WELLGROOMED VENTUREversusDR KAMATS HOSPITAL

                                                                          arbap69-2026-J.doc


                   AGK
                          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                              ORDINARY ORIGINAL CIVIL JURISDICTION

                              ARBITRATION APPLICATION NO.69 OF 2026

                   Wellgroomed Venture                             … Applicant

ATUL                                      Vs.
GANESH
KULKARNI
                   Dr. Kamat’s Hospital                            … Respondent
Digitally signed
by ATUL
GANESH
KULKARNI
Date: 2026.09.29
11:16:14 +0530


                   Mr. Manoj P. Mhatre with Shubham Gupta for the
                   Applicant.
                   Ms. Shabnam Indorewala for the Respondent.



                                     CORAM                  : AMIT BORKAR, J.

                                     RESERVED ON            : SEPTEMBER 23, 2026.

                                     PRONOUNCED ON          : SEPTEMBER 29, 2026

                   JUDGMENT:

                   1.    By this Application under Section 11 of the Arbitration and
                   Conciliation Act, 1996, the Applicant seeks appointment of an
                   Arbitrator for deciding the disputes and differences which have
                   arisen between the parties out of the registered Agreement for Sale
                   dated 4 July 2014.

                   2.    According to the Applicant, the facts which have led to filing
                   of the present Application are as follows. In the year 2012, the
                   Applicants were constructing a commercial building known as
                   “Hubtown Viva” at Jogeshwari (East), Mumbai. In June/July 2014,



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the Respondent approached the Applicants and expressed an
intention to purchase a commercial unit in the said building. On 4
July 2014, the Applicants agreed to sell and the Respondent
agreed to purchase Commercial Unit No.501 situated on the 5th
Floor, having carpet area of 1950 sq. ft. (181.15 sq. mtrs.), along
with the use and exclusive possession of the attached area of the
said unit. Accordingly, the Applicants and the Respondent entered
into a registered Agreement for Sale in respect of Unit No.501.
Under the said Agreement, the Respondent was required to make
the payments within time and was also required to pay the
outgoings, including maintenance charges and assessment charges,
whenever demanded by the Applicants.

3.   According to the Applicants, till June 2021, the Respondent
had failed to pay an amount of Rs.29,36,552/-, together with
interest at the rate of 24% per annum, in respect of Commercial
Unit No.501. The Applicants had, by their communication dated
20 August 2019, called upon the Respondent to clear the
outstanding amount. Thereafter, several communications were
addressed to the Respondent between August 2019 and April
2024, calling upon the Respondent to clear the arrears.

4.   In June 2021, the Applicants handed over the management
and affairs of the building to the society formed by the purchasers
of various units in the building. According to the Applicants, from
2014 till June 2021, they were maintaining the building and were
paying the taxes, assessment charges and other expenses relating
to the building. The Applicants thereafter issued a final notice
dated 30 April 2024, informing the Respondent of their intention



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to terminate the registered Agreement dated 4 July 2014 on
account of failure to clear the outstanding dues. Thereafter, on 4
July 2024, the Applicants issued a notice invoking Clause 51 of the
Agreement. It is in these circumstances that the present
Application has been filed.

5.   Mr. Mhatre, learned Advocate appearing for the Applicants,
submits that under the terms and conditions of the registered
Agreement, and particularly under Clauses 4.1, 4.2 and 4.5, the
Respondent was required to pay to the Applicants his monthly
provisional proportionate share of the outgoings and other
expenses mentioned in the said clauses. According to the
Applicants, till August 2019, an amount of Rs.6,74,210/- was
outstanding towards maintenance charges. An additional amount
of Rs.3,07,595/- was also outstanding towards assessment charges
up to March 2018 in respect of Commercial Unit No.501.

6.   Mr. Mhatre submits that the Applicants, through their
Advocate, issued a communication dated 20 August 2019 calling
upon the Respondent to make the payments mentioned therein.
The envelope containing the said notice was returned with the
remark "UNCLAIMED". Therefore, the Applicants forwarded an
email dated 4 October 2019 along with the notice dated 20 August
2019. According to the Applicants, the said email and notice were
received by the Respondent. Even after receipt of the email and
notice, the Respondent did not give any reply.

