M/S. Shv Energy Pvt. Ltd v. M/S. Vasantha Bhavan Hotels (I) Pvt. Ltd

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD FRIDAY,THE THIRTIETH DAY OF DECEMBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE B.VIJAYSEN REDDY ARBITRATION APPLICATION NO: 124 OF 2022 Between:

M/s. SHV Energy Pvt. Ltd, SUPERGAS House, lVth Floor, SDE Serene Chambers, 8-2-334, Road No. 7, Banjara Hills, Hyderabad 500 034 Represented by its Authorized Signatory. Ritwik Raj, Aged 24 Years S/o. Dhananjay Agrawal Ph. No 040-23540079 Email ld, rritwik@supergas.com ...APPLICANT AND Mis. Vasantha Bhavan Hotels (l) Pvt. Ltd, Corporate Office at 34, South Phase, Developed Plot Estate, Guindy, Chennai- 600032. ...RESPONDENT Arbitration Application Under Section 11 (6) of the Arbitration and Conciliation Act, 1996 RJw. Scheme for Appointment of Arbitrators, 2000 praying that for the reasons stated in the accompanying affidavit filed therewith, the Hon'ble Court may be pleased to kindly take necessary measures for the appointment of the arbitral tribunal in terms of clause 20 of the Agreement dated 29-01-2011 and appoint a sole arbitrator to resolve the disputes between the Applicant and the Respondent arising out of the said agreement . Counsel for the Petitioner: M/s. R.S. ASSOCIATES Counsel for the Respondent: NONE APPEARED The Court made the following: ORDER

IION'I}I-E SIU JUSTICE I}. VIJAYSEN ITEI)D}'

All.li I T Il,\'l'lON APPI- ICATI ON No. I 24 O li 2022 ORDER: (ORAL) Heard M/s R.S. Associates, learned counsel for applicant, and perused the material on record.

2. None appears for the respondent despite service ofnotice.

3. An agreement dated 29.01 .20 I I was entered into between the appiicant and respondent companies, wherein the applicant company agreed to install thc complete system of 2 x 30 size manifold which includes 60 nurnber of 33 KG Supergas LPG Cylinders, regulators, pigtails, primary piping, primary pressure regulatory systems etc., along with other associated seryices (hereinafter collectively referred to as 'SGS') at the facilities of the respondent company situated at Chennai.

4. It is the case of the applicant that as per the terms and conditions of the agreement, the applicant has installed the SGS and has been supplying LPG. However, the respondent company has stopped purchasing supplies from the applicant since 21.03.2020 and has failed to clear the outstanding dues from January 2020 to March 2020 lbr the supplies already rnadb by the applicant. As per clause 3(b) of the agreement, the respondent company was under obligation and commitment to purchasc a guaranteed

rninimum quantity of 8.9 MT of LPC per month from the eighth month of commissioning of the SGS. The respondent company gave a projection that it would procure approxirnately IOMT of LPG per rnonth and under this assurance the applicant agreed to set up SGS system at the premises of the respondent company. Furlher, respondent has specifically agreed to purchase LPG supplies from'the applicant during the tenure of the agreement. The tenure of the agreement, as per clause 4, is l0 years, covering the period from 29.01.2011 to 28.01.2021, with the option of renewal at consensus of the parties. The applicant has requested the respondent company to clcar the due amount of Rs. i 2,83,75 1/- and as there was no response for the same from the respondent, as per clause I I of the agreernent, it was constrained to issue the legal notice dated 0'].

09.2020, calling upon the respondent company to clear the outstanding dues. Reply dated 16.09.2020 was issued by the respondent company making fiivolous allegations against the applicant and claiming that disbursement of outstanding amounts were delayed due to the pandemic and made a meagre paft payment of Rs.2,00,0001. Subsequently, the applicant was constrained to issue second legal notice vide e-rnail dated 09.04.2021 for payment of outstanding dues. Reply was issued via e-mail dated 12.04.2021 by the respondent with a settlement proposal of re-payment of outstanding dues at Rs.2,00,0001 per month.

approve the settlement proposal bccause despite various assurances of repayment, the respondent failed to make payments. The applicant has issued an Arbitration Notice vide e-mail dated 06.05.2021 by invoking clause 20 of the agreement dated 29.01.2011, proposing the name of Mr. K. Sanga Reddy, Retired District Judge, as sole Arbitrator for resolving the disputes. Furtl.rer, the respondent was called upon to provide confirmation or suggest name of another arbitrator within ten ( I 0) days from the date of receipt of the arbitration notice. The respondent replied vide e-mail dated 17.05.2021 admitting that there are pending dues, however intimated that due to pandemic their operations have been shut down and requested time for a detailed reply.

5. In the above circumstances, the applicant approached this Court seeking appointment of arbitrator in terms of Clause - 20 of tl.re agreqment dated 29.01 .20 I I between the pa(ies. Notice sent to tlie respondent has been served. Proof of service is filed vide USR No.81836 of 2022. To the notice dated 06.05.2021 invoking arbitration issued by the applicant, a reply dated I 7.05.2021 has been issued by the respondent admitting the pending due amount and intimating that operations of the respondent have been shut down due to the causc stated in the earlier reply dated 16.09.2020. Thus, the respondent has admitted the ducs payable to the applicant. Howevcr, as thc amounts were not paid, arbitr-ation clause was

,.1 invoked AS contemplated under Section 1 1 of the Arbitration and Conciliation Act 1996 (for sliort 'Arbitration Act'). There is no contest from the respondent and they remained Ex parte.

6. Accordingly, this arbitration application is allowed appointing Mr. R. Damodar, Retired District Judge, Flat No.204, H.No. l-13-t/2/1/A, MNR Sripadham, Plot No.1, Block No.13, Alkapuri Colony, Saroornagar, Ranga Reddy District - 500035 as Arbitrator to arbitrate on the disputes between the applicant anC tlie respondent and the learned Arbitrator shall enter on reference and proceed with, as enjoined by the Arbitration Act.

7. The learned Arbitrator is entitled to fees as per the rates specified in the Schcdulc - IV to Arbitration Act, inserted byAct 3 of 2016 withelfect from 23. 10.2015, which shall be bome by both parties in equal shares. As a sequel thereto, miscellaneous applications, if any, pending in this arbitration application shall stand closed. Sd/. C.V. MALLIKARJUNA VARMA JOINT REGISTRAR /ffRUE COPY// <_,x, \ SECTION OFFICER To,

1. Sri R. Damodar, Retired District Judge, Flat No 204, H'No 1-13-1/2/1/A' UNfi 5np"Onim, Plot No.1, Block No. 13, Alkapuri Colony' Saroornagar' ninoa ieOOv District - 50035. ( by Special Messenger) ( along with a copy of afridavit ahd material PaPers)

2. One CC to Mis. R.S. ASSOCIATES, Advocate [OPUC] 3- Two CD CoPies k'ul \,\z"

pr

HIGH COURT DATED:3011212022 -($Es 'q \,, !

J 10 FEB 2[n ll) r-)

ORDER

D ia!x'.r,---'

\s,..,-- ARB.APPL.N o.124 of 2022 ALLOWING THE ARBITRATION APPLICATION