ARBAPPL/124/2022 of M/s. SHV Energy Pvt. Ltd Vs M/s. Vasantha Bhavan Hotels (I) Pvt. Ltd on 30 December 2022

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD

FRIDAY,THE THIRTIETH DAY OF DECEMBERTWO 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 itsAuthorized Signatory. Ritwik Raj, Aged 24 Years S/o. Dhananjay Agrawal Ph. No040-23540079 Email ld, [REDACTED]

...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 andConciliation Act, 1996 RJw. Scheme for Appointment of Arbitrators, 2000 prayingthat for the reasons stated in the accompanying affidavit filed therewith, theHon'ble Court may be pleased to kindly take necessary measures for theappointment of the arbitral tribunal in terms of clause 20 of the Agreement dated29-01-2011 and appoint a sole arbitrator to resolve the disputes between theApplicant 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 perusedthe 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 theappiicant and respondent companies, wherein the applicant companyagreed to install thc complete system of 2 x 30 size manifold whichincludes 60 nurnber of 33 KG Supergas LPG Cylinders, regulators,pigtails, primary piping, primary pressure regulatory systems etc., alongwith 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 ofthe agreement, the applicant has installed the SGS and has been supplyingLPG. However, the respondent company has stopped purchasing supplies from the applicant since 21.03.2020 and has failed to clear the outstandingdues from January 2020 to March 2020 lbr the supplies already rnadb bythe applicant. As per clause 3(b) of the agreement, the respondentcompany was under obligation and commitment to purchasc a guaranteed rninimum quantity of 8.9 MT of LPC per month from the eighth [month ]ofcommissioning of the SGS. The respondent company gave a projectionthat it would procure approxirnately IOMT of LPG per rnonth and underthis assurance the applicant agreed to set up SGS system at the [premises ]ofthe respondent company. Furlher, respondent has specifically agreed topurchase LPG supplies from'the applicant during the tenure of theagreement. 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 ofrenewal at consensus of the parties. The applicant has requested therespondent company to clcar the due amount of Rs. i 2,83,75 1/- and as therewas no response for the same from the respondent, as per clause I I of theagreernent, 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 makingfiivolous allegations against the applicant and claiming that disbursementof outstanding amounts were delayed due to the pandemic and made ameagre paft payment of Rs.2,00,0001. Subsequently, the applicant wasconstrained to issue second legal notice vide e-rnail dated 09.04.2021 forpayment of outstanding dues. Reply was issued via e-mail dated12.04.2021 by the respondent with a settlement proposal of re-payment ofoutstanding dues at Rs.2,00,0001 per month. The applicant did not

approve the settlement proposal bccause despite various assurances ofrepayment, the respondent failed to make payments. The applicant hasissued an Arbitration Notice vide e-mail dated 06.05.2021 by invokingclause 20 of the agreement dated 29.01.2011, proposing the name ofMr. K. Sanga Reddy, Retired District Judge, as sole Arbitrator for resolvingthe disputes. Furtl.rer, the respondent was called upon to provideconfirmation or suggest name of another arbitrator within ten ( I 0) daysfrom the date of receipt of the arbitration notice. The respondent repliedvide e-mail dated 17.05.2021 admitting that there are pending dues,however intimated that due to pandemic their operations have been shutdown and requested time for a detailed reply.

5. In the above circumstances, the applicant approached this Courtseeking appointment of arbitrator in terms of Clause - 20 of tl.re agreqmentdated 29.01 .20 I I between the pa(ies. Notice sent to tlie respondent hasbeen 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 thepending due amount and intimating that operations of the respondent havebeen shut down due to the causc stated in the earlier reply dated16.09.2020. Thus, the respondent has admitted the ducs payable to theapplicant. Howevcr, as thc amounts were not paid, arbitr-ation clause was I

\

invokedAScontemplated under Section 1 1 of the Arbitration andConciliation Act 1996 (for sliort ['Arbitration ]Act'). There is no contestfrom the respondent and they remained Ex parte.

6. Accordingly, this arbitration application is allowed appointingMr. 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 disputesbetween the applicant anC tlie respondent and the learned Arbitrator shallenter 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 withelfectfrom 23. 10.2015, which shall be bome by both parties in equal shares.

As a sequel thereto, miscellaneous applications, if any, pending inthis arbitration application shall stand closed.

Sd/. C.V. MALLIKARJUNA [VARMA]

JOINT REGISTRAR<_,x,

/ffRUE COPY//

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)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"

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HIGH COURTDATED:3011212022

ORDERARB.APPL.N o.124 of 2022

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ALLOWING THE ARBITRATION APPLICATION

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