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2022 DIGILAW 253 (TS)

Writer Business Services Pvt. Ltd. v. Aditya Birla Retail Ltd.

2022-03-23

UJJAL BHUYAN

body2022
ORDER : 1. Heard Mr. N. Ashwani Kumar, learned counsel for the applicant and Mr. K. Chaitanya, learned counsel for the respondent. 2. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (briefly ‘the 1996 Act’ hereinafter) for appointment of arbitrator, preferably, a technical person. 3. It is stated that applicant is in the business of providing allied services including services related to meal coupon handling and managing. M/s. Trinethra Superretail Private Limited had entered into an agreement dated 28.09.2010 with M/s. Writer Safeguard Private Limited, a wholly owned subsidiary of the applicant. As per the agreement dated 28.09.2010, the subsidiary company was to provide certain services relating to meal coupon handling to M/s. Trinethra Superretail Private Limited. 4. Subsequently, M/s. Trinethra Superretail Private Limited got merged with M/s. Aditya Birla Retail Limited i.e. respondent. It is also stated that as per business transfer agreement dated 07.03.2019, between the applicant and M/s. Writer Safeguard Private Limited, the applicant had taken over all the rights and liabilities of the subsidiary company. 5. It is stated that in terms of the agreement dated 28.09.2010 applicant was entitled to payment of certain amounts as it had provided the services as required by the respondent. 6. Respondent informed the applicant on 07.12.2011 regarding termination of the agreement. However, applicant was requested to undertake reconciliation of the services rendered in order to determine the amounts due to the applicant. But when the respondent sought for details, those were not furnished. On the other hand, respondent raised contra claim against the applicant without substantiating on what basis such claims were made. It was however denied by the applicant. 7. After considerable delay and on the face of repeated requests by the applicant, respondent furnished the information sought for. Thereafter applicant raised claim before the respondent on 28.03.2013 which was however denied by the respondent by communication dated 02.05.2013. It is stated that in view of the failure of the respondent to make payment as demanded by the applicant, a dispute had arisen between the parties which was required to be resolved by way of arbitration as per provisions of the agreement. Therefore, applicant invoked the arbitration clause vide communication dated 28.04.2016 seeking appointment of sole arbitrator. However, respondent failed to appoint the sole arbitrator. Applicant did not receive any response to the communication dated 28.04.2016. Therefore, applicant invoked the arbitration clause vide communication dated 28.04.2016 seeking appointment of sole arbitrator. However, respondent failed to appoint the sole arbitrator. Applicant did not receive any response to the communication dated 28.04.2016. It is under such circumstances that the present application came to be filed. 8. Respondent has filed counter affidavit. While denying the contention of the applicant it is stated that on 10.04.2019 the name of the respondent was changed from Aditya Birla Retail Limited to More Retail Limited. 9. According to the respondent there is no valid arbitration agreement between the parties. The service agreement dated 28.09.2010 is an un-executed agreement as it had not been signed by the respondent. Therefore, no reliance can be placed on such agreement. 10. Respondent has also raised the question of locus-standi of the applicant to file the related application. It is stated that the contract was entered into with M/s. Writer Safeguard Private Limited. Respondent had not entered into any contract with the applicant. There is no privity of contract with M/s. Writer Business Services Private Limited. Much later, according to the applicant, it had acquired M/s. Writer Safeguard Private Limited on the basis of a business transfer agreement dated 07.03.2019. Additionally, it is contended that both the agreement dated 28.09.2010 and the business transfer agreement dated 07.03.2019 are insufficiently stamped documents. That apart, respondent has contended that the claim of the applicant is barred by limitation. 11. Learned counsel for the parties have made elaborate submissions based on the rival pleadings. That apart, learned counsel for the applicant has placed reliance on the following decisions: (i) Govind Rubber Ltd. vs. Louis Dreyfus Commodities Asia (P) Ltd. (2015) 13 SCC 477 to contend that a written document which may not be signed by the parties can be invoked as an arbitration agreement. (ii) Uttarakhand Purv Sainik Kalyan Nigam Ltd. vs. Northern Coal Field Ltd. (2020) 2 SCC 455 on the question of limitation which can be gone into by the arbitral tribunal being a mixed question of fact and law involving question of jurisdiction. (iii) N.N. Global Mercantile (P) Ltd. vs. Indo Unique Flame Ltd. (2021) 4 SCC 739 on the contention that non-payment or deficiency of stamp duty would not invalidate the contract. (iii) N.N. Global Mercantile (P) Ltd. vs. Indo Unique Flame Ltd. (2021) 4 SCC 739 on the contention that non-payment or deficiency of stamp duty would not invalidate the contract. 