M/s. Biswajit Ghosh Mining and Movers Private Limited vs M/s. DNC Infrastructure Private Limited

When the matter is taken up for hearing today, learned counsel appearing for the respondent prays for further time to file a counter-affidavit. However, the proceedings dated 31.07.2026 show that the respondent either remained unrepresented by counsel or sought time despite counsel entered appearance and filed vakalatnama. Or 07.08.2026, learned counsel appearing for the applicant has placed the relevant facts including the Arbitration Agreement and the Notice invoking Arbitration. Learned counsel appearing for the respondent sought time on the ground that she came on record only on 27.07.2026. No counter-affidavit has been filed till date. Hence, this Court is not inclined to grant any further time or delay the matter

The present Arbitration Application was filed on 17.06.2025 seeking the appointment of an Arbitrator under section 11(6) of The Arbitration and Conciliation Act, 1996 ('A & C Act').

The dispute between the applicant and the respondent relates to recovery of money. The Parties entered into an Internal Memorandum of Understanding ('IMOU') dated 31.01.2023, for the purpose of executing a Project floated by Eastern Coalfields Limited for the Development and Operation of the Itapara OCP ('Project Works'). The said IMOU contains an Arbitration Clause, which constitutes an Arbitration Agreement to the effect that in case of any disagreement or dispute, the matter shall be referred to a Sole Arbitrator, who shall be appointed by mutual consent of both the parties. The Arbitration will be conducted under Provisions of the A & C Act, as amended from time to time. The place of Arbitration shall be Hyderabad. Work will not, however, be stopped during the Arbitral proceedings and will be kept in full force.

As per the IMOU, the applicant and the respondent were to jointly bid for the Project Works, with their respective contributions towards the Earnest Money Deposit (EMD) being 30% and 70%. Accordingly, the Applicant contributed an amount of Rs.1,00,00,000/- towards the EMD and paid the said amount to the Respondent. The Tender however was cancelled.

Learned counsel appearing for the respondent has no instructions regarding the date on which the Tender was cancelled.

The applicant repeatedly requested the respondent to refund the amount of Rs.1,00,00,000/-. The respondent issued a cheque bearing No. 978228, drawn on Yes Bank Limited, which was dishonoured upon presentation. Thereafter, the applicant issued a Legal Notice dated 07.09.2024 to the respondent, for refund of Rs.1,00,00,000/- along with interest at the rate of 18% per annum. However, the respondent failed to reply to the said Notice. The applicant was hence constrained to issue a Notice invoking Arbitration on 03.12.2024 and nominated Mr. Vivek Basu Roychowdhury, Advocate, High Court at Calcutta, as the Sole Arbitrator to adjudicate the disputes between the parties. The respondent also failed to respond to the Notice invoking Arbitration.

The only argument made by learned counsel appearing for the respondent is that the IMOU was terminated pursuant to the cancellation of the Tender. Counsel does not have any instructions or information as to the date of the cancellation of the Tender or Agreement. In any event, this argument is untenable in view of the settled legal position that the Arbitration Agreement has an independent existence of its own and will not be affected or touched by termination of the underlying Agreement.

The other contention of learned counsel appearing for the respondent is that the applicant did not make any payment towards its contribution of Rs.1,00,00,000/- to the respondent.

This Court is of the firm view that all such contentions can be urged and adjudicated before the Arbitrator, since the Arbitration Agreement fully covers the disputes between the parties.

Hence, Sri Ch.Appala Narasimha Murthy, Retired District Judge, R/o. C-502, 'C' Block, Amsri Central Court Apartments, Near Secunderabad East Metro Station, Secunderabad - 500 026. Mobile No. 9440760644, is hereby appointed as the Sole Arbitrator to adjudicate the disputes between the parties. The parties shall appear before the Learned Arbitrator on 31.08.2026 at 11.00 A.M. along with a copy of this order. The Learned Arbitrator shall thereafter proceed with the Arbitral Proceedings in accordance with law.

The parties are at liberty to raise all the contentious issues before the learned Arbitrator. The fee of the Arbitrator as well as the other terms and conditions, shall be settled by the parties in consultation with the Arbitrator so appointed.

Arbitration Application No. 133 of 2025, along with all connected applications, is accordingly Allowed. There shall be no order as to costs.