Gujarat High Court
National Dairy Development Board vs Harsh Agrawal on 22 September, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
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C/ARBI.P/100/2025 ORDER DATED: 22/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 100 of 2025
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NATIONAL DAIRY DEVELOPMENT BOARD
Versus
HARSH AGRAWAL
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Appearance:
UDIT N VYAS(9255) for the Petitioner(s) No. 1
PARTY IN PERSON(5000) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
Date : 22/09/2025
ORAL ORDER
1. Having heard Mr. Udit N. Vyas, learned counsel for the
petitioner and Mr. Harsh Agrawal, respondent appearing as
party-in-person and perused the record, pertinent is to note
that the present petition has been filed by the National Dairy
Development Board, an institute of national importance,
constituted by an Act of Parliament namely the National
Dairy Development Board Act, 1987. It is stated in the
petition that the petitioner - Board can sue and be sued in its
own name. The petitioner has been appointed as the Nodal
Agency for implementation of a scheme namely Rashtriya
Gokul Mission launched by Animal Husbandry and Dairying,
Government of India for development and conservation of
indigenous bovine breeds. Financial assistance in the nature
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of subsidy/grant in aid is to be provided to the beneficiaries
which are desirous of establishing and operating Breed
Multiplication Farms to the extent of 50% of the capital cost
subject to a maximum of INR 2 crore per applicant.
2. The respondent namely Mr. Harsh Agrawal had applied
for subsidy of INR 200 Lakhs under the Breed Multiplication
Farms Scheme (in short referred as "BMF Scheme"), on the
designated portal for establishing a Breed Multiplication
Farm at Momanthal, Noida, Uttar Pradesh. The subsidy to
the tune of INR 200 Lakhs was sanctioned in favour of the
respondent by the Ministry vide order dated 01.12.2022.
3. In furtherance of the sanction, an agreement for
implementation of Breed Multiplication Farm Programme
under the Rashtriya Gokul Mission was entered into between
the petitioner and the respondent on 02.02.2023. A copy of
the said agreement is appended at Annexure B to the
petition.
4. It is contended by the petitioner that as per the terms
and conditions of the agreement, the petitioner was to
release the subsidy in 4 (four) tranches of INR 50 Lakhs
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each. The first tranche was to be released on the approval of
the project, subject to the release of funds by the lending
bank of the respondent. The release of subsequent tranches
would depend on the actual physical progress of the project,
as certified by the petitioner.
5. Accordingly, an amount of INR 50 Lakhs was released
in the account of the respondent on 22.03.2023. On
31.03.2023, the first physical progress inspection of the
project site was conducted by the officials deputed by the
petitioner. In the said report, the respondent had assured
that full infrastructure for the project with the capacity of
200 animals would be ready by September, 2023. A copy of
the inspection report drawn on 31.03.2023 is appended at
Annexure 'D' to this petition.
6. Another physical verification inspection was carried out
by the officials deputed by the petitioner on 25.09.2023.
However, it was noticed that there was virtually no progress
in the project, inasmuch as, even the civil work for
construction of shed had not commenced. The respondent
had not even procured any livestock required for the project.
During the course of visit, the respondent indicated that he
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would require a further period of 12 months, i.e. till
September, 2024 to complete the infrastructure for the
project. Subsequent thereto, another inspection of the
project site was made on 13.02.2024. During the course of
the said inspection, it was noticed that no actual civil
construction was undertaken by the respondent and
temporary and poorly erected structures were attempted to
be passed on as 'civil structures' for the project. Even, these
erected structures were of substandard quality with rusted
poles and torned sheets. The respondent was reprimanded
and informed that the progress of the project was totally
unsatisfactory and unless the respondent invested in proper
infrastructure, the sanction would be cancelled.
7. Again, on 01.04.2024, a joint physical inspection of the
Project site was undertaken by the officials of the petitioner
and the Ministry in the presence of the respondent. A
detailed verification of the shortcomings and deficiencies
noticed during the inspection dated 13.02.2024 was
undertaken. As no improvement or development was
observed during the said inspection, the petitioner was
constrained to recommend for cancellation of the
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respondent's sanction given to the respondents to the
Ministry on the account of poor and unsatisfactory progress.
