ORDER O-8

IN THE HIGH COURT AT CALCUTTA

ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE

AP/15/2022
SUNIL KUMAR SAMANTA
VS.
SMT. SIKHA MONDAL

BEFORE:
The Hon’ble JUSTICE SHAMPA SARKAR
Date: 7th April, 2025.
Appearance:
Ms. Mayuri Ghosh, Adv.
Ms. Somali Bhattacharya, Adv.
Ms. Megha Das, Adv.
…for petitioner.

1. Affidavit of service is taken on record. The respondent has refused

service. Refusal is good service. The postal article is also taken on

record. The matter proceeds.

2. The petitioner claims to be a lessee in respect of the property as

described in the schedule below, on the strength of a registered deed of

lease dated August 16, 2001.

Schedule:-

“That all that piece and parcel of land containing an area of 4 sataks more or

less thereupon two storied building upon which ground floor occupied as

leased premises situated at Mouza- Mahal, police station – Kotowali, Touzi

no. 7, ParganaUkhora, Sub Registry office – Krishnanagar, R. S. Khatian No.

13394, 11924 and 11929, L. R. Khatian No. 2888(kri) and 892(1) (kri), R. S
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dag No. 1394, L. R. Dag No. 3145 and 3146, Survey plot no. SA/4/2 in the

district of Nadia, butted and bounded by

ON THE NORTH:- By survey plot no. A 3.

ON THE SOUTH:- By Survey Plot No. A 5.

ON THE EAST:- By Survey plot no. A 4/2.

ON THE WEST:- By Krishnanagar Santipur Road.”

3. The said deed of lease was entered into between Jiten Mondal, the

predecessor of the respondent (husband) and the petitioner. The lease

was for a period of twenty one years. Jiten Mondal expired on June 26,

2013. Although the lease had come to anend on August 15, 2022, the

respondent allegedly started to create disturbance and wanted to evict

the petitioner. The lease contains a renewal clause. It is alleged that by a

letter dated August 21, 2021, the learned advocate for the petitioner

exercised the renewal option.

4. The respondent replied to the said letter through her learned Advocate

and denied the right of renewal. Accordingly, disputes arose. It is stated

that the Deed of Lease contained an arbitration clause which is quoted

below :-

“The Lessor shall be bound to renew the lease for subsequent periods of

same tenure if such option is exercised by the Lessee. The rent and other

terms and conditions shall be mutually agreed and if not agreed upon
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the same may be decided by an Arbitrator to be appointed by the

parties.”

5. According to the petitioner, the said clause is a binding arbitration

clause and the dispute should be referred to arbitration. The respondent

failed to renew the lease, which gives rise to a dispute.

6. The petitioner invoked arbitration. This Court finds that the

arbitration clause provides that the lessor will be bound to renew the

lease for subsequent periods of the same tenure, if such option is

exercised by the lessee, and the rent and terms otherwise shall be

mutually agreed upon. In case of failure to agree upon the same, it may

be decided by an arbitrator to be appointed by the parties.

7. The use of the expression “may” indicates that the parties had agreed

that, in future the parties may approach the arbitrator for settlement of

disputes. The use of the expression “may” is a possibility and not a

binding agreement. The meeting of minds of the parties to refer such

dispute to arbitration is not available from the clause itself. Not only

must an arbitration clause indicate that the parties had agreed that they

‘shall’ refer the disputes to arbitration, but the clause should also

indicate that the parties agreed to refer the dispute to a private tribunal

and would be bound by the decision of the said Tribunal.

8. Accordingly, the use of the expression “may” in the clause clearly

indicates that the parties had not decided to refer their disputes to

arbitration, but had kept an option open that in case of disputes not
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being settled, the parties would have an opportunity to approach an

arbitrator for adjudication of the disputes. This is not a binding

arbitration clause. The use of word ‘may’ denotes a discretion and is

typically non-binding.