7.   In the meantime, the society was formed on 29 May 2021 by
the purchasers of the units in “Hubtown Viva”. In or about June




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2021, the Applicants handed over the management and affairs of
the building to the society. After taking over the management, the
society started issuing maintenance bills to the unit holders from 1
July 2021. According to the Applicants, till 30 June 2021, the
Applicants themselves had maintained the building and its
services. As stated in the Applicants' communication dated 10
August 2023, the Respondent had, till 30 June 2021, outstanding
maintenance charges of Rs.12,63,843/-, calculated on the basis of
provisional billing from July 2011 till June 2021. The Applicants
further claim interest of Rs.16,72,710/- at the rate of 24% per
annum under the terms of the Agreement. Thus, according to the
Applicants, the total amount payable by the Respondent was
Rs.29,36,552/-.        It   is   submitted     that,   despite     several
communications and demands, the Respondent deliberately failed
to clear the outstanding amount.

8.      The Applicants thereafter issued another communication
dated     30   April    2024     to   the   Respondent.   By     the   said
communication, the Applicants placed their case on record and
informed the Respondent that, if the demands made in the said
communication were not complied with, the registered Agreement
dated 4 July 2014 would stand terminated and the Applicants
would be required to take appropriate action against the
Respondent.

9.      The Applicants state that, while preparing the notice dated
30 April 2024, a typographical error occurred in its last and
concluding paragraph. In that paragraph, the date of the
Agreement was wrongly mentioned as 16 April 2013. However, in



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the other portions of the notice, including the reference and the
body of the notice, the correct date of the Agreement, namely 4
July 2014, was mentioned. According to the Applicants, the said
mistake was neither deliberate nor intentional. The Applicants also
submit that they would not gain anything by mentioning an
incorrect date in the concluding paragraph. The Respondent was
admittedly aware of the correct date of the Agreement. According
to the Applicants, the notice dated 30 April 2024 clearly informed
the Respondent about their intention to terminate the registered
Agreement dated 4 July 2014 if the demands contained in the
notice were not complied with.

10.   The Applicants submit that the Respondent received the said
notice. In any event, the same notice was also forwarded to the
Respondent by email dated 2 May 2024. According to the
Applicants, the notice was therefore duly communicated to the
Respondent at his email address. The Applicants further submit
that, as the Agreement dated 4 July 2014 stood terminated, the
License Agreement annexed as Annexure-H to the said registered
Agreement, which permitted the Respondent to park two cars in
the mechanical car parking space in Basement-2, would also stand
terminated as it was connected with and arose out of the said
registered Agreement.

11.   Since the Respondent did not reply to the notice dated 30
April 2024, the Applicants, through their Advocate, invoked Clause
51 of the registered Agreement dated 4 July 2014. The Respondent
was called upon to submit the disputes to arbitration. According to
the Applicants, the said notice was also received by the



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Respondent. However, the Respondent did not reply even to the
arbitration   notice.   The   Applicants   claim   an   amount         of
Rs.29,36,552/- as on 30 April 2024 and rely upon the statement of
claim in support of the said claim.

12.   Clause 51 of the registered Agreement for Sale dated 4 July
2014 contains the arbitration agreement relied upon by the
Applicants. The said clause reads as follows:

      "51. ARBITRATION: In the event that, any dispute is not
      resolved even after mediation before MCHI the same shall be
      settled through arbitration by a sole arbitrator. The
      arbitration proceedings shall be governed by the Arbitration
      &     Conciliation     Act,   1996,     or    any    statutory
      amendments/modifications thereof for the time being in
      force. The arbitration proceedings shall be held at an
      appropriate location in Mumbai, by sole arbitrator, a panel of
      three arbitrator is agreed by the parties from amongst which
      one of the arbitrator as may be available shall be selected by
      the Developer/Promoter to be the sole Arbitrator. The panel
      of Arbitrators as agreed between the parties is as follows
      namely (1) Retd. Judge M. S. Rane, (2) Retd. Judge V. R.
      Datar and (3) Retd. Judge P. S. Pandit. The Purchaser(s)
      hereby confirms that he/she/it shall have no objection to
      such appointment. The arbitration shall be conducted in
      English. The Court at Mumbai alone shall havbe the
      jurisdiction in all matters 18 arising out of touching and/or
      concerning this Agreement regardless of the place of
      execution of this Agreement which is deemed to be at
      Mumbai."
13.   The Applicants further submit that, under the Agreement for
Sale, interest at the rate of 24% per annum was payable on
defaulted and delayed payments. According to the Applicants,




