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IN THE COURT OF LD. DISTRICT JUDGE;
(COMMERCIAL COURT); DISTT. CENTRAL; xx, DELHI.
OMP (COMM.) NO. _____ OF 2024.
IN THE MATTER OF:-
XX
: PETITIONER
XXX. : RESPONDENTS
INDEX
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S.NO. |
PARTICULARS |
PAGES |
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1. |
REPLY ON BEHALF OF THE RESPONDENT NO.1 TO THE
PETITION UNDER SECTION 34 OF ARBITRATION & CONCILIATION ACT, 1996 FILED
BY THE PETITIONER. ALONG WITH AFFIDAVIT. |
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2. |
STATEMENT OF TRUTH |
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3. |
LIST OF DOCUMENTS |
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4. |
VAKALTNAMA. |
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RESPONDENT
NO.1
Through
XXX
XXX
ADVOCATES FOR
XXX
LAW FIRM AT
xxx
XXX
DELHI
DATED
IN THE COURT OF LD. DISTRICT JUDGE;
(COMMERCIAL COURT); DISTT. CENTRAL; TIS HAZARI COURTS, DELHI.
OMP (COMM.) NO. _____ OF 2024.
IN THE MATTER OF:-
XX
. : PETITIONER
XXX.
: RESPONDENTS
N.D.O.H.:
__09.2024
REPLY ON BEHALF OF THE RESPONDENT
NO.1 TO THE PETITION UNDER SECTION 34 OF ARBITRATION AND CONCILIATION ACT, 1996
AGAINST THE AWARD DATED 01.12.2023 FILED BY THE PETITIONER.
MOST RESPECTFULLY
SHOWETH;-
PRELIMINARY SUBMISSIONS:-
1.
That at the outset, the answering
Respondent no.1 (hereinafter called as “Respondent”) denies and disputes all
the allegations, averment contained in the Petition under reply, unless
otherwise specifically admitted herein below. Nothing contained in the
Preliminary Submissions, Preliminary Objections and in Reply on Merits below
may be treated as admission of any of the allegations contained in the Petition
unless explicitly admitted. The Respondent seeks to submit the following
Preliminary submissions, each of which is taken in the alternative and is
without prejudice to the other.
2.
That the Appellant firm
through its directors in and around the beginning of 2017 approached the
Respondent’s Firm and represented themselves as Directors of the Appellant
Company, who were also managing the Daily Day to Day Affairs and management of
the Appellant Company. Xxx, Xxx and Xxx represented to be carrying out all the
management responsibilities of the Appellant Company coupled with the fact that
the said mentioned directors are also entrusted with Substantial Powers of
Management.
3.
The afore-mentioned
directors of Appellant Company gave personal guarantees to the Respondent Firm
coupled with assuring the Respondent Firm that the Appellant Company through
mentioned directors shall make the payment immediately post the receipt of
Goods/Material from the Respondent Firm.
4.
That starting from the
year 2017, the Appellant through the mentioned directors started to place
numerous orders to the Respondent Firm and it was mutually agreed between the
parties and also as per the Tax/Retail Invoices that the payment of the due
amount, being due against the goods being supplied by the Respondent’s Firm to
the Appellant Company, shall be paid/remitted by the directors of Appellant
within the stipulated period of days as prescribed under the Law.
5.
That starting from the
year 2017, the Appellant through its Directors personally visited the Office of
the Respondent Firm and subsequently placed numerous orders. Consequent to
which, all such Order/Orders of the Appellant was duly fulfilled by the
Respondent Firm. That the Respondent firm, as and when requested by the
Appellant Company through its director, supplied goods to the Appellant in the
same manner and as per the specifications as were requested by the Appellant
Company through its director.
6.
That against the orders
being placed by the Appellant Company to the Respondent Firm at their Delhi
office, goods were supplied by the Respondent and such goods were accepted by
the Appellant without any protest or demur of any manner whatsoever.
7.
That it is pertinent to
mention that as and when an order was placed by the Appellant, the Respondent
Firm subsequently delivered such goods, being of topmost quality and being as
the per the specifications ordered by the Appellant, and the goods were
supplied by the Respondent Firm to the Appellant by or before the time period
as requested by the Appellant.
