REACH GLOBAL Vs. RAJEEV RANJAN

JUDGEMENT

(1.) M/s Reach Global has approached this Court through its partner Lalit Prakash for appointment of an Arbitrator under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 (in short, AC Act).

(2.) Briefly stated, the applicant entered into Development Agreement dtd. 28/7/2020 for developing a piece of land admeasuring about 17 Kathas comprised under Mauza-Kokar within Thana Sadar (Thana No. 197), corresponding to Holding No. 874/A within Ward No. 8 of the district-Ranchi. The aforesaid Development Agreement contains a clause for arbitration under Article IX which deals with legal procedures. Sub-clause 4 to Article IX provided that the parties had agreed that all dispute between the land owner and the developer shall be referred to sole arbitrator in accordance with the provisions of the AC Act. According to the applicant, some dispute arose with the land owners on account of which it became necessary for it to invoke the aforesaid arbitration clause for resolution of the dispute through arbitration. The applicant has therefore issued letter dtd. 18/1/2022 to each of the respondents separately putting them on notice that on account of their failure to adhere to the terms of the Development Agreement it has suffered the anticipated loss which has been assessed at Rs.4,10,98, 860.00.

(3.) The scheme of the AC Act indicates that existence of a dispute between the parties is the jurisdictional fact only upon pleading of which the provisions under the AC Act can be resorted to. A dispute shall arise only when there is a claim made by one party which has been denied or repudiated by the other. Therefore, merely raising a claim is not sufficient for invoking the provisions under Sec. 11(6) of the AC Act unless it is demonstrated before the Court that by not responding to the written notice by the aggrieved party the other party has shown his denial. In "Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority" (1988) 2 SCC 338 the Honb'le Supreme Court has held that in the matters of commercial transaction it is necessary that there should be a claim raised by one party and a specific denial made by the other. Other important issues which need to be considered by the Court before the powers under Sec. 11(6) of the AC Act are exercised are: (i) whether there is a valid arbitration clause, (ii) whether the dispute falls within the scope of the arbitration clause and (iii) whether the dispute is arbitrable.