M/S Canbank Factors Limited vs M/S Repro India Ltd on 1 December, 2008

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Karnataka High Court

M/S Canbank Factors Limited vs M/S Repro India Ltd on 1 December, 2008

Bench: V.G.Sabhahit

..........r..n....  ..-......-u ur nMnnIHIHr\.R mu!-I Luum or KAKHATAKA HIGH COURI OF KARNATAKA HIGH COUR1

THIS cu? CXJHIHG cm ma Amaxsszxore  nmr
TBS CQURT 3-53.133 THE FGLLDWING 3   

ms petition its 

»:>£ tits: Pxrhitratian aﬁ,c_i"--..;;o13,ﬁéiiiaati%§fL"A:._}§'et,"; 199$'

gﬁsar ahernzt 219::-an'_3'.naft-fq;_:3L}"':-..gegartkd f;gA % as 'the
2=s.c'».:'§ aeeking  Arbitrator.
2. 1+;  1§g':'VIt£:ai:i'%;§9:V{V:it:on that the
p at it 3'       financial Cvzmgarzy .
angfiégé '    i V  fact orinq f a<::'..l it ie Is
  Racaursa Expert

E'a¢1;0riLiirg£ Px:e.paﬁtméﬁt facility" 1: at the

 r'ér§p:m§cia;nt  its Humhai Branch. The
    would esxpmzt merchandise,

."mﬁ£ar§..aLi'$  saxvi czes etc. ta its

C§x1at;i_tﬁentafInpGrtex abzaad and submit: the

V'  iV;::§?."t:§ef sf dispatch alang with the invoices
 §ev1.denc:Lng the mtcnznt gayable by the irwcaxter

fax: the merchandise sold. and ciispatched. Thaw

gatitianar would purclmsa the debt invoiaad

Kr'-

 



. ............ ...-.- nmmmu-um mu:-1 LUURT OF KARNATAKA HIGH coma

and pay the value «cf the invoiced debt; the

respandent subject ta margin 

factoring charges. On the  
zeapcsrzﬁant the petitiansﬁ  '

f avail ity with a deh*.';; ;;uzcAIi.a;V§.m li$:Ei.x'u:..  

lakhs -amt: pr:-a-payment 'f'$;§i.3:i1:$}~..,¢§f'V'R§':;f§80 lakhs
as ye: tha l%¢§%: y§§$%# H3.14é656. In
czazzsideratign oi oi the
fa<:t<:~x:ing:_   .t}}:;:§":'V.te.g%Q¢ndent executeci
exgert:   dated 5.1.2806.
ti33_az i :;-'.§      agreement menus as

fazzéw " =9  

  "*"2u.z V'§d'i--.s3§;z_g:'s2s, differences, axaints,
V é?§;e;$'&4Vons and cantzavexsias arising
 "4V£i=gs;{$z3a¢tinn with this agreement
_ A  the partiea are unable ta
 x é:§.;e.':.ft:x..£e lwtween thamaelws, ahaii be
H iﬁfarxed to Iszbi tzrati an, in
 accordance with ma axbi tration and
Gmzaciliation Act, 1996 or any
atatutazry amatzwenc ax modification
thereof. 2329- Arbx ttxatizsm proceedings

W



---~--- - -w---I-_. .-gm -v-nn-unru- -nu-rv uvunr vr Iv-\mVHtHI\H ﬂluﬂ LUUKI Ur ISAKNAIAIUI HIGH COURT OF KARNATRKA HIGH CCU"

3

51:31}. be hair} 1:: the English xanggzVa§g§fésT.
and max; he held at Ben9'a.za.re-f.... V  ' 'V

3.. It is further: avezrea§i4«t1§ag1£V'4"é&-i$'4  f:he ; 

agreement, raspondant is 

payznant aa per Claﬂ§'§......V'13  V @213; "':._§':§zu'§m:9nt'

dealing with 'Iie¢ou3:a--$V:A"'v-311% E':'-é'i:v-nzatﬁfi' which

reads as tfallews "
13.  'é:i!;ia:11:'r.; receivable
 claims to be
 : --$;p._  by raaaan of
 ~'§=--é:3Egi'::'.asI§:;'r§i-:1__1:e: I or ac ta 9: orders
"m.;f'«  far any athm:
_ xéascszz  §.r_2's:.ln~t;@-soevar, and each
u rac9.:utr;££n..I__9__.I:z raspcmt of which the
  ms his legal representative
 3:¥§$patr::had liability the Factor
 have recouxaa to the cliazzt as

 z V"f}::>.Iiowa :

 TV"'V'.AA'va}:".--'oz2 the expiry :26 the natica to the

aiimtt: :75 the langth specified in
pazagraplz 14 of the aczizadala oz;

\9$



 -...n....  ...,...\. VJ!' ~..um.n.m Mam-I COURT or KARNATAKA HIGH com':

1:} an tam insolvancy of the 

whichever is than earliest.

