BLUE HORIZON ESTATES PRIVATE LIMITED vs ASHISH DHANDHANIA AND ORS

IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE

RESERVED ON: 05.05.2026
DELIVERED ON: 14.05.2026

PRESENT:

THE HON’BLE MR. JUSTICE GAURANG KANTH

AP 4 OF 2026

BLUE HORIZON ESTATES PRIVATE LIMITED

VERSUS

ASHISH DHANDHANIA AND ORS .
Appearance: -

Mr. Shuvasish Sengupta, Adv.
Mr. Lalit Baid, Adv.
Mr. Akash Munshi, Adv.
Mr. Tamoghna Saha, Adv.
Ms. Sanjana Shaw, Adv.
Mr. Kuldeep Das, Adv.
.…………………….. for the Petitioner

Mr. Aniruddha Chatterjee, Sr. Adv.
Mr. Kushal Chatterjee, Adv.
Ms. Sayanti Nandy, Adv.
….……. … for the Respondent


JUDGMENT

Gaurang Kanth, J. :-

1. The Petitioners have preferred the present petition under Section 11(6) of
the Arbitration and Conciliation Act, 1996 seeking appointment of an
arbitrator for adjudication of the disputes and differences alleged to have
arisen between the parties out of and in connection with the Agreement for
Sale dated 23.07.2012.
2. The facts leading to the filing of the present petition are as follows.
3. The Petitioners entered into an Agreement for Sale dated 23.07.2012 with
Respondent No. 1 as the vendor, Respondent No. 2 as the Developer and
Confirming Party, and Respondent No. 3 as the owner, in respect of

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purchase of a flat being Unit No. 4B, measuring about 2245.43 sq.ft. super
built-up area on the 4th floor of premises No. 12, Shakespeare Sarani,
Kolkata – 700071, together with one car parking space on the ground floor
of the said premises. The total consideration for the said flat was agreed at
Rs. 2,11,00,000/-. According to the Petitioners, the entire sale
consideration was paid and possession of the said flat was handed over to
them instantly upon execution of the said agreement.
4. It is the case of the Petitioners that under Clause 3(10) of the said
Agreement for Sale, the Respondents were required to complete the sale
and execute the conveyance in favour of the Petitioners within a period of
20 months from the date of execution of the agreement, or within 30 days
of Respondent No. 1 causing to be executed and registered the Deed of
Conveyance in respect of the said flat by Respondent Nos. 2 and 3 in favour
of Respondent No. 1, whichever is earlier. However, according to the
Petitioners, the execution and registration of the conveyance deed were
deferred from time to time on various grounds.
5. The Petitioners have stated that Respondent No. 2 forwarded a draft
conveyance deed, though certain clauses contained therein were objected to
by the Petitioners, resulting in several meetings and exchanges between the
parties. According to the Petitioners, the issues remained unresolved. The
Petitioners have further alleged that conveyance deeds in respect of several
other flats in the said premises were also not executed, as a result whereof
the flat owners were unable to constitute a flat owners' association or
obtain access to the accounts and records relating to the maintenance of
the building. Respondent No. 2 continued to manage and maintain the
building premises until it intimated, vide letter dated 17.08.2023, that it

