Gujarat High Court
Heubach Colour Pvt Ltd vs Narmada Clean Tech Formerly Known As ... on 6 March, 2020
Author: N.V.Anjaria
Bench: N.V.Anjaria, Ashokkumar C. Joshi
C/FA/1216/2020 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1216 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/FIRST APPEAL NO. 1216 of 2020
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HEUBACH COLOUR PVT LTD
Versus
NARMADA CLEAN TECH FORMERLY KNOWN AS BHARUCH ECO-AQUA
INFRASTRUCTURE LTD
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Appearance:
MR SHALIN MEHTA, SR. ADVOCATE WITH MR HEMANG M SHAH(5399)
for the Appellant(s) No. 1
for the Defendant(s) No. 2
MR KAMAL TRIVEDI, SR. ADVOCATE WITH MR ABHISHEK M
MEHTA(3469) for the Defendant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
and
HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI
Date : 06/03/2020
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE N.V.ANJARIA) By seeking draft amendment dated 05th March, 2020 which already forms part of the papers of the Appeal, learned advocate for the appellant seeks to add the Notified Area Authority GIDC, Ankleshwar, as party. However, it was noticed that the said party is already arrayed as respondent No.2 in the cause-title of the Appeal as well as in the Civil Application.
2. The amendment stands granted considering that the presence of Notified Area Authority would help to adjudicate the controversy effectively.
3. The present Appeal is under Section 37 of Page 1 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER the Arbitration and Conciliation Act, 1996 read with Section 13 of the Commercial Courts Act, 2015, which is directed against order dated 03rd March, 2020 passed by the 4th Additional District Judge, Ankleshwar in application under Section 9 of the Arbitration Act, 1996 filed by the appellant herein. The said application came to be dismissed.
4. Heard learned senior advocate Mr.Shalin Mehta assisted by learned advocate Mr.Hemang Shah for the appellant and learned senior advocate Mr.Kamal B. Trivedi with learned advocate Mr.Abhishek Mehta for respondent No.1.
5. There shall be Notice, returnable on 12th March, 2020.
ORDER IN CIVIL APPLICATION What is prayed in the Civil Application is to stay the operation and the implementation of the impugned order dated 03rd March, 2020 aforementioned. Further prayer is sought to restrain the respondents from taking any coercive measures of disconnection or shutting down of the plant of the applicant company. It is next prayed also by way of interim relief to stay the operation and implementation of communication dated 03rd March, 2020 in respect of suspension of membership of the applicant company. The interim relief is also prayed for restoration of the connection for the effluent discharge which have been severed by respondent No.2.
2. The applicant company is located in the Page 2 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER Ankleshwar Industrial Estate which is engaged in the manufacturing of organic pigments and its preparation etc. It is also a member industry which discharges its effluent in the Final Effluent Treatment Plant. The treatment plant is run and managed on co- operative system for the benefit of member industries by the respondent No.1 company. Respondent No.1, in other words, is a service provider company.
3. It appears that as determined by the Board of Directors of the service provider, the applicant company was called upon to pay the charges towards operation and maintenance which were unpaid in respect of the period from October, 2018 till October, 2019, amounting to Rs.10.05 crores. As the said amount was not paid by the applicant, the Board and Appeal Committee decided on 22nd November, 2019 to suspend the membership of the applicant company.
3.1 The applicant company filed application for interim measure for protection under Section 9 of the Arbitration and Conciliation Act, 1996, ending up with the dismissal of the said order as per the impugned order. The jurisdiction of the Court under Section 9 was invoked pending the commencement of the arbitration proceedings.
4. Learned senior advocate for the applicant submitted that the applicant is not liable to pay the bill to the tune of aforesaid extent and that which is an unjust demand, according to him. His submission was that there are unauthorised pipelines in the Page 3 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER estate because of whom the applicant is made a sufferer. He submitted that the amount is required to be paid by the applicant, nothing would remain for the applicant to contest the arbitration proceedings which are to be resorted to. He prayed for stay of the impugned order and further prayed to direct the restoration of the functioning of the industry which is stopped due to disconnection effected by the respondents of the discharge of effluent.
