IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION No.296/2018 BETWEEN:
M/S. FLY HIGH LOGISTICS (P) LIMITED, 603, GBR ESTATE, DEVER YAMJAL ROAD, KOMPALLY, R R DISTRICT SECUNDERABAD-500014 REP. BY ITS DIRECTOR MR. VINOD KUMAR (BY SRI G. R. LAKSHMIPATHY REDDY, ADVOCATE) AND:
BASE CORPORATION LTD NO.3, SANGEETHA TOWER NEAR CMH HOSPITAL INDIRA NAGAR 1ST STAGE, BANGALORE-560038.
AND ALSO ...PETITIONER VILLAGE NAGALLI, PO., OACHGHAT TEHSIL AND DISTRICT SOLAN HIMACHAL PRADESH-173223(FACTORY) REP BY ITS MANAGING DIRECTOR MR. GIRISH ARRORA DIRECTOR MR. GIRISH ARRORA SOLAN …RESPONDENT (RESPONDENT IS SERVED, BUT UNREPRESENTED) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(2),(3) & (6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT A SOLE ARBITRATOR i.e., THE ARBITRATOR OF A PERSON NOMINATED AND APPOINTED BY THE MANAGING DIRECTOR OF A COMPANY AS PER THE PROVISIONS OF ARBITRATION AND CONCILIATION ACT 1996 TO ADJUDICATE THE DISPUTE AS PER CLAUSE XLIII OF ANNEXURE-A OR IN THE ALTERNATIVE THIS HON’BLE COURT MAY APPOINT ANY RETIRED HIGH COURT JUDGE OR DISTRICT JUDGE AND GRANT SUCH OTHER RELIEF OR RELIEFS AS THIS HON’BLE COURT MAY DEEM FIT TO GRANT IN CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE, EQUITY AND LAW.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner filed the present Civil Miscellaneous Petition under Sections 11(2)(3) and (6) of the Arbitration and Conciliation Act, 1996 (‘the Act’ for short) for appointment of sole Arbitrator, in terms of Clause XLIII of the Consigning and Forwarding Agent’s agreement dated November-2014 entered into between the parties as per Annexure-A.
2. It is the case of the petitioner that petitioner is a reputed Logistics Service Provider having all safety norms and sophisticated equipments to handle the jobs which are entrusted to them. The respondent has made enquiries in respect of works handled/done by the petitioner. Having satisfied with works done by the petitioner, the respondent has entered into consigning and forwarding Agent’s Agreement in November-2014 (the agreement commences w.e.f 1.12.2014) with the petitioner on conditions/clauses stipulated therein for a period of one year for the territory of Hyderabad in Telangana, Vijayawada, in Andhra Pradesh as per Annexure-A. It is further contended that the conditions are imposed as per Annexures-a,b,c attached to the original agreement – Annexure-A. Further, as per the directions, the petitioner has commenced the constructions of the respondent business with due diligence and great care and the respondent has paid bills after scrutinizing the same till October-2015.
3. Since some disputes arose between the parties, the petitioner issued demand notice dated 27.1.2016 to the respondent for appointment of arbitrator to sort out differences between the parties. Despite service of notice, the respondent failed to perform his part of the contract as per the agreement entered into between the parties. Therefore, the petitioner was constrained to issue arbitral legal notice to the respondent on 9.2.2018 claiming a sum of Rs.1,14,78,138/- along with interest at 21% till the date of realization, and to vacate premises within 10 days from the receipt of notice. Notice issued to the respondent was delivered on 20.2.2018, but he did not give any reply. Therefore, the petitioner filed the present Civil Miscellaneous Petition for the relief sought for.
