ARBAPPL/228/2024 of SARVESH SECURITY SERVICES PVT LTD Vs Footwear Design and Development Institute on 12 March 2026

ORDER:

...Applicant Respondent Heard Mr. Zubak Fazal, learned counsel for the applicant; and Mr. R.S.Slrravan Kumar, learned counsel for the respondent.

The instant Arbitration Application has been filed by the applicant under Sect:ion ll(5) of the Arbitration and Conciliation Act, 1996 (for short 'the r\ct') seeking for appointment of an Arbitrator in pursuance of the contrar:t dated 18.10.2018 and to decide the disputes between the applicant and the respondent.

3. The applicant is said to be an agency which runs security services. The applicant had entered into an agreement with the respondent to provide security services for the period from.November, 2018 to November,2019. The tender was granted on the basis of the Government contract market. The contract period was from 0l.l 1.2018 to 20.1 I .2019. The applicant had also furnished a security deposit in the form of Fixed Deposit Receipt (FDR) for an amount of Rs.4,55,000/-.

4. [n terms of the contract, the learned counsel for the applicant contends that he had provided all necessary services to the satisfaction of the respondent institute and as a result the contract stood extended from time to time. However, the respondent failed to release the payment dues to the applicant for the services rendered for the period between November, 2018 to Novembe\ 2019. That, in spite of the applicant raising bills and repeatedly approaching the respondent, the admitted dues were not released to the applicant. Learned counsel for the applicant lurther submitted the applicant sent e-mails and letters to the respondent and also met the oflicials at the institute, yet it could not fetch any results. [n all, the applicant, as on date is entitled for an amoup1 roughly

Rs.46,64,853/- from the respondent. In addition, the applicant is also entitled [or refund of the security deposit of Rs.4,55,000/- along with certain statutory dues'towards EPF and ESIC amounting to Rs.5,80,1781- and Rs. I .02,5281 - respectively.

5. [t was in this context when the respondent failed to honor the claim, tht: applicant invoked arbitration clause [.8 read along with clause 16 of the GeM vide letter dated 16.06.2021, requesting to appoint an Arbitrator'.

6. I-eaLrned counsel for the respondent had not disputed the fact so far as the agreement entered into between the parties and also insofar as the applicant being engaged for security services. However, as regards the claim of the applicant, learned counsel for the respondent took two major objections. Firstly, the claim raised by the applicant is one hit by delay latches anrJ $sprsd by limitation. Secondly, invocation of the arbitration clause under Section 2l was at a belated stage.

7. So flar the period of limitation is concerned, looking at the proceedings drawn itself would give a clear indication of the CovlD

ir period coming in the way and in terms of the order passed by the Hon'ble supreme court in Suo Moto writ Petition No.3 of 2020, dated 10.01.2022, the period from 15.03.2020 ro l4.O3.Z0Zt has to be excluded for all practical purposes. Moreover, the question of limitation again is a mixed question of fact and law and in order to answer that query, proper evidence would be required to be advanced on either side and it would be thereafter for the Arbitrator to take a decision on the basis of materials brought before hirn.

8. Even on the aspect of invoking Section 2l of the Act is concerned, as has been objected by learned counsel for the respondent, this again is a matter of evidence which has to be produced by either side. Nonetheless, from the materials available on record it appears that after the covlD period, in terms of the order of the Hon'ble Supreme court in Suo-Moto writ Petition No.3 of 2020, dated 10.01 .2022, Section 2l proceedings i.e. invocation of the arbitration clause was initiated by the applicant on 1,6.06.2021 and the waiting period for the respondent to act on the Section 2l notice was till '17.07.2021. Thereafter, Section ll(5) application has been filed on 19.06.2024. Thus, the applicant has prima

.facie salisfied the Court insofar invocation of Section 2l within a reasonable period and the same cannot be doubted. Rest of the objections which the learned counsel for the respondent has insofar there being valid arbitrable issue and any such related objections and contentions can all be raised before the Arbitrator and the Arbitrator is expected to deal with.

9. [n view of the sarne, this Court is inclined to allow the instant Arbitration Application seeking for appointment of an Arbitrator. With the consent ol'the pafties, Mr. Challa Kodanda Ram, former Judge of this High Court (Plot No.68, Road No.7l, Phase III, Jubilee Hills, Hyderabad

- 500 034, Mobile No.833 1010695) is appointed as an Arbitrator to pass an approp:iate award in terrns of the provisions of the Act. The venue of the arbitration shall be decided mutually by the parties subject to the consultatic,n and agreement of the Arbitrator. so far as the fees of the Arbitrator is concerned, the same shall also be decided mutually by the parties again in consultation and agreement with the Arbitrator. The arbitration proceedings shall be governed in accordance with the provisions of the Act.

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10. Office to communicate a copy of this order to the Arbitrator t l. The instant Arbitration Application accordingly stands allowed.

12. As a sequel, miscellaneous petitions pending if any, shall stand closed. However, there shall be no order as to costs. SDIK.SHYLESHI JOINT REGIS /TTRUE COPY'/ SECTION OFFIGER

1. Sri Justice Challa Kodanda Ram, former Judge h Court for the State of Tetangana, at HYderabad , (Plot No. 68, Road No , Phase lll, Jubilee Hills, Hyde rabad - 500 034, Mobile No. 8331010695) (Bv Special Messenger) (Along with a GopY of affidavit and material PaPers)

2. One CC to SriZubair Fazal,Advocate [OPUC]

3. One CC to Sri R S Sravan Kumar, Advocate [OPUC]

4. Two CD CoPies fk t:

r' HIGH COUF:T DATED: 1211 312026

ORDER

ARBAPPL.No.228 of 2O24 ALLOWNG THE APPEAL e -fA ,k'