G4S Secure Solutions (India) Pvt. Ltd. v. CGI Information Systems and Management Consultants Pvt. Ltd.
2025-07-02
ASHOK S KINAGI
body2025
DigiLaw.ai
ORDER : 1. This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 , seeking the appointment of an Arbitrator to resolve the dispute that has arise between the parties in terms of clauses 14 and 25 of the service agreements dated 31.03.2016 and dated 19.09.2016 vide (Annexure-A and B) respectively, as per the provisions of the Arbitration and Conciliation Act, 1996 . 2. Brief facts leading rise to the filing of this petition are as follows: The petitioner is involved in the business of providing security and related services to its customers. The respondent is engaged in software development and providing consultancy services, including strategic IT and business consulting, systems integration, intellectual property, and etc. 3. In 2016, the respondent approached the petitioner to avail security services as the premises of the respondent at Divyasree Technopolis, 124-125 Yemlur Main Road, Off Airport Road Yemlur, P.O. Bangalore - 560037 and to that effect executed a Service Agreements dated 31.03.2016 (effected from 01.04.2016) and 19.09.2016, in lieu whereof, the consideration, being the payments for the services to be disbursed by the respondent within 30 days after the receipts of the invoices from the petitioner. 4. In view of the services rendered by the petitioner under the service agreement, the petitioner raised several invoices against the respondent, but the respondent failed to clear the outstanding dues. The petitioner approached the respondent and demanded payment of the outstanding dues. The respondent neither disputed the invoices submitted by the petitioner nor paid the outstanding dues. The petitioner issued a demand notice on 01.10.2020 under Section 8 of the Insolvency and Bankruptcy Code, 2016 to the respondent demanding payment of Rs.1,06,67,430.91/- (Rupees One Crore Six Lakhs Sixty Seven Thousand Four Hundred and Thirty Point Nine One Only), including a delay interest @ 18% p.a. 5. The respondent replied to the demand notice vide reply letter dated 10.10.2020 with untenable reasons. The petitioner approached the National Company Law Tribunal, Bengaluru, in view of the default in payment of outstanding bills due and the said petition was dismissed vide order dated 30.11.2022 on the grounds of the pre-existence of a dispute.
The respondent replied to the demand notice vide reply letter dated 10.10.2020 with untenable reasons. The petitioner approached the National Company Law Tribunal, Bengaluru, in view of the default in payment of outstanding bills due and the said petition was dismissed vide order dated 30.11.2022 on the grounds of the pre-existence of a dispute. The petitioner invoked the Arbitration clauses by issuing an arbitration notice dated 02.02.2024 under Section 21 of the Arbitration and Conciliation Act, of 1996, suggesting the name of an Arbitrator to which an untenable reply was issued by the respondent, rejecting the name of the Arbitrator proposed by the petitioner. Hence, this petition. 6. Respondent filed a statement of objections regarding the execution of the service agreements and contended that the claim made by the petitioner is barred by limitation. Hence, prays to dismiss the petition. 7. Heard the arguments of the learned counsel for the petitioner and the learned counsel for the respondent. 8. Learned counsel for the petitioner submits that the petitioner and the respondent have entered into service agreements and the petitioner has rendered a service to the respondent. The respondent is liable to pay and outstanding due of Rs.1,06,67,430.91/- (Rupees One Crore Six Lakhs Sixty Seven Thousand Four Hundred and Thirty Point Nine One Only). The petitioner, despite issuing the demand notice, the respondent did not pay the outstanding due. There is arbitration clauses in the service agreements dated 31.03.2016 and 19.09.2016. The petitioner invoked the Arbitration clauses by issuing an arbitration notice to the respondent by proposing the name of the Arbitrators. The respondent did not accept the name of an Arbitrator proposed by the petitioner. He submits the dispute has arisen between the parties and there are the arbitration clauses in the service agreements. Hence, the petition may be allowed. 9. Per contra, learned counsel for the respondent submits that the claim made by the petitioner is barred by limitation. He submits that the petitioner is not entitled to the present claim, as the amount was due in 2019 and the present Civil Miscellaneous Petition is filed in 2025. Hence, she prays to dismiss the petition on the grounds of delay and laches. 10. Perused the records and considered the submissions of the learned counsel for the parties. 11.
