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Judgment
Yesterday, when this application was taken up for hearing, learned counsel appearing for the respondent was unable to proceed with the application in the absence of the advocate-on-record of the respondent. At the instance of the respondent, the hearing of this application was adjourned today. Today, once again the respondent seeks for an accommodation.
In view of the fact that the learned counsel for the petitioner had already concluded his submission on December 18, 2018, this Court is not inclined to entertain the prayer for accommodation made by the respondent and such prayer is rejected.
In this application under Section 9 of the Arbitration & Conciliation Act, 1996, as amended by Act 3 of 2016 (in short, "the Act of 1996"), the petitioner has sought for various relief against the respondent as mentioned hereinafter.
It is the case of the petitioner that by an agreement dated March 2, 2017 entered into between the parties, the petitioner agreed to advance Rs.22.50 crores to the respondent towards procurement of sugar for obtaining supply of 90,000 quintal of sugar to be manufactured by the respondent at its factory, at the rate of Rs.2,500/- per quintal on or before November 30, 2018 with the discount of Rs.70/- per quintal per month. In terms of the said agreement dated March 2, 2017 as a security for repayment of the said amount of Rs. 22.50 crores the respondent had also issued 23 post dated cheques in favour of the petitioner. Clause 8 of the said agreement also provided that all disputes arising between the parties herein relating to the said agreement shall be decided in arbitration, as per the provisions of the Act of 1996.
According to the petitioner, later on the parties agreed that instead of Rs.22.50 crores the petitioner would advance the financial accommodation to the respondent of a lessor amount. The petitioner has prayed for various relief including an order directing show cause as to why it should not furnish security to the respondent of Rs.3,24,44,258/- and in the event the respondent being unable to furnish the said security the properties of the respondent as stated in paragraphs 30 and 38 be attached.
At this juncture, it is to be noted that the properties mentioned in paragraphs 30 and 38 of the application do not form part of any security in favour of the petitioner. On August 16, 2018 this Court passed an order directing the respondent to show cause as to why it should not furnish security to the extent of the outstanding balance claimed by the petitioner for Rs.3,24,44,258/-. The respondent has filed an affidavit. In the said affidavit the respondent has claimed that it has already supplied the entire quantity of sugar to the petitioner against the advance amount paid by the latter.
From the documents disclosed in the application it appears that prior to the execution of the said agreement dated March 2, 2017 some amount of money was lying outstanding from the respondent to the petitioner.
Admittedly, the said agreement was entered into between the parties on March 2, 2017. From the letter dated July 21, 2017 issued by the respondent, being Annexure-'E' to the petition it is evident that on July 21, 2017 the petitioner had made payment of Rs.3.50 crore, respectively to the respondent. The amounts mentioned in the said communication dated July 21, 2017 against opening balance and the payment on February 18, 2017 cannot be due and payable by the petitioner under the said agreement dated March 2, 2017.
Even the balance confirmation, disclosed as Annexure-G to the petition establishes that the first payment made by the petitioner on the basis of the said agreement dated March 2, 2017 was on July 21, 2017 for Rs.3.50 Crores. It was asserted by the petitioner that as per the balance confirmation issued by the respondents, being Annexure-"G" to the application a sum of Rs.5,18,09,276/-remained outstanding to the petitioner.
In the letter dated June 25, 2018 addressed to the respondent the petitioner has alleged that in terms of the said agreement dated March 2, 2017 it paid Rs. 12,46,25,000/- to the respondent and subsequently on January 1, 2018 it had paid a further sum of Rs. 15,51,985/- to the respondent. According to the petitioner, under the said agreement dated March 2, 2017 it paid a total sum of Rs. 12,61,76,985/- to the respondent. While arriving at the figure of Rs. 12,46,25,000/- the petitioner has taken into account an amount of Rs. 8,96,25,000/- which has been disclosed as the opening balance in the balance confirmation being Annexure- "G" to the application. As mentioned earlier, since after entering into the said agreement dated March 2, 2017 the petitioner made the first payment of Rs. 3.50 crore to the respondent only on July 21, 2017 I am not inclined to accept the case made out by the petitioner in its said letter dated June 25, 2018 that it had paid Rs. 12,61,76,985/- to the respondent under said agreement dated March 2, 2017. It appears that at the highest the petitioner has paid Rs. 3,65,51,985/- under the said agreement dated March 2,2017. In paragraph 18 of the application, the petitioner has admitted to have received Rs. 2,18,09,276/- from the respondent. Thus, it appears to this Court that the amount remaining outstanding from the respondent to the petitioner under the said agreement dated March 2, 2017 is Rs. 1,47,42,709/- (3,65,51,985/-minus 1,47,42,709/-). Accordingly, the petitioner can invoke the arbitration agreement contained in clause 8 of the said agreement dated March 2, 2017 for realising its claim against the respondent for Rs. 1,47,42,709/-.
The respondent, however, in its affidavit-in-opposition has not disclosed any defence to the claim of the petitioner for the said sum of Rs. 1,47,42,709/-. The averments made in the respondent in its affidavit-in-opposition evince its intention not to pay the said dues of the petitioner. Accordingly, the respondent is directed to deposit a demand draft issued of Rs. 1,47,42,709/- with the Registrar, Original Side of this Court within January 8, 2019.
Let this application appear in the list on January 10, 2019. In the meantime, the petitioner shall refer the disputes between the parties to arbitration.