Bombay High Court
S.R. Turbo Energy Pvt. Ltd. New Delhi ... vs M/S Bharat Heavy Electricals Ltd. ... on 9 June, 2017
Author: S.B. Shukre
Bench: S.B. Shukre
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
MISC. CIVIL APPLICATION (ARBITRATION) No.1126 OF 2016
S.R. Turbo Energy Pvt. Ltd.,
A company registered under the
Companies Act, 1956, acting through its
duly authorized Managing Director
Mr.Ravindra Pratap Singh s/o.
Vishwanath Singh, Aged about 51 years,
Occ. Business, having its office at 72/C,
P.D. Block, Pritampura, New Delhi-100 034. : APPLICANT
...VERSUS...
M/s. Bharat Heavy Electricals Limited,
A government company, acting through its
duly authorized Engineer, having its office
at 345, Kingsway, Nagpur-440 001. : RESPONDENT
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Shri Amit Khare, Advocate for the Applicant.
Shri H.V. Thakur, Advocate for the Respondent.
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CORAM : S.B. SHUKRE, J.
th
DATE : 9
JUNE, 2017.
ORAL JUDGMENT :
1. Rule. Rule is made returnable forthwith. Learned Advocate Shri H.V. Thakur, learned counsel waives notice on behalf of respondent. By consent matter is taken up for final hearing and disposed of by this Judgment and order.
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2. This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of the Arbitrator, in view of the terms of agreement regarding appointment of the sole Arbitrator, in case of a dispute arising out of the terms and conditions of the agreement and failure of the party authorized to appoint an Arbitrator.
2. According to Shri Amit Khare, learned counsel for the applicant, there is no dispute about the existence of the arbitration agreement between the parties and since the claim of the applicant as contained in the final bill for the works completed by the applicant has not been settled or paid so far by the non-applicant, a dispute has arisen between the parties and it is an arbitral dispute. This is, however, disagreed to by Shri H.V. Thakur, learned counsel for the respondent. According to him, the final bill has been processed and certain amount has been found liable to be deducted from it and this has been done as per the procedure contained in the terms and conditions of the agreement. He submits that if the formalities are completed by the applicant the final bill amount, as approved by the non-applicant will be paid to the applicant and thus there is no arbitrable dispute in existence.
3. On going through the terms of agreement, I find that even though no time is stipulated for clearing the final bill submitted by the applicant, it is expected that the final bill, whenever it is submitted, is ::: Uploaded on - 14/06/2017 ::: Downloaded on - 15/06/2017 00:34:18 ::: J-mca1126.16.odt 3/5 cleared by the non-applicant within a reasonable period of time. In the instant case, the final bill has been submitted on 11 th March 2013 and is still outstanding. Although, it is contended by the learned counsel for the non-applicant that its a long drawn procedure for clearing and approving such bill, it cannot be found that the procedural requirement could be stretched to such a period as of more than four years, as has happened in the instant case. To add salt to the injury, the respondent has not even informed the applicant till recently if the final bill would be cleared fully or partially or not at all. Non-clearance of the final bill, for such a long time, for whatever amount, itself shows that there is in existence a dispute between the parties which is arbitrable.
4. It is also the contention of the learned counsel for the non-applicant that under the terms and conditions of the agreement between the parties, the non-applicant is entitled to make some deductions and as the non-applicant has made those deductions strictly in accordance with those terms and conditions, the applicant can no longer stake any claim for receiving that amount which he is not entitled to receive and thus, there cannot be any dispute which can be referred for arbitration. Learned counsel for the applicant submits that whether the non-applicant is entitled to make any deductions or not and if the deductions have been made, whether they are made strictly in accordance with the procedure contained in the terms and conditions of ::: Uploaded on - 14/06/2017 ::: Downloaded on - 15/06/2017 00:34:18 ::: J-mca1126.16.odt 4/5 the agreement, are the issues which are disputed and, therefore, these issues themselves will give rise to a dispute referable to the sole arbitrator. I find substance in the submission of the learned counsel for the applicant. When, it is contended by one party that it has decided to make certain deductions, which is disputed by the other party, it would be a case fit enough for reference being made to an arbitrator for adjudicating the same. It is significant to note that there were certain communications made by the non-applicant to the applicant informing the applicant that his final bill was processed and approved. Nowhere in these communications was it stated by the non-applicant that the final bill was approved not for the amount claimed therein, but for the lesser amount. The non-applicant also did not inform to the applicant, at least till the date of filing of this application, anything about the intention of the non-applicant to make deductions from the final bill. In fact, the non-applicant, till filing of this application, did not make its stand clear in the matter and all the while it would only say and generally so that the final bill was approved by it and that the applicant should send its representative for completing the formalities. These facts would also show that there is a serious dispute, regarding payment of final bill in existence between the parties and since this dispute needs to be resolved through an adjudication, as per the terms of the agreement, the adjudication would have to be made by the sole arbitrator. ::: Uploaded on - 14/06/2017 ::: Downloaded on - 15/06/2017 00:34:18 ::: J-mca1126.16.odt 5/5
5. Notice as required under Section 11 of the Arbitration Act was also issued to the non-applicant as the non-applicant had the authority, under clause 2.21.1 to appoint the sole Arbitrator. But, there was no response given to this notice by the non-applicant. Therefore, it would be now necessary for this Court to step in and appoint the Arbitrator.
6. In view of above, the application is allowed.
7. Shri S.D. Mohod, former Principal District and Sessions Judge is appointed as an Arbitrator.
8. The applicant to deposit process fees Rs.2,000/- in this Court within two weeks from the date of order.
JUDGE okMksns ::: Uploaded on - 14/06/2017 ::: Downloaded on - 15/06/2017 00:34:18 :::