Trend Marketing Through Partner Devesh Rastogi v. Director General Medical Health And Family Welfare Department Uttar Pradesh And A

Srivastava, Sudeep Kumar Counsel for Opposite Party(s): C.S.C. Court No. - 17 HON'BLE SUBHASH VIDYARTHI, J.

1. Heard Sri Devendra Mohan Shukla, the learned Additional Chief Standing Counsel appearing on behalf of the State/opposite parties.

2. On 19.09..2025 this court had passed the following order: "1. Heard learned counsel for the petitioner and Shri Hemant Kumar Pandey, learned Standing counsel for the respondents.

2. The instant petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of a sole Arbitrator.

3. The submission of the learned counsel for the petitioner is that through the Gem Portal, an agreement was entered between the parties in furtherance thereof certain computer peripherals were to be supplied to the respondent no. 1 who was the primary buyer, thereafter the respondent no. 2.

4. It is stated that the general conditions of contract contained an arbitration clause which is clause 16 and for the sake convenience, is being reproduced hereinafter:- "16. Dispute Resolution Between Buyer and Seller: AMICABLE SETTLEMENT: In the event of any question, dispute or difference arising connection with the Contract, the Parties shall use their respective reasonable 2 ARBT No. 48 of 2025 endeavour to settle any dispute amicably. If a Dispute is not resolved within 30 days after written notice of any dispute by one Party to the other, the same shall be resolved through the mechanism of a co- ordination committee to be formed by the Buyer and Seller/Service Provider and the Primary User of Buyer Organization/Department along with representatives from Buyer Department and Seller. to be chaired by ARBITRATION: In the event of any question, dispute or difference arising under the terms and conditions of the contract placed through GeM, the same shall be referred to the sole arbitration by an officer nominated as Arbitrator by the Primary Buyer of the concerned Buyer Organization. It will be no objection that the arbitrator is a Government Servant and that he had to deal with the matters to which the contract relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to the contract. The arbitration shall be governed as per Indian Arbitration and Conciliation Act 1996 as amended up to date. The place for arbitration shall be at the place from where contract has been placed by the Buyer or at the place of Primary Buyer as decided by the Primary Buyer. In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, it shall be lawful for the Primary Buyer to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. In respect of all contract placed through GeM, the dispute would not be referred or entertained by Micro and Small Enterprise Facilitation Council, Consumer Forum or any other adjudication forum. the to All disputes in connection with the Contract, shall be subject exclusive jurisdiction of the Court within the local limits of whose jurisdiction, the place from where Contract was issued is situated GeM SPV would not be a party to any such dispute/matter. In case any Seller / Service provider makes GeM a party/ respondent in any case involving any dispute between Buyer and Seller arising out of a concluded contract or arising out of bidding process initiated / concluded by the Buyer on GeM, it would be obligatory on the part of the Buyer to represent GeM also through their Counsel / Lawyer in 3 ARBT No. 48 of 2025 the proceedings before the legal authority sand ensure timely filing of replies/ affidavits etc provided by, GeM also Counsel/Lawyer before the concerned legal authority during the course of litigation. A standard reply on behalf of GeM, covering foliowing aspects shall be incorporated in all replies/affidavits filed by the Buyer in such cases: through "Government e-Marketplace is a National Public Procurement Portal; an end-to-end online Marketplace for Central and State Government Ministries /Departments, Central & State Public Sector Undertakings (CPSUS & SPSUs), Autonomous institutions and Local bodies, for procurement of common use goods & services. Prima facie, the dispute in the present case appears to be between the Buyer and Seller arising out a contract placed / bid created by the Buyer on Government e-Marketplace. As per Clause 16, Clouse 17 and Clouse 22 of the General Terms and Conditions of Government e- Marketplace (duly accepted by. the Buyer and Seller), GeM is not to be made a party to any dispute between the Buyer and the Seller. As such Government e-Marketplace is liable to be deleted from the array of parties. In light of the above, we request your goodself to kindly delete Government e-Marketplace from the array of parties."

5. The learned counsel for the petitioner further submits that since the goods were supplied but payments were not made rather the respondents had breached the understanding regarding the payment to be made within a stipulated period, the petitioner escalated the matter by writing letters dated 15th April, 2023 followed by another letter dated 19.07.2024 and though both the letters were received by the respondents wherein they did not dispute the fact that they did not have to pay rather the contention was that they are waiting for certain funds and once the same is released, they would make the payment.

