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One97 Communications Limited vs Nightstay Travels Private Limited & Anr on 3 March, 2022

Author: Vibhu Bakhru

Bench: Vibhu Bakhru

                          $~1(2021)
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     ARB.P. 654/2021 & IA 14772/2021
                                ONE97 COMMUNICATIONS LIMITED                        ..... Petitioner
                                                    Through Mr Niraj Singh, Advocate.

                                                    versus

                                NIGHTSTAY TRAVELS PRIVATE LIMITED
                                & ANR.                                     ..... Respondents
                                             Through None appears for respondent no.1.
                                             Ms Aditi Mohan, Ms Sakshi Sharma,
                                             Advocates for R2.

                                CORAM:
                                HON'BLE MR. JUSTICE VIBHU BAKHRU
                                        ORDER

% 03.03.2022

1. None appears for respondent no.1 despite, service of notice. In the circumstances, this Court does not consider it apposite to await the representation on behalf of respondent no.1.

2. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act'), praying that an Arbitrator be appointed to adjudicate the disputes that have arisen in connection with the Deed of Assignment dated 14.12.2018. The petitioner states that in terms of the said Deed of Assignment, the respondents assigned certain Intellectual Property Rights for an agreed consideration. The petitioner states that the respondent would bear all taxes and also ensure compliance of the Central Goods and Service Tax Act, 2017.

3. The respondent no.1 issued a tax invoice for a sum of ₹6,49,00,000/- which includes a sum of ₹99,00,000/- as applicable for SGST and CGST. The petitioner had paid the said sum. The disputes essentially, relate to the allegations that respondent no.1 has failed to deposit the GST with the concerned authorities.

4. In view of the above, by a letter dated 25.03.2020, the petitioner had called upon the respondents to refund an amount of ₹99,00,000/- along with interest at the rate of 18% per annum. This was followed by a legal notice dated 20.04.2020 whereby, a similar demand was made against the respondents.

5. Since the respondents failed to comply with the same, the petitioner issued a notice dated 07.06.2021 under Section 21 of the A&C Act and invoked the Arbitration Clause [Clause no. 12.3 of the Deed of Assignment]. The said clause 12.3 of the Deed of Assignment reads as under:-

"12.3 If after the Consultation Period, the Parties have failed to reach an amicable settlement on a dispute, the Dispute shall, at the request of either the Disputant or the Respondent, be settled by an arbitral panel consisting of 3 (three) arbitrators ("Arbitration Board"), of which the Disputant and the Respondent shall each appoint 1 (one) arbitrator and the 2 (two) arbitrators so appointed shall then jointly appoint a third arbitrator, who shall act as the presiding arbitrator. It is hereby clarified that the Assignor and the Founder shall be considered as one Party for the purpose of this Clause and shall appoint an arbitrator jointly in case of occurrence of a Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:07.03.2022 Dispute."

6. Notice of the present petition was directed to be issued on 26.07.2021 which was duly served on respondent no.2 and he is represented. However, none appeared for respondent no.1.

7. The learned counsel appearing for respondent no.2 states that respondent no.2 is one of the promoters of respondent no.1 company. He states that he has sold his interests in the said company and is now no longer in control of the same. He also alleges that the new promoters of the respondent no.1 have siphoned off funds from the said company including the amounts received from the petitioner on account of the GST. Since none was appearing on behalf of respondent no.1 and no officer of respondent no.1 was available at the given address (the address available with Registrar of Companies), this Court had allowed the petitioner's application for service of notice of publication in newspapers ['Hindustan Times' and 'Dainik Jagran] having circulation in Delhi. The notice was duly published and respondent no. 1 is deemed to have been served.

8. Respondent no.2 does not dispute the existence of an arbitration agreement. In the circumstances, this Court considers it apposite to allow the present petition.

9. Mr. Omar Ahmad, Advocate (Mobile No. 9810012702) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties. This is subject to the Arbitrator making the necessary disclosure as required under Section 12(1) of the A&C Act and not being ineligible under Section 12(5) of the A&C Act. The parties are at liberty to approach the learned Arbitrator for further proceedings.

10. All rights and contentions of the parties regarding the disputes are open.

11. The petition is allowed in the aforesaid terms.

VIBHU BAKHRU, J MARCH 3, 2022 pkv Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:07.03.2022