The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Arb. Application No. 4 of 2023 M/s. Safearth Clean Technologies Private Limited, having its registered office at 4-L, Shree Gopal Complex, Court Road, PO-GPO, PS – Kotwali, Ranchi-834001, Jharkhand through its Director, Hemant Kumar Poddar, aged about 59 years, son of Krishna Kumar Poddar, resident of Poddar Niket, Bariatu Road, Near Central Academy ... Applicant School, PO & PS- Ranchi, District-Ranchi-834009.... Versus M/s. Baritech Infra Private Limited, having registered office at 330/K, Church Road , Faird Nagar, Supela, Bhilai-490023 PO & PS- Bhilai, Chhattishgarh … … … Respondent ... --------- CORAM: SRI SANJAYA KUMAR MISHRA, C.J. --------- For the Applicant: For the Respondent: 06/Dated: 11.08.2023 Ms. Khushboo Kataruka, Advocate Mr. Sanajy Kumar Thakur, Advocate --------- 1) By filing this application under Section 11(6) of the Arbitration and Conciliation Act, 1996, the petitioner through its director has prayed for appointment of an Arbitrator to arbitrate the dispute, as per the Clause 26 of the Purchase Order No. STPL/22-23/01 dated 04.04.2022 as there is, allegedly, a dispute occurring from the failure to supply the goods as agreed upon. 2) The petitioner is engaged in the business of providing renewable and clean energy solutions. The respondent M/s. Baritech Infra Private Limited is engaged in sale of Solar Modules. On 04.04.2022, after a discussion between the representatives of the parties, a Purchase Order bearing number as aforesaid was issued by the petitioner for supply of 2046 Kilo-Watt power having per unit price at Rs. 24,300/-. The total amount that was to be paid by the petitioner is Rs. 4,97,17,800/-. It was to carry a GST @ 12%. Therefore, the total amount to be paid was Rs. 5,56,83,936/-. 3) After issue of the Purchase Order, the petitioner on 06.04.2022 transferred a sum of Rs.4,49,71,780/- only for the said -2- procurement. The respondent on 06.07.2022 vide Annexure-2 to the application raised an invoice for the sum of Rs. 27,84,196/- after delivering only 102.3 Kilo-Watt power instead of 2046 Kilo- Watt power of electricity in between 15.07.2022 and 15.08.2022. The respondent transferred an amount of Rs.4,21,87,584/-. The petitioner paid an advance GST on 22.08.2022 for a sum of Rs.19,25,428/- only. On 11.10.2022 the petitioner has sent a legal notice through its advocate to the respondent and has proposed the name of the Arbitrator. 4) The respondent has filed a counter affidavit in which they have stated that it is not disputed that an agreement was entered into between them. It is pleaded that, in fact, there has been a business transaction between the parties due to which a purchase order dated 04.04.2022 is placed by the petitioner-Company to the respondent-Company, but the petitioner-Company never tried to resolve the issue as per Clause 26 of the Purchase Order and, therefore, the instant case is filed by the petitioner-Company with malicious intent on false and fabricated averment. It is not necessary for this Court to go into the question of merit of the claim of the petitioner regarding the amount of liquidated damage and other damages or any dues from the respondent. An application under Section 11(6) of the Act requires the Court to determine two
Legal Reasoning
things. Firstly, it has to decide whether there was an agreement between the parties which has a clause for settlement dispute through arbitration. The second aspect which is to be determined is whether there is a dispute between the parties arising out such an agreement. In that view of the matter, it is not necessary to go into -3- other pleas raised by the respondent regarding their inability to supply the goods. 5) Admittedly, in this case there is no written contract between the parties. However, it is contended by the learned counsel for the petitioner that the very fact of issuance of the purchase order containing an arbitration clause and the acceptance of the order by the respondent and part compliance thereof together with acceptance of money paid through bank and refund of the money by the respondent would imply that there was an agreement between the parties and the purchase order was acted upon by the respondent. In this connection, learned counsel for the petitioner would rely upon the observations made by the Bombay High Court, Nagpur Bench in the case of Sai Wardha Powers Ltd. and others vs. Goyal Dhatu Udyog Pvt. Ltd., Manu/MH/2181/2015, wherein similar facts arose before the Nagpur Bench of the Bombay High Court and in paragraph 17 the Single Bench of the Bombay High Court has held that the learned Trial Judge has rejected the application filed by the petitioner under Section 8 of the Arbitration and Conciliation Act, 1996 on the ground