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since the parties had expressly agreed to this rate of interest under
the Agreement, the same rate would apply to the amounts payable
by the Respondent to the Applicants. The Applicants further claim
liquidated damages as agreed between the parties, amounting to
25% of the purchase consideration, which according to them
comes to Rs.90,11,025/-.

14.   Ms. Indorewala, learned Advocate appearing for the
Respondent, submits that Clause 51 on page 52 of the registered
Agreement for Sale dated 4 July 2014 cannot be invoked directly
by the Applicants. According to her, Clause 51 contains a condition
that the dispute must first undergo mediation under Clause 50 of
the registered Agreement. She submits that the Applicants have
not complied with this mandatory pre-condition before invoking
arbitration. It is further submitted that the Applicants have not
disclosed this material fact to the Court and have thereby
suppressed an important part of the Agreement.

15.   Ms. Indorewala submits that the present Application, as well
as the claims made by the Applicants, are barred by limitation.
According to her, by invoking arbitration, the Applicants are
attempting to raise claims relating to alleged arrears from the year
2014. She submits that the possession letter dated 9 September
2014 was issued by the Applicants within about two months from
execution   of   the   Agreement,    after   receiving    the     entire
consideration amount, including taxes, from the Respondent.
According to the Respondent, this circumstance itself shows that
the claim now made by the Applicants is not genuine and is barred
by limitation.



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16.   Ms. Indorewala further submits that, even if the Applicants'
case regarding the notice dated 20 August 2019 is accepted only
for the sake of argument, the cause of action, according to the
Applicants themselves, arose in the year 2019. The present
Arbitration Petition No.69 of 2026 has been filed almost seven
years thereafter. She submits that the Applicants had also handed
over the management and charge of the building to the registered
society consisting of the purchasers, including the Respondent.
According to the Respondent, the claim sought to be raised after
such a long period is a dead claim and is prima facie barred by
limitation.

17.   Ms. Indorewala further submits that the Respondent has
already filed a dispute before the Co-operative Court in which the
Applicants have been made parties. According to her, the said
dispute concerns the same subject matter and the Applicants are
contesting the proceedings before the Co-operative Court. The
Applicants have also filed their written statement therein. It is
therefore submitted that, when the dispute between the same
parties concerning the same subject matter is already pending
before the competent Co-operative Court, commencement of
parallel proceedings under Section 11 of the Arbitration and
Conciliation Act by the Applicants amounts to misuse of the legal
process. The Respondent therefore submits that appropriate
orders, including penal action, ought to be passed against the
Applicants.

18.   The Respondent has also filed written submissions in
response to the query raised by this Court regarding the latest



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submission filed by the Applicants. It is submitted that the said
submission was filed on the same day without advance service
upon the Respondent. According to the Respondent, the dispute
filed by the Respondent, as the Original Disputant, before the Co-
operative Court makes the Applicants herein Opponent No.2. The
said dispute also refers to the arbitration notice and the claims
raised by the Applicants. The Respondent has relied upon and
enclosed its reply to the arbitration notice for consideration by the
Co-operative Court.

19.   The Respondent submits that this position is clear from
Clauses 4, 5 and 6 appearing on pages 4, 5 and 6 of the dispute
filed before the Co-operative Court, which was produced by the
Applicants during the hearing of the present proceedings at Serial
No.15. According to the Respondent, this material establishes the
Respondent's contention raised in the Affidavit in Reply that
proceedings between the same parties concerning the same subject
matter are already pending before the competent Co-operative
Court. The Respondent therefore submits that this circumstance
ought to be taken into consideration by this Court while deciding
the present Application under Section 11 of the Arbitration and
Conciliation Act, 1996.

