Delhi District Court
Arb. No. 1313/14 vs Raviendrabharti International School on 29 June, 2015
IN THE COURT OF MS. VRINDA KUMARI:
ADJ-03 : NDD : PATIALA HOUSE COURTS: NEW DELHI
Arb. No. 1313/14
Unique ID No.
Edu Smart Services Private Limited
Having its Registered office at
L-74, Mahipalpur Extension,
New Delhi-110037.
........... Petitioner No. 1
M/s. Educomp Solutions Limited
Having its office at
1211, Padma Tower-I,
5, Rajendra Palace,
New Delhi-110008 ........... Petitioner No. 2
Versus
Raviendrabharti International School,
Ammapet Village,
Mudigonda, Khammam,
Andhra Pradesh-507158. ............ Respondent
Date of institution : 26.07.2014
Date on which reserved for order : 29.06.2015
Date of decision : 29.06.2015
ORDER
1. Vide this order I shall dispose of the present petition U/sec. 9 of the Arbitration and Conciliation Act, 1996 Arbtn. No. 1313/14 1 of 8 (hereinafter referred to as the Act) of the petitioners. The case of the petitioners is that the petitioner No. 2 is global diversified education solutions provider and the largest education company in India. It created, sourced and developed an exhaustive repository of world class digital curriculum modules or lessons which are collated, controlled and rendered from a central base and circulated to all the interested schools through non- exclusive licenses. The aforesaid digital curriculum was developed by the petitioner No. 2 under the name and style of 'Smart Class' which became a renowned and a credible brand in the supplemental education field. The licensed services owned by petitioner No. 2 are distributed by the petitioner No. 1. The respondent school with a view to take advantage of the Smart Class programme accepted the proposition of the petitioners and accordingly a Tripartite Agreement dated 30.05.2011 was entered into between petitioner No. 1, petitioner No. 2 and the respondent for setting up and implementing the Smart Class programme at the respondent school. The term of the Tripartite Agreement was for a period of 5 years ending on 31.05.2016 or Arbtn. No. 1313/14 2 of 8 a period of 60 months from the date of installation, which ever was later. The Tripartite Agreement cast certain obligations on petitioner No. 1. The respondent was also required to provide its support and co-operation in the manner specified under Clauses 3.4 to 3.14 of the Tripartite Agreement. In consideration of services provided, the respondent was required to make payment of the specified fee in accordance with Clauses 5.1, 5.2 and 5.3 of the Tripartite Agreement in installments. Petitioner No. 1 performed its part of the contract by supplying and installing the entire hardware at the respondent's premises, providing the repository of digital curriculum and also by providing the support services and consumables in accordance with the terms of the Tripartite Agreement. It was done to the complete satisfaction of the respondent. Invoices were accordingly raised by petitioner No. 1 on the respondent. Despite having availed the services of the petitioners to its complete satisfaction and despite receipt of the invoices, the respondent failed to honour its payment obligation under the Tripartite Agreement. A grace period of 15 days was given to Arbtn. No. 1313/14 3 of 8 the respondent for making the payments. As on 31.12.2013, a sum of Rs. 17,18,450.98 was outstanding against the respondent. Legal demand notice dated 30.03.2014 was accordingly issued. In view of default in payment on expiry of 30 days notice period, the Tripartite Agreement stood terminated and the consequences as specified under the Clauses 6.3, 6.4 and 6.5 shall follow in such circumstances. As on 31.12.2013, an amount of Rs 17,18,450.98 including interest was outstanding against the respondent. In the present petition U/sec. 9 of the Arbitration and Conciliation Act, the petitioner has prayed for direction to the respondent to deposit the amount of Rs. 17,18,450.98 alongwith interest @ 18% per annum from 31.12.2013 till the date of actual depositing in the Court. The petitioner has also prayed for directing the respondent to disclose details of its Bank accounts having sufficient balance to pay the outstanding amount and to direct attachment of such accounts till the adjudication of dispute before the Arbitral Tribunal. It has also been prayed that the respondent should be restrained from alienating its movable and immovable property Arbtn. No. 1313/14 4 of 8 in any manner till the adjudication of the dispute between the parties before the Arbitral Tribunal. Rendering of true and correct account for the amount earned by it from the services/Smart Class programme of the petitioner has also been prayed.
2. I have heard the Ld. Counsel for the petitioners and perused the records carefully.
3. Copy of the legal notice dated 30.03.2014 is on record.
Apart from being a demand notice, it is also a notice seeking commencement of Arbitration U/sec. 21 of the Arbitration and Conciliation Act 1996. It is mentioned in this notice that the dispute shall be referred to the Sole Arbitrator in terms of Clause 9.1 of the Agreement. It has been specifically mentioned in this notice that there would be no further notice in this regard. No document has been filed to show that Arbitration proceedings have commenced or that an Arbitrator has been appointed. As per clause 9.1 of the Tripartite Agreement dated 30.05.2011 (hereinafter referred to as 'the Agreement), the place of Arbitration was agreed to be New Delhi.
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4. Ld counsel for the petitioner has relied upon Section 9(ii)
(b), (d) and (e) of the Act. Section 9(ii)(b) of the Act provides that a party, may before or during arbitral proceedings or at any time after the making of Arbitral Award before it is enforced in accordance with Section 36, apply to a Court for an interim measure of protection in respect of securing the amount in dispute in the Arbitration. Under Section 9 (ii)(d) of the Act, interim injunction may also be sought from the Court. Section 9
(ii)(e) provides that a party may also apply to the Court for such other interim measure of protection as may appear to the Court to be just and convenient. It has been argued that in view of these provisions of the Act, the petitioner is entitled to the relief claimed. Court is, however, not convinced with this argument. Such interim measures of protection as envisaged Under Section 9 of the Act cannot be granted to the petitioner on mere asking. A cause of action must be established for grant of such relief. The respondent is a School. No apprehension has been specifically expressed by petitioner in the petition that the respondent may run away or avoid or obstruct or delay the Arbtn. No. 1313/14 6 of 8 execution of the Award that may be passed against it. The petitioner has not explained that if at all such an apprehension exists then what is its basis. No cause of action, thus, exists so far as prayer for directing the respondent to deposit the outstanding amount of Rs. 17,18,450.98 alongwith interest in the Court is concerned.
5. The petitioner has also prayed for directing the respondent to furnish details of Bank accounts with sufficient balance and attach these Bank accounts. The petitioner has nowhere claimed or shown that the respondent is about to dispose of or remove any part of his property with the intention of obstructing or delaying the execution in Award that may be passed against him. In absence of any such plea and supporting documents, the prayer of attachment of the Bank accounts of the respondent cannot be granted. Besides, the order of attaching the Bank account of the respondent shall gravely hamper the day to day functioning and transactions of the respondent school. There is also nothing to show that any of the assets of the respondent are located within the territorial jurisdiction of Arbtn. No. 1313/14 7 of 8 this Court. For the same reasons as discussed above, there are no grounds to restrain the respondent from alienating its movable and immovable properties. The Court is also convinced that the prayer for direction to the respondent for rendering true and correct account of its income from the services/Smart Class programme of the petitioner is nothing but a prayer for rendition of account which is beyond the scope of Section 9 of the Arbitration Act.
6. In view of above discussion, the petition Under Section 9 of the Arbitration Act of the petitioner is dismissed.
7. File be consigned to record room.
PRONOUNCED IN THE OPEN COURT ON THIS 29TH DAY OF JUNE, 2015.
(VRINDA KUMARI)
ADJ-03/NDD/PHC
29.06.2015
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