8.
Apropos, to
afore-mentioned the invoice(s) being issued by the Respondent Firm to the
Appellant, and the Appellant accordingly made payments to the Respondent at
their Delhi office on a running account basis.
9.
That the Appellant
Company through its directors, in light of the mutually accepted terms and
conditions between the parties placed their order, and subsequently, against
such order placed by the Appellant, the Respondent Firm company supplied the
Goods to the Appellant in accordance to the specifications and satisfaction of
the Appellant. It is pertinent to mention herein that the Appellant without any
protest or demur accepted the Goods being supplied by the Respondent Firm.
10.
That it is pertinent to
mention that the Goods were supplied by the Respondent Firm through the medium
of a transport carrier, to which the Respondent Firm had delivered the Goods to
the Appellant against the invoices being issued by the Respondent Firm to
Appellant and the Payments were made on the Running Account basis and the
Appellant made payments to the Respondent at their Delhi office on a running
account basis.
11.
That the Respondent Firm
very fairly states before this Hon’ble Court that on the 4th of January 2020,
the Appellant also admitted and confirmed the Accounts and the Balance Payment
i.e., the Principal Amount was outstanding to an extent of INR 68,62,948/-
which was to be paid by the Appellant to the Respondent Firm. That on 6th of
January 2020, the Respondent Firm by invoking the Provision of Insolvency Act,
issued a Demand Notice demanding payment of an unpaid debt to an extent of INR
1,39,08,017.13/- in which INR 68,62,948/- was pending towards the Principal
Amount and INR 70,45,069.13/- was pending towards Interest and the said Demand
Notice very specifically stated that the payments are to be made in accordance
with the Provisions of MSME Act as the Respondent Firm is registered under the
Provision of MSME Act and the Appellant was at continuous default of the said
outstanding amount which can also be confirmed by their own admission of
admitting the Liability of the Amount.
12.
That the Respondent Firm
Fairly states before this Hon’ble Tribunal that post the receipt of the Demand
Notice, the Appellant through its director approached the Partner of the
Respondent Firm and Appellant requested to settle the disputes as directors of
Appellant Company assured that the Principal Amount as stated in the Demand
Notice shall be paid by the Appellant to the Respondent Firm and subsequent to
which, a Settlement Agreement was made and it was explicitly made clear that
the Outstanding Amount shall be paid in Four Instalments vide Cheque No.
574683, 574684, xxx, xxx and the Appellant through its directors confirmed that
in the event of breach of payment plan/schedule, the Appellant through its
director shall be liable to pay the entire amount with an interest as claimed
in the Demand Notice of 06.01.2020.
13.
The Respondent Firm
states fairly before this Hon’ble Tribunal that two instalments vide Cheque No.
574683 and 574684 was paid as the same can also be verified from the Statement
of Account of the by the Respondent Firm as well as the Appellant. Subsequent
to the clearance of the Afore-mentioned Cheques, the director of Appellant
Company once again requested the resumption of business amongst the Parties and
again on the personal assurances and representations as warranted by the Appellant,
the Respondent Firm once again started the Business Trade inter se between the
Parties and on request, the Cheque No. xxx and xxx were returned back as it was
assured by the Appellant that said payment shall be made during the course of
the running account as the financial status of Appellant Company was not that
great and only once the business of Appellant is restored back to its original
then only the payments shall be released over.
14.
Owing to the Cordial
Business Relationship, inter se, between the Parties, the Respondent Firm
started once again to supply the goods as per the specifications as rendered
down upon by the Appellant and being satisfied with the quality of the Goods,
the Appellant once again started making Payments qua the Running Account basis.
That the Payments starting from the 28th of September 2017 till the last
invoice dated the 16th of October 2021, the Appellant failed to make the
payment of the Amount to the Claimant Firm as required under the Provision of
Section 15 of the MSMED Act.
15.
As on 14th of June 2022,
the Total Principal Amount as rendered outstanding between the Parties to the
Proceedings were to an extent of INR 7,21,091.20 and also the Interest on
Delayed Payments as to be levied under the provision of MSMED Act.
16.