9. In the matter of Wellington Associates Ltd vs. Kirit Mehta reported

in (2000) 4 SCC 272, where the Arbitration Clause was worded as

under:-

“It is also agreed by and between the parties that any dispute or
differences arising in connection with these presents may be referred
to arbitration in pursuance of the Arbitration Act, 1947, by each party
appointing one arbitrator and the arbitrators so appointed selecting an
umpire.”
The Apex Court decided in the following manner:-
“21 Does clause 5 amount to an arbitration clause as defined in
section 2(b) read with section 7? I may here state that in most
arbitration clauses, the words normally used are that "disputes shall
be referred to arbitration".
But in the case before me, the words used are `may be referred'.
22 It is contended for the petitioner that the word 'may' in clause 5
has to be construed as `shall'. According to the petitioner's counsel,
that is the true intention of the parties. The question then is as to
what is the intention of the parties? The parties, in my view, used the
words `may' not without reason. If one looks at the fact that clause 4
precedes clause 5, one can see that under clause 4 parties desired
that in case of disputes, the Civil Courts at Bombay are to be
approached by way of a suit. Then follows clause 5 with the words `it
is also agreed' that the dispute 'may' be referred to arbitration
implying that parties need not necessarily go to the Civil Court by way
of suit but can also go before an arbitrator. Thus, clause 5 is merely
an enabling provision as contended by the respondents. I may also
state that in cases where there is a sole arbitration clause couched in
mandatory language, it is not preceded by a clause like clause 4 which
discloses a general intention of the parties to go before a Civil Court by
way of suit. Thus, reading clause 4 and clause 5 together, I am of the
view that it is not the intention of the parties that arbitration is to be
the sole remedy. It appears that the parties agreed that they can "also"
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go to arbitration also in case the aggrieved party does not wish to go to

a Civil Court by way of a suit. But in that event, obviously, fresh
consent to go to arbitration is necessary. Further, in the present case,
the same clause 5, so far as the Venue of arbitration is concerned,
uses word 'shall'. The parties, in my view, must be deemed to have
used the words `may' and `shall' at different places, after due
deliberation.

While construing the word ‘may’, the Apex Court further clarified as
under :-

24. Before leaving the above case decided by the Rajasthan High
Court, one other aspect has to be referred to. In the above case, the
decision of the Calcutta High Court in Jyoti Brothers vs. Shree
Durga Mining Co. [AIR 1956 Cal. 280] has also been referred to. In
the Calcutta case, the clause used the words "can" be settled by
arbitration and it was held that fresh consent of parties was
necessary. Here one other class of cases was differentiated by the
Calcutta High Court. It was pointed out that in some cases, the word
`may' was used in the context of giving choice to one of the parties to
go to arbitration. But, at the same time, the clause would require that
once the option was so exercised by the specific party, the matter was
to be mandatorily referred to arbitration. Those cases were
distinguished in the Calcutta case on the ground that such cases
where option was given to one particular party, the mandatory part of
the clause stated as to what should be done after one party exercised
the option. Reference to arbitration was mandatory, once option was
exercised. In England too such a view was expressed in Pittalis and
Sherefettin [1986 (1) QB 868]. In the present case, we are not
concerned with a clause which used the word `may' while giving option
to one party to go to arbitration.
Therefore, I am not concerned with a situation where option is given to
one party to seek arbitration. I am, therefore, not to be understood as
deciding any principle in regard to such cases.