8. Ultimately, by order dated 10.08.2024, the Ministry
had cancelled the respondent's sanction granted vide earlier
order dated 01.12.2022 and required the respondent to
refund the 1st tranche of the subsidy worth INR 50 Lakhs
with interest at the rate of 11% per annum as per the terms
of the agreement. As the respondent had failed to refund the
said amount, e-mail communications dated 18.09.2024 and
02.10.2024 were sent by the petitioner. It is further stated
that subsequent to the cancellation of the sanction on
10.08.2024, the respondent had made several requests for
reconsideration of the decision of cancellation of his grant to
the petitioner and the Ministry.
9. In furtherance of such requests, again on 09.10.2024, a
team of the officers of the petitioner and the Ministry had
visited the project site for inspection. The inspection,
however, did not reveal any improvement in the situation
from 01.04.2024, the date of the last inspection. As a result
of it, the petitioner was constrained to issue a demand notice
calling upon the respondent to refund the amount of INR 50
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Lakh with interest as per the agreement. In response to the
said demand notice, the respondent vide an email
communication dated 11.12.2024 denied the assertions of
the petitioner and claimed resumption of the subsidy and
sanction. A legal notice was, thereafter, served to the
petitioner and a formal notice invoking the arbitration clause
under Section 21 of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as "the Act, 1996) was sent on
11.02.2025, before filing the present petition.
10. In reply to the said notice, the respondent vide e-mail
communications dated 11.02.2025 had objected to the place
of Arbitration on the ground that the agreement was an
unsigned, unexecuted and unstamped agreement. The
respondent contended that either an arbitrator suggested by
the respondent should be appointed and the arbitration
should be conducted either in Noida, Uttar Pradesh or New
Delhi. The contention of the petitioner herein is that since
there is a dispute between the parties requiring arbitration,
the matter is to be referred to the arbitration by allowing the
present petition.
11. However, Mr. Harsh Agrawal, the respondent
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appearing as party-in-person has relied upon various
decisions of the Apex Court in his reply to the petition and
would submit that the arbitration is to be held in the region
of Noida or New Delhi. The assertion in the affidavit in reply
to the present petition is that the purported jurisdiction
clause in a draft memorandum of agreement that refers to
arbitration in Anand, Gujarat, was never finalised or
mutually agreed by the parties. The contention is that the
principle of equality must be upheld at the stage of
appointment of the arbitrator when one of the party is a
Government entity and another is a private person. There is
a reference of the decisions of the Apex Court in paragraph
no. 5 of the affidavit in reply, to submit that any unilateral
appointment or an arbitration clause that disproportionately
favours the government entity deserves strict scrutiny,
particularly where the dispute affects a micro-enterprise.
12. In paragraph no. 6 of the affidavit in reply, the
respondent has stated that by virtue of Section 18 of the
Micro, Small and Medium Enterprises Development Act,
2006 (hereinafter referred to as "the MSMED Act, 2006"),
the statutory dispute resolution mechanism overrides any
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contractual arbitration clause. It is further contended in the
paragraph no. '7' of the affidavit-in-reply that the respondent
is a young entrepreneur who had invested heavily in building
infrastructure and procuring livestock and is currently
responsible for the welfare of nearly 20 dairy cattle,
including pregnant livestock. Further the contention in the
paragraph no. '8' of the reply is that conducting arbitration
outside Noida or Delhi would impose an unjust financial and
logistical burden upon a micro-entrepreneur with limited
financial means denying fair access to justice. The expenses
of travel, representation, witness production, and
accommodation are unaffordable and would amount to
procedural inequality.
13. The further contention in paragraph no. '9' of the reply
is that the respondent requests that the venue of arbitration
be fixed in Noida or New Delhi so that access to justice may
not be rendered illusory by imposing disproportionate
burdens on a weaker party. The further contention in
paragraph no. 10 of the reply is that the dispute arises due
to non-release of agreed grant exclusively for the Breed
Multiplication Farm Project located in Village Momnathal,
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Noida, Uttar Pradesh. All inspections, communications and
contractual activities took place at that place by the regional
office in Noida. The cause of action lies in Noida or Delhi.
Therefore, the logical, just, and factually connected venue
for arbitration is Noida or Delhi.
