Itc Ltd. vs Gagandeep Singh Sodhi And Anr.
1997 Latest Caselaw 436 Del

JUDGMENT

Lekeshwar Prasad, J.

(1) The petitioner, named above, has filed the present petition under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act), averring that the petitioner is a Company, having its registered office at 37, Chowringhee, Calcutta and its Hotels Division Welcomgroup at W.G. Maurya Sheraton, Hotel & Towers Diplomatic Enclave, New Delhi and Shri M.M. Bhatnagar is the constituted attorney of the petitioner-Company who is competent to sign and verify the pleadings and to institute the present proceedings on behalf of the petitioner-Company. It is averred that the petitioner-Company owns and operates a chain of other Hotels, situated at various places in this Country and runs a number of Hotels including Hotel Maurya Sheraton, Hotel and Towers at Delhi and about 15 other Hotels, popularly known as Welcomgroup of Hotels. The operation of these Hotels & Restaurants is a specialised operation, requiring considerable skill and knowledge in the field of hoteleering and catering. The petitioner, it is alleged, possesses expertise and know how in the sophisticated manufacturing process involved in the running of these Hotels & Restaurants.

1.2. It is alleged that the petitioner also trains persons in the specialised fields through its Training Department and develops persons which enhances their skill and professional capabilities which enables them (trainees) after training to procure lucrative jobs in their field because of scarcity of the availability of these technical skills. The above training is provided by the petitioner to the trainees at their request at the cost to be borne by them. In order to help the trainees financially, the petitioner gives such facilities to the trainees in the form of loans to be recovered later towards the cost of training inputs and also by giving monthly loans in the form of stipends to enable these trainees for their subsistence during their training period. The petitioner-Company also provides extensive training to its trainees for career enhancement. The said training is a specialised training on which considerable sum of money is spent by the petitioner so as to train the trainees to assume managerial responsibilities.

1.3. It is averred that the petitioner-Company selected respondent No. 1 as 'Hotel Executive Trainee' and gave him an offer dated 16.5.89. Respondent No. 1, it is alleged, requested the petitioner Company that he was desirous of improving his professional skill and requested the petitioner for providing him with special training. Respondent No. 1 also agreed to pay the training cost of Rs. I lac and also agreed to abide by the other terms and conditions. It is alleged that it was agreed between the petitioner and respondent No. 1 that the petitioner Company shall provide the training and the cost involved in the said specialised training, which amounted to Rs. I lac shall be provided to respondent No. 1 by the petitioner Company as a loan. The petitioner-Company, on the request of respondent No. 1, agreed to provide him with the training. The petitioner-Company thus provided a loan of Rs. I lac to respondent No. 1 to bear the expenses of the training to be incurred by the petitioner-Company. Respondent No. 1, in consideration of the aforesaid receipt of money in the form of training expenses, executed a Service Bond dated the 1st August, 1989. As per the terms and conditions of the Service Bond, executed by respondent No. 1, respondent No. 1 was to serve the petitioner-Company for a period of not less than five years after the completion of the said training i.e. respondent No. 1 undertook to serve the petitioner-Company for a period of five years w.e.f. 1.2.1991, which was the schedule date for the completion of the training with the petitioner-Company and it was on the above consideration that the petitioner Company agreed to provide the training and to waive off the loan on the expiry of the five years from the completion of training successfully.

1.4. Respondent No. 1 was provided with the training which continued for 18 months. During the period of training, respondent No. 1 was provided with a stipend and subsistence allowance @ Rs 2,400.00 per month for the first four months and @ Rs 2,500.00 per month for the remaining period of training. After the conclusion of the training, respondent No. 1 was offerred employment as 'Front Office Executive' in Grade-X by the petitioner vide letter dated 31.1.1991 which was duly accepted by respondent No. 1.

1.5. It is alleged that respondent No. 1 after serving the petitioner Company for about seven months resigned from the service of the petitioner vide letter of resignation dated 16.9.91. The said resignation was accepted by the petitioner vide letter dated 30.10.91 without prejudice to the claim of the petitioner under the terms and conditions of the Service Bond dated the 1st August, 1989.

