Govindpura, Hathoj Tehsil And District Jaipur v. Rajasthan State Ganganagar Sugar Mills Limited, Centre For

Manager (Sales) And Authorised Signatory Mr. Anil Kumar Gupta S/o Shri Rameshwar Prasad Gupta Aged 55 Years, Residing At 4/4 Jawahar Nagar, Jaipur. Versus ----Applicant Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Center Of Exellence For Revenue (Research And Analysis Bhawan, Plot No. 2, Aranyan Bhawan, Jhalana Institutional Area, Jhalana Doongri, Jaipur-302004.) S.B. Arbitration Application No. 114/2024 M/s Agribiotech Industries Limited, A Public Limited Company ----Respondent [2025:RJ-JP:5621] (2 of 9) [ARBAP-14/2024] Incorporated In India And Registered Under The Companies Act, 1956, Having Its Registered And Corporate Office At SP-825, Road, No. 14, V.K.I. Area, Jaipur And Factory Situated At RIICO Industrial Area, Ajitgarh District Sikar, Rajasthan Through Its Authorised Signatory Mr. Narendra Kumar Agarwal. Versus ----Applicant Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Centre For Excellence For Revenue (Research And Analysis) Bhawan, Plot No. 2, Aranyan Bhawan, Jhalana Institutional Area, Jhalana Doongri, Jaipur-302004 Through Director In Charge. ----Respondent S.B. Arbitration Application No. 115/2024 M/s Agribiotech Industries Limited, A Public Limited Company Incorporated In India And Registered Under The Companies Act, 1956, Having Its Registered And Corporate Office At SP-825, Road, No. 14, V.k.I Area, Jaipur And Factory Situated At RIICO Industrial Area, Ajitgarh District Sikar, Rajasthan Through Its Authorised Signatory Mr. Narendra Kumar Agarwal. Versus ----Applicant Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Centre For Excellence For Revenue (Research And Analysis) Bhawan, Plot No. 2, Aranyan Bhawan, Jhalana Institutional Area, Jhalana Doongri, Jaipur-302004 Through Director In Charge. ----Respondent S.B. Arbitration Application No. 116/2024 M/s Globus Spirits Limited, A Public Limited Company Incorporated In India And Registered Under The Companies Act, 1956, Having Its Registered And Corporate Office At F-0, Ground Floor, The Mira Corporate Suites, Plot No. 1 And 2, Ishwar Nagar, Mathura Road, New Delhi 110065 And Factory Situated At Village Shyampur, Tehsil Behror, District Alwar, Rajasthan Through Its Senior Sales Officer And Authorised Signatory Mr. Ramesh Chand Bairwa Residing At C-42, C-Block, Mangalam City, Govindpura, Hathoj Tehsil And District Jaipur. Versus ----Applicant [2025:RJ-JP:5621] (3 of 9) [ARBAP-14/2024] Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Centre For Exellence For Revenue (Research And Analysis) Bhawan, Plot No. 2, Aranyan Bhawan, Jhalana Institutional Area, Jhalana Doongri, Jaipur-302004. Through Director In-Charge ----Respondent S.B. Arbitration Application No. 117/2024 M/s Vintage Distillers Limited, A Public Limited Company Incorporated In India And Registered Under The Companies Act, 1956, Having Its Registered And Corporate Office At 710, 7Th Floor, B-09, Itl Twin Towers, Pritampura, Netaji Subhash Place, Delhi 110034 And Factory Situated At 117, Matasya Industrial Area, Alwar- 301030, Rajasthan Through Its Deputy General Manager (Sales) And Authorised Signatory Mr. Anil Kumar Gupta S/o Shri Rameshwar Prasad Gupta, Aged 55 Years, Residing At 4/4, Jawahar Nagar, Jaipur Versus ----Applicant Rajasthan State Ganganagar Sugar Mills Limited, 3Rd Floor, Centre For Excellence For Revenue (Research And Analysis) Bhawan, Plot No.2, Aranyan Bhawan, Jhalana Institutional Area, Jhalana Doongri, Jaipur- 302004 Through Director In -Charge ----Respondent For Applicant(s) For Respondent(s) : Mr. Sunil Nath & Mr. Pratik Jain : Mr. Sandeep Pathak Mr. Palesh Gupta HON'BLE MR. JUSTICE SUDESH BANSAL Order 07/02/2025