10. By relying upon Jagdish Chander Vs. Ramesh Chander and

Ors. reported in AIR 2007 SC 107 reported in , which had analysed the

effect of use of the word ‘may’ or ‘shall’ , it was held as under :-

“A reading of Clause 17 of the said Agreement shows that unlike the

pre- existing agreement between the parties in the case of Zhejiang
Bonly Elevator Guide Rail Manufacture Company Limited (supra) and
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Indel Technical Services (P) Ltd. (supra), in the instant case there is no
pre-existing agreement between the parties that they "should" or they
"will" refer their disputes to arbitration or to the Court. In other words,
the parties have at no stage agreed to an option of referring their
disputes under the said Agreement to arbitration or to the Court.
Instead, it is clear beyond any doubt that Clause 17 of the Agreement
is a Clause which is drafted with proper application of mind. Under
sub-clause (a) of Clause 17, the parties have first agreed that all
disputes under the Agreement "shall" be amicably discussed for
resolution by the designated personnel of each party, thereby making
it mandatory to refer all disputes to designated personnel for
resolution/settlement by amicable discussion. It is thereafter agreed in
Sub-Clause (a) of Clause 17 itself, that if such dispute/s cannot be
resolved by the designated personnel within 30 days, the same "may"
be referred to Arbitration, thereby clearly making it optional to refer
the disputes to Arbitration, in contrast to the earlier mandatory
agreement to refer the disputes for amicable settlement to the
designated personnel of each party. Again it is made clear in Sub-
Clause (a) of Clause 17 that the parties may refer their disputes to
Arbitration as stated below i.e. as stated in Sub-Clause (b) of Clause
17, meaning thereby that if the parties agree to refer their disputes to
Arbitration, such Arbitration shall be as stated in sub- lause (b) of
Clause 17, i.e. upon such agreement between the parties, the disputes
under the said Agreement shall be referred to arbitration as per the
Arbitration and Conciliation Act, 1996, as amended from time to time;
the place of arbitration shall be at Pune and the language shall be
English. The Arbitral Tribunal shall comprise of one Arbitrator
mutually appointed by the parties, failing which there shall be three
Arbitrators, one appointed by each of the parties and the third
Arbitrator to be appointed by the two Arbitrators. Therefore, the words
'shall' and 'may' used in sub- clauses (a) and (b) of Clause 17 are used
after proper application of mind and the same cannot be read
otherwise. In fact, sub-clause (c) of Clause 17 reads thus :
c. Subject to the provisions of this Clause, the Courts in Pune, India,
shall have exclusive jurisdiction and the parties may pursue any
remedy available to them at law or equity."
Clause (c) therefore further makes it clear that if the disputes are not
settled within 30 days by the designated personnel, the parties will
have an option to refer the same to Arbitration ; if the parties agree to
refer their disputes to Arbitration, the same shall be referred to
Arbitration as per the Arbitration and Conciliation Act, 1996, as
amended from time to time, as set out in Sub- Clause (b) of Clause 17
; and if the parties decide not to exercise the option of Arbitration, the
Courts in Pune, India, shall have the exclusive jurisdiction to enable
the parties to pursue any remedy available to them at law or equity.
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11. In the matter of GTL Infrastructure Ltd. vs Vodafone India

Ltd. (VIL) decided in Commercial Arbitration Petition No. 323 of

2021, the Bombay High Court held as follows:-

“21. I need not multiply the authorities wherein the intention of

the parties have clearly guided the Courts to construe a
particular clause in an agreement to be not an imperative
mandate, if it do not conform the essential attributes of an
Arbitration Agreement under Section 2(b) and Section 7 of the
Act. Ultimately, the position of law which could be discerned
from the authoritative pronouncements, is that the word ‘may’
however conclusive and mandatory affirmation between the
parties to be certain, to refer to disputes to arbitration and the
very use of the word ‘may’ by the parties does not bring about
an arbitration agreement, but it contemplate a future possibility,
which would encompass a choice or discretion available to the
parties. It thus provides an option whether to agree for
resolution of dispute through arbitration or not, removing the
element of compulsion for being referred for arbitration. This
would necessarily contemplate future consent, for being referred
for arbitration. Since the intention of the parties to enter into an
arbitration agreement has to be gathered from the terms of the
agreement and though Mr. Kamath has submitted that by the
reply to the notice of invocation of arbitration by the respondent,
distinguish the judgment in case of Quick Heal Technologies
Ltd, by submitting that at the relevant point of time, the
decision in case of Vidya Drolia Vs Durga Trading Corporation,
(Supra), was not available, which has propounded a principle,
“when in doubt, do refer”. I do not think that the principle laid
down by the learned Single Judge in Quick Heal Technologies
(supra) is in any way impacted. Apart from this, merely because
there was no correspondence between the parties, is also not a
ground to distinguish the said judgment, as ultimately what is
to be looked into, is the wording of a clause in an agreement,
though it is permissible to look into the correspondence
exchanged between the parties, to ascertain whether there exists
an arbitration agreement.