REASONS AND FINDINGS:

20.   I have considered the present Application, the registered
Agreement for Sale dated 4 July 2014, the arbitration clause relied
upon by the Applicants, the objections raised by the Respondent
and the written submissions placed before the Court. I have also




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considered the relevant page of the Agreement which is produced
on record. On page 52 of the Agreement, Clause 50 deals with
mediation and Clause 51 deals with arbitration. The Agreement
itself therefore shows that mediation and arbitration are provided
as separate stages. The question before the Court is therefore not
only whether there is an arbitration clause in the Agreement. The
question is also whether, according to the procedure agreed by the
parties, the Applicants have reached the stage where an Arbitrator
can be appointed by this Court.

21.   There is no serious dispute that the parties entered into the
registered Agreement for Sale dated 4 July 2014 and that the said
Agreement contains an arbitration clause. Clause 51 is part of the
same Agreement. It is not a clause taken from any other document.
Therefore, the existence of the arbitration agreement is clear from
the Agreement itself. At the stage of Section 11, the Court mainly
has to see whether there is an arbitration agreement and, where
necessary, whether there is any issue apparent from the record
which prevents the matter from being referred to arbitration. The
Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning
has explained that at this stage the Court is not required to
conduct a full trial. The enquiry has to remain limited.

22.   However, merely because an arbitration clause is there, every
notice   invoking   arbitration   cannot   automatically       result     in
appointment of an Arbitrator. The parties have to follow the
procedure which they themselves agreed. In the present case,
Clause 50 and Clause 51 have to be read together. Clause 50
provides:



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      "All or any disputes arising out of or touching upon or in
      relation to the terms of this Agreement including the
      interpretation and validity of the terms thereof and the
      respective rights and obligations of the parties shall be
      settled amicably by mutual discussion failing which the same
      shall be referred for mediation to the Maharashtra Chamber
      of Housing Industry (MCHI)."
      Clause 51 then provides:
      "In the event that any dispute is not resolved even after
      mediation before MCHI the same shall be settled through
      arbitration by a sole arbitrator."
23.   The words used by the parties make the procedure
reasonably clear. First, the parties were required to try to settle the
dispute by mutual discussion. If the dispute was not settled, the
dispute was then to be referred to MCHI for mediation. Only when
the dispute remained unresolved "even after mediation before
MCHI" could the matter proceed to arbitration. Therefore, the
parties had provided different stages for settlement of their
dispute. They could have agreed to go directly to arbitration, but
they did not do so. They specifically placed mediation before
arbitration. Therefore, this part of the Agreement cannot be
treated as an unnecessary provision and simply ignored while
considering Clause 51.

24.   The objection raised by Ms. Indorewala, learned Advocate
for the Respondent, that the Applicants directly invoked arbitration
without first following Clause 50 therefore has substance. The
Applicants have relied upon the notice dated 20 August 2019, the
subsequent demands, the notice dated 30 April 2024 and
thereafter the notice dated 4 July 2024 invoking Clause 51.



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However, there is no material placed before this Court to show that
the Applicants referred the dispute to MCHI for mediation. There
is no notice seeking mediation before MCHI. There is no reference
made to MCHI. There is no mediation proceeding and there is no
material showing that mediation before MCHI failed. Therefore,
the step which was required to be taken before invoking
arbitration has not been shown to have been taken.

25.   This distinction is important. The Applicants say that several
demands were made to the Respondent and that the Respondent
did not reply. This may show that the monetary dispute was not
settled through correspondence between the parties. But this by
itself does not show that the second stage agreed by the parties,
namely mediation before MCHI, was followed. Correspondence
between the parties cannot automatically be treated as mediation
before MCHI. A demand notice and mediation before MCHI are
different things.

26.   The Respondent had raised this objection at the stage of the
present Section 11 proceedings itself. Therefore, there is no
conduct of the Respondent from which it can be said that the
Respondent knowingly gave up the agreed requirement of
mediation. The Respondent has consistently relied upon Clause 50
and has specifically submitted that the invocation of arbitration
was premature. In these circumstances, this Court cannot ignore
the contractual requirement merely because the Respondent may
not have replied to the earlier demands or because mediation may
not have resulted in settlement.




