Tata Power Ajmer Distribution Limited v. Ajmer Vidyut Vitran Nigam Limited
2021-09-17
INDRAJIT MAHANTY
body2021
DigiLaw.ai
JUDGMENT 1. Heard learned counsel for the respective parties. 2. The present application has come to be filed by the applicant namely Tata Power Ajmer Distribution Limited under Section 11(4) read with 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred as 'Act of 1996') for appointment of an arbitrator. 3. Bereft of any unnecessary facts, suffice it to record herein that the applicant-TPADL had entered into an agreement with the respondents on 19.04.2017. In terms of the said agreement, in event of any dispute, the parties had agreed to three tier process of resolution of dispute and the same is recorded in Clause 18.2.2, 18.2.3, 18.2.4, 18.2.5 & 18.2.6 at page 75 of the agreement which are quoted hereunder:- "18.2.2 The other Party shall, within thirty (30) days of receipt of dispute notice issued under Clause 18.2.1, furnish: (i) Counter-claim and defences if any regarding the Dispute; and (ii) All documentary evidence in support of its defences and counter-claim. 18.2.3 Both the parties shall constitute a permanent dispute resolution body having equal representation from each of the parties. The disputes or differences arising under this Agreement shall be referred for resolution to this body, which shall communicate its decision within Thirty (30) days. 18.2.4 In case of non-settlement of dispute by the permanent dispute resolution body, such disputes or differences shall be referred for decision to a body constituted by Chairman/ Managing Director of the Distribution Licensee and Head, Distribution Franchisee which shall communicate its decision preferably within a period of fifteen (15) days. 18.2.5 Any dispute arising out of, in connection with or with respect to this Agreement, the subject matter hereof, the performance or non-performance of any obligation hereunder, which cannot be resolved by negotiation between the Parties and the Dispute Resolution procedure as stated in the foregoing Clauses, shall be initiated to be settled through arbitration at the request of either party upon written notice to that effect to the other party. The proceedings shall be conducted subject to the provisions of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) by a panel consisting of three arbitrators. 18.2.6 While submitting the dispute or difference for arbitration with this Clause the Party so submitting shall, in its notice, specify the name of one arbitrator appointed by it. Within thirty (30) days of the receipt of notice, the other Party shall appoint an arbitrator.
18.2.6 While submitting the dispute or difference for arbitration with this Clause the Party so submitting shall, in its notice, specify the name of one arbitrator appointed by it. Within thirty (30) days of the receipt of notice, the other Party shall appoint an arbitrator. The third arbitrator (who will act as the Presiding Arbitrator) shall be nominated by the two arbitrators appointed as aforesaid or, failing such nomination within thirty (30) days of appointment of the second arbitrator, shall be appointed in accordance with the Arbitration and Conciliation Act, 1996." 4. It is asserted by the learned counsel for the applicant that in terms of the Clause 18.2.3, a request was made by them on 03.09.2019 under Annexure-2 requesting for constitution of the Permanent Dispute Resolution Body (PDRB) as per Clause 18.2.3 of their agreement. It appears that the said request of the applicant was accepted by respondent- Ajmer Vidyut Vitran Nigam Limited (AVVNL). The respondent-AVVNL constituted the necessary first level body by its communication dated 18.11.2019 vide Annexure-4. Inspite of constitution of such a committee as constituted under Clause 18.2.3, it appears that committee did not hold a single meeting and on 04.02.2020, under Annexure-3, reminder was sent by the applicant to the respondent-Company detailing the facts and the claims contained therein and requesting for its early conclusion of its first level resolution at the earliest under cover of its letter dated 04.02.2020 under Annexure-3. 5. It appears that since there no steps were taken by the constituted body i.e. PDRB, the applicant made a further request that due to inaction on the part of the first level committee i.e. PDRB made a further request to constitute a body i.e. second level resolution body under Clause 18.2.4 under cover of its letter 18.7.2020 under Annexure-6. A reminder thereto was also sent by the applicant under cover of its letter dated 29.07.2020 under Annexure-7 detailing therein that various steps that have been taken in the matter and highlighting the fact that the constituted disputed redressal bodies for resolution of dispute had failed to do so within the time limit as prescribed under the agreement and, therefore, pleaded for constitution of second level committee as contained under clause 18.2.4. It appears that a Second Disputes Redressal body was ultimately constituted by the respondent vide Office Order dated 10.09.2020.