Arte-2: ma axaraisa ___Q.f__ .'E'«G:CiVz:5¥..i'.ﬁ'%:g*zc'V"":.z:V"}';eVV  
the Factaor in 
receivable the  V'
the client    
maba aqua-222:1 3' reco_Qf§x§§£»._v5by .' t.'2-T&_Af§f¢tox
in r&apect'§;E .i.§:Va zeauli: af
enfaxcement 'V  at' any
aasca-.';.zfa;E:,§d  7 Vzﬁze said
xeg9i..vvaé_§§;:tQ   j§5'..$ :.'}§:édiatad rights
re}§a.»_ig,;§V   £22511, unless
 "t$'t£:2s';§§iwi§§'e;  dé~;§xn.i§_i'§d  by the Factax,
 the Faator until
 -rép1§z*§r;h.ais5'i;:V"'j§x1oa has been fully
 é.rZa';-i.?:r.§:9récZ,."- ﬂew»: by paymant: ta
  Faax?:'t*ar;"V at by set; eff of an
--._aLm:c'::.:z i§f..__ payable to the cliant Linda:
3  ;§§':*<ivia.ia>z1as of thia agreement.

 It is further averted that wince there

  breach sf cenditionu of this contract dated

__55.1..2£Z:*-.'3t~'-3, net-tics was issued ta the reaporzdont

aw pm: A1mexu:::e-B to the petiti-an calling upon

the raspczmcient ta appoint 1:119 Arbitrator as

\0..3>



. ...... - uuvuu Vp\r\al\l 'I-ll t\r'Il\l1l'lll"\l\I-'I l"H\7I'I L90"!    

7

rslepaeci and thexsfare, them 5.3 no }.iabfgl.jit:j;.r on

tha part at thﬁ respondent ta

It is also warned that in "c;ﬁ gaymant by I<!,fs.B1ue AV ' payment: vvwta on that 1 oi; th:é, zrumpondent. It is eiﬁfujjﬁrﬁd the Arbitratian C}.a2:?3j;af.. There is *9 "rbitr"?i¢#- ﬁ$;3?ﬁf$Xu hatwean the Eat:it:£.»:»nveif:4'§:,1r:$;é1 and whe1:¢f<:-1:6; no case; gppointmant of the is liable ta be diamiaaad. ' " V' V' Z;..'«l:.aa1a'*§-,§V""'hﬁax:d the learned c<>unsel fox 'xii:_TI'S7e* and the learned caunsal for the i'-ggpgizﬁéént .

;'I'he leaxrnad couzmal far the pntitioner A' taken me through the contents or the .=ggxsemsn: dated 5.1.2095 with apa¢ial raferaanca to 61.3.1259 13 regarding the liability U& ...... .......... .. ...--....m..-..m mun uuum ur IKAKNATAKA men coma- 9

19. In respcnm tea the arguments'. learned couzzse}. fax: the petiti;:s2:>aQ1;_,..'__: ﬁha laarnmi ezscmmxel for the . mitaxatad the cantaaatiE,_cngs..4T&A fjvt"a;Jcié_z z'---. 4' in__ A ' csbﬁectiona atatemen:

agree:-r:;ant was -axacuted'V'VL'&§ B_mnbVﬁy iiiaragalcra Caurt has 11:: fpfantartaining any gnatitian _inc1u¢i:f;g_ i§:h&'Ai* "~:V..'p,$tition for aypcintmezit " "

',:{'V}.~.§v .i._s_-- Minot liable ta make pazytu«é:'2';1;" atgxremueni: and it is Mf§:.vEL3ué} to whom the gaaods have: . AVB$§1;:,.,"*;gu§3§iie¢1V§' "" ta mks payment and in the " payment by It!/3.31159 Nightingale, At:*1-rye gaﬁeﬁt ham to has made by Nedﬁank and rm-t _1::3,»*' izméi rasyondant. The learned counsel tutthaaz .,.V"a:1.§$snita that it is anly a creataci agrement since Iifmalue Nightingale its new closed, the qzmztion urf paying any meant by the rasycmdent do-as not arise. \_9,/E .

_._.. --_.-. _. .........--..n...--. mvu wvunl ur AHKIVHIAIU-\ mun couﬁr 11 be zzefezxred tn the mrbitxrutian and pxagaéﬁﬁnqa shali has held at Eangalora, this 'éi{§6~5 ram: have inherant: jux:iadicti::m__.¢ﬁ§i~ i5.{: neat: enable this Cam-:t t¢ gmtition and it is giqt zqmz, the petitioner its rsgiatemd v:>:E3E:i.<:*a-; _'_"2Vz',:t: regard ta the ﬁacgﬁ Cauxrt has j2:ris~riict:§;§>§:;:'V €:'¢ that may arise is speciﬁcally tzha agraamant under:

