SAB INDUSTRIES LTD Vs. STATE INDUSTRIAL DEVELOPMENT CORPORATION OF UTTARANCHAL LTD
LAWS(UTN)-2012-7-99
HIGH COURT OF UTTARAKHAND
Decided on July 06,2012

Sab Industries Ltd Appellant
VERSUS
State Industrial Development Corporation Of Uttaranchal Ltd Respondents

JUDGEMENT

BARIN GHOSH, J. - (1.) A works contract was entered into between the parties hereto. In relation to the said contract, applicant made certain claims. Those were not accepted. On 17th February, 2012, applicant, accordingly, gave a last reminder to make payment of such claims within 15 days with a caution that, upon failure to pay the amounts so claimed, it will be deemed that there is denial of such claims on the part of the respondents resulting into disputes and differences arising between the parties. This letter was not replied within 15 days from the date of receipt thereof. In the circumstances, on 19th April, 2012, applicant applied to the Managing Director of State Industrial Development Corporation of Uttaranchal Limited to appoint an Arbitrator for the purpose of sorting out the disputes, raised in the circumstances as regards the claims indicated by the applicant in his letter dated 17th February, 2012. There is no dispute that the works contract, which is in writing, stipulates that disputes between the parties hereto shall be referred to sole Arbitrator to be appointed by the Managing Director of State Industrial Development Corporation of Uttaranchal Limited and the arbitration proceedings shall be governed by the provisions of the Arbitration and Conciliation Act, 1996, as amended from time to time, and also, that the place of arbitration shall be Dehradun. Despite receipt of the said letter, the Managing Director of State Industrial Development Corporation of Uttaranchal Limited did not react at all, instead on 15th May, 2012, the Deputy General Manager (Technical), by a letter written to the applicant, held out that the claims put forward by the applicant in its letter dated 17th February, 2012 are totally false, baseless and concocted and hence denied. Each of the claim was separately dealt with also by the said letter.
(2.) LEARNED counsel for the State Industrial Development Corporation of Uttaranchal Limited submitted that disputes arose only after 15th May, 2012 and, subsequent thereto, there was no demand for arbitration, inasmuch as, by the letter dated 15th May, 2012, the claims put forward in the letter of the applicant dated 17th February, 2012 were denied. The said contention is rejected outright. Letter dated 17th February, 2012 indicated that the claims, as put forward thereby, should be paid within 15 days, otherwise it shall be deemed that the claims have been denied resulting in disputes and differences arising between the parties. In the circumstances, on 19th April, 2012, when the applicant approached the Managing Director of the State Industrial Development Corporation of Uttaranchal Limited, disputes and differences already arose between the parties in connection with the works contract. Despite such disputes and differences having arisen, the Managing Director of the State Industrial Development Corporation of Uttaranchal Limited did not react thereon. In the circumstances, applicant having approached this Court under Section 11 of the Act, it is my duty to appoint an Arbitrator. I, accordingly, appoint Mr. Lakshmi Bihari, a retired High Court Judge, who is a permanent resident of Dehradun, as Arbitrator to adjudicate upon the disputes inter se the parties herein.
(3.) IT does not appear that the respondents have a counter claim against the applicant. It appears that the claim of the applicant is about '7 crores. In the circumstances, the remuneration of the Arbitrator is fixed at '3.5 lacs to be shared equally by the applicant 3 and the respondents. Fifty percent thereof shall be paid at the commencement of the arbitration proceeding and the remaining fifty percent immediately before the closure of the proceeding, i.e before passing of the award. In the event, the Arbitrator, for any fault on his part, is unable to conclude the arbitration proceeding, he shall be obliged to refund the payment made to him in advance. The application is, accordingly, disposed of.;


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