It appears that a Second Disputes Redressal body was ultimately constituted by the respondent vide Office Order dated 10.09.2020. Though the said body was only described by way of the office held by the officers and not by the name. 6. However, since there was again inaction on the part of the respondents in particular to the second level resolution body, the applicant again wrote a letter dated 09.11.2020 under Annexure- 10 referring for previous events as occurred and made a prayer in terms of clause 18.2.5 under their agreement and appointed Shri Vishwa Jeet Talwar as their nominated arbitrator and requested the respondent to nominate name of arbitrator on their part so that two arbitrators may appoint a third independent arbitrator. 7. Due to inaction on the part of the respondent in this regard, the present application has come to be filed. 8. Learned counsel for respondent-AVVNL contended that the respondent has not nominated its arbitrator since it is of the opinion that in the absence of any conclusion by the first level redressal body or the second level redressal body, there was no cause of action on the part of the applicant for making a prayer for appointment of arbitrator. 9. In this regard, he asserted that although the respondent had constituted the first level PDRB by cover of its letter dated 03.09.2019, the applicant had failed to raise a claim before PDRB. Consequently, it is only after the applicant raised its claims on 04.02.2020 that is for the first time, the respondent was made aware of the claims of the applicant-company. Therefore, he asserts that in absence of the claim, no further steps could have been taken by the PDRB. 10. In this regard, this contention of the learned counsel for respondent is recorded merely to be rejected outright. Events as recorded and available in the pleadings indicate that, even if it is presumed that claim statement was required to be submitted by the applicant, even then the PDRB was under an obligation to conclude its proceedings within thirty days as contemplated under clause 18.2.3. Admittedly, though PDRB formed by the respondent did not do so. 11. Apart from the above, the respondents responded positively to the request made by the applicant-company to form a second level redressal committee as contemplated under clause 18.2.4 and constituted the second level redressal committee vide communication dated 10.09.2020.
Admittedly, though PDRB formed by the respondent did not do so. 11. Apart from the above, the respondents responded positively to the request made by the applicant-company to form a second level redressal committee as contemplated under clause 18.2.4 and constituted the second level redressal committee vide communication dated 10.09.2020. In view of this act on the part of the respondent of their contentions relating to first level PDRB and alleged inaction on the part of the applicant is wholly incorrect and cannot be accepted. 12. Insofar as the second level redressal committee is concerned, though the said committee was constituted on 10.09.2020 and the said committee according to the agreement clause 18.2.4 was required to resolve the dispute within fifteen days. No action was taken by the said committee until 09.11.2020, when a notice was issued by the respondent- company calling upon the applicant-company to suggest a date for its meeting. 13. In view of the circumstances recorded hereinabove, the objections raised by the respondent's counsel regarding awaiting the resolution of the outcome of the second tier of dispute redressal has been rendered fruitless due to the delay that has occurred in the process and clearly in violation of the agreement as extracted hereinabove. 14. This court is of the clear and categorical view that respondent was trying to justify its own inaction. The request of the respondent to the applicant to "suggest a date" is a mere big leap to cover up its own inaction. In any event, by communication dated 09.11.2020, the period of 15 days, under clause 18.2.4 had been already long concluded. Consequently, such constituted body at the second level grievance redressal committee was also set at naught by the inaction of the respondent. 15. The applicant could have no other alternative remedy other than to seek appointment of arbitrator under clause 18.2.5 under cover of its letter dated 09.11.2020 under Annexure-10, and to appoint an arbitrator i.e. Shri Vishwa Jeet Talwar and called upon the respondent to appoint their arbitrator. 16. At this stage, after rejecting the objections raised by the respondent, the court called upon the counsel for the respondent to indicate this court as to whether they intend to appoint an arbitrator or not in the present matter and the counsel for the respondent prays for one day time to obtain instructions in the matter. 17.
16. At this stage, after rejecting the objections raised by the respondent, the court called upon the counsel for the respondent to indicate this court as to whether they intend to appoint an arbitrator or not in the present matter and the counsel for the respondent prays for one day time to obtain instructions in the matter. 17. Accordingly, the matter stands adjourned till tomorrow i.e. 18.09.2021, as prayed for.