1 2025:CGHC:60063 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 64 of 2025 Ms Eminent Infra Structures Pvt Ltd. A Company Registered Under The Provisions Of Companies Act, 1956 Having Its Head Office At Govind Dham, Civil Lines, Raipur, Chhattisgarh. Represented Through Its Director, Mr. Harbaksh Singh Batra, S/o Late Shri Gurubaksh Singh Batra, Aged About 66 Years, Resident Of Govind Dham, Civil Lines, Raipur, Chhattisgarh, Chhattisgarh ... Applicant versus 1. Chhattisgarh Housing Board Division No. 3, Through Its Executive Engineer, Commercial Premises, 2nd Floor, VIP Road, Moulshree Vihar, Purena, Raipur, District - Raipur, Chhattisgarh 2. Commissioner, Chhattisgarh Housing Board, Having Office At Nirman Bhawan, North Block, Sector 19, Nava Raipur, Atal Nagar, Raipur, District Raipur, Chhattisgarh ... Respondents For Applicant : Mr. Abhishek Vinod Deshmukh, Advocate. (through video-conferencing). For Respondents : Mr. Shobhit Mishra, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 10.12.2025 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”) for appointment of an arbitrator. 2. The applicant has prayed for the following relief(s): “a. Appoint an Sole arbitrator as per the provisions of PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.12.11 14:44:07 +0530 2 Arbitration and Conciliation Act, 1996 for resolution of the disputes referred by the Parties to the arbitration agreement contained in the Contract. b. Pass any such other order as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case.” 3. The fact, in brief, as projected by the applicant is that the applicant is a company incorporated under the Indian Companies Act and is registered with the Registrar of Companies. Respondent No. 1 is a Chhattisgarh Housing Board established under the Housing Board Act and the Respondent No. 2 is the commissioner of Respondent No. 1. Respondent No. 1 had in the year 2008 invited bids for Build, Operate and Transfer of a Top End Cosmopolitan Social and Health Club at Raipur. The applicant had also submitted its bid and the bid submitted by the applicant were accepted on 19.09.2008. Thereafter, the concession agreement was signed on 10.02.2009. The applicant had then in fulfilment of the conditions of agreement had constructed and set up the club after investing a huge sum of more than Rs. 16 Crores in its development. The Club was initially run in the name of Queens Club of India and subsequently in name of the Aluser Inn. Further, a road has been constructed by the respondents in the year 2021 on the adjoining personal property of the applicant ad-measuring about 3500 sq. ft. The consent was given by the applicant vide its letter dated 03.04.2021 and the respondent vide its letter dated 06.04.2021 have stated that land would be purchased by Housing Board by mutual consent. The Patwari in the demarcation report have stated that the road has been constructed on the land of the applicant. Respondent No. 1 had on 15.03.2024 terminated the Contract on frivolous grounds, namely, (i) changing the name of club in display board; (ii) default in payment of annual concession fees; (iii) use of premises for carrying on or abetting unlawful operations; (iv) attempt to sell the land of the club. With respect to the 3 changing of name of Club, it is stated that the same was done vide letter dated 27.04.2022 and the same was acknowledged by the respondents vide their letter dated 02.05.2022. Thereafter, no objection was raised by the respondent, which means that the respondent was agreeable to the change of name by the applicant. Thereafter, rent was also demanded from the applicant and further consent was also sought from the applicant regarding use of the private land of the applicant for construction of road. With respect to the default in payment of annual concession fees. it is stated that the proceedings were pending with the respondent authorities regarding payment, wherein the matter was taken up by the Court of Competent authority of Housing Board on 26.12.2023 and the next date was fixed for 02.04.2024. With respect to the use of premises for carrying on or abetting unlawful operations, it is stated that the said act was done by the persons who had made the booking and the club was unsealed pursuant to the Order dated 11.02.2022 of the Hon'ble High Court. With respect to the allegation of attempt to sell the land of the club, it is stated that the alleged MoU dated 25.11.2019 was for transfer of shareholdings in applicant company, which was terminated vide Mutual Termination Agreement 21.10.2020 and the termination of MoU in the year 2020 was well within the knowledge of the Respondents. 4. Mr. Abhishek Vinod Deshmukh, learned counsel appearing through video-conferencing for the applicant submits that the alleged show cause notice dated 06.02.2024 was not served upon the applicant, as the director of the applicant along with his family had travelled to Mumbai for medical treatment on 31.01.2024 and had returned on 16.04.2024. This notice was served upon the applicant along with the reply filed by the respondent before this Hon'ble Court. Without prejudice to the same, it is stated that in the said notice dated 06.02.2024, the respondent had alleged only two ground, viz. 4 default in payment of licence fee and change in name of club. The applicant had filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, being ARB MJC No. 36 of 2024, before the Ld. Commercial Court, which was rejected vide Order dated 25.06.2024. The applicant vide its letter dated 28.03.2024 has made a representation to the Respondent No. 1 in accordance with the clause 11 of the agreement, which was rejected vide Order dated 22.05.2024. The respondent received this letter but remained silent and failed to agree upon appointment of an independent Arbitrator. 5. As per the clause 11 (2), which provides for arbitration, provides that Secretary, Government of Chhattisgarh, Department of Housing and Environment shall be the arbitrator. However, in view of the law laid down by the Hon'ble Supreme Court, the appointment of the Secretary, Department of Housing and Environment as arbitrator is contrary to the provisions of Section 12 (5) of the Arbitration and Conciliation Act, 1996 and as such the Secretary, Department of Housing and Environment is ineligible to become the arbitrator. It is for this reason, the applicant had proposed for appointment of an independent Arbitrator unconnected with the parties. In view of the forgoing compelling circumstances there is no effective remedy to the applicant except approaching this Hon'ble Court for appointment of an independent Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996 as the condition precedent for the application has been satisfied as the respondent has failed to agree upon the appointment of the arbitrator at the request by the Applicant to do so. 6. Mr. Shobhit Mishra, learned counsel for the respondents, relying on the return filed on behalf of respondents, opposes this arbitration request application