that there is no arbitration agreement between the parties. The High Court further ruled that the learned Trial Judge has not averted to the issue as to whether the dispute between the parties is required to be referred for arbitration. In that view of the matter, this Court is of the opinion that the placement of the purchase order and the subsequent conduct, as described by the respondent, there was a concluded contract between these parties and as per Clause 26, an arbitral agreement is very much present and it reads as follows:- -4- “25. Infringements: The supplier/service provider shall indemnify company against all third party claims of infringement of patent, trademark or industrial design rights arising from the use of Products or any part thereof. Supplier/service provider shall indemnify and keep indemnified the company against all actions or claims for infringement of patents, copyrights, registered designs or any other intellectual property right by reason of the proper use of the Products where the Products installed and supplier/service provider shall promptly, at its option and own expense, either > Procure for Company the rights for continued use of the Products in its present form, or > Replace or modify the Products so that it no longer infringes on any such rights, or > Settle or defend any further claim, suit or proceeding against Company arising out of such continued use. 26. Arbitration: Any disputes or differences arising between the parties here to from and out of any others provisions of the agreement as to the constructions, meaning or effect thereof or as to the rights or liabilities of the parties hereto, either during the term days from the date of such disputes. In the event of failure to resolve such disputes or differences by the parties within this agreement or upon expiration thereof shall be settled amicably by mutual accord between the parties within period of 30 days, the parties shall refer the disputes or differences to a sole arbitrator appointed through mutual agreement and the proceeding shall be conducted in accordance with the provisions of the Arbitrations and -5- Conciliation Act, 1996 and Rules therein. The language used shall be English and the place of such arbitration shall be Ranchi (Jharkhand). The award passed by the arbitrator shall be final and binding on both the parties. 27. Non Disclosure: The supplier/services provider shall not at any time during their association and thereafter, without the prior written consent of Company, disclose, divulge or make public any of the confidential information regarding account, costs data or any other account, figures, transactions, processes, records, formulae, specification, engineering drawings, technical and patent information of Company, which may become known to them during the course of assignment herein whether the association with Company continues or not.” 6) Thus, it is apparent that there is an arbitral agreement between the parties. It is also borne out from the pleadings raised as well as the submissions of the learned counsel appearing for the parties that there is a dispute regarding the supply and the payments to be made to the parties. In that view of the matter, this Court is of the opinion that there is a valid arbitral agreement between the parties and there is a dispute regarding the subject-matter of the agreement, i.e., the purchase order dated 04.04.2022. In that view of the matter, the application should be allowed that all the conditions required for appointment of an Arbitrator is satisfied in this case. 7) In course of hearing, both the learned counsel appearing for the
Legal Reasoning
parties would agree upon appointment of Sri Shree Krishna Murari, -6- a retired District Judge who is currently based at Ranchi, to be appointed as the sole Arbitrator. 8) Sri Shree Krishna Murari, retired District Judge and also being the member of the Advocate Association, Ranchi, is appointed as the Sole Arbitrator to preside over the Arbitral Tribunal and adjudicate the dispute between the parties. Learned Arbitrator would be free to lay down the fees and other expenses towards conduct of the arbitration proceedings, however keeping into account the ceiling prescribed under Schedule IV of the Act of 1996 as amended. Learned Arbitrator would endeavor to conclude the proceedings expeditiously, also taking into regard the mandate of the Legislature under Section 29-A of the Act of 1996. 9) Let a photocopy of the entire pleadings along with copy of the entire order sheet be sent to the learned Arbitrator by the Registry.
Decision
10) This application stands disposed of accordingly. 11) All pending Interlocutory Applications stand disposed of. 12) Urgent copies as per Rules. Manoj/MM (Sanjaya Kumar Mishra, C.J.)