Case Details

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY, THE THIRTEENTH DAY OF NOVEMBER TWO THOUSAND AND NINETEEN PRESENT THE HONOURABLE SRI JUSTICE A.RAJASHEKER REDDY Arbitration Application No. 6 of 2014 Between: M/s. R.K. Infra and Engineering (India) Pvt. Ltd, Having registered office at 7-2-49/75, Nizampet Road, Hyder Nagar, Hyderabad 500 072 Represented By its Managing Director Mr. B. Ravi Kalyan Reddy. ...Petitioner. AND M/s. RATNA Infrastructure Projects Pvt. Ltd., Plot No.88, Prasasan Nagar, Roacl No.72, Jubilee Hills, Hyderabad-33, Represented by its Chairman anc-l Managing Director. ...Respondent Application Under Sec. 16 of the Arbitration & Conciliation Act, 1996 praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to appoint an arbitrator for adjudication of the disputes between the parties. Counsel for the Petitioner: Sri B.Chandrasen Reddv. Counsel for the Respondent: Sri S.U.V.Srinivas. The Court made the following: ORDER THE }!!)N BLE SRI JUSTICE A.RAJASHEKER RE=DIY ARIIII RA ON APPLICATION NO.5 0F 4 This Arbitration Application is filed under Sectic,n :1"1 (6) of the Arbitration and (lorciliation Act, 1996 (for short'the A:t cf 1996'), read with Rule-2(b) of the Scheme for Appointment of Arbitrators, 1996, for appointment of an Arbitrator for adjudicating and settlement of the dispute by passing an auiarrj, 2. It is the case of the applicant that it is a compan) re,3istered under the provisions c,f the Companies Act, 1956; that it is errgaged in the business of prosper:ting, exploring, operating, excavatiol, (:onstruction of roads, earth works, etc in India; that Meja Ufia Nigam Pvt Ltd (hereinafter referred to as "M[JNPL") has awarded the work of ";ite levelling and infrastructure urork, package for its project Meja Thermal Po\^/er Project" to the respondent. and a contract agreement dated 21.9..:010 was entered into between MUNPL and the respondent; that the resporrdent entered into a deed of lvlemorandum of Understanding dated 18.11.2019 with M/s Rithwik Projects Pvt Ltd, Hyderabad, to ward the wlrole of the above- mentioned work on 100o/o back to back basis subject to the terms and conditions agreed thereunder; that the said M/s Rithwik Prrtjects Pvt Ltd, Hyderabad, an,l the applicant have entered into a Joint Vr:nture namely Rithwik-RK Infra Joint Venture on 28.7.2010 for executon of the above- mentioned work subject to the terms and conditions arlreed thereunder; that the respondent has subcontracted the whole work cn 100o/o back to back basis on Fl.ithr,r,ik-RK Infra Joint venture and entered intc sub-contract agreement on 28.7.2010; that condition No.13 of the agreement ORDER: 7 empowered the respondent to issue power of attorney in the name of the representative of loint Venture Company for the purpose of dealing with the MUNPL with respect to the execution of work; that M/s Rithwik entered into an agreement under a Memorandum of Understanding on 29,7.2010 with the applicant to execute the entire work on sub-contract basis on behalf of the Joint venture subject to the terms and conditions agreed thereon; that pursuant to the above agreements and understanding between the parties, the applicant had deployed entire machinery and men at site as per the contract and was executing the entire work contract; that leaving a balance of Rs.74,20,9t,7391-; that however, the parties to the Joint venture have terminated the joint venture agreement by executing the Dissolution Deed dated 28.7.2012 and desired to execute the remaining work worth Rs.74,20,91,739l- individually holding equal shares; that the respondent subcontracted the work per the ratio decided to the applicant and M/s Rithwlk at Rs.37,10,45,869/- each and entered into separate subcontract agreements with the respective parties on 28.7.2012; that M/s Rithwik has subcontracted their share of 500/o work to the applicant as per the modified agreement dated 28.7.2012; that the applicant was executing the balance works under the said contracu and that out of the total contract value of Rs.137,2L,75,3271-,lhe value of the work executed by the applicant as on the above date worked out to Rs.90,98,34,857/-. 