11.1 However, learned counsel for the respondent submits that the decision in N.N. Global Mercantile Private Limited (Supra) is contrary to earlier decision of the Supreme Court in M/s. SMS Tea Estates Private Limited vs. M/s. Chandmari Tea Company Private Limited, (2011) 14 SCC 66 as affirmed in Garware Wall Ropes Limited vs. Coastal Marine Constructions and Engineering Limited, (2019) 9 SCC 209 and therefore, reference has been made to a constitution bench of five Judges for an authoritative pronouncement. 12. Submissions made by learned counsel for the parties have been duly considered. 13. From the facts as narrated above, it may not be necessary to delve deep into the intricate questions of law as urged. 14. The claim to arbitration of the applicant is based on the service agreement dated 28.09.2010 between M/s. Trinethra Superretail Private Limited and M/s. Writer Safeguard Private Limited. Clause 12 of the agreement provides for arbitration. It says that that in case of any disputes and differences arising out of the service agreement between the service provider and M/s. Trinethra Superretail Private Limited, it shall be settled mutually between the parties failing which the same shall be settled by arbitration under the 1996 Act by the sole arbitrator appointed by M/s. Trinethra Superretail Private Limited. On carefully going through the said service agreement, we find that it was signed by the authorized signatory of M/s. Writer Safeguard Private Limited only. There was no signature or endorsement on behalf of M/s. Trinethra Superretail Private Limited. As a matter of fact, at page No. 23 of the paper book there was no signature of the two witnesses on behalf of the service provider M/s. Writer Safeguard Private Limited. Likewise, there was no signature of the two witnesses of M/s. Trinethra Superretail Private Limited. In such circumstances, the said agreement cannot be said to be an effective agreement binding the two parties. That apart by letter dated 07.12.2011 authorized signatory of M/s. Trinethra Superretail Private Limited had informed M/s. Writer Safeguard Private Limited that the said agreement would be terminated with effect from 21.01.2012. 15. Though applicant had raised claim of Rs. 28,85,287-00, the same was denied by the respondent vide letter dated 09.02.2015. That apart by letter dated 07.12.2011 authorized signatory of M/s. Trinethra Superretail Private Limited had informed M/s. Writer Safeguard Private Limited that the said agreement would be terminated with effect from 21.01.2012. 15. Though applicant had raised claim of Rs. 28,85,287-00, the same was denied by the respondent vide letter dated 09.02.2015. On the other hand, the respondent stated that there was outstanding payment of Rs. 70,69,708/- to be paid by the applicant to the respondent, besides a further amount of Rs. 23,98,901/- totaling to Rs. 94,68,609.00. It was thereafter that applicant invoked the arbitration clause by letter dated 28.04.2016 referring to the service agreement dated 28.09.2010 reiterating that an amount of Rs. 28,85,287-00 was liable to be paid to the applicant. Applicant called upon the respondent to appoint a sole arbitrator failing which it was stated that it would invoke provisions of the 1996 Act. It was thereafter that the related application came to be filed in the year 2019. 16. In the facts and circumstances of the case, this Court is not inclined to accede to the prayer made by the applicant. The demand for arbitration has been made on the basis of an unsigned agreement. Though learned counsel for the applicant would like to argue that if from subsequent correspondence it can be deduced that there is arbitration agreement between the parties, Court is of the view that no such conclusion can be drawn from the materials on record inasmuch as respondent has consistently denied any claim to arbitration. On such factual basis, the decision in Govind Rubber Limited (supra) is distinguishable. From the correspondence exchanged between the parties, no conclusion can be arrived at that there was any meeting of mind between the parties which would create a binding contract between them. 17. In view of what has been discussed above, the decision rendered in Uttarakhand Purv Sainik Kalyan Nigam Limited and N.N. Global Mercantile Private Limited (supra) need not be gone into as these two decisions do not have any application to the facts of the present case. 18. Consequently, Court finds no merit in this application, which is accordingly dismissed. No order as to costs. Miscellaneous petitions if any pending in this arbitration application shall also stand dismissed.