He submits that the petitioner is not entitled to the present claim, as the amount was due in 2019 and the present Civil Miscellaneous Petition is filed in 2025. Hence, she prays to dismiss the petition on the grounds of delay and laches. 10. Perused the records and considered the submissions of the learned counsel for the parties. 11. The point that arises for my consideration is: "Whether the petitioner has made out a ground to refer the Arbitral dispute to the Arbitrator in terms of clause 14 of the Service agreement dated 31.03.2016 vide Annexure-A and in terms of the clause 25.1 of the service agreement dated 19.09.2016 vide annexure-B as per the provisions of the Arbitration and Conciliation Act, 1996 and Rules." 12. There is no dispute regarding the execution of the service agreements dated 31.03.2016 and 19.09.2016 and accordingly, pursuant to the execution of the service agreements, the petitioner has provided a security service at the premises of the respondent. 13. The petitioner demanded the outstanding dues of Rs.1,06,67,430.91/- (Rupees One Crore Six Lakhs Sixty Seven Thousand Four Hundred and Thirty Point Nine One Only). The respondent did not pay the said amount. The petitioner issued a demand notice calling upon the respondent to pay the alleged outstanding dues. The respondent replied to the demand notice alleging that the respondent is not liable to pay the amount claimed in the demand notice. 14. The petitioner invoked the Arbitration clause, Clause No.14 of the service agreement dated 31.03.2016 and clause No.25 of the service agreement dated 19.09.2016 by issuing the notice vide Annexure-G dated 02.02.2024 wherein the petitioner has proposed the name of an Arbitrator. The respondent replied to the arbitration notice but refused to accept the name of the arbitrator proposed by the petitioner. Admittedly, there is an arbitration clause in the agreements dated 31.03.2016 and 19.09.2016. 15. Learned counsel for the respondent submits that the claim made by the petitioner is barred by limitation. The scope of judicial intervention under Section 11 of the Arbitration and Conciliation Act, 1996 Act is restricted to the situation that the judicial authorities are to find that an Arbitration Agreement exists or is null and void.
15. Learned counsel for the respondent submits that the claim made by the petitioner is barred by limitation. The scope of judicial intervention under Section 11 of the Arbitration and Conciliation Act, 1996 Act is restricted to the situation that the judicial authorities are to find that an Arbitration Agreement exists or is null and void. The scope of examination is now confined only to the existence of the Arbitration Agreement as per the law laid down by the Hon'ble Apex Court in M/s Uttarkhand Purv Sainik Kalyan Nigam Limited Vs. Northern Coalfiled Ltd. AIR 2020 SC 979 . The Hon'ble Apex Court held that the scope of examination is confined only to the existence of the Arbitration Agreement at the Section 11 stage and nothing more. The Hon'ble Apex Court further examined the issue of limitation and held that limitation is a mixed question of law and fact and the same involves a question of jurisdiction. The said issue is to be determined having regard to the facts and grounds. Hence, the issue of limitation is to be decided by the arbitral Tribunal. The said decision is aptly applicable to the present case, as the respondents have taken the contention that the claim made by the petitioner is barred by limitation. The said issue cannot be considered at the stage of considering an application under Section 11 of the Arbitration and Conciliation Act, 1996 and the contention of the learned counsel for the respondent in regard to the issue of limitation cannot be accepted for the reasons stated above. 16. In view of the above discussions, the petitioner has made out a ground to refer the arbitral dispute to the Arbitrator in terms of clauses 14 and 25.1 of the service agreements dated 31.03.2016 and 19.09.2016. Accordingly, I answer the point for consideration in the affirmative. I proceed to pass the following order: ORDER : 1. The Civil Miscellaneous petition is allowed. 2. Shri. D.S. Muttur, Retired District Judge, is nominated as an arbitrator to resolve the dispute between the parties in terms of the clauses 14 and 25.1 of the service agreements dated 31.03.2016 and 19.09.2016 as per the provisions of the Arbitration and Conciliation Act, 1996 and Rules. 3. The office is directed to communicate this order to the learned Arbitrator and to the Arbitration and Conciliation Centre, Bengaluru. 4.
3. The office is directed to communicate this order to the learned Arbitrator and to the Arbitration and Conciliation Centre, Bengaluru. 4. All contentions of the parties are kept open, including the issue of limitation. 5. In view of the disposal of the petition, pending IA's, if any, stand disposed of accordingly.