Delhi District Court
Vide This Order I Shall Decide ... vs Sports Authority Of India Pg.1 Of 7 on 12 December, 2014
IN THE COURT OF SH. LALIT KUMAR:
ADDITIONAL DISTRICT JUDGE 01 SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
CS 256/2013
M/s. Anapoorna Industrial Corporation
Versus
M/s. Sports Authority of India & Anr.
ORDER:
12.12.2014
1. Vide this Order I shall decide application under Section 8 of the Arbitration and Conciliation Act, 1996 r/w Section 151 CPC moved on behalf of defendants no. 1 and 2.
2. It is submitted by the defendant that plaintiff has filed the present suit against the defendant for recovery of Rs. 11,89,005/ concealing certain facts from this Court. It is further submitted that an open tender no.5 was advertised by Sports Authority of India on 17.03.2010 for supply of mattresses for Hostel Building at Jawahar Lal Nehru Stadium and Indira Gandhi Stadium, New Delhi. The plaintiff submitted the 'TenderScheduleCumForm' for mattress and cushioned items alongwith the "Tender Document" duly signed and sealed on each page. It is further submitted that the quotation submitted by the plaintiff was accepted vide letter dated 18.05.2010 and that the Tender Document contain the arbitration clause which provides as under:
"32. ARBITRATION CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.1 Of 7
a) In the event of any question, dispute or difference arising under these conditions or any special conditions of contract, or in connection with this contract (except to any matters the decision of which is specially provided for by these or the special conditions) the same shall be referred to the sole arbitration of an officer of SAI appointed to be the arbitrator, by the Director General Sports Authority of India (SAI). The Officer to be appointed as arbitrator however will not be one of those who had an opportunity to deal with the matters to which the contracts relates or who in the course of their duties as an officer of SAI have expressed views on all or any of the matters under dispute or difference. The award of the arbitrator shall be final and binding on the parties to this contract."
It is also submitted that the Tender Document further provides about the 'Consequence of Rejection' and 'Removal of Rejected Stores'. It is further submitted that the mattresses supplied by the plaintiff were not confirming with the approved sample, therefore plaintiff was asked to take back the supplied material as per the tender terms and conditions. However, the plaintiff did not take back the same and has failed to abide by the tender terms and conditions. It is further submitted that the present suit has been filed without disclosing the material fact of 'Arbitraiton Clause' in tender document as described above. Thus, the plaintiff has abused of law by filing the present suit rather to go for arbitration. It is further submitted that the dispute between the parties is subject matter of an arbitration agreement. Therefore, the parties should be referred to arbitration in view of arbitration clause in the tender document and the Section 8 of the Arbitration and CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.2 Of 7 Conciliation Act, 1996. It is therefore prayed that the parties to the suit be referred to arbitration.
3. In reply to the said application the contents of the applications have been denied stating that no doubt the defendant has admitted the agreement by relying its contents in the I.A. and seeking the compliance of its contents and terms and conditions of Arbitration clause, though the application is highly time bar and the conduct of the defendant is apparent and is not bonafide as the defendant has not made the payment and thereby putting heavy loss to the plaintiff company. It is further submitted that the plaintiff company had duly supplied the mattresses to the defendant and having accepted all the conditions, packages and requirement etc. the defendant duly entered into an agreement with the plaintiff company having signed over it and and so the plaintiff company had sent the goods to the defendant for an amount of Rs. 7,87,421/. It is further submitted that the plaintiff company had sent a registered A.D. Notice for Mutual Discussions and Conciliation dated 31.10.2012 to the defendant to pay the amount spent by the plaintiff company and the defendant had replied to the said notice vide letter dated 05.12.2012. It is further submitted that the plaintiff had visited the defendant office for mutual discussion and conciliation but till date, the defendant's have not made the aforesaid due payments. Further, the plaintiff company had sent a Legal notice dated 25.07.2013 to the defendant, calling upon them to pay the amount spent by the plaintiff company on supplying of mattresses and other damages and loss occurred to the plaintiff which was duly received by the defendant but nothing turns fruitful and the amount is due with interest on the defendant and even notice was never replied. It is CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.3 Of 7 further submitted that as there was no response of the legal notice and the plaintiff company was compelled to file the suit by paying court fees etc. At this belated stage, the defendant cannot be allowed to raise such plea of arbitration etc., therefore the application of the defendant is liable to be dismissed with costs.
4. In rejoinder to the said application, the defendants have submitted that at the outset it is stated that save and except what is specifically admitted hereunder, each and every averment, submission, allegation and contention of the plaintiff raised in the reply to the Application u/S. 8 of the Arbitration and Conciliation Act, 1996 of the defendants, which is no specifically admitted herein and which are inconsistent with the tenor of the Application may be treated as specifically denied and not admitted by the defendants and further reiterated the contents of their application under Section 8 of Arbitration and Conciliation Act. It is submitted that the plaintiff is supposed to invoke the arbitration clause provided under the Tender Document as per the law. The present suit filed by the plaintiff is not maintainable in view of the Section 8 of the Arbitration and Conciliation Act, 1996 and that the plaintiff has not approached the Court with clean hands as it suppress the facts of tender document and Arbitration Clause. It is denied that the application u/S. 8 of the Arbitation and Conciliation Act, 1996 is liable to be dismissed. It is prayed that the application u/s. 8 of the Arbitration and Conciliation Act, 1996 be allowed the parties be referred to the Arbitration.