6. On the aforesaid premise, the matter remained rested at the behest of the petitioner who thereafter finding no respite from the respondents, by means of notice dated 12.12.2024 invoked the arbitration clause. In spite of two letters invoking the arbitration, the respondent did not participate as such appointment procedure had failed which prompted the petitioner to file the instant petition. is urged

7. Sri Hemant Kumar Pandey, learned Standing Counsel has submitted that though the arbitration clause is not disputed but the 4 ARBT No. 48 of 2025 fact remains that in order for this petition to be made maintainable, it was incumbent upon the petitioner to have followed the agreement in its letter and spirit to invoke the arbitration clause.

8. It is urged that since the arbitration clause stated that first an attempt would be made to resolve the disputes amicably and in case if the disputes are not resolved within a period of 30 days, after a written notice of dispute by one to the other has been served. The same shall be resolved through mechanism of a Coordination Committee to be formed by the buyer and the service provider and to be chaired by the primary user of the Buyer Organization along with the representative from the Buyer Department and seller and only thereafter the matter, if still remained unresolved, would be referred for arbitration and the Arbitrator is to be nominated by the primary buyer of the concerned Organization.

9. It is urged that since this procedure and process has not been adhered to by the petitioner, accordingly, the petition is pre-mature and cannot be entertained.

10. In support of his submissions, Sri Pandey, learned Standing Counsel has relied upon a decision of this Court in Omex Autos Ltd. v. Hi-Tech Competent Builders Pvt. Ltd.; 2023:AHC-LKO:76241, Sushil Kumar Bhardwaj v. Union of India and Others; MANU/DE/1324/2009; so also on the decisions of the Apex Court in R.S. Khanna and Sons v. Rites Ltd. an Others; MANU/DE/0880/2024 and National Highway Authority of India v. Transstroy (India) Ltd.; 2022 (15) SCC 91.

11. The Court has considered the submissions and also perused the material on record.

12. From the rival submissions, the existence of the arbitration, the amount in dispute and its liability is not in question. What has been disputed by the respondents is the manner in which the arbitration clause has been invoked.

13. In this context, it will be appropriate to take note of the decisions which have been cited by learned counsel for the respondents.

14. The Apex Court in National Highway Authority of India (supra) was dealing with a different issue altogether, however, what is important to note is that in the said decision, the court had interpreted the word 'shall' to have a mandatory connotation. In so far as the aforesaid proposition is concerned, the can be no dispute, however, 5 ARBT No. 48 of 2025 in case if the instant arbitration clause is seen, it would indicate that there is a desire that the parties would adopt the same, however, there is nothing in the said amicable settlement clause which gives any indication that it would precede the invocation of the arbitration clause.

15. The Arbitration Clause in Omex Auto (supra) was completely different to the one at hand and thus the proposition noted in the said case cannot be applied here.

16. Similarly in decision of the High Court of Delhi in Sushil Kumar Bhardwaj (supra) and R.S. Khanna and Sons (supra) also do not come to the aid of the respondent as the clause in the instant case is different to the one in the said cases before the Delhi High Court.

17. The clause in the instant case, as reproduced, at the beginning would show that amicable settlement and demand for Arbitrators is on two different footing and it is not as if one precedes the other and only upon exhaustion of one entitles the party to invoke the other. This is a clear distinction which is to be noted here and therefore it cannot be gainfully urged that the arbitration clause has not been invoked appropriately.

18. There is another way to look at the issue. In the instant case, the supply of goods is not disputed. It is also not disputed that the petitioner is a Medium Scale Industry and has an appropriate registration and the provisions of the M.E.S.E. Act is applicable.

19. It is also not disputed that the amount against the supplies made was to be paid and the petitioner had twice raised the matter with the respondents with sufficient particularity for the release of the said payments. The record would also indicate that there is an inter-se correspondence between the respondent no. 1 and 2 wherein they agreed that the amount is to be paid but they were waiting for certain funds to be released by their parent organization from which the amount was to be paid and a copy of the said letter has been marked to the petitioner.

20. In this aforesaid backdrop where there is hardly any dispute except the fact that the respondents apparently were facing some kind of a financial crunch and they were looking for time, there can hardly be any purpose for holding a committee for resolving this, inasmuch as, as the basic amount and the payment was never in question as denied. 6 ARBT No. 48 of 2025

21. Another way to understand the dilemma is whether a Government instrumentality can defer the right of a person to invoke its right to seek legal redressal on technical grounds when the respondent does not deny the payments so in that sense that may not be a substantive dispute and on the other take a stand that the payment would be made whenever it will have funds which is no answer and such a vague stand which in law amounts to a stand which at the behest of a Government instrumentality cannot be appreciated.