The Respondent had no
other option but to file a Claim under the Provision of Section 18 of the MSMED
Act before the Facilitation Council as the Appellant failed to make the Payment
under the Provision of Section 15 of the MSME Act and on failure to Pay the
Interest under the Purview of Section 15 and 16, the Application under the
Provision of Section 18(1) was filed before the Office of the Sub-Divisional
Magistrate and the same was registered vide File No. XXX. Notice was issued to
the Appellant, who, appeared and preferred a reply before the Office of the
Sub-Divisional Magistrate and the objections were taken primarily on pretext of
Interest Rate coupled with Settlement, to which in reality was not even
complied by the Appellant and all the other contents were not denied, hence the
same becomes an admission on part of the Appellant that the Goods were
delivered and that too without any protest and also the Principal Amount was
admitted and the only objection was taken with regard to the Calculation of the
Interest Amount.
17.
Despite the Indulgence of
the Learned Council under the Provision of 18(2) of the Act In order to conduct
a conciliation in the matter or by providing an alternate dispute resolution
service for conducting conciliation. Despite the best of possible assistance as
rendered down up by the Learned Council and the Respondent, the Appellant
miserably failed to respect the Proceeding and on failure on part of the
Appellant despite the fact that the services stood rendered by the Respondent
and the Appellant was not discharging the payments, the Council deemed it
appropriate to refer the Matter to before the Present Arbitration Centre.
18.
That all the director of
the Appellant Company, as stated afore-said are jointly and severally liable to
the Claimant Firm and because of the Personal Guarantees and Assurances as
rendered down upon by the Appellant coupled with Fraud been played by the
Appellant, the Corporate Veil is required to be lifted in the Present Matter
and to clear the Legitimate dues of the Respondent Company under the Provision
of Section 15 and 16 of the MSME Act which requires the Appellant to make the
payment to the Respondent Company within specific days of the submission of the
Invoice and the Section 15 of the Act uses the word “Shall” hence making it
mandatory for the Appellant to clear the dues within the specific period of
days of submission of the Respondent Invoice and in any case, it is statutorily
incumbent in law that a buyer cannot exceed the period of 45 Days from the date
of Acceptance of service for discharging the Payments.
19.
The Compound Interest is
mandated by MSMED Law and the provision also uses the word Shall, and is
therefore mandatory in nature and the law has mandated that the Compound
Interest has to be paid by the Buyer at Three Times of the Bank Rate as
notified by the Reserve Bank of India, making the said provision applicable on
all the pending dues and belated payments that stand due on the Appellant and
in the issue at hand, the calculation of compound interest clock commences from
the 30th to 45th Day of receipt of Claimants invoice by the Appellant which
remained uncleared by the Appellant within the given time frame.
20.
Consequent to the above,
the Appellant is duty bound and obligated in law to clear and principal amount
and interest of the Respondent as enshrined in Section 17 of the Act and the
Appellant has miserably failed to comply with the provisions of Law and
deliberately violated the same despite several reminders and no action was taken
by the Appellant on payment of the dues towards the Respondent.
21.
That, as such, it is
clear from the above-mentioned facts, that the Appellant has failed to make
payments as per the aforementioned section of the MSMED Act and as such the
Respondent, approached the Ld. Tribunal, as enshrined under the relevant
provision of Law.
22.
The Respondent, submitted
the claim, before the Learned Tribunal by virtue of the statement of claim as
per the provision of MSMED Act on 10th of August 2023 alongside the documents.
23.
The Appellant then on
23rd of August 2023 filed its Statement of Defence, inter alia, praying for
dismissal of the Statement of Claim and at the same time the Appellant also
filed a Counter Claim inter se raising a claim of INR 80,00,000/- on account of
Damage on account of loss of sale and INR 10,00,000/- as claim for damages on
account of Loss of reputation and mental distress plus costs and interest.
24.
The Petitioner then on
07th of September 2023, filed the Rejoinder to the Statement of Defence as
filed by the Appellant to the Claim Petition alongside the Statement of Defence
to the Counter Claim as filed by Appellant. In addition to the same, the
Petitioner then filed an affidavit of admission and denial and Evidence by way
of an Affidavit before the Ld. Tribunal over an e-mail.
25.