1. In all these arbitration applications, dispute raised by the applicants is identical in nature, which is in respect of raising demand of differential amount from respondent - Rajasthan State Ganganagar Sugar Mills Limited (RSGSM) as per revised rates of country liquor and Rajasthan Made Liquor (RML) w.e.f. 01.11.2020 [2025:RJ-JP:5621] (4 of 9) [ARBAP-14/2024] for the stock/transit stock, sold by respondent - RSGSM after

01.11.2020 at the revised/increased rate and for seeking resolution of such dispute through arbitration, the applicants have filed these arbitration applications under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the A&C Act') for appointment of an Arbitrator.

2. With the consent of counsel for both the parties, all the arbitration applications have been heard together and would stand decided by this common order.

3. The facts are not in dispute that the applicants were declared successful bidders, pursuant to E-bids invited by respondent - RSGSM, for procurement or supply of RML and country liquor at the depots of RSGSM and in furtherance thereof, supply orders were issued to the applicants and separate agreements with each applicant were entered into on 02.07.2020. Since, the Excise Department, Government of Rajasthan vide order dated

30.10.2020 has revised the rates of country liquor and RML w.e.f.

01.11.2020, the applicants are claiming differential amount obtained by respondent - RSGSM by selling the opening stock as well as stock in transit on or after 01.11.2020 at the revised/increased rate. The respondent - RSGSM has denied the claim of the applicants for differential amount. Thus, a dispute between the applicants and the respondent has arisen.

4. It is not in dispute that an Arbitration Agreement has been executed between the parties, which finds its place in Clause-5 of the Agreement, which reads as under:- “5. In case of any dispute arising out of any matter related to the tender/contract/agreement, the matter will be referred to Sole Arbitrator appointed by Director [2025:RJ-JP:5621] (5 of 9) [ARBAP-14/2024] In charge, RSGSM whose decision shall be final and binding on both the parties. The place of arbitration shall be Jaipur. The fees and other expenses of the arbitrator shall be borne by both parties equally.”

5. The High Court being a referral Court while exercising its jurisdiction, dealing with an application under Section 11 of A&C Act for appointment of Arbitrator, exercises a limited jurisdiction, which is provided under Section 11(6A) of the A&C Act. The provision of Section 11(6A) of the A&C Act, reads as under:_ “(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.”

6. This Court is aware that in a recent judgment of Hon'ble Supreme Court in case of SBI General Insurance Co. Ltd. Vs. Krish Spinning: [Civil Appeal No.7821/2024 arising out of SLP (C) No.3792/2024] delivered on 18th July, 2024, in respect of scope of the High Court while dealing with the arbitration application in context of Section 11(6A) of the A&C Act, it has been held and observed by Hon'ble Supreme Court in following paras as under:- "110. The scope of examination under Section 11(6- A) is confined to the existence of an arbitration agreement on the basis of Section 7. The examination of validity of the arbitration agreement is also limited to the requirement of formal validity such as the requirement that the agreement should be in writing.

111. The use of the term 'examination' under Section 11(6-A) as distinguished from the use of the term 'rule' under Section 16 implies that the scope of enquiry under section 11(6-A) is limited to a scrutiny of the existence of the arbitration agreement, and does not include a contested or [2025:RJ-JP:5621] (6 of 9) [ARBAP-14/2024] laborious enquiry, which is left for the arbitral tribunal to 'rule' under Section 16. The prima facie view on existence of the arbitration agreement taken by the referral court does not bind either the arbitral tribunal or the court enforcing the arbitral award.

112. The aforesaid approach serves a two-fold purpose - firstly, it allows the referral court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the arbitral tribunal to rule on the issue of existence of the arbitration agreement in depth.