14. It is further contended that the petitioner, National
Dairy Development Board has enormous presence and
resources in Noida and New Delhi. Thus, conducting
arbitration in Noida or New Delhi would cause no
inconvenience to the petitioner, who is institutionally
equipped and financially capable. Apart from these
averments, it is further submitted in paragraph no. '16' that
Clause 11 of the draft agreement, which empowers the
petitioner to appoint a sole arbitrator, is violative of Article
14, 19 and 21 of the Constitution of India, as it undermines
procedural fairness and equality.
15. Pertinent is to note that it is an admission on the part
of the respondent in paragraph no. '18' of the affidavit-in-
reply that the grant was sanctioned and money was released
and transmitted in the bank account of the respondent
namely Mr. Harsh Agrawal, appearing as a party-in-person.
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It is also pertinent to note that the agreement signed by the
parties and appended as Annexure 'B' to the present petition
is in the individual name of Mr. Harsh Agrawal as the second
part of the agreement and the beneficiary. The contention of
the respondent - party-in-person that the project was
conceived by Micro and Small Enterprise (MSE) created and
registered by the respondent herein is, therefore, liable to be
turned out as misconceived.
16. It may further be noted from the affidavit-in-reply filed
on behalf of the respondent that apart from the jurisdictional
questions raised therein, the contentions are on the merits of
the claim of the petitioner to seek the refund of subsidy and
the submission is that the petition is motivated to unjustly
withhold the respondent being entitled to subsidy and avoid
legitimate compensation claims. It also jeopardizes animal
welfare and undermines national policies aimed at rural
development and self-employment.
17. While giving the para-wise reply to the present petition
from Page No. '125' of the paper-book, in reply to the
paragraph no. 3. 5 of the petition, it is stated that no validly
executed agreement existed as of 02.02.2023, and Annexure
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'B' of the petition clearly does not support this date. It is
contended that despite repeated requests by the respondent
and the concerned Bank, a duly executed agreement was not
provided and this remains a critical lapse.
18. Further, the contention in the reply to the other
paragraphs are pertaining to clauses of the agreement and
the submission in reply to paragraph no. 3.7 is that only INR
50 Lakhs being half of the proposed INR 100 Lakhs was
released on 22.03.2023, in direct violation of entitlement of
the respondent. Further, the averments in the affidavit in
reply are about the inspections carried out by the petitioner
and denial to the averments made by the petitioner in the
petition about 'no actual civil construction' with the
contention that the said averments are completely false.
19. It is contended at page no. '134' which is part of the
long paragraph no. 3.10, giving para-wise reply to the
paragraph no. 3.10 of the petition, that the petitioner
appears to be attempting to frame the matter as one of
misappropriation and criminal breach of trust, which is
outside the purview of arbitration. However, the arbitration
remains maintainable for the respondent's legitimate claims
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including the compensation of direct loss of INR 300 Lakh,
loss of reputation, opportunity loss etc.; the release of the
remaining INR 150 lakh subsidy; issuance of a letter of
restoration of the project to UCO Bank.
20. There is further contention with regard to the arbitrary
cancellation of project by the Ministry without giving the
reasonable opportunity of hearing to the respondent. Further
assertions are about the civil construction having been
raised more than 24 months ago. The contention is that the
cancellation letter contains false and contradictory
statements and incorrectly mentions "misappropriation of
funds and criminal breach of trust" Misappropriation is a
criminal allegation and is not subject to arbitration. With
these averments, it is further stated in paragraph no. 4 at
page no. '146' of the paper-book, placed before this Court by
Mr. Harsh Agrawal, party-in-person which reads as under:-
"Para 4. In response to para 4 of the petition, The
Respondent further submits that respondent has never
agreed, either orally, in writing, or by conduct, to hold
arbitration proceedings in Anand or elsewhere in the
State of Gujarat. No stamp paper was purchased in
Gujarat. In fact, a stamp paper worth INR 300 was
purchased in Noida on February 6, 2023 was handed
over with objections marked, to the inspecting officer
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Dr. Satyapal Kurrey, Manager (AB), NDDB Noida at
NDDB residential complex (Plot A84, Block A, Sector
17, Noida, Uttar Pradesh 201301, Uttar Pradesh). That
the statement by the petitioner that "The respondent
signed the agreement in presence of 2(two) witnesses,
affixed an e-stamp of INR 500 dated February 6, 2025"
is totally false and is intended to mislead the court.