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27.   I am conscious that arbitration law seeks to avoid
unnecessary technical objections and unnecessary interference by
the Court. At the same time, arbitration itself is based upon the
consent of the parties. The Court cannot change the procedure
which the parties had agreed between themselves. When the
Agreement provides that one step has to take place before the next
step can be taken, that agreement has to be given proper meaning.
Otherwise, Clause 51 could be invoked even before the event
mentioned in Clause 50 had taken place.

28.   This approach is also in keeping with the limited jurisdiction
of the Court under Section 11. The Supreme Court has recently
reiterated that the Court making a reference may conduct a limited
examination, but should not decide complicated factual questions
which are properly to be decided by the Arbitral Tribunal. At the
same time, where an objection is clear from the Agreement itself,
the Court can refuse the reference. In the present case, the
requirement of mediation is clearly found in Clauses 50 and 51. It
does not depend upon complicated oral evidence. The material
placed before the Court also does not show that this requirement
was followed.

29.   The submission of Mr. Mhatre that the Applicants had
repeatedly demanded the outstanding amount does not answer
this objection. Those demands may show that, according to the
Applicants, there was non-payment and a dispute between the
parties. But they do not show that the procedure required before
invoking arbitration was followed. The existence of a monetary
dispute and the stage at which arbitration can be invoked are two



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different questions.

30.   I, therefore, find that the arbitration notice dated 4 July
2024 cannot, on the material presently before the Court, be
treated as a valid invocation of Clause 51. The Applicants had not
first completed the procedure agreed under Clause 50. The present
Application under Section 11 is therefore premature.

31.   The next objection raised by the Respondent is that the
claims made by the Applicants are barred by limitation. This
objection has to be considered separately. Two different periods
have to be kept in mind. One concerns the limitation for filing the
Section 11 Application itself. The other concerns the limitation
applicable to the actual monetary claims which the Applicants seek
to raise in arbitration.

32.   So far as the Section 11 Application is concerned, the
Supreme Court in M/s Arif Azim Co. Ltd. v. M/s Aptech Ltd., 2024
INSC 155, has held that Article 137 of the Limitation Act applies to
an application under Section 11. The period is three years from the
date when the right to apply arises. The Supreme Court has also
made it clear that this period is different from the limitation
applicable to the substantive claims. Normally, the right to file a
Section 11 Application arises after a valid invocation of arbitration
and failure or refusal to make the appointment according to the
agreed procedure.

33.   In the present case, the Applicants rely upon the arbitration
notice dated 4 July 2024 and the alleged failure of the Respondent
to appoint an Arbitrator thereafter. The present proceedings are



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stated to be Arbitration Petition No.69 of 2026. Therefore, on the
material before the Court, I am unable to hold that the Section 11
Application itself is barred only because the Applicants had earlier
raised their demand in 2019. The submission of the Respondent
that the Section 11 Application itself is barred because of a delay
of seven years therefore cannot be accepted in that broad manner.
The limitation for the Section 11 Application has to be considered
from the point when the right to seek appointment arose and not
necessarily from the date when the first monetary demand was
made. The distinction made in Arif Azim is relevant in this regard.

34.   The position relating to the substantive claims is somewhat
different. Under Section 43 of the Arbitration and Conciliation Act,
the Limitation Act applies to arbitration proceedings in the same
manner as it applies to proceedings before a Court. The Supreme
Court has held that where a claim is clearly dead and hopelessly
barred by limitation, the referral Court may refuse to make a
reference. But where the question of limitation depends upon
disputed facts or requires detailed examination of documents, that
question normally has to be considered by the Arbitral Tribunal. In
Arif Azim, the Supreme Court has explained that the Court has to
consider two separate aspects. It has to see whether the Section 11
Application itself is barred and also whether the substantive claim
is clearly a dead claim on the date when arbitration was
commenced.