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would not be continuing with the maintenance activities beyond
30.08.2023.
6. The Petitioners have further stated that complaints were raised from time
to time by the Petitioners and other residents regarding maintenance and
upkeep of the building, which were denied by Respondent No. 2. Thereafter,
by letter dated 14.09.2023, the Petitioners called upon the Respondents to
execute the conveyance deed. Respondent No. 2, by its reply dated
30.09.2023, denied any liability to execute the conveyance deed and stated
that such obligation, if any, vested upon Respondent Nos. 1 and 3. The
Petitioners replied thereto by letter dated 16.08.2025, to which Respondent
No. 2 responded by letter dated 19.08.2025 reiterating its earlier stand.
7. In view of the disputes and differences so arising, the Petitioners invoked
the arbitration clause contained in Clause 18 of the Agreement for Sale
dated 23.07.2012 by issuing a notice dated 10.09.2025 under Section 21 of
the Arbitration and Conciliation Act, 1996, proposing the name of Mr.
Saptarshi Banerjee, Advocate, as Sole Arbitrator. The arbitration clause in
the Agreement provides for reference of disputes to Mr. Pankaj Shroff,
Advocate, of 7B, Kiran Sankar Roy Road, Calcutta – 700001, or such
person as may be nominated by him. The Petitioners contended that Mr.
Pankaj Shroff had acted on behalf of the Respondents and is therefore
ineligible to act as arbitrator. The said notice was received by the
Respondents and Respondent No. 2 replied thereto by letter dated
07.10.2025 reiterating its earlier stand. No consensus having been arrived
at regarding appointment of an arbitrator, the present petition has been
filed.

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Submissions on Behalf of the Petitioners
8. Learned Counsel for the Petitioners submitted that all requirements under
Section 11(6) of the Act stand satisfied. A valid and binding arbitration
agreement exists in Clause 18 of the Agreement for Sale dated 23.07.2012
and the disputes raised arise directly therefrom. The arbitration was duly
invoked by notice dated 10.09.2025 issued under Section 21 of the Act, yet
no consensus on the appointment of an arbitrator could be reached. It was
further submitted that the named arbitrator Mr. Pankaj Shroff, Advocate,
having acted on behalf of the Respondents, is rendered ineligible under
Section 12(5) of the Act, and this Court ought therefore to appoint an
independent and impartial arbitrator.
9. On the issue of limitation, Learned Counsel submitted that although the
Agreement for Sale was executed on 23.07.2012 and possession of the flat
was handed over simultaneously upon payment of the entire sale
consideration, the Respondents continuously assured the Petitioners that
the conveyance deed would be executed and registered. Respondent No. 2
circulated a draft conveyance deed and several meetings and exchanges
took place regarding modification of certain clauses therein. The
Respondents never unequivocally refused to perform their obligations
under the agreement until the reply dated 30.09.2023, following which
further correspondence ensued and Respondent No. 2 reiterated its stand
by letter dated 19.08.2025. It was accordingly argued that the disputes
between the parties crystallised upon the unequivocal refusal
communicated through the said correspondence and the invocation of
arbitration by notice dated 10.09.2025 was therefore well within the
prescribed period of limitation. Reliance was placed upon the decision of

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the Hon'ble Supreme Court in Ahmadsahab Abdul Mulla (2) v. Bibijan &
Ors. reported as [(2009) 5 SCC 462], wherein it was authoritatively held
that limitation for specific performance commences from the date on which
the plaintiff has notice of refusal to perform, irrespective of whether a date
for performance was fixed or not. It was thus contended that the disputes
sought to be referred to arbitration cannot be held to be ex facie barred by
limitation.
Submissions on Behalf of Respondent No. 2
10. Learned Senior Counsel for Respondent No. 2 opposed the petition and
contended that the claims sought to be referred are ex facie barred by
limitation and therefore, no reference ought to be made. It was submitted
that the Agreement for Sale dated 23.07.2012 was executed between the
Petitioners as purchasers, Respondent No. 1 as vendor, and Respondent
No. 2 merely as the confirming party. It was contended that under Clause
3(10) of the agreement, the obligation to execute the conveyance deed arose
within 20 months of execution of the agreement or within 30 days of the
specified event, whichever was earlier, and that the Petitioners having
admittedly taken possession of the flat instantly upon execution of the
agreement in 2012, the cause of action arose in 2012 itself. The present
claims, preferred after more than thirteen years, are hopelessly barred
under Article 54 of the Schedule to the Limitation Act, 1963.
11. Learned Senior Counsel further submitted that this Court, while exercising
jurisdiction under Section 11 (6) of the Act, is empowered to examine
whether claims are ex facie time-barred and ought to refuse reference
where such bar is manifest. Strong reliance was placed upon the two-
pronged test specifically formulated by the Hon'ble Supreme Court in