3. It is the further case of the applicant that as an amount of Rs.27,28,26,000/- was not released by MUNPL, the applicant issued legal the value of work executed by the Joint Venture Company worked out to Rs.63,00,83,588/- as against the total contract value of Rs.t37,2L,75,3271- notice dated -..4.7)..2013 for invoking the arbitration tlau:;e in the Sub- contract agreement, dated 28.7.20t2 and dentanding to pay Rs.29,63,76,755/-. The respondent has issued reply to the sald notice on 30.11.2013 disputirg the liability apart from raising othr:r contentions and also stated that before going for arbitration, the dispute: has to be settled amicably and then': is no arbitrary dispute for referrin,; to arbitrator. As such, the present A,rbitration Application is filed. 4. Heard learned counsel for the applicant and learned :ounsel for the respondent. Nr: counter affidavit is flled on behalf of the resl)ondent. 5. Learned coursel for the applicant while reiteratirrg the contents in the Arbitration Application submits that when there is dispute regarding payment of arrount by the respondent to the appliclnt, the applicant issued notice to the respondent seeking to invoke the arbitration clause; and that in the reoly, the respondent has only disputerd the liability. He further submits that though the applicant was agreeabk: for amicable settlement, the respondent has not come forward for the same and that therefore, having no other go, the present Arbitration Application is filed. 6. There is no dlspute with regard to existence of ai bitration clause in the Sub-contract agreement dated 28.7.2012 entered intr: between the parties, the invocation of arbitration under clause 14 therer.rnder and also with regard to issuance of notice by the applicant and th,: reply sent by the respondent thereto. Exchange of notices regarding payrren: goes to show that there exists dispute. 7. In this c,ase, it is to be seen that the Sub-contracl agreement dated 28.7.2012 contains arbitration clause, which reads as unrler: "lf an'r' dispute or difference of any kind whatsoeve r shall arise behveen PATNA and Rithwik-RK (JV) in connecton with or 1 arising out of this agreement or the carrying out of the Services whether arising durlng the progress of the Works or after their completion, an attempt to amicably settle the same shall be made between the authorized representatives of RATNA and Rithwik-RK (lV), failing which such disputes shall be flnally, immediately settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996, and/or any re-enactment and amendments thereof. The parties herein also agree to constitute a three panel arbitrator proceedings, either party shall appoint, one arbitrator each and the appointed two arbitrators shall appoint the third arbitrator in accordance with the provisions of the Arbitration Act. The venue of the arbitration proceedings shall be at Hyderabad, and the language shall be English." 8. In view of the same, Sri Justice Amitava Roy, Former Judge of the Supreme Court of India, is appolnted as Arbitrator to adjudicate the claims and disputes between the parties and to pass an award in accordance with law. 9. The learned Arbitrator shall be entitled to fees as per the rates specified in the Fourth Schedule to the Act of 1996, inserted by Act 3 of 2016 with effect from 23.10.2015, which shall be borne by both partles in equal proportion. 10. The Arbitration Application is accordingly allowed. 11. Interlocutory applicatlons pending, if any, shall stand closed. No order as to costs. Sd/-M.SANTHI VARDHANI JOINT REGIS AR //TRUECOPY// SECTIO FFICER To, 1. Sri Justice Amitava Roy, Former Judge of the Supreme Court of India, A-96,2"a Floor, Defence Colony, New Delhi-110024. 2. One CC to Sri B.Chandrasen Reddy, Advocate [OPUC] 3. One CC to Sri S.U.V.Srinivas, Advocate [OPUC] 4. Two CD Copies IR\ 4- TIIGH COURT ARR,J DATED:13l11,/2011) ORDER ARBAPPL.No.6 o12014 Allowing the Arbitration Application. o -rHE SIa ( ) 0? ,tUr 2020J (. ), .,,4;:ilpAT(:H a 3sv 6 c-otrruj )- r\r\.,- i\ .i/