S.R. Turbo Energy Pvt. Ltd. New ... vs M/S Bharat Heavy Electricals Ltd. ...
2017 Latest Caselaw 2999 Bom

        J-mca1126.16.odt                                                                                                1/5  


                    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


        =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
        Shri Amit Khare, Advocate for the Applicant.
        Shri H.V. Thakur, Advocate for the Respondent.
        =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-


                                                      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

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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

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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.

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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

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