Jammu & Kashmir High Court
M/S Allied Sales Services Udhampur vs Bharat Sanchar Nigam Limited Bahu Plaza on 2 May, 2024
Author: Chief Justice
Bench: Chief Justice
Page 1 of 7
Sr. No. 4
Regular
IN THE HIGH C0URT 0F JAMMU & KASHMIR AND LADAKH
AT JAMMU
(Through VC)
Arb P No. 62/2023
M/S Allied Sales Services Udhampur ...Petitioner(s)/appellant(s)
Through: Mr. Sunny Mahajan, Advocate
Vs.
Bharat Sanchar Nigam Limited Bahu Plaza ...Respondent(s)
Jammu and Ors
Through: Mr. Jagpaul Singh, Advocate
CORAM:
HON'BLE THE CHIEF JUSTICE
ORDER
02.05.2024
01. Heard Mr. Sunny Mahajan, learned counsel appearing for the
petitioner as also Mr. Jagpaul Singh, learned counsel for the
respondents.
02. The present petition has been filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, seeking appointment of an
Independent Arbitrator for reference of the disputes/claims of the
petitioner.
03. It has been submitted that Petitioner is a partnership firm duly
registered with the Registrar of Firms and vide Franchisee
Agreement executed on 07.12.2006 and the Petitioner Firm is
working as a franchisee of the Bharat Sanchar Nigam Limited for its
marketing and distribution of its BSNL Telecom Service.
04. It has been submitted that the respondent No.3-Chief Accounts
Officer, Bharat Sanchar Nigam Limited, Udhampur, had wrongly
deducted an excess amount of Rs.1,48,878/- on account of TDS from
the account of the petitioner for the years 2008 to 2011 coupled with
the fact that the respondents had failed to provide the Form-16A to
the petitioner to enable him to made any claim for recovery from the
Income Tax Department.
05. It has been submitted that in spite of repeated requests made by the
Petitioner firm to the Respondents authorities to either refund the
amount that has been wrongly deducted on account of TDS from the
Petitioner firm or to provide Form-16A, the respondents did not pay
any heed to the repeated requests of the petitioner, resulting in
dispute.
06. It has also been submitted that because of the inaction on the part of
respondents either to refund the amount which has been wrongly
deducted on account of TDS from the Petitioner firm or to provide
Form-16A and failure of the respondents to redress the
grievances/disputes of the Petitioner firm, the Petitioner firm vide
letter dated 29.06.2022 through its authorized partner had invoked
the Arbitration Clause 30 of the Franchisee Agreement, and
requested the respondent No.2 for appointment of an Arbitrator
which provides for resolution of dispute or differences amongst the
parties by way of arbitration.
07. As far as the existence of the Arbitration agreement and the
Arbitration Clause is concerned, same has not been disputed by the
respondents.
08. The respondents have raised objections to this petition on the
following grounds; firstly, the present petition under Section 11 (6)
of the Arbitration and Conciliation Act, 1996 is not maintainable as
there is no dispute. Secondly, even if there is a dispute, the same
cannot be referred to an Arbitrator unless the same is preceded by an
endeavor to resolve the dispute through mutual
discussions/negotiations as provided under the arbitration clause.
Thirdly, the claim of the petitioner obviously is time barred,
inasmuch as, the matter pertains to alleged wrongful deduction of
TDS in the year 2008 to 2012.
09. In view of the fact that existence of the Arbitration Clause is not
disputed, this Court will proceed to examine as to whether the
present dispute which has come is within the scope of Arbitration
agreement and whether the claim is time barred or not as contended
by the respondents.
10. As regards the contention of Mr. Jagpaul Singh, learned counsel for
the respondents that there is no dispute, this Court is unable to agree
with the same, inasmuch as, there is a specific claim raised by the
petitioner which has not been addressed by the respondents to the
satisfaction of the petitioner and as such, it cannot be said that there
is no dispute.
11. As regards the second contention that even if there is a dispute,
whether the said dispute comes within the scope of Arbitration
Clause under Clause 30 of the Franchisee Agreement as referred to
above, it has been submitted by the learned counsel for the petitioner
that the petitioner did in fact raise a dispute for settlement through
various communications before invoking the arbitration clause for
appointment of an arbitrator but of no fruitful results.
12. Learned counsel for the petitioner submits that it is a fact that
Income Tax Department had written a letter to respondents on
23.05.2017 to provide the Form-16A to the petitioner to enable him
to get the refund, has not been acted upon by the respondents which
would clearly indicate that they were not keen to settle the matter by
mutual negotiations as otherwise the respondents would have taken a
stand on the letter issued to them by Income Tax Department.