In addition to above, the
Petitioner on 16th of September 2023 filed the Evidence by way of an affidavit
and the Appellant on 12th of September 2023 filed the Evidence by way of an
affidavit dated 14th of September 2023 and whereas in the Counter Case, the
Evidence was filed by Counter Claimant on 10th of October 2023 and the
Petitioner on Evidence in the Counter Claim case and the same is annexed and
appended. It is stated that the directors of the Appellant Company were pleaded
over in the said arbitration, however, an interim application seeking deletion
of directors were filed, which was thus subsequently dismissed. In addition to
the same, the Respondent also filed that interim application seeking permission
to cross examine the AR of the Appellant, and the same was also dismissed by
the Ld. Arbitrator for the reasons best known to the learned Arbitrator.
PRELIMINARY OBJECTIONS:-
1.
That the Clauses of the
Settlement Agreement and more particularly, Clause No.3.1, inter alia, which
states and records that the Appellant agrees and confirms alongside
acknowledged to pay an amount of INR 68,00,000/- to the Respondent in order to
amicably resolve the present matter, in accordance with the payment schedule
and in lieu of which Four Cheques of INR 17,00,000/- were issued over by
Appellant to the Respondent.
2.
That the Clause No.3.2 of
the Settlement Agreement, inter alia, which records that the Appellant
irrevocably agreed and confirmed that the Demand Notice dated 06th of January
2020 shall remain in effect and continuance until the payment of the entire
dues as mentioned in Clause 3.1.
3.
That the Legal Notice as
mentioned aforenoted i.e., 6th of January 2020, wherein the total amount of
debt was of INR 1,39,08,017.13/- out of which INR 68,62,948/- was the amount
outstanding for Principal and INR 70,45,069.13/- was for Interest. It is an
admitted fact that the said amount of INR 1,39,08.017.13/- was an admitted
amount by the Appellant resulting which only the Settlement Agreement as afore-mentioned
was entered upon by the parties to the present petition. Perusal of the
settlement agreement would reveal that the said settlement agreement was
binding upon on the parties to the present arbitration, their successors in
interest, and present and future affiliates, subsidiaries, assignees or
acquirers, including any acquirer of substantially all of an asset.
4.
That the Clause 3.3 of
the Settlement Agreement, which inter alia, and more specifically stated that
the Appellants will pay the sum of INR 68,00,000/- in accordance with the
payment schedule as mentioned in Clause 3.1 above, the Respondent had agreed to
amicably resolve the present matter in an amount of INR 68,00,000/-. The
furtherance of the clauses of the settlement agreement which connoted the
intent of the parties to the present petition as the Appellant vehemently
agreed that in event of breach of payment plan/schedule as mentioned in Clause
3.1 of the Settlement Agreement, the Appellant shall be liable to pay the
entire amount with interest as claimed in the Demand Notice of 06th of January
2020 for an amount of INR 1,39,08,017.13/- after deducting the amount already
paid by the Appellant.
5.
That the statement of
defence on record wherein the Appellant themselves admitted to the Settlement
Agreement and the Amount of the Legal Notice dated 06th of January 2020 and
also the fact that the Cheques, as mentioned above were handed over.
6.
The Learned Arbitrator in
its order gave a very categorically finding qua one of the issues which is
co-related to the second issues, in which the Learned Arbitrator despite
adjudicated the issues in the favour of Respondent, turned the clock against
the Respondent. The Ld. Arbitrator as held the submissions of the Respondent to
be correct to an extent that the claim as filed by the Respondent was well
within time and the Ld. Arbitrator had also post the perusal of the pleadings
on records and post the submissions has rightly held that it is an admitted and
acknowledged fact between the parties that “despite the non-compliance with the
settlement agreement, given that the Appellant failed to pay the last two
instalments of INR 17,00,000/- each within scheduled timeframe specified in the
agreement and has only made a part payment to the Respondent.
7.
The Learned Arbitrator
despite having a conclusive finding qua the fact that the settlement agreement
which was entered upon by the parties by their free will was anyway not
complied with by the Appellant and hence the Appellant violated the Clause 3.3
of the Settlement Agreement inter alia by which it was now on Appellant to pay
the entire amount of the demand notice minus the amount already paid, the
Learned Arbitrator gave a perverse and patently wrong finding qua the fact that
since the parties to the petition resumed their transaction, with the
Respondent making last sale on October 16th, 2021 and Appellant completing the
last payment to the Respondent on June 14th, 2022 coupled with the fact that
the Respondent did accept the part-payment from Appellant without objection and
hence such the Respondent is not entitled to re-open the issue of delayed
payments for the transaction that happened before hand.
