They Have Already Vacated Premises: Allahabad HC Dismisses Petition Against Decathlon Sports India In Arbitration Case
The Allahabad High Court dismissed the petition preferred against M/s Decathlon Sports India Private Ltd. in an arbitration case.
The petition filed before the Lucknow Bench challenged the validity of an order of the Sole Arbitrator in the arbitration proceedings instituted against Decathlon by which an application under Section 16(2) of the Arbitration and Conciliation Act, 1996 (A&C Act) was allowed and the arbitration proceedings were dropped for want of jurisdiction.
A Single Bench of Justice Subhash Vidyarthi said, “In the present case, the claimants have purchased various portions of a property that had been taken on lease by the respondent no. 1 from M/s Rohtas Projects Limited, in violation of the conditions of the registered lease deed. Although there is no arbitration agreement between the petitioners and the respondent no. 1, the petitioners initiated arbitration proceedings claiming payment of arrears of rent and damages etc. The proceedings under the IBC have been initiated against the lessor M/s Rohtas Projects Limited. A Resolution Professional has already been appointed by the NCLT, New Delhi. The respondents have deposited the entire arrears of rent and damages etc. in the National Company Law Tribunal and they have already vacated the premises in dispute.”
The Bench noted that the jurisdiction of the court under Article 227 of the Constitution is supervisory jurisdiction which should be exercised to prevent injustice being caused to a party but where the order under challenge in the petition under Article 227 does not cause any injustice to any of the parties, the court will not exercise its discretion in such a case.
Advocate Pritish Kumar represented the petitioners while Senior Advocate S.C. Mishra represented the respondents.
Brief Facts -
The petitioners challenged the validity of the judgment passed by the Presiding Officer, Commercial Court, dismissing an application under Section 13(1A) of the Commercial Court Act, 2005 read with Section 37 of A&C Act filed by the petitioners who challenged the order of the Sole Arbitrator. A lease deed was executed in favour of Decathlon, letting out an area in Rohtas Presidential Arcade situated in Lucknow for a period of 20 years. The petitioners filed an Arbitration application before the High Court Section 11 of A&C Act stating that they were allotted commercial units by M/s Rohtas Projects Limited. They requested Decathlon to clear the outstanding liability of payment of rent under the lease deed.
Upon failure of Decathlon to clear the dues, the petitioners issued a joint notice terminating the tenancy created by the lease deed. They requested the High Court to appoint an Arbitrator for adjudication of the dispute between the parties. Justice Dilip B. Bhosale (retired) was appointed as the Sole Arbitrator by means of an order and the petitioners filed a statement of claim before him. Whereas, Decathlon prayed for the dismissal of arbitration proceedings. The Sole Arbitrator rejected the application and hence, the petitioners approached the High Court.
The High Court in the above context of the case observed, “When we examine the facts of the present case in light of the law referred to above, it appears that there is no arbitration agreement between the petitioners and the respondent no. 1. The transfer of property made by M/s Rohtas Projects Ltd. in favour of the petitioners, has been made in violation of the terms and conditions of lease deed executed by M/s Rohtas Projects Limited in favour of the respondent no. 1 and, therefore, none of the obligations contained in the lease deed dated 07.04.2017 by M/s Rohtas Projects Limited stood transferred to the petitioners, including the right to initiate the arbitration proceeding under Clause 23 of the lease deed. Therefore, there is no arbitration agreement between the petitioners and the respondent no. 1.”
The Court concluded that interfering in the order passed by the Sole Arbitrator and the order passed by the Commercial Court, Lucknow will not serve the interest of justice in any manner.
Accordingly, the Court dismissed the petition.
Cause Title- Chitra Misra and 13 Others v. M/s Decathlon Sports India Private Ltd. Thru. Managing Director and Another (Neutral Citation: 2024:AHC-LKO:39780)
Appearance:
Petitioners: Advocates Pritish Kumar and Amal Rastogi.
Respondents: Senior Advocate S.C. Mishra and Advocate Sanjeev Singh.