The Annexure R of the Petition itself verifies
respondent's submission/objection. The purported
draft Memorandum of Agreement relied upon by the
Petitioner is vague, contradictory, undated, and
unsigned by either party. It is not a legally binding
document and cannot confer jurisdiction or determine
the venue or seat of arbitration on the basis of equity
and natural justice. Furthermore, the said draft
attempts to vary the terms of the original grant
scheme, which is impermissible under law, being first
clause of this concocted document."
21. The averments are, thus, pertaining to the document
appended as Annexure 'R' of the petition which is the draft
memorandum agreement signed by the respondent and two
witnesses, which according to the petitioner, was sent
through e-mail and was later signed by the petitioner in its
office, resulting into an execution of agreement between the
parties.
22. The perusal of the aforesaid paragraph indicates that
the dispute has been raised about legal sanctity of the draft
memorandum appended as Annexure 'R' to the petition. It is
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further stated that the agreement is undated, unsigned by
both parties, and not stamped in Gujarat and, as such, is not
binding and cannot determine the venue or seat of
arbitration on the basis of equity and natural justice.
23. The further statement in the paragraph no. 9 of the
affidavit at page no. '148' is that the petitioner's allegation
that the respondent has shown unwillingness to form an
arbitral tribunal is incorrect. It is contended that the
respondent invoked and proposed a panel of arbitrators on
01.02.2025 and it is the petitioner who failed to cooperate by
refusing to concur with any name from the panel. The
respondent for the sake of equity and natural justice invoked
arbitration to be held at Noida/New Delhi.
24. Further statement in the paragraph no. '13' of the
affidavit is that the petitioner has prayed for constitution of
Arbitral Tribunal and the respondent prays for
place/venue/seat of arbitration at Noida/ New Delhi for the
sake of equity and justice.
25. Other assertions in the affidavit are about the legal
prepositions and final prayer made on behalf of the
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respondent to hold that no validly executed arbitration
agreement exists conferring jurisdiction to the Court in
Gujarat and the present petition is premature and not
maintainable. In the alternative, the prayer is to fix the seat
and venue of arbitration at Noida or New Delhi or dismiss
the petition under Section 11 (6) of the Act, 1996 for lack of
territorial jurisdiction, as the cause of action did not arise in
Gujarat and the respondent has no operational presence
here.
26. Taking note of the above assertions from the pleadings
of the parties, this Court finds that there is no dispute about
the execution of agreement which is appended as Annexure
'B' to the present petition. The Arbitration Clause 11 of the
agreement dated 02.02.2023 at page no. 30 of the paper-
book reads as under:-
"Any dispute arising out of, or in connection with this
agreement shall be settled amicably between the parties
and if it is not settled amicably, it shall be referred to a sole
arbitrator, to be appointed by NDDB, who shall adjudicate
the same as per provisions of Arbitration and Conciliation
Act, 1996. The award of the sole arbitrator shall be final and
binding on both the parties. The language of the arbitral
proceedings shall be in English. The venue of the arbitration
shall be Anand and the competent court in Anand shall have
jurisdiction in respect of all the matters arising out of,
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under or in connection with this Agreement."
27. The agreement contains signature of the respondent,
Mr. Harsh Agrawal as beneficiary, as it is evident from page
no. '30' of the paper-book.
28. As there is a categorical assertion in the Arbitration
Clause about the venue of the arbitration being at Anand, no
plausible objection can be taken by the respondent - party-in-
person about the jurisdiction of this Court to entertain the
application under Section 11 (6) of the Act, 1996, for
appointment of Arbitrator at the instance of the petitioner.
29. The issue about the exclusive jurisdiction of the Court
to deal with the matters arising out of the agreement
containing Arbitration Clause providing for the 'venue' or
'place' of arbitration has been settled with the decision of
the Apex Court in the case of BGS SGS Soma JV V/s.
NHPC Limited reported in (2020) 4 SCC 234, which reads
as under:-
Tests for determination of "seat"
60. The judgments of the English Courts have examined
the concept of the "juridical seat" of the arbitral
proceedings, and have laid down several important tests
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in order to determine whether the "seat" of the arbitral
proceedings has, in fact, been indicated in the
agreement between the parties. The judgment of Cooke,
J.,in Shashoua states:
"34. London Arbitration is a well known phenomenon
which is often chosen by foreign nationals with a
different law, such as the law of New York, governing
the substantive rights of the parties. This is because of
the legislative framework and supervisory powers of the
courts here which many parties are keen to adopt.
