The High Court · 2025

Mr. Nand Kishor Ghurka And Also. 2'1-C Phase 1 , ...ResPondent Arbitration Application filed under Section 1 1(6) of Arbitration and Conciliation Act, 1996 that in the circumstances stated in accompanying affidavit this Hon'ble court may be pleased to appoint Arbitrator for settlement of dispute between the Applicant and Respondent with regard to the clarm of the Applicant with interest and damages in pursuance of Purchase order dated 03.08.2023. Counsel for the Petitioner : Sri Damodar Mundra Counsel for the ResPondents : K.Rajendran The Court made the following : ORDER f . ---;a-== C HONOURABLE SRI JUSTICE N.V. SHRAVAN KUMAR Arbitration Application No.316 of2024 ORDER This Arbitration Application is filed under Section 1 1(6) of the Arbitrati.n ancl conciliation Act, 1996 to appoin t a sole Arbitrator for the purpose of adjudication of disputes rhat have arisen betrveen thc applicant and the respondent in respect of purchase order datecl o3.08.2023.

2. The Applicant is a private timited company duly incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing material hanclling system and rcspondcnL is also a private limited company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of Spccialist Turnkey Contracting Company in the areas of Fuel Hyclrocarbon oi1 and gas handling.

3. 1'he Applicant would submit that the respondent hac[ placed two purchase ordcrs (i) No.P-417lWC /20l214Og dated 03.08.2O23 for fabrication and supply of Conveyor Belt System lor a total value of Rs.11,58,76,O00/ and (ir) p-417lNB /2tl21410 dated 03.08.2023 for supply of spares for a total value of Rs.23,6O,000/-. As per the said purchase orders, the respondent has to comply with certain conditions with respect to advance payment and submissions of Bank guarantee and its adjustments to invoices raised for supply of material. t I I I I I i I I i i i r I I I I I : I I t I I I ! I I I 2 NVSK, J A.A. No.316 of2024 The Techno-Commercial Terms and Conditions appended to the said purchase order, tnter alia, provided that in case of delay in supplies as per agreed schedule by the Applicant and amount equivalent to 0'5% of the total purchase order value per week or part thereof subject to a maximum of 5% ol total purchase order value was required to be deducted by respondent towards liquidated damages Pursuant to sharing the purchase order along with annexures, the Applicant vide email dated 14.O8.2O23, sent a proforma of Advance Bank Guarantee for approval by the responcient The respondenl vide email dated 21.O8.2023 sent back the approved format of advance bank guaranr.ee. The respondent vide letter dated 30'08'2023 submitted advance bank guarantee equivalent to 1O% of basic order value i-c Rs. 1,OO,20,OOO/ - being bank guarantee No'OO83NDDG00056224 ' d'ated,29.o8.2o23,whichwasvalidupto18.o1.2o24.T]nerespondent released the advance against bank guarantee on 22 'O9 '2023 of Rs.1,O0,14,98 O /- after deduction of TDS of Rs 5'O2O/- after a delay of about 22 days. The respondent vide letter dated 09 Ol'2O24 requested the Applicant's bank to extend the advance bank guaranlee for a further period of one year and stated that in case of non-extension, the bank guarantee may be encashed and amount may be directly credited to the respondent's bank account' The respondent in a high handed arbitrary fashion vide email dated 26 O3'2O24 rejected all the requests made by the Applicant The respondent stated it was releasing dispatch clearance for material offered by the Appiicant and aiso requested the Applicant to share three months bill -"" -//=2 (: a.) NVSX, J A.A. [o.316 of2024 plan so that funds can be reserved against the purchase order. The appiicant r.ide email dated O5.04.2024 provided the dispatch documents to applicant and raised two invoices for material supplied i.e. Invoir:e No.SPPL/B/24-2Sll dated. 04.O4.2024 for an amount of Rs.35,17,875,/ .rnd invoice No.SppL/B/ 2 4_25 /2, dated 04.O4.2024 for an amount of Rs.35,17,g75. Thc Applicant vide email dated 1O.O5.2024 responded to the proposals made by the respondent. It is further submitted that due to the actio.rs of the respondent, the work in question stancls tcrminated and as such the appricant is entitled ro an amount of Rs.6,18,72 ,7351_ trom the respondent as per the statemcnt o1'trccount attached. The respondent replied Lo the legal notice on 08.O7.2024, dcnying the terms agreed between the parties and justified thc invocation of bank guarantee on whimsical grounds.