22. In the aforesaid circumstances, the decisions which have been cited by the learned counsel for the respondents does not come to their aid. Apparently, even after the invocation of the said arbitration clause, the respondents did not give its response nor raised any objections regarding the same which led the petitioner to file the instant petition.

23. In the given circumstances, this Court is of the clear view that first the clause in itself does not create a mandate nor the wordings are such which makes the petition bad. Moreover, the petitioner had already escalated the matter and put the respondents to notice regarding the payment and, if at all, there was any dispute, it was for the respondents to have referred the matter to the said Committee or called upon the petitioner to appoint their representative who would form part of that Resolution Settlement Committee, but nothing of this sort happened.

24. Since the respondents themselves did not take any step forward for constituting the same rather gave an impression to the petitioner that the funds upon receiving would be released in favour of the petitioner. In these circumstances, this Court is not inclined to hold that the instant petition is pre-mature.

25. Accordingly, at this stage, this Court finds that it is a fit case to be referred for arbitration leaving all contentious issues open to be raised before the Arbitrator. It is clarified that any observation made herein may not be taken as an expression of opinion on merits and this Court has merely looked at the controversy only for the purposes of referring the matter for arbitration.

26. Accordingly, the Court proposes the name of Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector- II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 to act as an Arbitrator. 7 ARBT No. 48 of 2025

27. Learned counsel for the petitioner shall provide a complete set of the paper-book to the office of this Court within a period of one week which shall be forwarded to the proposed arbitrator to seek his consent under Section 12(5) of the Arbitration and Conciliation Act, 1996.

28. List this matter on 28th October, 2025 for further orders. "

3. The proposed Arbitrator Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector-II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 has signified her consent to act as an Arbitrator for adjudication of disputes between the parties through letter dated 19.11.2025, which is accompanied by disclosure under Section 11(8) read with Section 12(1)(b) and VIth and VIIth Schedule of the Arbitration and Conciliation Act, 1995.

4. Accordingly, the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is allowed. Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector-II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 is hereby appointed as an Arbitrator to adjudicate upon the disputes between the parties.

5. The office is directed to communicate this order to the Arbitrator Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court). December 8, 2025 Ram. (Subhash Vidyarthi,J.) RAM SINGH High Court of Judicature at Allahabad, Lucknow Bench

Srivastava, Sudeep Kumar Counsel for Opposite Party(s): C.S.C. Court No. - 17 HON'BLE SUBHASH VIDYARTHI, J.

1. Heard Sri Devendra Mohan Shukla, the learned Additional Chief Standing Counsel appearing on behalf of the State/opposite parties.

2. On 19.09..2025 this court had passed the following order: "1. Heard learned counsel for the petitioner and Shri Hemant Kumar Pandey, learned Standing counsel for the respondents.

2. The instant petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of a sole Arbitrator.

3. The submission of the learned counsel for the petitioner is that through the Gem Portal, an agreement was entered between the parties in furtherance thereof certain computer peripherals were to be supplied to the respondent no. 1 who was the primary buyer, thereafter the respondent no. 2.

4. It is stated that the general conditions of contract contained an arbitration clause which is clause 16 and for the sake convenience, is being reproduced hereinafter:- "16. Dispute Resolution Between Buyer and Seller: AMICABLE SETTLEMENT: In the event of any question, dispute or difference arising connection with the Contract, the Parties shall use their respective reasonable 2 ARBT No. 48 of 2025 endeavour to settle any dispute amicably. If a Dispute is not resolved within 30 days after written notice of any dispute by one Party to the other, the same shall be resolved through the mechanism of a co- ordination committee to be formed by the Buyer and Seller/Service Provider and the Primary User of Buyer Organization/Department along with representatives from Buyer Department and Seller. to be chaired by ARBITRATION: In the event of any question, dispute or difference arising under the terms and conditions of the contract placed through GeM, the same shall be referred to the sole arbitration by an officer nominated as Arbitrator by the Primary Buyer of the concerned Buyer Organization. It will be no objection that the arbitrator is a Government Servant and that he had to deal with the matters to which the contract relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to the contract. The arbitration shall be governed as per Indian Arbitration and Conciliation Act 1996 as amended up to date. The place for arbitration shall be at the place from where contract has been placed by the Buyer or at the place of Primary Buyer as decided by the Primary Buyer. In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, it shall be lawful for the Primary Buyer to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. In respect of all contract placed through GeM, the dispute would not be referred or entertained by Micro and Small Enterprise Facilitation Council, Consumer Forum or any other adjudication forum. the to All disputes in connection with the Contract, shall be subject exclusive jurisdiction of the Court within the local limits of whose jurisdiction, the place from where Contract was issued is situated GeM SPV would not be a party to any such dispute/matter. In case any Seller / Service provider makes GeM a party/ respondent in any case involving any dispute between Buyer and Seller arising out of a concluded contract or arising out of bidding process initiated / concluded by the Buyer on GeM, it would be obligatory on the part of the Buyer to represent GeM also through their Counsel / Lawyer in 3 ARBT No. 48 of 2025 the proceedings before the legal authority sand ensure timely filing of replies/ affidavits etc provided by, GeM also Counsel/Lawyer before the concerned legal authority during the course of litigation. A standard reply on behalf of GeM, covering foliowing aspects shall be incorporated in all replies/affidavits filed by the Buyer in such cases: through "Government e-Marketplace is a National Public Procurement Portal; an end-to-end online Marketplace for Central and State Government Ministries /Departments, Central & State Public Sector Undertakings (CPSUS & SPSUs), Autonomous institutions and Local bodies, for procurement of common use goods & services. Prima facie, the dispute in the present case appears to be between the Buyer and Seller arising out a contract placed / bid created by the Buyer on Government e-Marketplace. As per Clause 16, Clouse 17 and Clouse 22 of the General Terms and Conditions of Government e- Marketplace (duly accepted by. the Buyer and Seller), GeM is not to be made a party to any dispute between the Buyer and the Seller. As such Government e-Marketplace is liable to be deleted from the array of parties. In light of the above, we request your goodself to kindly delete Government e-Marketplace from the array of parties."

