Decided on March 25,2019

Biotech International Ltd, New Delhi Appellant
A P State Coop Marketing Federation Ltd Respondents


Sanjay Kumar, J. - (1.)By way of this application filed under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (for brevity, 'the Act of 1996'), M/s.Biotech International Limited, New Delhi, seeks appointment of a sole Arbitrator to resolve its claim for a sum of Rs.2,30,20,233/-, with interest thereon, raised against the A.P. State Co-operative Marketing Federation Limited, Hyderabad, the respondent herein.
(2.)The applicant company entered into Agreement dated 12.08.2015 with the respondent company for supply of bio-pesticides/bio-agents. Claiming that a sum of Rs.2,30,20,233/- still remained outstanding and payable after completion of supplies, the applicant company ultimately issued legal notice dated 10.01.2017 seeking resolution of the issue through arbitration. It nominated a Retired Judge and requested the respondent company to confirm his appointment if the same was acceptable to it. Having received no response to this notice, the applicant company preferred the present application.
(3.)Notice having been ordered, Sri P.Durga Prasad, learned counsel, entered appearance for the respondent company and filed a counteraffidavit. Therein, its Managing Director stated that as per the arbitration agreement existing between the parties, the Deputy Registrar of Co-operative Societies (Enforcement) of the respondent company or any other person nominated by the Managing Director of the respondent company was to be the Arbitrator to decide any dispute upon reference at the instance of either party and therefore, it was not open to the applicant company to nominate an Arbitrator of its choice. He further stated that as per the arbitration agreement, any dispute arising between the parties was to be dealt with as if it was a dispute under Section 61 of the A.P. Co-operative Societies Act, 1964 (for brevity, 'the Act of 1964'), and in terms of the said provision, the case would have to go through two stages - the dispute must be referred under Section 61 and thereafter, the Registrar, in turn, must decide to refer the dispute to an Arbitrator under Section 62 thereof. The Managing Director contended that upon a combined reading of these two sections, the inference has to be drawn that the Registrar may himself decide the issue or he may refer the parties under Section 62(1)(b) and (c) of the Act of 1964. He further stated that Section 12(5) of the Act of 1996 would have no application to the instant case and that the application was liable to be dismissed.

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