Rajasthan High Court - Jaipur
M/S Efkon India Pvt. Ltd vs M/S Sv Transpay Solutions Pvt. Ltd on 11 February, 2022
Author: Pankaj Bhandari
Bench: Pankaj Bhandari
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No. 47/2014
M/s Efkon India Pvt. Ltd. (EFKON), a Company incorporated and
Registered under the provisions of the Companies Act, 1956 and
its present registered office at 1405-1408, SUPREMUS E-WING,
I - THINK TECHNO CAMPUS, KANJURMARG (EAST) MUMBAI
400042 through its Company Secretary Shri Ravi Bhushan
Dashore.
----Applicant
Versus
1. M/s SV Transpay Solutions Private Limited (TPAY) a Company
incorporated and Registered under the provisions of the
Companies Act, 1956 now known as Transpay Solution Private
Limited, having its present registered office at C-37, Paryavaran
Complex, IGNOU Road, Saidul-A-Jaib, New Delhi - 110030 and
Corporate Address at Building No.12, 2nd Floor, Ring Road, Lajpat
Nagar-IV, New Delhi - 110024 through its Director.
2. M/s. UTI Infrastructure Technology and Services Limited
(UTITSL), a government company under Section 617 of the
Companies Act, 1956, its present registered office at Plot No.3,
Sector-II, CBD Belapur, Navi Mumbai (Maharashtra) - 4006141
through its Director.
3. M/s. Scheidt & Bachmann GmbH, [a company incorporate with
Limited Liability in accordance with the Companies Act of
Republic of Germany] having its registered office at Breite
Strasse 132, 41238 Monchengladbach, Germany, through its
authorized signatory and constituted attorney.
----Respondents
For Petitioner(s) : Mr. Rajeev Surana with Mr. Sankalp
Sogani through VC
For Respondent(s) : Ms. Suruchi Kasliwal through VC
HON'BLE MR. JUSTICE PANKAJ BHANDARI
Order
ORDER RESERVED ON :: 20/01/2022
ORDER PRONOUNCED ON :: 11/02/2022
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1. Applicant - M/s. EFKON India Pvt. Ltd. (for short "EFKON"),
which is a Company incorporated and registered under the
provisions of the Companies Act, 1956 has preferred this
arbitration application under Section 11 of the Arbitration and
Conciliation Act, 1996 (for short "the Act of 1996") and as per
Clause 37 of ITMS for CMC Project Agreement dated 14.12.2011.
2. It is pleaded in the application that the applicant is working
in the field of Intelligent Transportation Management Systems
(ITMS) in India and provides various services such as urban traffic
management, project management services, operations and
maintenance services for toll operations etc. It is pleaded that
Ministry of Urban Development (MUD) vide its letter No.K-
14011/28/2009-Metro dated 23rd April, 2010 awarded UTI
Infrastructure Technology and Services Limited (for short
"UTITSL") - Respondent No. 2 the project of launching an all India
Common Mobility Card (CMC) along with Automatic Fare Collection
(AFC) across India. Further, Jaipur City Transport Services Limited
(JCTSL) was interested in implementing ITMS for Common
Mobility Card (CMC) along with Automatic Fare Collection (AFC)
and a letter of intent was issued for the same. A service provider
agreement was signed on 20.08.2011 by JCTSL and UTITSL to
implement ITMS for CMC for their bus fleet. Also, a teaming
agreement was signed by UTITSL and SV Transpay Solutions
Private Ltd. (TPAY) on 5th April, 2011 and formed a consortium to
implement CMC Project across India. A tender floated by UTITSL
was awarded to the applicant along with Scheidt & Bachmann
(S&B) whereby applicant was to be a key partner in terms of
operation, implementation, part technology and investment &
commercial and Scheidt & Bachmann was a purely technology
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supporting partner for the Jaipur Project. An agreement was
signed on 14.12.2011 by S&B, EFKON and TPAY. The said
agreement was amended by an Addendum on 11.04.2012. The
applicant has filed the present arbitration application invoking
Clause 37 of the agreement dated 14.12.2011.