8.
The said afore-mentioned
findings by the Ld. Arbitrator is in complete contradiction to the documents on
record and moreover the admissions which are quite evident from the documents
as filed by Appellant to an extent that there was no question of Respondent
accepting or denying the part-payments (if any), the parties to the contract
was very well governed by the Clause of 3.3 of the Settlement Agreement which
specifically made it clear that if the Appellant failed to pay the entire
amount with interest as claimed in the Demand Notice after deducting the amount
already paid by the Appellant.
9.
That the Respondent
without prejudice to the rights and contention of Respondent states that the
total amount as claimed in the demand notice dated 6th of January 2020 was INR
1,39,08,017.13/- and even if we believe the version of the Appellant and also
the fact which has been acknowledged by Ld. Arbitrator that the payments of
First Two Instalments for an amount of INR 34,00,000/- has been paid and
Respondent without prejudicing the right also if state that even if the payment
if we take from 1st of April 2020 till 6th of July 2020 which were of INR
5,00,000/- coupled with INR 7,00,000/-, INR 5,00,000/-, INR 5,00,000/-, INR
4,00,000/- and INR 4,00,000/-, the total of which shall come at INR
30,00,000/-, henceforth leaving a balance of INR 4,00,000/- , by which the Ld.
Arbitrator also affirmed that the settlement agreement has not been complied,
therefore Clause 3.3 shall be attracted and the result of which the Appellant
was under an obligation to pay INR 75,08,017.1/- i.e., {INR 1,39,08,017.13- INR
34,00,000/- minus INR 30,00,000/-} and by adding an amount of INR 7,21,091.20/-
coupled with interest at the rate as prescribed under the provision of MSMED
Act.
10.
The Learned Arbitrator
out of 9 issues has rightly awarded and held seven issues to be in favour of
the Respondent, however the Ld. Arbitrator had patently failed to acknowledge
the remaining two issues in light of the documents as well as submissions of
the Appellant which makes the present judgment to be perverse, hence making it
in conflict with the public policy of India and in conflict with the most basic
notions of morality and justice. Henceforth, the Appeal under Section 19 of
MSME Act r/w Section 34 of Arbitration & Conciliation Act filed by the
Respondent before the Ld. District Judge (Commercial), Delhi limited to those
two findings as rendered by the Ld. Arbitrator as the last issues is read in
conjunction with issue no.5 as the Learned Arbitrator at one place mentions
that there was a default on part of Appellant and at the other side rules in
favour of the Appellant by saying that the Appellant has fulfilled the
obligations of the settlement agreement.
11.
The Law Commission
examined and submitted its 246th Report on "Amendments to the Arbitration
and Conciliation Act, 1996" in August, 2014 and recommended various
amendments in the said Act. The proposed amendments were intended to facilitate
and encourage Alternative Dispute Mechanism, especially arbitration, for
settlement of disputes in a more user-friendly, cost effective and expeditious
disposal of cases since India is committed to improve its legal framework to
obviate in disposal of cases.The 246th Report of the Law Commission recommended
considerable changes to Section 34 of the said Act. The 246th Law Commission
Report proposed amendments to the said Act, narrowing down the grounds of
challenge the Arbitral Award, apart from providing for appointment of
independent, impartial and neutral arbitrators, amongst several other
amendments. The judgment in ONGC’s case stated supra along with the judgment in
ONGC v. Western Geco International Ltd. (2014) 9 SCC 263 : (AIR 2015 SC 363)
has been expressly done away with.
12.
Both Sections 34 and 48
of the said Act have been brought back to the position of law contained in
Renusagar Power Plant Co. Ltd. v. General Electric Co. (1994) Supp (1) SCC 644
: (AIR 1994 SC 860), where "public policy" will now include only two
of the three grounds set out therein, i.e., "fundamental policy of Indian
law" and "justice or morality" in addition to the ground where
making of the award was induced or affected by fraud or corruption or was in
violation of Section 75 or Section 81 as provided in Section 34 of theamended
Act . The ground relating to "the interest of India" stated in the
said Judgment is no longer available as valid ground. "Fundamental policy
of Indian law" is now to be understood as laid down in Renusagar (supra).
