National Agricultural ... vs Megnostar Telecommunication (P) ...
2009 Latest Caselaw 3917 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 Arb.P. No.94/2009 & IA No.7831/2009

%                                Date of decision:23.09.2009

NATIONAL AGRICULTURAL CO-OPERATIVE
MARKETING FEDERATION OF INDIA LTD. (NAFED)....Petitioner

                       Through: Mr. Anubhav Mehrotra and Ms. Jaya
                                Tomar, Advocate for the Petitioner.

                               Versus

MEGNOSTAR TELECOMMUNICATION (P) LTD.                 ... Respondent

                       Through: Mr. Shashank Deo Sudhi, Advocate for
                                the Respondent.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?       No

2.    To be referred to the reporter or not?         No

3.    Whether the judgment should be reported        No
      in the Digest?


RAJIV SAHAI ENDLAW, J.

1. Counsel for the Respondent seeks time to file a reply. The

Respondent had been avoiding service of the notice of the petition.

On 11th September, 2009, the respondent was found to be a

petitioner in another case listed before this Court. It was found that

the address given by the respondent herein as petitioner in

arbitration application 12/2009 was the same as given of the

respondent in these proceedings. However, the notices issued at the

same address in these proceedings were being returned with the

endorsement that the respondent company had shifted without

address and does not exist. In these circumstances, the counsel for

the respondent appearing in arbitration application number 12/2009

was made to accept the service on behalf of the respondent and only

one week was given for filing reply and matter listed today. In the

aforesaid circumstances, no ground is found to grant any further

opportunity to the respondent.

2. The counsel for respondent next contends that Arbitration

proceedings are already going on before the Indian Council of

Arbitration and the present petition is mis-conceived. In this regard,

it may be stated that the petitioner had earlier approached this Court

for appointment of an arbitrator in Arbitration Application No.

146/2008. However, finding that the arbitration clause between the

parties was of arbitration of Indian Council of Arbitration, New

Delhi, that petition was disposed of on 1st August, 2008 giving liberty

to the petitioner to approach the Indian Council of Arbitration. The

petitioner approached the Indian Council of Arbitration which issued

notice to the respondent. The respondent, however, vide advocate's

letter dated 26th December, 2008 to the Indian Council of Arbitration

stated that since arbitration was agreed only of disputes which

parties were unable to mutually resolve the arbitration before the

Indian Council of Arbitration was not maintainable without such

disputes being listed out. The respondent, thus, refused to

participate in the arbitration before the Indian Council of Arbitration.

The Indian Council of Arbitration resultantly asked the petitioner to

pay the respondent's share of fee also.

3. The aforesaid led to the petitioner filing the present petition.

The petitioner is a national level co-operative society under the Multi

State Co-operative Societies Act. It is, inter alia the case of the

petitioner that it had rendered financial assistance to the respondent

and more than Rs. 30 crores are due from the respondent to the

petitioner. The petitioner's grievance is that as per the rules of

Indian Council of Arbitration, the fee to be deposited by each of the

parties is Rs. 10,70,250/- and upon the refusal of the respondent to

participate in the said proceedings, the Petitioner will have to suffer

the burden of paying the fee of over Rs. 20 lacs while its dues

against the respondent are still held up. The Indian Council of

Arbitration has in the meanwhile written to the petitioner that since

the fee has not been paid they were unable to keep the matter in

abeyance and would proceed to close the matter. The petitioner has

filed I.A. No. 7831/2009 to stay the said letter of the Indian Council

of Arbitration.

4. The respondent in the present case is found to be indulging in

dilatory tactics while holding up public dues. The counsel for the

respondent states that interim order securing payment have been

made in the OMP preferred by the petitioner u/S 9 of the Arbitration

Act. However, that does not resolve the matter and the same cannot

be a substitute for arbitration.

5. Accordingly, this petition is disposed of with directions to the

respondent to within six weeks, pay its share of fee to the Indian

Council of Arbitration.

6. As far as the plea of the respondent of not participating in

arbitration for the reason of preceeding step of amicably resolving

the disputes having not been taken and disputes remaining

unresolved is concerned, no merit is found therein. From what has

transpired till now, there does not appear to be any likelihood of

amicable resolution. The plaintiff has already preferred its claims

and the disputes are evident therefrom.

7. It is further clarified that if the respondent fails to comply with

the directions of this Court, besides respondent becoming liable for

the same, the petitioner shall also become entitled to seek

appointment of a sole arbitrator.

RAJIV SAHAI ENDLAW (JUDGE)

September 23, 2009 mr