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M/S Centurion Laboratories,Division ... vs Centeral Medical Service Society ... on 3 March, 2022

Author: Mukta Gupta

Bench: Mukta Gupta

                        $~2

                        *            IN THE HIGH COURT OF DELHI AT NEW DELHI

                        +            ARB.P. 431/2021
                                     I.A.7450/2021 (for dismissing the petition o/b R)

                                     M/S CENTURION LABORATORIES,DIVISION OF
                                     CENTURIAN REMEDIES PVT LTD          ..... Petitioner
                                              Represented by: Mr.Bishwajit Singh, Advocate.

                                                           Versus

                                     CENTERAL MEDICAL SERVICE SOCIETY THROUGH
                                     DIRECTOR GENERAL AND CEO             .... Respondent
                                              Represented by: Mr.Harish Vaidyanathan
                                                              Shankar, CGSC with Mr.Karan
                                                              Chhibber, Mr.Zeeshan Rizvi,
                                                              Advocates.
                                     CORAM:
                                     HON'BLE MS. JUSTICE MUKTA GUPTA
                                                           ORDER

% 03.03.2022 ARB.P. 431/2021

1. By this petition, the petitioner seeks appointment of a Sole Arbitrator.

2. According to the petitioner, an E-tender was invited by the respondent pursuant whereto a long term agreement was entered into between the petitioner and the respondent on 21st April 2017. The petitioner gave a performance bank guarantee No. OGT00171700112184 dated 26th April 2017 and a demand draft which was to be invoked only in case of breach of long term agreement. The petitioner supplied TB and ARV drug/medicines to Signature Not Verified Digitally Signed By:JUSTICE MUKTA GUPTA ARB.P. 431/2021 Page 1 of 4 Signing Date:05.03.2022 16:13:47 the respondent for its various orders and raised invoices. It is the claim of the petitioner that it was wrongly blacklisted by the respondent on 14th March 2018 for two years and the contract agreement was terminated vide the letter dated 14th March 2018. Further, the respondent also encashed the performance bank guarantee on 22nd March 2018 and thus, in view of the disputes raised, the petitioner claims that despite issuance of notice to the respondent, no arbitrator was appointed and hence, seeks appointment of an Arbitrator.

3. In response to the present petition, a counter affidavit has been filed by the respondent as also an application in this behalf being IA 7450/2021 seeking dismissal of the petition. According to the respondent, the petitioner had already approached the Micro and Small Enterprises Facilitation Council (MSEFC), Gujarat for the recovery of alleged outstanding towards the unpaid bills, encashed performance bank guarantee and secured deposit withheld by the respondent and thus, this Court will not proceed for appointment of the Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 ('A & C Act', in short).

4. The petitioner has placed on record a letter dated 9th August 2021 written to the Council withdrawing from the reference to arbitration under the Micro, Small and Medium Enterprises Development Act ('MSME Act', in short) as a delay of more than 1280 days had already occurred. The fact that the application for reference for arbitration under MSME Act was withdrawn, is not disputed by the learned counsel for the respondent and hence, it Signature Not Verified Digitally Signed By:JUSTICE MUKTA GUPTA ARB.P. 431/2021 Page 2 of 4 Signing Date:05.03.2022 16:13:47 cannot be said that the present petition seeking appointment of an Arbitrator is not maintainable. The petitioner seeks appointment of an Arbitrator in terms of clauses 20 and 21 of the E-tender dated 26th December 2016 which provides as under:-

"20 RESOLUTION of DISPUTES

(i) The CMSS and the supplier shall make every effort to resolve, amicably by direct informal negotiation any disagreement or dispute arising between them under or in connection with the contract,

(ii) In case of a dispute or difference arising between the CMSS and a supplier relating to any matter arising out of or connected with this Bid or the consequent agreement, such dispute or difference shall be settled in accordance with the Arbitration and Conciliation Act, 1996 before a sole arbitrator to be appointed by CMSS. The place and venue of arbitration shall be New Delhi.

21 JURISDICTION In the event of any dispute arising out of the Bid with any Bidder such Dispute will be subject to the jurisdiction of the Civil Court within the city of New Delhi only".

5. It is thus evident that there is no arbitration pending on the disputes raised and the seat of the arbitration is at New Delhi. Thus, this Court has jurisdiction to deal with the matter. Consequently, this Court requests Mr.O.P.Gupta, the Retd. District and Sessions Judge to arbitrate the disputes between the parties which is stated to be involving around ₹1 Crore.

6. The learned Arbitrator would be entitled to charge fees as per the Schedule IV of the 'A & C Act'. The learned Arbitrator is requested to furnish the requisite disclosure under Section 12(2) of the A & C Act within one week of entering into the reference.

7. The right of the respondent to file counter-claim and objections before the learned Arbitrator in accordance with law is reserved.

8. Petition is disposed of.

9. Order be uploaded on the website of this Court. I.A.7450/2021 (for dismissing the petition o/b R) In view of the order passed in the petition, the application is disposed of as infructuous.

MUKTA GUPTA, J.

MARCH 03, 2022/akb Signature Not Verified Digitally Signed By:JUSTICE MUKTA GUPTA ARB.P. 431/2021 Page 4 of 4 Signing Date:05.03.2022 16:13:47