4. Notice issued by this Court to the respondent served on 17.8.2019, but the respondent remained unrepresented.
5. I have heard the learned counsel for the petitioner.
6. Sri G.R. Lakshmipathy Reddy, learned counsel for the petitioner reiterating the averments made in the Civil Miscellaneous Petition contended that there is no dispute between the parties with regard to consigning and forwarding agreement entered into between the parties in the month of November-2014. In terms of the agreement, the respondent has to discharge his duty as contemplated. But, he has not discharged his obligation under the agreement. Therefore, the petitioner issued notice on 27.1.2016 requesting the respondent to sort out differences and comply the terms of the agreement. Inspite of service of notice, the respondent did not reply. Therefore, the petitioner issued arbitral legal notice on 9.2.2018 invoking the arbitration Clause – XLIII of the agreement complying the provisions of Section 11(5) of the Act. The same was delivered to the respondent on 20.2.2018, but he did not give any reply. Learned counsel for the petitioner submits that once legal notice issued and the acknowledgment depicts delivery of notice, the presumption is notice is deemed to have been served. In support of his contention, he relied upon the dictum of the Hon’ble Supreme Court in the case of N. Parameswaran Unni vs.
G. Kannan and another reported in (2017)5 SCC 737, wherein, the Hon’ble Supreme Court at paragraphs 13 and 16 held as under:
13 It is clear from Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872, that once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been effected. Then requirements under proviso (b) of Section 138 stand complied, if notice is sent in the prescribed manner. However, the drawer is at liberty to rebut this presumption.
16. Moreover the first notice sent by the appellant on 12-4-1991 was effective and notice was deemed to have been served on the first respondent. Further, it is clear that the second notice has no relevance at all in this case at hand. The second notice could be construed as a reminder of the respondent's obligation to discharge his liability. As the complaint was filed within the stipulated time contemplated under clause (b) of Section 142 of the NI Act, therefore Section 138 read with Section 142 of the NI Act is attracted. In the view of the matter, we set aside the impugned judgment of the High Court.
7. Learned counsel for the petitioner would further contend that though the notice issued by this Court to the respondent is served, he remained unrepresented and has not traversed the allegations made in the present Civil Miscellaneous Petition. In view of the above, the counsel for the petitioner sought to allow the Civil Miscellaneous Petition.
8. Having heard the learned counsel for the petitioner, it is an undisputed fact that the petitioner and the respondent entered into Consigning and Forwarding Agent’s Agreement in the month of November-2014. It is also not in dispute that the agreement entered into between the parties is in writing and the same is duly signed by both the parties. It is also not in dispute with regard to the existence of the arbitration clause in the agreement. As per Clause-XLIII of the agreement, any dispute between the parties shall be referred to arbitration and the venue of the arbitration shall be at Bengaluru, which reads as under:
XLIII. ARBITRATION:
Any disputes or differences between the parties arising out of or in connection with this agreement or its performance shall, so far as it is possible, be settled amicably between the parties.
If after 30 days of consultation the parties have failed to reach an amicable settlement on any and all disputes or differences arising out of or in connection with this agreement or its enforcement, such disputes or differences shall be referred to the sole arbitrator of a person nominated and appointed by the managing director of the company and the provisions of the Arbitration and Reconciliation Act 1996 and rules made there under from time to time shall apply. No objection shall be taken by the C & F Agent on the ground that the arbitrator so appointed is an employee of the Company or is in any way associated with the Company or is sole Arbitrator. The award of the Arbitrator shall be final, conclusive and binding on all the parties. The venue for such arbitration shall be the office of the Company as mentioned herein be conducted in accordance with Arbitration & Conciliation Act, 1996. The venue of the Arbitration shall be Bangalore only.
9. It is the obligation of the respondent to discharge his obligation, in terms of the agreement. Since there was a dispute arose between the parties, the petitioner has issued arbitral legal notice invoking Clause – XLIII of the agreement on 9.2.2018 complying the provisions of Section 11(5) of the Act. But, the respondent did not give any reply. Further, the notice issued by this Court to the respondent though served, he remained unrepresented and not denied the allegations made in the CMP. In view of the above, there is no impediment for this Court to appoint the sole arbitrator to adjudicate the dispute between the parties.
10. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Hon’ble Sri Justice A.N. Venugopala Gowda, Former Judge of this Court is appointed as the sole Arbitrator to adjudicate the dispute between the parties, in terms of Clause XLIII of the Consigning and Forwarding Agent’s Agreement dated November-2014 entered into between the parties as per Annexure-A.
The Registry is directed to send copy of this order to Hon’ble Shri Justice A.N. Venugopala Gowda, Former Judge of this Court and the respondent as well as to the Arbitration Centre forthwith.
Gss/-
Sd/-
JUDGE