Claufaétﬂ ' that; ﬁgmeznent: shg~:.l3._ bé" gVV¢vVu:§rné:dé"'§r:ci tzoxzastsmeci in mcardanca 1a.'jui£$"""V;:revaLi1ing in India and the accepts the jzzzisdictien of the %:--:;__u::§:a¢~ i::.AT3an§a1ore alone and wherefore, it is AA nast.'«::;§an ta than raspcmdent to new contend that ":a.a :pazt m'. the czauae of action is accrued at _;%Banga1c:r.a 533:3. cnly Bombay court would have juriaﬁictzion to entertain thus patition for appaintmant at Axhitratmr. In view of the \y.\/9 vrur-u-r~ ""\IfI' wuvn v_.w.-Vv- -\ruu1r-Iu-1Iv- 'II\n7" uvvnv vi l'\J"1l\I'FlFI"'|l\I'| I'Il\3I'I \.\JUlIl Ll!' IV!-IIUVI-\lJ\l'\l-I l"H\.'ﬂ" \.|..JUI'KI U!" l\I-\KlV¥I§i5\IK/P HID?' §UUK' E 12 specific clauses 29 and 20 in the a:g:ét;e' is:s;}ent referred to above and wharaforaa,;""t1i£a.. __: contention af the leazzaeci far the zrtespetxdaant t:hat:I_ thigjj. $0 ' ju3':i.a<'.iict:§..cn to ente'r.;ain"'._f:"he appointment at Arbitra§V'§Emif%'h§5 rﬁj a¢:%;ad.. 3.3. Tug athﬁxi §2§i§ﬁ?a%:t*i$i;§_'Wﬁaisad by the learned the reaponzient on: clause 3.3 of mm turhathex there is :_'r@§&§bndent to make payment: or }.;zaj,2*aa;:1t33.V$"~"'t<$'- "he made by III/s.B}.uelina .1*i'i§§hi~:"in%§a;.}.=e commodities: harm been asold §;;;';f:a:,: a1::sa:c;.a::a of nan payment: by the said £'i_mg_v'"§:;a§wient is to be made by Nedﬁank and zmt AA by ihé' respondent.

14. A bus rawding of clause 1.3 would show prisms: fucie the rasgondent is alac liahla ta pay in View of Clause 3.13 am: the said \3.J~ ....... ............ V. w-nun-unnn nlu-r1 \...UUKi U!" KARNATAKA HIGH COURT I3 ccntaantion can well be rained bef9.£s;§¥"'._V_the Arbitratm: himself as ta whethe:;"""t 2--.x§:--§: §'1' liability on the part of this make payment as per Claus}; "--a4ig*:r:®_ oVit:«9rit ' and Clause 13 daals with pﬁygiént, , "

set:-eff and whara£ora;"~.._V'»%t2:_gt " snhjact matter: (sf the ta but decided by'tha A:bi::ato;,_ , 7'' ' V ' 15;_--rhg "£aﬁ£§§that}"thsra is duspute betﬁrféa-n'_'TA and the raaaporanant rega:E;;i:§.r'g_q tﬁé of the amount: as spelt esujr: --. _23»3,r t,V1;é'v"'v1§::yT <:.-ontantrioxxs made in the . 'a"t.§.t£é'§aeiité_ tha averm-ants maﬁa in the the raspondant is not liable to étmgke which ban to he decided by the AA .i:nrbit.*.-Eaatcazc .

16.. In viaw at the ahave said toms of the cnntrszct, the deciaion relied upon by tins lararnerd aeurzsei far the zcaspendant in A.B.€ \9.} .

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E 1 z I 5 L 3 E 3 3 J :

c 5 S x :

t E L > E 3 3 J L 2 5 5 S :

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2.

z 2 K E L . ._ I V ; ,.

n 3 J E 2 C E S I F 2 5 In 2 E 3 3 14 £a3§I§f33'¥.e'-'xR'I' PVI' . LTD . AND APKOIEER §.P.3§:."3ENCIES, SALE}! repartad 1;; Suyzzeme C-r:»t1::t: Cases 3.63 is not

--_ -

1' j raspcmdent in the p1:aemntL__ c§.5 §; :: bald that all thaV.t:;§:1diAE.i.f.$i1a r$§:gi:§$i.t§; '.£<:>:.i:'*. thﬁ wpcuintxrsent of as pm:

Clauaa 11:5; :>f' %%%g:;a i§§::t;. iﬁ3__'»v.§$&t'isfi;é<§. and the Ekrbitrator __is ¢p§'¢ix£tﬁVeaiﬁ iiecztiding the ciiapute 3._.he'§..w2l;ﬁZi'~' "$3133 A.p'ef'.i~t«i¢ner mspanxient as per tE2:gG'i:.<x:fga;1t:L'£?sT1!a',',f:'1f"~.:.V¢:?.-t:&.§2i§€1 [i.2UG6. 1?. Shr:i.Jﬁ£i1;3';'::e ' Bhat, Fazmar: Judge «fm (2@)ur't the Delhi court ! " '. ..... _ .' a 1.5 wpﬁéintegi' Arbxtrator to danced? the clisvput-9 batsman the petitiamar rez!1A?\3!3-W ._ ./,_"'?: Erna leauzrneci Arbitzatcr in " _ ta} the award axyeditiously.

Sd/-5' Judge I23 and the

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