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paragraph 89 of Arif Azim Co. Ltd. v. Aptech Ltd. r eported as [(2024) 5
SCC 313], wherein it was held that the referral court is required to satisfy
itself both that the Section 11(6) petition is within limitation and that the
underlying claims are not ex facie dead claims barred by limitation on the
date of commencement of arbitration proceedings. Reliance was also placed
upon the decision of the Hon’ble Supreme Court in Visa International
Ltd. v. Continental Resources (USA) Ltd. reported as [(2009) 2 SCC 55]
to contend that the Court exercising jurisdiction under Section 11(6) is not
denuded of the power to examine whether a live and subsisting dispute
exists. It was accordingly prayed that the petition be dismissed.
12. No separate arguments were addressed on behalf of Respondent Nos. 1 and
3, who are respectively the vendor and the owner of the premises in
question.
Legal Analysis
13. This Court has heard the learned Counsel for the parties, considered the
pleadings and documents placed on record, and applied its mind to the
judgments cited at the Bar.
14. The primary objection raised by Respondent No. 2 is that the claims sought
to be referred are ex facie barred by limitation and that this Court ought to
refuse reference on that ground. This objection is founded upon the two
pronged test specifically articulated in Arif Azim (supra) wherein the
Hon'ble Supreme Court held that the referral court must satisfy itself both
that the Section 11(6) petition is within limitation and that the underlying
claims are not ex facie dead claims barred by limitation as on the date of

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commencement of arbitral proceedings, and that failure on either count
would justify refusal of reference.
15. This Court has carefully considered the said submission. The two-pronged
test in Arif Azim (supra) upon which Respondent No. 2 places reliance no
longer represents the correct position of law. The Hon'ble Supreme Court,
in SBI General Insurance Co. Ltd. v. Krish Spinning reported as [2024
SCC OnLine SC 1754], has expressly reconsidered and authoritatively
clarified the second limb of the Arif Azim (supra) test in the light of the
seven Judge Bench decision in In Re: Interplay Between Arbitration
Agreements under the Arbitration and Conciliation Act, 1996 and the
Indian Stamp Act, 1899 [(2024) 6 SCC 1]. Since Respondent No. 2 has
specifically relied upon Arif Azim (supra) that have since been clarified, it
is necessary to set out the operative clarification of the Hon'ble Supreme
Court in Krish Spinning (supra) in extenso:
"132. Insofar as our observations on the second issue are concerned,
we clarify that the same were made in light of the observations
made by this Court in many of its previous decisions, more
particularly in Vidya Drolia (supra) and NTPC v. SPML (supra).
However, in the case at hand, as is evident from the discussion in
the preceding parts of this judgment, we have had the benefit of
reconsidering certain aspects of the two decisions referred to above
in the light of the pertinent observations made by a seven-Judge
Bench of this Court in In Re: Interplay (supra).

133. Thus, we clarify that while determining the issue of limitation in
exercise of the powers under Section 11(6) of the Act, 1996, the
referral court should limit its enquiry to examining whether Section
11(6) application has been filed within the period of limitation of
three years or not. The date of commencement of limitation period
for this purpose shall have to be construed as per the decision in
Arif Azim (supra). As a natural corollary, it is further clarified that
the referral courts, at the stage of deciding an application for
appointment of arbitrator, must not conduct an intricate
evidentiary enquiry into the question whether the claims raised by
the applicant are time barred and should leave that question for
determination by the arbitrator. Such an approach gives true
meaning to the legislative intention underlying Section 11(6-A) of
the Act, and also to the view taken in In Re: Interplay (supra).

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134. The observations made by us in Arif Azim (supra) are
accordingly clarified…….."