22.Reading of the clauses in the two agreements which are

subject matter of consideration before me, the use of the word
“may be referred”, perforce me to arrive at a conclusion that the
relevant clause for dispute resolution is not a firm or mandatory
arbitration clause and in fact, it postulates a fresh consensus
between the parties, when an option become available to them,
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to be referred for arbitration. The mandatory nature of it gets

ripped off, once the option is available to one particular party,
and consciously not to be referred for arbitration. The parties
have carefully used the term “Shall” and “May”, which indicate
their clear intentions and I must honour it. Since I am
convinced that the relevant clause in the master Service
Agreement in the two applications, do not amount to an
“arbitration clause”, I need not go into the further objections
raised by Mr. Andhyarujina, as regards whether the invocation
of arbitration is properly done, by a composite reference and
whether it was necessary for the parties to mandatorily resort
themselves to the alternative mechanism of mediation or being
referred to the Coordination Committee, as a precondition before
they invoke arbitration. I do not deem it necessary to deal with
the submissions advanced by the parties on the said aspect.”

12. In the matter of M/S Linde Heavy Truck Division Ltd vs

Container Corporation of India Ltd & Anr. decided in CS(OS)

23/2012, the Delhi High Court held as follows:-

“6. In Jagdish Chander v. Ramesh Chander and Ors. (2007) 5 SCC

719, the question before the Court was as to whether clause 16 of the
deed of partnership was an arbitration agreement within the meaning
of Section 7 of Arbitration and Conciliation Act, 1996 or not. The
aforesaid clause reads asunder:-

"16. If during the continuance of the partnership or at any time

afterwards any dispute touching the partnership arises between the
partners, the same shall be mutually decided by the partners or
shall be referred for arbitration if the parties so determine."
In the course of the judgment, the Court set out the following
principle to determine as to what constitutes an arbitration clause
agreement:-
…..
Similarly, a clause which states that "if the parties so decide, the
disputes shall be referred to arbitration" or "any disputes between
parties, if they so agree, shall be referred to arbitration" is not an
arbitration agreement. Such clauses merely indicate a desire or
hope to have the disputes settled by arbitration, or a tentative
arrangement to explore arbitration as a mode of settlement if and
when a dispute arises. Such clauses require the parties to arrive at
a further agreement to go to arbitration, as and when the disputes
arise. Any agreement or clause in an agreement requiring or
contemplating a further consent or consensus before a reference to
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arbitration, is not an arbitration agreement, but an agreement to

enter into an arbitration agreement in future."

7. …..This clause, in my view, does not indicate a firm determination

of the parties and binding obligation on their part to resolve their
disputes through arbitration. It merely gives an option to either of
them to seek arbitration and on such an option being exercised, it
would be for the other party whether to accept it or not. As held by
Supreme Court in Jagdish Chander (supra), if the agreement between
the parties requires or contemplates a further or fresh consent for
reference to arbitration, it would not constitute an arbitration
agreement. The view taken by the Apex Court was that if the
agreement between the parties provides that in the event of any
dispute, they may refer the same to arbitration that would not
constitute a binding arbitration agreement.

13. The petitioner may have exercised such right by issuing a

notice, but the respondent did not accept such suggestion, which itself

shows that the parties did not agree to go to arbitration.

14. The application AP/15/2022 is accordingly dismissed.

(SHAMPA SARKAR, J.)

S. Kumar / R.D. Barua/SN/JM.