113. Referring to the Statement of Objects and Reasons of the Arbitration and Conciliation (Amendment) Act, 2015, it was observed in In Re: Interplay (supra) that the High Court and the Supreme Court at the stage of appointment of prima facie arbitrator shall examine the existence of a arbitration agreement and not any other issues. The relevant observations are extracted hereinbelow: "209. The above extract indicates that the Supreme Court or High Court at the stage of the appointment of an arbitrator shall prima facie "examine the existence of a arbitration agreement and not other issues". These other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the "other issues" also include examination and impounding of an unstamped instrument by the referral court at the Section 8 or Section 11 stage. The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a timebound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators.[...]" (Emphasis supplied)

114. In view of the observations made by this Court in In Re: Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima facie existence of the [2025:RJ-JP:5621] (7 of 9) [ARBAP-14/2024] arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral court when dealing with the issue of "accord and satisfaction" under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re: Interplay (supra)." (emphasis supplied)

7. Accordingly, the plea in respect of invalidity of arbitration agreement due to absence of all requisite attributes raised by counsel for the respondents is hereby decided in the aforesaid terms.

8. Since, this Court prima facie finds the existence of dispute and existence of Arbitration Agreement between the applicant and the respondent to resolve such dispute through arbitration, therefore, appointment of an Arbitrator is required.

9. As per the arbitration clause, the Sole Arbitrator was to be appointed by the Director In Charge of RSGSM, but RSGSM is one of the party to the lis, hence, as per the settled proposition of law by the Supreme Court in case of TRF Ltd. Versus Energo Engineering Projects Ltd.: AIR 2017 SC 3099, which has been followed and reiterated by the Supreme Court in case of Perkings Eastman Architechs DPC & Anr. Versus HSCC (India) Ltd.: AIR 2020 SC 59, the interested party to the lis is not authorized to appoint the Arbitrator, hence, an independent, impartial and neutral Arbitrator is required to be appointed by this Court.

10. As a final result, the instant arbitration applications are allowed and this Court appoints Hon’ble Mr. Justice Sunil Kumar [2025:RJ-JP:5621] (8 of 9) [ARBAP-14/2024] Garg (Former Judge), Mob. No.9829027732, E-mail:- [email protected]; Address:- 851, Ahinsa Path, Behind Rammandir, Mahaveer Nagar, Tonk Road, Jaipur-18, as a Sole Arbitrator to adjudicate the dispute between parties in accordance with provisions of the Arbitration and Conciliation Act,

11. The appointment of the Sole Arbitrator is subject to the declarations being made under Section 12 of the Arbitration & Conciliation Act, 1996 with respect to independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the prescribed period.

12. The arbitration fee of the Sole Arbitrator shall be payable in accordance with the provisions contained in the Manual of Procedure for Alternative Dispute Resolution, 2009 as amended by the Manual of Procedure for Alternative Dispute Resolution (Amendment), 2017 vide notification dated 23.03.2017 read with 4th Schedule appended to the Arbitration & Conciliation Act, 1996 or as determined by the Arbitrator with consensus of parties.

13. The Registry is directed to intimate Arbitrator Hon’ble Mr. Justice Sunil Kumar Garg (Former Judge), for his approval and consent to act as Arbitrator.

14. All other issues may be raised by the parties before the Arbitrator, which shall be considered in accordance with law.

16. Since as per Section 29A of the Arbitration and Conciliation Act, 1996, the arbitration proceedings are required to be concluded within scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on [2025:RJ-JP:5621] (9 of 9) [ARBAP-14/2024]

28.02.2025 or any other date as informed by the Arbitrator to parties or agreed between parties with the consent of Arbitrator, and further parties shall provide their respective E-mail/ Contact Number/ Mobile Number as also of their authorized representatives/lawyers, appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information to the parties, whenever required. The information sent by the Arbitrator, on such address/E-mail/cellphone of the parties/their authorized representatives/lawyers, shall be treated as sufficient unless same is not changed.

16. These Arbitration Applications stand disposed of accordingly.

17. A copy of this order be placed in each file. SUNIL SOLANKI /13-18 (SUDESH BANSAL),J