RAJURAM SAWAJI PUROHIT Vs. SHANDAR INTERIOR PRIVATE LIMITED

JUDGEMENT

(1.) Disputes have arisen under an Agreement for Purchase of salvage material dtd. 29/11/2011 ("Agreement"). The Applicant had paid a Security Deposit of Rs.51,38,000.00 to the Respondent, which is the subject matter of legal proceedings including this one. After a round of Winding-up Petition being Company Petition No.269 of 2016 and a Commercial Summary Suit No.721 of 2018, this Court in the said Suit, by consent of parties, referred the parties to arbitration (first round). An award was passed on 6/6/2022 by the Tribunal inter alia holding that the Applicant's claims are barred by limitation ("Award"). The Applicant's Sec. 34 Petition (Commercial Arbitration Petition No.305 of 2023) was allowed by this Court on 7/2/2024 and the Award was set aside in its entirety. The Applicant filed Interim Application (Lodging) No.10052 of 2024 for correction of order dtd. 7/2/2024. This was also rejected by the Sec. 34 Court by an order dtd. 11/7/2024. The Applicant has now filed this Sec. 11 Application seeking appointment of an Arbitrator to adjudicate the same disputes that have arisen between the parties under the said Agreement (second round). After this Application was filed, the Applicant has also filed a Sec. 37 Appeal (Commercial Arbitration Appeal (Lodging) No.31017 of 2024) in which the following order has been passed on 26/6/2024 :-

(2.) Mr. Khandeparkar, learned counsel for the Applicant submits that it is open for the Applicant to re-initiate arbitration and begin the entire process once again even though the Applicant's Sec. 37 Appeal is pending. He submits that the learned Arbitrator has held that although the Agreement is legal, binding and enforceable, the Applicant's claims have been dismissed as being barred by limitation. Consequently, the Tribunal has held that the Applicant is not entitled to the refund of Security Deposit of Rs.51,38,000.00. Upon the Applicant's challenge, the entire Award was set aside by the Sec. 34 Court. The second order dtd. 11/2/2024 passed in the Sec. 34 proceedings recognizes that the Applicant has to start the arbitration proceedings de novo in the following terms :

(3.) It is submitted that after passing of the above Sec. 34 order, the law on modification/severing the award was settled in Gayatri Balasamy Vs. ISG Novasoft Technologies Limited, 2025 DGLS(SC) 674 : 2025 SCC OnLine SC 986. He submitted that it is open for Court to appoint an Arbitrator and all issues can be adjudicated by the Tribunal. Reliance was placed on the judgment of this Court in Wadhwa Group Holdings Private Limited Vs. Homi Pheroze Ghandy and Anr., [Commercial Arbitration Application No.414 of 2019, dtd. 7/3/2022], wherein this Court has appointed an Arbitrator in a second round pending Sec. 37 Appeal. It is submitted that the Sec. 11 Court is only required to examine the existence of a valid arbitration agreement. It is not required to examine the issue of res judicata and whether the issue is covered by the first arbitration and leave that for determination by the Tribunal. It is prayed that the present Arbitration Application ought to be allowed and this Court should appoint an arbitrator to adjudicate the disputes between the parties.