Delhi High Court
Centre For Development Of ... vs Instrumentation Ltd. on 30 April, 2013
Author: Manmohan Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Order delivered on: April 30, 2013
+ ARB.P. 312/2012
CENTRE FOR DEVELOPMENT OF TELEMATICS(C-DOT)
..... Petitioner
Through: Mr.J.C. Seth, Advs.
Versus
INSTRUMENTATION LTD ..... Respondent
Through: Mr.Surendra Kumar Gupta and
Mr.B.M. Aggarwal, Advs.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J. (Oral)
1. The petitioner has filed the present petition under Section 11 of the
Arbitration and Conciliation Act, 1996 for appointment of a sole
independent arbitrator.
2. Brief facts as culled out from the petition are that the petitioner
entered into an agreement dated 23rd December, 2002 with respondent for
transfer of C-DOT Technology for AN-RAX to respondent.
3. As per the agreement the respondent paid `7 lac as fee for know-
how but did not pay royalty regularly @4% of the value of its net annual
sales, since 2002 onwards. The duration of the agreement is for a period
of 16 years from the date of signing or 15 years from commencement of
the commercial production, which date was in 1992. As per General
Clause of the agreement dated 23rd December, 2002, all other terms and
conditions of the agreement including „arbitration clause‟ shall be the
same as contained in 256 P-RAX Technology Transfer Agreement dated
20th August, 1992 between the parties which was made part of the
agreement.
4. The Arbitration Clause contained in the said agreement for 256 P
RAX Technology reads as under:
"13.1 Any/all disputes or difference arising under this
Agreement shall be settled by arbitration under the provisions
of the Indian Arbitration Act, 1940 at New Delhi."
5. The respondent failed to honour its commitment to make payments
of royalty regularly since 2003 onwards. After making adjustment of
petty payments received by the petitioner from the respondent, an amount
of `17,93,000/-, exclusive of interest, had become due as on 31st March,
2011. By letter dated 27th January, 2007 the respondent agreed to make
the payment in monthly installments of `10 lac each over a period of 18
months. The respondent paid a sum of `10 lac through DD No.218930
on 12th July, 2008 out of which an amount of `3 lac was appropriated
towards this agreement.
6. The respondent stopped payments of royalty and therefore the
petitioner sent registered notice dated 8th June, 2011 making a demand of
`17,93,000/- as on 31st March, 2011 along with interest @18% per
annum failing which legal action will be taken. Despite notice, no
amount on account of royalty was received. Executive Director decided
to invoke arbitration and appointed Sh.A.K. Nagar, retired Sr. DDG
(Civil), Department of Telecommunication Govt. of India, as sole
Arbitrator and wrote to the respondent on 7th July, 2011 to give its
concurrence to the appointment of Sh.A.K. Nagar as Arbitrator. It was
also stated that if the respondent did not object to the appointment of
Sh.A.K. Nagar, he shall be asked to proceed with arbitration in
accordance with the Arbitration and Conciliation Act, 1996.
7. The respondent did not pay nor denied its liability to pay the due
amount. By its letter dated 20th July, 2011, it expressed its inability to
pay the royalty because of financial constraints etc. and requested for
withdrawal of the arbitration proceedings and wanted more time to settle
the issue. By letter dated 3rd August, 2011, the petitioner informed the
respondent that the arbitration proceedings could be withdrawn if the
respondent made immediate payment of 1/3rd of the outstanding due to
the petitioner and further state as to how it would pay the balance
amount.
8. The respondent did not remit even a part of the amount and did not
given concurrence to the appointment of Sh.A.K. Nagar, as sole
Arbitrator. Thereafter, repeated efforts were made by the petitioner to
settle the matter with respondent amicably but all in vain. Since the
respondent is a Government of India Enterprise, the Arbitrator appointed
by the petitioner did not proceed with the arbitration in the absence of
concurrence of the respondent. Hence, the present petition. Learned
counsel for the petitioner agrees for appointment of an independent sole
Arbitrator by the Court.
9. No reply has been filed. The prayer is not seriously opposed by
the learned counsel for the respondent for appointment of an Arbitrator.
10. From the aforesaid, it is clear that a binding arbitration agreement
is in existence between the parties and the claims appear to be live from
the correspondence placed on record. The respondent has failed to
appoint an arbitrator within stipulated time. There is hardly any
opposition to the prayer sought by the petitioner. The present petition is
liable to be allowed. Accordingly, Mr. Vikram Nandrajog, Advocate
(Mobile No.9810097083), is appointed as a sole Arbitrator to adjudicate
the disputes between the parties including claims and counter claims.
Total fee of the learned Arbitrator shall be payable to the tune of
`50,000/- which shall be borne by both the parties in equal proportion.
The petition is accordingly disposed of.
11. Copies of this order be given dasti to the learned counsel for the
parties. A copy of the order be also sent to the learned sole Arbitrator.
(MANMOHAN SINGH)
JUDGE
APRIL 30, 2013