35.   Applying this principle to the present case, the submission of
the Respondent has some force, but it cannot be accepted in the
broad manner in which it is made. The Respondent submits that



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the Applicants are now trying to recover amounts allegedly due
from the year 2014 and that the possession letter dated 9
September 2014 was issued after the Applicants had received the
entire consideration and taxes from the Respondent. However,
payment    of   the   purchase   consideration    and   payment        of
maintenance charges, assessment charges and other outgoings are
different matters under the Agreement, as pleaded by the
Applicants. Merely because possession was given after the
purchase consideration was paid, it does not automatically mean
that all maintenance and other outgoings were also paid.
Therefore, the possession letter by itself does not establish that the
Applicants' monetary claim is false or impossible.

36.   At the same time, another fact cannot be ignored. According
to the Applicants themselves, they maintained the building only up
to 30 June 2021 and they are claiming maintenance arrears up to
that date. Thus, according to their own case, the period for which
maintenance charges are claimed ended in June 2021. Thereafter,
the Applicants handed over the affairs of the building to the
society. The arbitration notice was issued only on 4 July 2024.
Therefore, the Respondent is justified in raising a serious question
as to whether the amounts which had already become due by June
2021 could be claimed for the first time through an arbitration
notice issued more than three years thereafter.

37.   The correspondence relied upon by the Applicants also does
not, from the material presently before the Court, show any
acknowledgment of liability by the Respondent. The notice dated
20 August 2019 was a demand made by the Applicants. The email



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dated 4 October 2019 was also sent by the Applicants. The
communication dated 10 August 2023 is relied upon by the
Applicants for quantifying their claim. But none of these
documents, as placed before the Court, is an admission by the
Respondent accepting the alleged debt. A demand made by one
party does not itself become an acknowledgment of liability by the
other party.

38.   At the same time, it would not be proper for this Court,
while considering a Section 11 Application, to make a detailed
calculation of every maintenance bill, assessment charge, interest
amount and other alleged dues. The material presently before the
Court is not sufficient to determine the exact due date of each
amount, whether the amount was payable periodically, whether
any payment was made, whether there was any acknowledgment
by the Respondent, or whether any particular part of the claim was
saved or extended by any legally recognised circumstance. These
questions may require examination of documents and facts.

39.   I, therefore, do not accept the Respondent's submission that
the entire monetary claim can, only from the present pleadings, be
finally declared as a dead claim. However, I make it clear that the
Applicants cannot proceed on the assumption that the entire
amount of Rs.29,36,552/- is within limitation merely because a
consolidated amount was mentioned in the communication dated
30 April 2024 or in the arbitration notice. The limitation of each
substantive claim has to be considered with reference to the actual
date on which the amount became due and any legally recognised
event which may affect limitation. Merely sending later demand



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letters does not by itself extend limitation. The Supreme Court has
made it clear that the referral Court should interfere where the
claim is clearly dead, while other disputed questions of limitation
are ordinarily to be considered by the Arbitral Tribunal.

40.   The Respondent has also relied upon the possession letter
dated 9 September 2014 and has submitted that the entire
consideration, including taxes, had already been received. This
cannot by itself establish that the Applicants had no right to claim
maintenance or assessment charges. The Applicants rely upon
Clauses 4.1, 4.2 and 4.5 and say that these clauses separately
required the Respondent to pay his proportionate share of the
outgoings. Whether the charges were correctly calculated, whether
they were actually payable under the Agreement and whether the
Applicants have included any amount which is not legally
recoverable are matters concerning the merits of the dispute.
These questions cannot be finally decided in the present Section 11
proceedings only on the basis of the possession letter.

41.   The same position applies to the Applicants' claim for
interest at 24% per annum. The Applicants rely upon the
contractual provision and claim Rs.16,72,710/- towards interest.
The Respondent disputes the claim itself. If an Arbitrator is validly
constituted, the Arbitrator would have to consider the relevant
contractual provisions, the dates on which the principal amounts
became due, the principal amount actually payable and whether
the agreed rate of interest applies. At this stage, the claim for
interest cannot be accepted merely because a particular figure has
been stated by the Applicants.



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42.   The Applicants have also relied upon an alleged right to
claim liquidated damages of Rs.90,11,025/-, said to be 25% of the
purchase consideration. This is also a substantive claim. Such a
claim cannot enlarge the jurisdiction of this Court under Section
11. The question before this Court is whether the agreed
procedure for commencing arbitration has been followed and
whether the requirements for appointment of an Arbitrator are
satisfied. Whether the Applicants are entitled to liquidated
damages, what is the contractual basis of such claim and whether
it is enforceable are matters which have to be considered in
accordance with law at the appropriate stage.

