Patna High Court
M/S R.R. Agrotech vs Bihar State Ware Housing ... on 7 October, 2023
IN THE HIGH COURT OF JUDICATURE AT PATNA
REQUEST CASE No.62 of 2023
======================================================
M/s R.R. Agrotech, a Proprietary Concern having its Principal Place of
Business at 2603, Nai Basti, Naya Bazar, New Delhi-110006 through its
Authorized Signatory Manish Kumar Sinha, Male, (Aged about 38 Years) Son
of Late Sushil Kumar Sinha Resident of Sindhua Toli, Belwar Ganj
Sampachak P.S. Gulzarbagh, District-Patna.
... ... Petitioner/s
Versus
1. Bihar State Ware Housing Corporation (BSWC), B-2, Ist Floor, Maurya Lok
Complex, Dak Bungalow Road, P.S. Kotwali, Town and Distirct Patna
through its Managing Director.
2. The Managing Director, Bihar State Ware Housing Corporation, B-2, Ist
Floor, Maurya Lok Complex, Dak Bungalow Road, P.S. Kotwali, Town and
Distirct Patna.
3. The Divisional Manager, Revenue Section, Bihar State Ware Housing
Corporation, B-2, Ist Floor, Maurya Lok Complex, Dak Bungalow Road,
P.S. Kotwali, Town and Distirct Patna.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. S.D.Sanjay, Sr. Advocate
Mr.Mohit Agarwal, Advocate
For the Respondent/s : Mr. Mithilesh Kumar Rai, Advocate
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
ORAL JUDGMENT
Date : 07-10-2023
Heard learned counsel for the parties.
2. This application has been moved seeking
appointment of an Arbitrator invoking the powers of this Court
under Section 11(6) of the Arbitration and Conciliation Act,
1996.
3. The petitioner is concerned with an agreement
dated 29.11.2013 and the specific arbitration clause is referred
Patna High Court REQ. CASE No.62 of 2023 dt.07-10-2023
to from Annexure-1. There is no dispute with respect to the
arbitration clause.
4. The learned counsel for the respondent objects
to the request made, on the ground that the petitioner has, with
malicious intention, misappropriated/embezzled foodgrains
amounting to more than Rs. 4 crores and a criminal case bearing
No. 81/2023 dated 08.02.2023 under Sections 406, 409 and 420
of the India Penal Code has been lodged with the Udwantnagar
Ara P.S., Bhojpur.
5. Usefully, reference may be made to the
decision in Avitel Post Studioz Ltd. v. HSBC PI Holdings
(Mauritius) Ltd., (2021) 4 SCC 713. Therein a distinction
between a contract obtained by fraud and performance of a
contract being vitiated by fraud or cheating was highlighted.
The latter was found to fall outside the ambit of Section 17 of
the Contract Act, for which the remedy of damages would be
available and not the remedy of treating the contract itself as
void; which remedy would be available in the case of the
former. In that decision, on facts, it was found that there was
fraudulent inducement to enter into a contract under Section 17
of the Contract Act; which makes it voidable and there was an
element of siphoning off of funds, which pertains to the actual
Patna High Court REQ. CASE No.62 of 2023 dt.07-10-2023
performance of the contract, attracting the tort of deceit.
However, though there was fraudulent inducement to enter into
the contract, on the specific terms of the arbitration clause, it
survived as an independent clause; was the finding. The words
employed in the arbitration clause permitted resolution of any
dispute, controversy or claim, including any question regarding
the existence of the contract, validity, interpretation, breach or
termination.
6. In Avitel Post Studioz Ltd. (supra), the
identical issue was considered. If there is a fraud committed in
execution of the agreement itself; which fraud led to the
execution, then the arbitration clause would not be applicable,
unless the arbitration clause extended to cover resolution of that
dispute also. However, if a fraud is committed in the working of
the agreement then the arbitration clause would have full
operation and the dispute shall be settled by arbitration.
7. In the above circumstances, Hon'ble Mr.
Justice Jyoti Saran, a former Judge of the Patna High Court, is
appointed as learned Arbitrator to adjudicate all disputes arising
out of agreement entered into between the parties to the lis.
8. All pleas and issues raised, on merits, are left
open to be considered and decided by the learned Arbitrator.
Patna High Court REQ. CASE No.62 of 2023 dt.07-10-2023
9. The learned Arbitrator shall be entitled to fee
as per the schedule of the Act.
10. Since the dispute arises out of an agreement
of the year 2013, the hearing be expedited.
11. The issue of limitation, if any, is left open to
be raised before the Arbitral Tribunal.
12. Joint Registrar (List) is directed to
communicate the order to the learned Arbitrator.
13. Learned counsel for the parties also
undertake to communicate the order to the learned Arbitrator.
14. The Arbitral Tribunal shall issue notice to the
respondents.
15. The Request Petition stands disposed of in
the above terms.
(K. Vinod Chandran, CJ)
Sujit/-
AFR/NAFR NAFR
CAV DATE
Uploading Date 11.10.2023
Transmission Date