13. On the other hand, Mr. Jagpual Singh, learned counsel for the
respondents submits it is not correct that the respondents did not
furnish Form-16A in time to the petitioner. In fact, the same was
furnished to the petitioner, which however, has been disputed by the
petitioner by contending that he never received any such form. Thus,
what appears from the pleadings and submissions is that there is also
a dispute as to whether the respondents had furnished the Form-16A
to the petitioner. This Court is of the view that if there is certain
dispute even on this score also, the same will be required to be
examined but that examination will be beyond the scope of this
Court in exercise of power under Section 11 (6) of the Arbitration
and Conciliation Act.
14. This Court has also hastened to add as regards this issue as to
whether the exhausting of the process of making an endeavor to
resolve the dispute mutually between the parties before Arbitration
Clause is invoked is an aspect which can also be examined by the
arbitrator in light of the facts and circumstances obtaining in the
case. The view taken by this Court as above is purely tentative in
nature based on the pleadings and it was felt that it may not be
desirable to reject this application on the aforesaid ground raised by
the respondents without there being a definite finding which this
Court feels can be done by the Arbitrator based on the pleadings and
evidence that may be led by the parties.
It is now well settled that the Hon'ble Supreme Court as in a
number of cases has held that if there is a doubt about the
arbitrability of any dispute, same can be referred to the arbitrator as
held in Vidya Drolia versus Durga Trading Corporation (2021) 2
SCC 1. For facility of reference, para No.244 of the said judgment is
relevant to be quoted herein:-
"244. The court should refer a matter if the validity of
arbitration agreement cannot be determined on a prima facie
basis, as laid down above i.e., " when in doubt, do refer".
15. As regards the contention of the learned counsel for the respondents
that the claim is clearly time barred, learned counsel appearing for
the petitioner has drawn attention of this Court to the para no.4 of the
objections filed by the respondents in which it has been clearly
mentioned that upon the representation made by the petitioner for
providing Form-16A and on the direction of ITO (TDS), Jammu,
vide letter No.ITO/TDS/Jammu/2017-18/57 dated 25.05.2017, the
office of respondent No.3 in the year 2017, also pursued with the CA
for filing revised TDS return for the Assessment year 2008-09,
2009-10, 2010-11 and 2011-12 and the CA had provided the Form-
16A in the month of April, 2021, which was forwarded to the
petitioner.
16. According to the learned counsel for the petitioner, the aforesaid
averment made by the respondents would clearly indicate that
respondents themselves were acting upon the demand of the
petitioner and the last act of the respondents admittedly was to
provide the Form-16A in the month of April, 2021 though the
petitioner had categorically denied that he has received any such
Form, and hence, it cannot be said that the issue/claim is time barred,
as the respondents were still considering the claim till April, 2021.
17. This Court also is of the view that the aforesaid averment made by
the respondents in their objections would indicate that they were also
acting on the demand made by the petitioner by furnishing Form-
16A in the month of April, 2021, though denied by the petitioner,
and hence it cannot be said that the claim of the petitioner is time
barred.
18. We also make it clear that this Court has not made any specific
finding about this issue of the claim being time barred also which is
required to be examined by the adjudicatory authority which in the
present case would be the Arbitrator.
19. Under the circumstances, this Court is satisfied that prime facie the
petitioner has been able to make out his case for appointment of an
Arbitrator to resolve the dispute that has arisen between the parties
in terms of the aforesaid Clause 30 of the Franchisee agreement
executed on 07.12.2006. Accordingly, the matter is referred to an
Arbitrator for redressal of disputes/claims. Since this Court has not
made definitive findings about the various issues raised, as discussed
above, the parties would be at liberty to raise all the preliminary
objections before the learned Arbitrator.
20. Petition is accordingly, allowed by appointing Ms. Deepika
Mahajan, Advocate, High Court of J&K and Ladakh to act as the
Arbitrator, who will proceed in the matter subject to her consent, in
accordance with the provisions of the Act before whom the parties
will at liberty to raise all preliminary objections. The Ld. Arbitrator,
after affording opportunity of hearing to both the parties, shall make
the award within the time provided in the Act after charging the
prescribed fee along with the incidental expenses to be shared by the
parties.
21. Learned Arbitrator be accordingly informed.
22. The petition is disposed of accordingly.
(N. KOTISWAR SINGH)
CHIEF JUSTICE
SRINAGAR
02.05.2024
Shameem H.
Whether the order is reportable: Yes/No
Whether the order is speaking: Yes/No.
14.05.2024 12:58 Arb P No. 62/2023