5. I have heard the arguments and have perused the record. The main contention of the defendant in filing the present application is that the Tender Document contains the Arbitration clause at CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.4 Of 7 para 32 of the agreement in which it was agreed between the parties that in the event of any question, dispute or difference arising under these conditions or any special conditions of contract, or in connection with this contract (except to any matters the decision of which is specially provided for by these or the special conditions) the same shall be referred to the sole arbitration of an officer of SAI appointed to be the arbitrator, by the Director General Sports Authority of India (SAI). The agreement also contains that the Officer to be appointed as arbitrator, shall not be one of those who had an opportunity to deal with the matters to which the contracts relates or who in the course of their duties as an officer of SAI have expressed views on all or any of the matters under dispute or difference. The agreement also contains that the award of the arbitrator shall be final and binding on the parties to this contract. The agreement is duly signed by both the parties under their seal and signature.
On the other hand, plaintiff contended that the plaintiff company had duly supplied the mattresses to the defendant and having accepted all the conditions, packages and requirement etc. the defendant duly entered into an agreement with the plaintiff company having signed over it and and so the plaintiff company had sent the goods to the defendant for an amount of Rs. 7,87,421/. The plaintiff company had sent a registered A.D. Notice for Mutual Discussions and Conciliation dated 31.10.2012 to the defendant to pay the amount spent by the plaintiff company and the defendant had replied to the said notice vide letter dated 05.12.2012 and the plaintiff had visited the defendant's office for mutual discussion and conciliation but the defendants did not pay the due payments, Further, the plaintiff CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.5 Of 7 company had sent a Legal notice dated 25.07.2013 to the defendant, which was duly received by the defendant and the same was never replied. As there was no response of the legal notice and the plaintiff company was compelled to file the suit by paying court fees etc.
6. It is seen from the record that defendant has filed the original Tender document as Annexure A/2 which duly contains the arbitration clause. The said agreement is duly authorised by the plaintiff company as the partner of the plaintiff Company has duly signed the said Tender document. Pursuant to the agreement the tender schedule cum offer form was sent by the plaintiff to the defendant under their seal and signature which was duly accepted by the defendant vide their letter dated 18.05.2010 titled as 'letter of acceptance'.
7. Ld. Counsel for the plaintiff argued that defendant has not responded to his legal notice when dispute arised between the parties. Perusal of the legal notice reveals that nothing was written in the notice about the Arbitration Clause. It is not the case of the plaintiff that he had written any notice to the defendant stating that dispute arised between the parties and as per the agreement, arbitrator should be appointed. Had it been written so in his legal notice, the situation would have been different. The legal notice was merely a notice for recovery of the amount.
8. In case Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya and Anr. decided by the Hon'ble Supreme Court dated 14.04.2003 , it is held that the interpretation of Section 8, clearly bar a judicial authority before which an action is brought in a matter which is CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.6 Of 7 the subject matter of an Arbitration Agreement. If a party applies before the Court, when submitting his first statement on the substance of the dispute, Court can refer the dispute between the parties before Arbitration.
9. It is pertinent to mention that the present application has been filed at the initial stage of the case on the first appearance of Ld. Counsel for the defendant. Moreover plaintiff has not denied the fact that the partner of the Plaintiff Company, had signed the agreement.
10.Without going into the merit of the case, whether the mattresses were supplied to the defendant by the plaintiff or whether the payment was made by the defendant to the plaintiff, it would be in the interest of justice that the matter be referred to the Arbitrator in view of the conditions mentioned in the Tender Document.
11. In view of the above discussion, the application moved on behalf of the defendant u/S. 8 of Arbitration and Conciliation Act is allowed. Parties are directed to present their dispute before the Arbitration Committee of the Hon'ble High Court for proper adjudication of their dispute. Application accordingly disposed off. File be consigned to record room.
Announced in the open (LALIT KUMAR) court on 12.12.2014. Additional District Judge 01(SE) Saket Courts, New Delhi.
CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.7 Of 7 CS 256/2013 12.12.2014 Present : None Vide separate Order, the application moved on behalf of the defendant u/S. 8 of Arbitration and Conciliation Act is allowed. Parties are directed to present their dispute before the Arbitration Committee of the Hon'ble High Court for proper adjudication of their dispute. Application accordingly disposed off.
File be consigned to record room.
( LALIT KUMAR ) ADJ1(South East) Saket Courts New Delhi/12.12.2014 CS- 256/2013 M/s. Anapoorna Industrial Corporation Vs. Sports Authority of India pg.8 Of 7