1.6. It is alleged that respondent No. 1 committed breach of the terms of the 'Service Bond' dated the 1st August, 1989 inasmuch as he failed to serve the petitioner-Company for a period of five years after the completion of his training and thus committed breach of the terms of the Service Bond executed by him. The petitioner-Company, it it is alleged, is also entitled to recover the amount given to the respondent as loan to meet trie training expenses and also the stipend paid and other such expenses incurred by the petitioner-Company to impart the specialised training to respondent No. 1.

1.7. It is alleged that the petitioner-Company thereafter demanded from respondent No. 1 repayment of the loan amount of Rs I lac, other than the damages and refund of the stipend paid but respondent No. 1 failed to pay the amount to the petitioner Company. The petitioner-Company also got a legal notice served upon the respondents through their Advocate demanding the amount due to the petitioner Company vide notice dated 25th July, 1992 but the respondents failed to repay the same.

1.8. The petitioner, in the present petition, is claiming the loan amount of Rs. I lac given in the form of training expenses paid against the execution of Service Bond in favour of the petitioner, liquidated damages to the extent of Rs. I lac, as agreed to be paid by the respondents to the petitioner under the terms of the Service Bond dated 1st August, 1989; refund of the stipend paid by the petitioner-Company to respondent No. 1 which is refundable under the terms of Service Boi.d; damages to the extent of Rs I lac on account of dislocation of the work of the petitioner because of respondent No. 1 leaving the services of the petitioner-Company; interest @ 18% per annum as per the terms of the agreement. In all, the petitioner-Company is claiming a sum of Rs 5,06,660.00 .

1.9. It is further averred that the Service Bond executed between the parties contains an arbitration clause which provides that in case of any dispute or differences between the parties regarding the interpretation of Service Bond, nonpayment of claims of the Company or any dispute arising between the parties-in terms of this Service Bond, the same shall be referred to the Arbitrator who may be appointed as per the provisions- of the Arbitration Act.

1.10. It is averred that respondent No. 2 stood ag a guarantor and surety for respondent No. 1 under the terms of the Service Bond executed on 1.8.89. Respondent No. 2 also promised repayment of said loan and/or damages and as such both the respondents are jointly and severally liable to pay the amount due to the petitioner-Company.

1.11. It is prayed by the petitioner-Company that a direction may be issued to the parties to file the original agreement dated the 1st August, 1989, executed between the parties in the Court and to refer the matter to the arbitration for adjudicating upon the dispute and claims of the petitioner-Company against the respondents.

(2) Notice of the petition was issued to the respondents and since direct service was not possible on the respondents, the respondents were served by publication of notice in the daily "The Statesman' dated the 8th December, 1994. As the respondents did not care to appear despite the publication of the notice in the newspaper, they were directed to be proceeded ex-parte in the present proceedings by the learned Predecessor of this Court vide order dated 30.3.95.

(3) The petitioner has adduced the evidence in support of its case by means of affidavit and has filed the affidavit of Shri Mohan Bhatnagar, constituted attorney of the petitioner by way of evidence. Said Shri Mohan Bhatnagar in his affidavit dated the 16th August, 1995, filed by way of evidence, has fully supported the case of the petitioner and has proved and exhibited the material documents including the Service Bond (Exhibit P-4) dated the 1st August, 1989.

(4) I have heard the learned Counsel for the petitioner at length and have also carefully gone through the documents/material on record. From the ex-parte evidence, adduced by the petitioner, by means of affidavit of said Shri Mohan Bhatnagar, the constituted attorney of the petitioner, which has gone on record unrebutted and unchallenged, which I see no reason to disbelieve, the case of the petitioner, in my opinion, stands amply proved. I, consequently direct that the original arbitration agreement (Service Bond-Exhibit P-4) be filed in the Court. It is further directed that in terms of the arbitration clause contained in the Service Bond (Exhibit P-4) Mr. Justice (Retd.) S.C. Jain, a former Judge of this Court is appointed as Sole Arbitrator for decision. The Arbitrator shall fix his own fees to be initially borne by the petitioner. No order as to costs. The order is ex-parte.