When therefore there is an express designation of the
arbitration venue as London and no designation of any
alternative place as the seat, combined with a
supranational body of rules governing the arbitration
and no other significant contrary indicia, the inexorable
conclusion is, to my mind, that London is the juridical
seat and English law the curial law. In my judgment it is
clear that either London has been designated by the
parties to the arbitration agreement as the seat of the
arbitration, or, having regard to the parties' agreement
and all the relevant circumstances, it is the seat to be
determined in accordance with the final fall back
provision of Section 3 of the Arbitration Act."
61. It will thus be seen that wherever there is an
express designation of a "venue", and no designation of
any alternative place as the "seat", combined with a
supranational body of rules governing the arbitration,
and no other significant contrary indicia, the inexorable
conclusion is that the stated venue is actually the
juridical seat of the arbitral proceeding.
30. As there is no concept of "seat" in the domestic
arbitration and the words used in Section 20 (1) of the Act,
1996 are that "the parties are free to agree on the place of
arbitration". The place or the venue of the arbitration having
been agreed between the parties as stated in the Arbitration
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Clause 11 of the Agreement in the present case, no dispute
can be raised about the 'venue' or 'place' of the arbitration,
which has been agreed upon by the parties being Anand,
State of Gujarat.
31. In view of the observation made in paragraph no. '61'
in the case of BGS SGS Soma (supra) wherever there is an
expressed designation of a 'venue (place)' as per Section 20
(1) of the Act, 1966, the inexorable conclusion is that the
stated 'venue' is actually the juridical seat of the arbitral
proceeding.
32. As regards the contention of the respondent about the
existence of a valid agreement, the dispute about the signing
of the agreement by the parties, the reliance is placed by the
learned counsel for the petitioner on the decision of the Apex
Court in the case of Glencore International AG V/s. Shree
Ganesh Metals and Another reported in 2025 SCC
OnLine SC 1815, which clinches the issue, in a matter
similar to the facts and circumstances of the present case.
Reference may be made to paragraph no. '19' of the said
decision, wherein it was observed that an arbitration
agreement can be inferred even from exchange of letters
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including communication through electronic means, which
provide a record of the agreement. The mere fact that the
contract was not signed by one of the party would not
obviate from this principle when the conduct of the parties in
furtherance of the said contract clearly manifested the other
party's acceptance of the terms and conditions contained
therein, which would include the arbitration agreement in
clause mentioned thereof.
33. In the instance case, the draft agreement appended as
Annexure 'R' to the present petition had been sent to the
respondent - Mr. Harsh Agrawal who not only put his
signature on the same but also got the signatures of two
witnesses. The scanned copy of the signed draft agreement
was sent by the respondent through e-mail to the petitioner
on 06.02.2023 which is evident from Page No. '94' of the
paper-book. The e-mail address of the respondent at Page
No. '94' of the paper-book can also be compared with the
document at Page No. '87', which indisputably is the
objection to Section 21 notice sent by the respondent - Mr.
Harsh Agrawal through e-mail dated 11.02.2025. All
objections taken by the respondent appearing as party-in-
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person to the maintainability of the petition under Section 11
(6) of the Act, 1996 are, thus, liable to be turned out. As
regards the objection about the merits of the claim of the
petitioner, it is provided that all those issues have to be
agitated before the arbitrator and will be decided by the
learned Arbitrator without being influenced by any of the
observations made hereinabove.
34. In view of the above, the present petition stands
allowed.
ORDER
i. Mr Justice V. P. Patel, Former Judge, High Court
of Gujarat, having address at: D-39, Swastik - 1,
Bunglow & Row House, Opp. Gujarat High Court,
RC Technical Road, Ghatlodiya, Ahmedabad -
380061, Mob.no. 7574812176, Email ID:
[email protected] is hereby
appointed as the sole Arbitrator to resolve the
disputes between the parties in accordance with
the Arbitration Centre (Domestic and
International), High Court of Gujarat Rules, 2021.
Both Parties would also be governed by said Rules.
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ii. Registry to communicate this order to the sole
Arbitrator forthwith by Speed Post.
iii. Pending application/s, if any, stands consigned
to records.
(SUNITA AGARWAL, CJ )
VARSHA DESAI
