MOHAMMAD RAFIQ,J. - (1.) This application under Section 11 of the Arbitration and Conciliation Act, 1996(for short 'the Act') has been filed by the applicant M/s. Flexo Foam Pvt. Ltd. through its Director, Rupesh Jain praying for appointment of independent sole arbitrator for resolving its dispute with the non-applicant arising out of the agreement dated 28.04.2008 and purchase order dated 02.05.2008.
(2.) Non-applicant, Rajasthan State Road Transport Corporation(for short 'the Corporation') floated a tender for supply of 900 sets of 3 x 2 high back non-reclining type readymade passenger bus seats for super-express blue line buses in the year 2007-08. Bid of the applicant was accepted and agreement dated 28.04.2008 was executed between the parties. The non-applicant placed a purchase order dated 02.05.2008 upon the applicant for aforesaid supply. As per the applicant, it supplied the material to the non-applicant, but before taking delivery, a team of the officers of the respondent-corporation inspected the goods at the factory of the applicant. The applicant raised 201 bills amounting to Rs. 6,28,97,224/-, out of which Rs. 5,90,71,620.68 were paid and amount of Rs. 38,25,603.32 has been withheld by the non-applicant. The non-applicant conveyed the aforesaid fact to the applicant vide letter dated 24.12.2010 contending therein that this communication was being made as per BBC decision taken in its meeting dated 07.12.2010 duly approved by the Chairman.
(3.) Mr. N.K. Maloo, learned Senior Counsel appearing on behalf of the applicant argued that amount of Rs. 11,12,176.32 has wrongly been withheld by the non-applicant on account of reduction in excise duty. While the non-applicant claims that benefit of reduction in excise duty should go to them, whereas according to the applicant, the non-applicant unduly claimed such benefit because as per terms of the agreement and purchase order, the rate approved by the non-applicant was inclusive of excise duty. It is further argued that a sum of Rs. 3,47,427/- has been withheld by the non-applicant on account of alleged failure of samples. Thus, a total amount of Rs. 38,25,603.32 has unduly been withheld by the non-applicant. It is argued that despite persistent demand of the applicant, non-applicant has not made payment of outstanding dues. As per Clause 5 of the agreement, payment was to be made by the non-applicant-corporation within 15 days from the date of supply. The applicant is, therefore, entitled to interest @ 15% p.a. which comes to Rs. 4,21,724/-. The amount of earnest money withheld by the non-applicant should have also been refunded to the applicant. In these circumstances, the applicant served a legal notice on the non-applicant through its advocate on 23.04.2012 calling upon it to pay the outstanding amount as well as the earnest money along with interest @ 15% p.a. from respective due date till the date of payment. The non-applicant did not respond to the same. Rather, it vide letter dated 18.05.2012 demanded a sum of Rs. 1,66,035/- from the applicant towards failed samples otherwise the same was to be deducted from the earnest money. The applicant refuted the same vide its letter dated 28.06.2012.;