”
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8. The respondent agreed to the unconditional cancellation by the
petitioner, by specifically recording that it had no demand against the
petitioner and the amount of Rs.6.25 crores would be refunded without
any deduction. This document also, prima facie, shows that the
parties had acknowledged each others’ rights and liabilities arising out
of the usage agreement.
9. With regard to the point of limitation, it appears to this Court that in
January, 2021, the respondent had requested extension of time upto
July/August, 2021, for repayment of the loan. In the meantime, the
petitioner was in CIRP. Moreover, it appears that in June, 2022, the
petitioner again requested for refund of the money. Whether the
parties had agreed to wait for a while or till the petitioner was out of
CIRP to continue with the negotiation for refund of the security deposit
or whether the petitioner had extended the time by conduct or by oral
assurance thereby acceding to the request of the respondent for extra
time to refund the money, are matters of evidence. The last demand
was made in June, 2022 and the invocation of the arbitration clause
was in April 17, 2025.
10. Under such circumstances, this Court is unable to hold that the
claim is deadwood. The referral court can weed out absolutely dead
and frivolous claims, but in this case, limitation is a mixed question of
fact and law. With regard to the conflict between the overall
jurisdiction clause and the seat of arbitration, this Court is of the view,
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that the judgment relied on by Mr. Rishav Banerjee does not help him.
The Hon’ble Court was of the view that in case of a conflict between the
forum selection clause and the clause providing for the seat of
arbitration, the forum selection clause would prevail if there was a
conflict, provided that the forum selected by the parties had
jurisdiction in terms of Section 20 of the Code of Civil Procedure. Only
if the forum selected by the parties had territorial jurisdiction over the
subject matter, would the forum selection clause prevail over the
clause prescribing the seat. In the present case, the forum selected is
New Delhi and the seat of arbitration is Kolkata. The agreement was
entered in Kolkata. The address of the respondent is Kolkata. The
land in respect of which usage was given is in Kolkata and the records
do not show accrual of any part of the cause of action at New Delhi.
An averment has been made in the affidavit-in-opposition that the
respondent also has an office in New Delhi, but there is nothing on
record which would show that either of the parties at any point of time
had acknowledged the presence of the respondent at New Delhi.
11. Under such circumstances, this Court not only has jurisdiction to
entertain this application, this Court is also of the view that the
reference should be allowed for the reasons mentioned hereinabove.
The issue of limitations, the issue of mis-joinder of party, the issue as
to whether the petitioner can take advantage of the arbitration clause
in the usage agreement are all matters which should be decided by the
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learned arbitrator. All objections raised by Mr. Rishav Banerjee can be
urged before the appropriate forum. The observations hereinabove are
restricted to the disposal of this application.
12. Accordingly, the Court appoints Justice Syamal Kanti Chakraborti,
former Judge of this Court, [Mob. No. 9674156311] as the Arbitrator,
to arbitrate upon the disputes between the parties. This appointment is
subject to compliance of Section 12 of the Arbitration and Conciliation
Act, 1996. The learned Arbitrator shall fix his own remuneration as
per the Schedule of the Act.
13. The application is, accordingly, disposed of.
(SHAMPA SARKAR, J.)
B.Pal
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