3. Mr. Rajeev Surana, learned counsel appearing for the
applicant contends that payments were denied towards invoices
raised by the applicant, which is in contradiction to the basic spirit
of the signed agreement. It is also contended that EFKON has
signed a contract and performed in accordance and has been
waiting payments to the invoices raised so far. It is further
contended that a huge investment has been made by M/s. EFKON
India Pvt. Ltd. to the tune of Rs.4.20 crores till date and against
the aforesaid huge investment, till date M/s. EFKON India Pvt. Ltd.
has not received a single invoice payment. It is contended that
cause of action arises from various notices given in January and
thereafter on 20.02.2014 when the final notice for invocation of
arbitration clause was given and even then the respondents are
trying to give the work to another entity in derogation of contract.
4. It is also contended that a Payment Confirmation Agreement
for ITMS for CMC Project in JCTSL was executed between UTITSL
and respondent No.1 - TPAY. In the said agreement, it was
specifically mentioned that SBEC has been awarded a tender No.
UTITSL/AFC/12/10/03 dated 22.12.2010 for Automatic Fare
Collection across India as lowest bidder for this tender. For
implementation of this project, SBEC shall be represented by
EFKON and notifying for this project on behalf of SBEC shall be
done by EFKON. It was also mentioned that UTITSL, as per one of
the terms and conditions of the said tender, has instructed the
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SBEC to sign an agreement to execute the ITMS for CMC for Jaipur
city with its consortium partner and that SBEC and TPAY signed
the agreement dated 14.12.2011 titled as ITMS for CMC Project
Agreement. It is thus contended by learned counsel for the
applicant that respondent No.2 is a necessary party and that even
though he is not a signatory to the tripartite agreement,
respondent No.2 had agreed to pay the amount. The applicant has
prayed that the matter be referred to arbitration.
5. Learned counsel appearing for the applicant has placed
reliance on Purple Medical Solutions Pvt. Ltd. Versus MIV
Therapeutics Inc & Ors.: (2015) 15 SCC 622. Reliance is also
placed on Chloro Controls (I) P. Ltd. Versus Severn Trent Water
Purification Inc. & Ors.: 2014 (4) RLW 3750 (SC) and
Mahanagar Telephone Nigam Ltd. Versus Canara Bank & Ors.:
AIR 2019 SC 4449.
6. No one has put in appearance on behalf of M/s. SV Transpay
Solutions Pvt. Ltd. in spite of service. Reply has been filed on
behalf of respondent No.2 - UTITSL. It is contended by learned
counsel appearing for UTITSL that the agreement dated
14.12.2011 reveals that same has been executed between the
applicant, respondent No.1 - TPAY and S&B and that the
answering respondent is not a party to the said agreement. It is
contended that the answering respondent No.2 - UTITSL is a
complete stranger to the said agreement. It is also contended that
the alleged dispute exists between the applicant and the
respondent No.1 and the letters as well as the final notice have
been merely copied to respondent No.2.
7. In support of this contention, learned counsel for the
respondents has placed reliance on Reckitt Benckiser (India)
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Private Limited Versus Reynders Label Printing India Private
Limited & Anr.: (2019) 7 SCC 62 wherein it was held that a non-
signatory who does not assent to arbitration agreement, is not
bound by such agreement.
8. It is further contended that the applicant and S&B were
parties in form of consortium under the said agreement and were
collectively referred to as "SBEC" in the said agreement. Moreover,
the entire work under the said agreement was also to be carried
out jointly by the applicant and S&B. However, the applicant alone
has invoked Section 11 of the Act and has even failed to implead
S&B. It is contended that S&B is as such a proper and necessary
party to the subject matter and upon its non-impleadment the
present matter is not maintainable and thus deserves to be
quashed. It is also contended that S&B have admitted vide letter
dated 31.03.2014 that there exists no dispute between the
contracting parties. It is contended that the applicant being a
consortium partner of S&B could not have unilaterally filed the
present application particularly when S&B admits that there is no
dispute between the parties.