43.   The Applicants have relied upon the fact that the Respondent
did not reply to the notices dated 20 August 2019, 30 April 2024
and 4 July 2024. The absence of a reply may have some relevance
to the dispute between the parties. But such silence cannot be
treated as an agreement by the Respondent to bypass Clause 50.
The Agreement specifically provides that arbitration would arise
"even after mediation before MCHI". There is no material to show
that this event has taken place.

44.   The explanation given by the Applicants regarding the
typographical mistake in the notice dated 30 April 2024 also needs
to be considered. The Applicants say that in the concluding
paragraph the date of the Agreement was wrongly mentioned as
16 April 2013, whereas in the body and reference of the notice the
correct date, namely 4 July 2014, was mentioned. On the material
placed before the Court, this appears to be a mistake in one part of
the notice. I do not find that this mistake, by itself, makes the



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notice ineffective. The Respondent was aware of the Agreement
which was the subject matter of the dispute. The other portions of
the notice correctly referred to the registered Agreement dated 4
July 2014. Therefore, this mistake does not affect the decision of
the present Application.

45.   The submission regarding the License Agreement for parking
two cars also does not change the position. The Applicants submit
that the parking licence was connected with the registered
Agreement and therefore came to an end when the main
Agreement was terminated. Whether the termination of the main
Agreement was valid and what effect it has upon the parking
arrangement are substantive questions. It is not necessary to give a
final finding on these issues for deciding whether an Arbitrator can
be appointed at this stage.

46.   The Respondent has also relied upon the fact that
proceedings are pending before the Co-operative Court. According
to the Respondent, a dispute has already been filed by the
Respondent against the Applicants. The Applicants have been
made Opponent No.2 and have filed their written statement. It is
also submitted that the arbitration notice and the claims made by
the Applicants have been referred to in those proceedings. The
written submissions of the Respondent specifically rely upon
Clauses 4, 5 and 6 of the dispute filed before the Co-operative
Court.

47.   This submission cannot be rejected only because another
proceeding is pending. If two proceedings involve the same




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parties, the same cause of action and the same reliefs, the Court
would certainly have to consider the legal effect of such
proceedings. However, the complete pleadings before the Co-
operative Court have not been placed before this Court. What is
before the Court is the Respondent's description of that proceeding
and reference to certain paragraphs of the dispute. Therefore,
there is not enough material to finally hold that the proceedings
before the Co-operative Court and the proposed arbitration are
exactly the same in parties, issues, cause of action and reliefs.
There is also not enough material to hold that the Co-operative
Court has exclusive jurisdiction and that arbitration is completely
excluded.

48.   More importantly, the mere existence of another proceeding
does not require this Court to decide the entire substantive dispute
while dealing with a Section 11 Application. Section 11 is a limited
referral jurisdiction. The Court primarily considers the existence of
the arbitration agreement and does not normally conduct a full
adjudication of the disputed claims. Therefore, the pendency of the
Co-operative Court proceedings, by itself, cannot result in the
entire dispute being finally decided in the present Application.

49.   The Respondent has also described the conduct of the
Applicants as "contemptuous" and has alleged suppression of facts
and sought penal consequences. Such serious allegations cannot be
accepted only because the Applicants have not stated every fact in
the manner suggested by the Respondent. A finding of contempt or
deliberate suppression requires proper factual and legal material.
On the material presently before the Court, I find no sufficient



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basis to record such a finding. The objection regarding non-
compliance with the mediation requirement is itself sufficient to
decide the present Application. There is therefore no need to
convert the present Section 11 proceedings into separate
proceedings regarding alleged contempt.