4.1 On the other hand, learned senior advocate for respondent No.1 submitted that the applicant was paying the bills as given to it for the charges in question until October, 2018. From that juncture onwards, for the reasons best known to it, the payment was discontinued. It was submitted that the decision to levy the charges due as aforesaid is by the Board of Management of the service provider company in which, the Chairman and Managing Director of the applicant company and others connected with the industry, are the members. It was submitted that all the member industries have been paying the bills towards the charges for utilisation of the Final Effluent Treatment Plant.
5. It could be seen that the parties are privy to the two agreements dated 23rd November, 2001 (Mark 3/3) and 09th September, 2006 (Mark 3/4). The service provider - respondent No.1 which operates and manages the Final Effluent Treatment Plant for the member industries, is entitled to levy the charges for the utilisation of the facility from the member Page 4 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER industries. The Board of Directors of the service provider company decide and the bills are issued. Learned Additional District Judge in his impugned order has appropriately referred to condition No.5 of the agreement which inter alia contemplate that the member industry has to contribute the proportionate cost in respect of its effluent discharge quantity or make payment on the basis as may be decided by the Board of Directors as per the conditions of agreement.
6. The functioning of the applicant industry has stopped in view of non-payment of the charges. In the facts of the case and the aspects mentioned above, we are of the considered view that if the applicant wants to restore the operations, it can't be permitted to do the same without discharging its liability of payment towards the bills which are disputed by it. All the contentions which are sought to be raised on behalf of the applicant about the bills being on the higher side and about the unauthorised pipelines functioning in the estate resulting into inflated bills, etc. are the issues in the domain of the arbitration. It was stated that the steps are now made afoot by the applicant itself to commence the arbitration and the notice is issued for the purpose of appointment of arbitrator.
6.1 It was stated that till date Rs.12.59 crores are the dues payable by the applicant company. The disputed dues in respect of which the contentions are raised and in the context of which proceedings under Page 5 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER Section 9 came to be initiated, runs to Rs.10.05 crores as stated above. When the Appeal is pending for further consideration and further orders, it would be proper if at least 70% of the total dues for the period between October, 2018 to October, 2019 are directed to be paid and the permission to restart the operations are granted to the applicant company.
6.2 We are of the view that if the interim relief is granted on condition as above of payment of 70% of the amount and by imposing further condition of requiring the applicant to abide by the current payments, interests of both the sides would be balanced at this stage of the Appeal.
6.3 In view of the aforesaid discussion, there shall be notice to the respondents, returnable on 12th March, 2020.
7. Pending the present First Appeal, we are inclined to permit the applicant to restart their operations only upon satisfaction of the following stipulations.
(i) The respondents shall permit the applicant company to restart its operations upon following conditions.
(a) The applicant pays 70% of the total amount of Rs.10.05 crores being the dues towards the charges claimed for the period between October, 2018 and October, 2019;Page 6 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020 C/FA/1216/2020 ORDER
(b) The applicant pays, the bills raised towards the period from November, 2019 onwards;
(c) The applicant continues to pay the current bills as may be issued and given to it from time-to-time;
(d) The respondents shall permit the operations of the applicant company to restart, once the aforesaid payments contemplated in (a) and (b) are made to the competent authority.
(ii) This interim relief shall continue to operate till the next date;
(iii) It is clarified that the present order is passed without expressing any final opinion on merits of the Appeal.
Learned advocate Mr.Abhishek Mehta waives service of notice in the Appeal as well as in Civil Application on behalf of respondent No.1. The other respondent shall be served.
Direct service is permitted.
(N.V.ANJARIA, J) (DR. ASHOKKUMAR C. JOSHI,J) Anup Page 7 of 7 Downloaded on : Sat Mar 07 02:57:43 IST 2020