on the ground that the present application is not maintainable, misconceived, and liable to be dismissed in limine. The applicant has 5 deliberately omitted to place before this Hon'ble Court several material and crucial aspects such as (i) the applicant's continuous non-payment of concession fee despite repeated reminders, (ii) multiple violations and misuse of the project premises, (iii) breach of statutory obligations, and (iv) the failure to rectify defaults despite warnings etc. The alleged notice dated 20.06.2025 relied on by the applicant does not constitute a valid invocation of the arbitration clause. The notice does not satisfy the requirements of Clause 11 of the Concession Agreement, nor does it identify specific arbitrable disputes, nor does it comply with the mandatory pre-dispute resolution mechanism provided under the Agreement. Hence, the very foundation of the present petition is defective. The Concession Agreement contains a structured, multi-tier dispute resolution mechanism. The applicant has not exhausted the mandatory remedy of seeking resolution before the competent authority in terms of Clause 11(1) and 11(2). Without complying with these mandatory preconditions, the applicant cannot invoke arbitration and therefore cannot maintain this petition. The present application is liable to be rejected as the applicant has failed to adhere to the agreed dispute-resolution mechanism expressly stipulated under Clause 11(2) of the Concession Agreement. 7. Mr. Mishra further submits that the Clause 11(2) clearly provides that if the first level of dispute-resolution fails, the matter shall be referred to the Secretary, Government of Chhattisgarh, Department of Housing and Environment, for arbitration, and his decision shall be final. This clause constitutes the sole and exclusive contractual method agreed between the parties for the appointment of an Arbitrator. The applicant has not invoked this agreed mechanism. At no stage did the applicant refer the dispute to the Secretary as required under Clause 11(2), nor did the applicant request the respondents to act in accordance with the said clause. The applicant cannot 6 bypass the contractually agreed appointment procedure and directly approach this Hon'ble Court. The arbitration clause was consciously agreed to by both parties at the time of execution of the agreement and binds the applicant equally. The applicant cannot unilaterally disregard or avoid it. if the applicant believed that the named authority was incapable or unsuitable, the proper course was to first address this concern to the respondents and seek an alternative appointment through the agreed mechanism at the time of signing of the contract. The applicant has not done this and has instead directly moved this Hon'ble Court without exhausting the contractual steps. In view of the above, the agreed appointment mechanism remains intact and enforceable. There is no breakdown or failure of the procedure contemplated under Clause 11(2), which is a necessary condition before invoking Section 11(6). It is denied that the arbitration clause appointing the Secretary, Department of Housing and Environment as the arbitrator is invalid or unenforceable. The Secretary is the designated statutory authority expressly agreed to by the parties at the time of entering into the concession contract in 2009. The applicant, after having enjoyed the commercial benefits of the agreement for more than 15 years, is estopped from challenging the agreed procedure at this belated stage, that too only after their breaches have been established. The applicant's reliance on Section 12(5) of the Act is wholly misplaced. The ineligibility under Section 12(5) applies only where the arbitrator falls within the Seventh Schedule and the parties have not expressly waived the same after disputes have arisen. The applicants have never sought any such waiver, nor have they requested the respondents to propose an alternative arbitrator under the agreed mechanism. The respondents submits that the termination dated 15.03.2024 was validly issued after due consideration of the applicant's persistent and material breaches, namely: i. continuous default in payment of annual concession fee; 7 ii. unauthorized change of name of the club; iii. use of premises for unlawful operations leading to sealing by authorities; iv. attempted alienation of club land through the MOU dated 25.11.2019; v. misuse of adjoining land and violation of development norms. vi. These breaches go to the root of the agreement and render the termination lawful, leaving no subsisting arbitrable dispute. vii. Non-payment of dues/taxes/Bills to Municipal Corporation, Electricity Department etc. The applicant's averment that the show cause notice dated 06.02.2024 was not served is incorrect. The notice was duly issued and attempted to be served at the registered premises. The applicant's self-created absence cannot be a ground to claim non-service. The applicant was fully aware of the ongoing proceedings. The record clearly shows acts of misrepresentation, concealment and fraudulent conduct on part of the applicant, including attempts to transfer rights in the land and project premises. Serious allegations of fraud and illegal activities are involved, which render the disputes non-arbitrable. Since the contract has already been terminated on valid grounds and the termination has been sustained in judicial proceedings, the applicant cannot now revive contractual remedies through arbitration. There is no live or subsisting dispute capable of being adjudicated by an arbitral tribunal. The applicant has approached this Hon'ble Court more than one year after the termination and without any explanation for the prolonged delay. The arbitration notice was also issued belatedly, showing that the applicant has acquiesced to the termination. The applicant has been in continuous breach and has materially defaulted on its obligations. A party in default cannot invoke equitable jurisdiction of this Hon'ble Court under Section 11(6), which is a discretionary remedy. 8. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 8 9. A query was put to learned counsel appearing for the parties as to whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of District Court is appointed as the Sole Arbitrator. They further submit that Mr. N.D. Tigala, who is a retired District Judge may be appointed as Arbitrator. 10. In view of the above consensus between the learned counsel for the parties. Mr. N.D.Tigala, a retired Judge of District Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties. The respondents shall be at liberty to raise objections, if any, as has been raised in this petition, before the Sole Arbitrator, if so advised, which may also be looked into by the Sole Arbitrator. 11. The Registry is directed to communicate this order to Mr. N.D.Tigala in the proper address. 12. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 13. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) Chief Justice Preeti