Delhi High Court
M/S Good Will Enterprises vs M/S Feron Life Science (P) Ltd on 28 October, 2013
Author: Rajiv Shakdher
* THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 28.10.2013
+ ARB.P. 174/2013
M/S GOOD WILL ENTERPRISES ..... Petitioner
versus
M/S FERON LIFE SCIENCE (P) LTD ..... Respondent
ADVOCATES WHO APPEARED IN THIS CASE:
For the Petitioner: Mr. Shinoj K. Narayanan, Advocate
For the Respondents: Mr. Vijendra Kumar, Advocate
CORAM :-
HON'BLE MR JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J
1. This is a petition filed under Section 11 of the Arbitration and
Conciliation Act, 1996 (in short the Act). It appears that the petitioner had
approached the High Court of Kerala in the first instance. The Kerala High
Court vide order dated 22.02.2013 returned the petition filed by the
petitioner herein under Section 11(5) of the Act on the ground that, that
court did not have jurisdiction in the matter and that in view of the
agreement obtaining between the parties, in particular, clause 15 of the said
agreement, the appropriate court to entertain such a petition would be this
court.
2. It is in these circumstances that the petitioner has approached this
court.
3. The background in which the petitioner has approached this court is
briefly as follows :-
3.1 It appears that a consignment sales agency agreement dated
16.03.2006 (in short the agreement) was executed between the parties
herein. By virtue of this agreement, the petitioner was required to stock,
market, sale and distribute pharmaceutical products manufactured by the
respondent. The petitioner, it appears, deposited a sum of Rs.5 Lakh as
security. It is the case of the petitioner that the amounts payable towards the
services rendered have not been paid by the respondent.
3.2 The petitioner has averred that a legal notice dated 30.08.2011 was
served in that behalf on the respondent whereby a sum of Rs.7,19,136/-
alongwith interest at the rate of 18% p.a. was demanded from the
respondent.
3.3 There is no dispute that the respondent got a reply dated 16.09.2011,
issued through his advocate wherein the allegations made by the petitioner
were refuted. As a matter of fact, the respondent took a stand in the reply
dated 16.09.2011 that the petitioner owed a sum of Rs.80,511.29, to it.
3.4 To be noted, in the reply of 16.09.2011, there is a reference to a
earlier notice of the petitioner dated 09.07.2010. This reference was made to
meet the allegation of the petitioner that the business transactions between
them had come to an end in 2008.
3.5 Mr. Narayanan, who appears for the petitioner says that relief prayed
for in the petition ought to be granted. It is stated that the amounts due and
payable to the petitioner is towards refund of security deposit and other
amounts alongwith interest.
4. On the other hand, the learned counsel for the respondent resists
petition on the sole ground that the claim made therein is barred by time.
For this purpose, the learned counsel for the respondent relies upon legal
notice issued by the petitioner dated 09.07.2010 wherein the petitioner
seems to have averred, that a demand with respect to refund of security was
made for the first time in 2008. The learned counsel for the respondent
submits that since the amounts were due to the respondent, the sum of Rs.5
Lakh received as security was adjusted, as indicated in the reply of
16.09.2011. The petitioner, according to the counsel for the respondent,
owes instead a sum of Rs.80,511.29 to the respondent.
4.1 In any event, it is submitted that the claim of the petitioner being
stale, an arbitrator need not be appointed.
5. I have heard the learned counsel for the parties and perused the
record.
6. In my view, what emerges from the record is as follows :-
6.1 Admittedly, the petitioner had issued a legal notice dated 09.07.2010.
As a matter of fact, there is a reference in the petitioner's legal notice of
30.08.2011, to the earlier legal notice dated 09.07.2010. Though the notice
dated 09.07.2010 was not filed with the petition, the said notice dated
09.07.2010, has been brought on record by the respondent.
6.2 A perusal of the notice dated 09.07.2010, would show that the
petitioner has averred, that the respondent, had stopped supplying products
to the petitioner since 2008. The petitioner has further averred that demand
in respect to security was made from 2008 onwards.
6.3 There is also an averment to the effect that the petitioner was entitled
to a sum of Rs.1.85 Lakh towards stock claims. Therefore, in the notice of
09.07.2010, demand towards security deposit of Rs.5 Lakh alongwith claim
for stock, valued at Rs.1.85 Lakhs, was made. In addition to that, interest at
the rate of 18% p.a. was demanded.
6.4 This request was reiterated by the petitioner in its notice dated
30.08.2011.
6.5 The respondent, in its reply of 16.09.2011, however, refuted the fact
that the transactions between the parties herein ended in 2008. As a matter
of fact, the respondent in its reply, claims that till June, 2010, transaction did
take place between the parties herein. A specific assertion is made that
stock amounting to Rs.1,18,24,233.97 was transferred to the petitioner
between 2006 and 2010. It is in this context that the respondent appears to
have indicated that the monies were owed to it and after adjustment of Rs.5
Lakh, the petitioner is required to pay Rs.80,511.29, to it.
7. In the light of the aforesaid assertion in the notices exchanged
between the parties, it cannot be said at least at this stage, that the claim of
the petitioner is time barred. The respondent itself has taken a stand that the
transactions continued till 2010, and therefore, implying that the demand for
return of security deposit perhaps could not be entertained.
7.1 Apart from, refund of security deposit, there is also a claim for stock,
which is valued at Rs.1.85 Lakhs. The learned counsel for the respondent
admits that no response was sent to the notice dated 09.07.2010.
8. In these circumstances, whether claims of the petitioner are barred by
limitation would be a mixed questions of fact and law, and therefore, an
issue which would have to be determined by the learned arbitrator.
8.1 There is no other objection taken by the respondent to the
appointment of arbitrator.
9. Accordingly, the petition is allowed. Mr. Sachin Datta, Advocate
(Mobile No.9810032822), is appointed as an arbitrator in the matter. He
shall be paid a fee of Rs.50,000/- in addition to any incidental expenses that
may be incurred by the learned arbitrator; which shall be paid on actual
basis.
10. The captioned petition is disposed of in the aforesaid terms.
RAJIV SHAKDHER, J
OCTOBER 28, 2013
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