16. The position of law as it stands today is therefore clear and admits of no
ambiguity. The jurisdiction of the referral court under Section 11(6) is
confined to satisfying itself of the prima facie existence of a valid arbitration
agreement and to examining whether the Section 11(6) petition itself has
been filed within the three year period prescribed under Article 137 of the
Limitation Act, 1963, which period commences upon failure or refusal to
comply with the Section 21 notice, as held in Arif Azim (supra). The second
limb of the Arif Azim test requiring the referral court to examine whether
the underlying claims are ex facie dead and time-barred stands expressly
clarified and overruled by Krish Spinning (supra). That question falls
exclusively within the domain of the Arbitral Tribunal and any intricate
evidentiary enquiry into limitation of the underlying claims at the Section
11(6) stage is now impermissible.
17. This Court accordingly holds that the objection of Respondent No. 2 that
the underlying claims are barred by limitation is not available to be urged
at this stage and cannot constitute a ground to refuse reference. The
question whether the claims of the Petitioners are time barred involves
determination of disputed questions of fact including the nature and scope
of the obligations under Clause 3(10) of the agreement, the conduct of the
parties over the years, the alleged continuing assurances, the circulation
and negotiation of the draft conveyance deed, and the precise point at
which an unequivocal refusal to perform was first communicated, whether
upon the reply dated 30.09.2023 or the subsequent letter dated
19.08.2025. None of these questions can or ought to be resolved in

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summary proceedings under Section 11(6). The said question is accordingly
left entirely open for decision by the learned Arbitrator in accordance with
law.
18. Turning to the requirements for exercise of jurisdiction under Section 11(6),
this Court is satisfied on the following:
19. First, there prima facie exists a valid and binding arbitration agreement
between the parties contained in Clause 18 of the Agreement for Sale dated
23.07.2012, which covers all disputes and differences arising out of or in
relation to the said unit and the said agreement.
20. Second, the named arbitrator under the agreement, Mr. Pankaj Shroff,
Advocate, is alleged to have acted on behalf of the Respondents and is
therefore prima facie rendered ineligible to act as arbitrator by operation of
Section 12(5) of the Act read with the Seventh Schedule thereto. The
appointment mechanism under the agreement having thus failed, this
Court's jurisdiction under Section 11(6) stands squarely attracted.
21. Third, a notice invoking arbitration was duly issued by the Petitioners
under Section 21 of the Act on 10.09.2025, which was received and
responded to by the Respondents, yet no consensus on appointment of an
arbitrator could be reached.
22. Fourth, the present petition has been filed within three years from the date
on which the right to apply for appointment accrued, being the date of
failure to comply with the Section 21 notice. The petition is therefore within
limitation.
23. All conditions precedent for exercise of jurisdiction under Section 11(6)
stand satisfied. This Court accordingly proceeds to appoint an independent
arbitrator for adjudication of the disputes between the parties.

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24. Accordingly, this Court appoints Sounak Bhattacharya, (Mob. No.
9830420018), as the Sole Arbitrator to adjudicate all disputes and
differences between the parties arising out of and in relation to the
Agreement for Sale dated 23.07.2012. The appointment shall be subject to
compliance with the disclosure requirements under Section 12 of the
Arbitration and Conciliation Act, 1996. The learned Arbitrator shall be
entitled to fix remuneration in accordance with the Fourth Schedule to the
Act.
25. The learned Arbitrator shall be at liberty to consider and decide all
objections raised by any party, including the question of limitation of
individual claims and any question of maintainability, as preliminary
issues, after affording full opportunity of hearing to all parties. All
questions on merits are expressly left open. The arbitral proceedings shall
be conducted in accordance with the provisions of the Arbitration and
Conciliation Act, 1996.
26. With the aforesaid directions, the present petition stands allowed.

(Gaurang Kanth, J.)
SAKIL AMED (P.A)