50.   There is one more aspect arising from the wording of Clause
51. The clause provides for a panel of three Arbitrators and states
that one of them "as may be available" would be selected by the
Developer/Promoter to act as the sole Arbitrator. The present
proceedings, however, are for appointment by the Court under
Section 11. The Applicants cannot, merely on the basis of the
unilateral portion of the clause, insist that they themselves should
appoint the sole Arbitrator. The Supreme Court in Perkins Eastman
Architects DPC v. HSCC (India) Ltd. has held that a party having
an interest in the dispute cannot retain an unrestricted unilateral
power to appoint the sole Arbitrator. The present Court, however,
need not finally decide this question because the Application fails
at an earlier stage itself due to non-compliance with the agreed
pre-arbitration procedure.

51.   On considering the matter as a whole, I find that the
Applicants have established the existence of a written arbitration
agreement under Clause 51. They have also shown that there is a
dispute regarding maintenance charges, assessment charges,
interest and other alleged amounts. The objection that the
possession letter by itself proves that there could be no claim
towards outgoings is not accepted. Similarly, the submission that
the Section 11 Application itself is barred merely because the



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alleged dues arose in 2014 or 2019 is not accepted in that broad
form. The limitation of the substantive claims has to be considered
with reference to the individual dates and supporting documents,
subject to the limited power of the referral Court to reject a claim
which is clearly dead.

52.   However, the main objection raised by the Respondent
succeeds. The Agreement does not permit the Applicants to go
directly from a dispute regarding payment to arbitration. Clause
50 requires mutual discussion and, if the dispute is not settled,
mediation before MCHI. Clause 51 can operate only "in the event
that any dispute is not resolved even after mediation before
MCHI". The Applicants have not shown that this agreed
requirement was followed. Therefore, the arbitration notice dated
4 July 2024 was premature.

53.   The consequence is that this Court cannot presently appoint
an Arbitrator under Section 11 on the basis of the notice dated 4
July 2024. The parties have to first follow the procedure which
they themselves agreed. This finding does not mean that the
monetary claim of the Applicants is proved. It also does not mean
that the Respondent has no liability. It further does not finally
decide the limitation objection in respect of each individual claim.
Those questions can be considered in accordance with the
Agreement and law after there is a valid invocation of arbitration.

54.   I, therefore, hold that the present Section 11 Application is
premature because Clauses 50 and 51 of the registered Agreement
for Sale dated 4 July 2014 have not been complied with. The




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Applicants must first follow the agreed procedure of mutual
discussion and, if the dispute remains unresolved, mediation
before the Maharashtra Chamber of Housing Industry. Only
thereafter can arbitration be invoked in terms of Clause 51. Even
then, all objections available to the Respondent in law, including
limitation and the effect, if any, of the pending proceedings before
the Co-operative Court, will remain open.

55.   The Application is therefore liable to be dismissed at this
stage. The dismissal is only because the contractual procedure
before arbitration has not been followed. It shall not be treated as
a finding that the Applicants are entitled to Rs.29,36,552/-,
interest of Rs.16,72,710/- or the alleged liquidated damages of
Rs.90,11,025/-. These claims have not been finally decided on
merits in the present proceedings. Any proceedings which may be
initiated hereafter shall remain subject to limitation and all other
objections which may be available to either party in accordance
with law.

      (a)   The present Application under Section 11 of the
      Arbitration and Conciliation Act, 1996 is dismissed as
      premature;

      (b)   The Applicants shall, before invoking arbitration under
      Clause 51 of the registered Agreement for Sale dated 4 July
      2014, follow the procedure agreed under Clause 50 of the
      said Agreement, including mutual discussion and, if the
      dispute is not resolved, mediation before the Maharashtra
      Chamber of Housing Industry (MCHI);




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(c)    It is clarified that this Court has not adjudicated upon
the    merits   of   the   Applicants'   monetary      claims       of
Rs.29,36,552/-, interest of Rs.16,72,710/- or the alleged
liquidated damages of Rs.90,11,025/-;

(d)    It is further clarified that all objections of the
Respondent, including the objection as to limitation of the
substantive claims and the effect, if any, of the proceedings
pending before the Co-operative Court, are kept open;

(e)    In the event of a fresh and valid invocation of
arbitration in accordance with the Agreement, the parties
shall be at liberty to take all contentions available to them in
law;

(f)    There shall be no order as to costs;

(g)    The Application is accordingly disposed of.

                                         (AMIT BORKAR, J.)




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