9. I have considered the contentions and perused the material
available on record.
10. All payments related to ITMS for CMC Project in Jaipur were
granted to TPAY by UTITSL as per their separate "Payment
Confirmation Agreement" for ITMS for CMC Project in JCTSL
executed on 19.3.2012. As per Clause 12.5 of agreement dated
14.12.2011, the money due to SBEC that TPAY is obligated to pay,
will be paid through an escrow account that will be set up and
funded by UTITSL.
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11. In Chloro Control (I) P. Ltd. (supra), it was held by the Apex
Court that under the Group of Companies Doctrine, an arbitration
agreement entered into by a company within a group of
companies can bind its non-signatory affiliates, if the
circumstances demonstrate that the mutual intention of the
parties was to bind both the signatory as well as the non-signatory
parties. It is evident that Ministry of Urban Development (MUD)
awarded UTI Infrastructure Technology and Services Limited
(UTITSL) the project of launching an all India Common Mobility
Card (CMC) along with Automatic Fare Collection across India. This
system was to work across public transport organizations in all
cities of India. It is also evident that JCTSL and UTITSL signed a
service provider agreement on 20.8.2011 to implement ITMS for
CMC for their bus fleet. TPAY - respondent No.1 signed teaming
agreement on 5.4.2011 and formed a consortium to implement
CMC project across India. It is also evident that EFKON and
Scheidt & Bachmann (S&B) entered into a consortium agreement
on 16.12.2011 wherein EFKON was a key partner and Scheidt &
Bachmann was a purely technology supporting partner for the
Jaipur Project. EFKON along with Scheidt & Bachmann was
awarded a tender bearing No. UTITSL/AFC/12/10/03 dated
22.12.2010 floated by UTI Infrastructure Technology Services Ltd.
(UTITSL) for implementation of Integrated Transportation
Management System (ITMS) for Common Mobility Card (CMC) for
Jaipur City Transport Services Ltd. (JCTSL) in Jaipur. Thus, in view
of above considerations, the contention of counsel for respondent
No.2 that UTITSL is a stranger to the tripartite agreement, fails to convince this Court.
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12. The contention of learned counsel for respondent No.2 that applicant and respondent No.1 were collectively referred as 'SBEC' and applicant individually has no right to apply for arbitration, does not have any force for the very reason that in the arbitration clause itself it is mentioned that either party can notify thereby.
13. The Apex Court in Reckitt Benckiser (India) Private Limited (supra) was of the opinion that the burden is on the applicant to establish that non-signatory had an intention to consent to the arbitration agreement. Thus, Reckitt Benckiser (India) Private Limited (supra) is inapplicable to the present case as from the documents submitted, it is evident that respondent No.2 had a major role to play in the agreement executed between the parties and further, the agreement was executed at the behest of respondent No.2 and thereafter also, respondent No.2 entered into a Payment Confirmation Agreement and agreed to pay the amount. This Court is thus of the view that the arbitration clause needs to be invoked and therefore, the arbitration application requires to be allowed.
14. This Court deems it proper to appoint Shri A.C. Goyal (Retd. High Court Judge), D-19/B, Meera Marg, Bani Park, Jaipur, as the arbitrator to decide the dispute between the parties. Accordingly, arbitration application stands allowed. The arbitrator shall be entitled to lay down fees as provided under Manual of Procedure for Alternative Disputes Resolution, 2009, as amended from time to time.
15. Registry is directed to intimate Shri A.C. Goyal and obtain his formal consent.
(PANKAJ BHANDARI),J SUNIL SOLANKI/PS (Downloaded on 14/02/2022 at 09:16:24 PM) Powered by TCPDF (www.tcpdf.org)