5. The learned counsel for the petitioner further submits that since the goods were supplied but payments were not made rather the respondents had breached the understanding regarding the payment to be made within a stipulated period, the petitioner escalated the matter by writing letters dated 15th April, 2023 followed by another letter dated 19.07.2024 and though both the letters were received by the respondents wherein they did not dispute the fact that they did not have to pay rather the contention was that they are waiting for certain funds and once the same is released, they would make the payment.

6. On the aforesaid premise, the matter remained rested at the behest of the petitioner who thereafter finding no respite from the respondents, by means of notice dated 12.12.2024 invoked the arbitration clause. In spite of two letters invoking the arbitration, the respondent did not participate as such appointment procedure had failed which prompted the petitioner to file the instant petition. is urged

7. Sri Hemant Kumar Pandey, learned Standing Counsel has submitted that though the arbitration clause is not disputed but the 4 ARBT No. 48 of 2025 fact remains that in order for this petition to be made maintainable, it was incumbent upon the petitioner to have followed the agreement in its letter and spirit to invoke the arbitration clause.

8. It is urged that since the arbitration clause stated that first an attempt would be made to resolve the disputes amicably and in case if the disputes are not resolved within a period of 30 days, after a written notice of dispute by one to the other has been served. The same shall be resolved through mechanism of a Coordination Committee to be formed by the buyer and the service provider and to be chaired by the primary user of the Buyer Organization along with the representative from the Buyer Department and seller and only thereafter the matter, if still remained unresolved, would be referred for arbitration and the Arbitrator is to be nominated by the primary buyer of the concerned Organization.

9. It is urged that since this procedure and process has not been adhered to by the petitioner, accordingly, the petition is pre-mature and cannot be entertained.

10. In support of his submissions, Sri Pandey, learned Standing Counsel has relied upon a decision of this Court in Omex Autos Ltd. v. Hi-Tech Competent Builders Pvt. Ltd.; 2023:AHC-LKO:76241, Sushil Kumar Bhardwaj v. Union of India and Others; MANU/DE/1324/2009; so also on the decisions of the Apex Court in R.S. Khanna and Sons v. Rites Ltd. an Others; MANU/DE/0880/2024 and National Highway Authority of India v. Transstroy (India) Ltd.; 2022 (15) SCC 91.

11. The Court has considered the submissions and also perused the material on record.

12. From the rival submissions, the existence of the arbitration, the amount in dispute and its liability is not in question. What has been disputed by the respondents is the manner in which the arbitration clause has been invoked.

13. In this context, it will be appropriate to take note of the decisions which have been cited by learned counsel for the respondents.

14. The Apex Court in National Highway Authority of India (supra) was dealing with a different issue altogether, however, what is important to note is that in the said decision, the court had interpreted the word 'shall' to have a mandatory connotation. In so far as the aforesaid proposition is concerned, the can be no dispute, however, 5 ARBT No. 48 of 2025 in case if the instant arbitration clause is seen, it would indicate that there is a desire that the parties would adopt the same, however, there is nothing in the said amicable settlement clause which gives any indication that it would precede the invocation of the arbitration clause.