4. The Applicant lurther submits that the respondent in unilaterally cancclling the contract between the parties and encashing the bank guarantee is in breach of the terms and conditions stipulated betu'een the parties for the supply as agreed between thcm. The petitioner is questioning the actions of the respondent, as to the u,ork in question stands terminated and as such the applicant is entilled to an amount of Rs.6, 1g,72,7351_ from the respondent as per the starement of account encrosed. The applicant in fact has invoked the Clause I of the Techno Commercial Terms and Conditions which is appended to the purchase orders dated 03.08.2023 as Annexure_Il. Thc su mc reads ers under: i l j i I I .) l. I i I t I I t I i ! ? 4 NVSX, J A.A. No.316 of 2024 "Any and all disputes arising out of' ald or in connection with this contract including its execution, interprctations shall be referred to Arbitration by a sole arbitrator mutually appointed by the parties, in accordance with the prowisions of the Arbrtration and Conciliation Act' 1996 This Arbitration Clause is deemed to have been incorporated in the purchase order/contract upon the suppliers acceptance and or execution of the contract, even if reference to this clause is not particularly incorporated in the contract The seat and venue of arbitration shall be Hyderabad'" It is furthcr submitted that aggrieved by the unilateral 5. cancellation of the purcha3t orders by the rcsponder-rt' the applicant issued a legal notice-cum-arbitration invocation on 18 '06 2024 seeking payment of amount in disputes between the Applicant and the respondent and as agreed by the parties' the disputes resolution is stipulated is the purchase order dated 03 O8'2O23 As such' thls Court deems it appropriate for the purpose of deciding the disputes of Applicant and the Respondent to refer the matler to ' Arbitration

6. Recording the above submissions' this Arbitration Application is disposed of and Sri Justice M'S'K Jaiswal' a former Judge of this Court (resident of H'No'3-4-340/1' Fiat No'2O1' Sarasrvathi Residency, Barkatpura, Hyderabad-27; Mobile No'9493193422' 9247 2026461, is appointed as sole Arbitrator to adjudicate the The parties shall appear before the sole disputes between the Parhes .,i.tt-,.- 5 tfvsK, J A.A. No.316 of 2024 Arbitrator, along with a copy of this order. it is open to the parties to raise all thcir contentions before the Arbitrator, and thereafter, the sole Arbitrator shall proceed with the arbitral proceedings in accordance u.ith law. 7 . Accord ingly, the Arbitration Application is disposed of

8. Oflicc is directed to communicate a copy of this order to the learne d Arbitrator. Miscellaneous applications, if any pending, sha1l stand closed SD/- M. VIJAYA BHASKER JOINT REGISTRAR //TRUE COPY// SECTION OFFICER 7 To, The Hon'ble Sri Justice M.S.K.Jarswal, a former Judge of High Court of Judicature_at Hvderabad for tre siate bir"il.ii"i,""xio the state of Andhra Pradesh (Resident of H.No.3-4-340/1, Flat lt'o:Oi, SaraswatUi R_esid encl . Ba rka rpu ra. H-ytle ra bad_271 fVf rnih lj".Sn $ itrl3ii2, 924720264G) (By speciat Mlssenser; lai;";;ih ;;"py of affidavft and material papers) One CC to Sri Damodar Mundra, Advocate tOpUCl One CC to Sri K.Rajendran, Advocate tOpUCl Two CD Copies

2. 2 4 Svs/gh W HIGH COURT DATED:0310412A25 ORDER ARBAPPL.No.316 ot 2024 STAI.E s 10, Nq N[ ? I S * DISPOSING OF THE ARBAPPL I b i I I I I I I I i I I i I I i : i I i i ; I