15. The Arbitration Clause in Omex Auto (supra) was completely different to the one at hand and thus the proposition noted in the said case cannot be applied here.

16. Similarly in decision of the High Court of Delhi in Sushil Kumar Bhardwaj (supra) and R.S. Khanna and Sons (supra) also do not come to the aid of the respondent as the clause in the instant case is different to the one in the said cases before the Delhi High Court.

17. The clause in the instant case, as reproduced, at the beginning would show that amicable settlement and demand for Arbitrators is on two different footing and it is not as if one precedes the other and only upon exhaustion of one entitles the party to invoke the other. This is a clear distinction which is to be noted here and therefore it cannot be gainfully urged that the arbitration clause has not been invoked appropriately.

18. There is another way to look at the issue. In the instant case, the supply of goods is not disputed. It is also not disputed that the petitioner is a Medium Scale Industry and has an appropriate registration and the provisions of the M.E.S.E. Act is applicable.

19. It is also not disputed that the amount against the supplies made was to be paid and the petitioner had twice raised the matter with the respondents with sufficient particularity for the release of the said payments. The record would also indicate that there is an inter-se correspondence between the respondent no. 1 and 2 wherein they agreed that the amount is to be paid but they were waiting for certain funds to be released by their parent organization from which the amount was to be paid and a copy of the said letter has been marked to the petitioner.

20. In this aforesaid backdrop where there is hardly any dispute except the fact that the respondents apparently were facing some kind of a financial crunch and they were looking for time, there can hardly be any purpose for holding a committee for resolving this, inasmuch as, as the basic amount and the payment was never in question as denied. 6 ARBT No. 48 of 2025

21. Another way to understand the dilemma is whether a Government instrumentality can defer the right of a person to invoke its right to seek legal redressal on technical grounds when the respondent does not deny the payments so in that sense that may not be a substantive dispute and on the other take a stand that the payment would be made whenever it will have funds which is no answer and such a vague stand which in law amounts to a stand which at the behest of a Government instrumentality cannot be appreciated.

22. In the aforesaid circumstances, the decisions which have been cited by the learned counsel for the respondents does not come to their aid. Apparently, even after the invocation of the said arbitration clause, the respondents did not give its response nor raised any objections regarding the same which led the petitioner to file the instant petition.

23. In the given circumstances, this Court is of the clear view that first the clause in itself does not create a mandate nor the wordings are such which makes the petition bad. Moreover, the petitioner had already escalated the matter and put the respondents to notice regarding the payment and, if at all, there was any dispute, it was for the respondents to have referred the matter to the said Committee or called upon the petitioner to appoint their representative who would form part of that Resolution Settlement Committee, but nothing of this sort happened.

24. Since the respondents themselves did not take any step forward for constituting the same rather gave an impression to the petitioner that the funds upon receiving would be released in favour of the petitioner. In these circumstances, this Court is not inclined to hold that the instant petition is pre-mature.

25. Accordingly, at this stage, this Court finds that it is a fit case to be referred for arbitration leaving all contentious issues open to be raised before the Arbitrator. It is clarified that any observation made herein may not be taken as an expression of opinion on merits and this Court has merely looked at the controversy only for the purposes of referring the matter for arbitration.

26. Accordingly, the Court proposes the name of Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector- II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 to act as an Arbitrator. 7 ARBT No. 48 of 2025

27. Learned counsel for the petitioner shall provide a complete set of the paper-book to the office of this Court within a period of one week which shall be forwarded to the proposed arbitrator to seek his consent under Section 12(5) of the Arbitration and Conciliation Act, 1996.

28. List this matter on 28th October, 2025 for further orders. "

3. The proposed Arbitrator Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector-II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 has signified her consent to act as an Arbitrator for adjudication of disputes between the parties through letter dated 19.11.2025, which is accompanied by disclosure under Section 11(8) read with Section 12(1)(b) and VIth and VIIth Schedule of the Arbitration and Conciliation Act, 1995.

4. Accordingly, the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is allowed. Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court) R/o Flat No. 304-A, Sector-II, 3rd Floor, Block- Agea Botonic, Vrindavan Yojna, Raebareli, Lucknow, Mob No. 7839113970 is hereby appointed as an Arbitrator to adjudicate upon the disputes between the parties.

5. The office is directed to communicate this order to the Arbitrator Hon'ble Mrs. Justice Renu Agarwal (Retd. Judge of this Court). December 8, 2025 Ram. (Subhash Vidyarthi,J.) RAM SINGH High Court of Judicature at Allahabad, Lucknow Bench