Meaning of "Justice or morality" has been tightened and is now to be
understood as only basic notions of justice and morality i.e., such notions as
would shock the conscience of the Court as understood in Associate Builders v.
Delhi Development Authority (2015) 3 SCC 49 : (AIR 2015 SC 620). The main
object of the amendment of 2015 is to speed up the arbitration process and to
minimize the intervention of the Courts which would ultimately ease doing
business in India.
13.
That the Amendment of
2015 clearly defines the term public policy of India and has introduced a new
ground, namely Section 34(2A) for setting aside domestic arbitral awards on the
ground of patent illegality. This ground will be applicable only to
arbitrations taking place in India and not to International Commercial
Arbitrations as can be make out from the wording of the section which says
“other than International commercial arbitration”.
14.
In one of its earlier
decisions in Gherulal Parekh v. MohadeodasMaiyain AIR 1959 SC 781, the Hon’ble
Supreme Court gave a narrow interpretation of public policy. It held that
within public policy of India, lay certain determinate specified heads and that
it would not be prudent to begin search for new heads. However, in Central
Inland Water Transport Corp Ltd v Borjo Nath Ganguly, the Hon’ble Supreme Court
promoted a wider stance by interpreting the term public policy on the pillars
of public conscience, public good and public interest.
15.
The MSME Act was
introduced with the purpose of facilitating the promotion and development of
micro, small and medium enterprises as well as ensuring their competitiveness.
It aims at ensuring timely and smooth flow of credit to such enterprises as
well as minimizing instances of sickness among them. Further, the Act itself
provide statutory remedy of appeal under Section 19 of the MSME Act.
16.
In support of the above
contentions, Respondent relied upon various judgments of Apex Court in the
cases of Tirupati Steels vs. Shubh Industrial Component and Ors. reported in
(2022)7 SCC 429, Modern Industries Versus Steel Authority of India Limited and
Others reported in (2010) 5 SCC 44: 2010 LAWPACK(SC) 48090, United Bank of
India Versus SatyawatiTondon and Others reported in (2010)8 SCC 110: 2010
LAWPACK(SC) 48508, Snehadeep Structures Private Limited Versus Maharashtra
Small Scale Industries Development Corporation Limited reported in (2010)3 SCC
34: 2010 LAWPACK(SC) 47743: 2010(1) R.A.J. 532, Goodyear India Limited Versus
Norton Intech Rubbers Private Limited and Another reported in (2012)6 SCC 345:
2012 LAWPACK(SC) 51351, Gujarat State Disaster Management Authority Versus Aska
Equipments Limited reported in (2022)1 SCC 61: 2021 LAWPACK(SC) 65628, Sri
Paravathi Parmeshwar Cables and Others Versus Andhra Pradesh Transmission
Corporation Limited and Another reported in (2013)10 SCC 693: 2012 LAWPACK(SC)
51904: 2013(1) R.A.J. 148 and Authorized Officer, State Bank of Travancore and
Another Versus Mathew K.C. reported in (2018)3 SCC 85: 2018 LAWPACK(SC) 60356.
Reliance is also placed upon judgment of this Court in Sanghi Industries Ltd.
and Anr. Verus Micro Small Enterprises Facilitation Council and Anr. (SBCWP
No.988/2018) which has been upheld by Division Bench also in DBSAW No.591/2018
titled as Sanghi Industries Ltd. and Anr. Verus Micro Small Enterprises
Facilitation Council and Anr.. Relying upon the same, the Respondent submits
that the MSME Act is a special and beneficial piece of legislation and has an
overriding effect over other laws, in terms of Section 24 of MSME Act; and
Section 15 of the MSME Act imposes a liability on buyer to make timely payment
and Section 16 of the MSME Act imposes heavy interest liability for the delay.
It is submitted that when provisions of Section 18 and 19 of the MSME Act
prescribe a statutory and specific mechanism, the same cannot be bye passed. In
the present facts and circumstances, on merits as well as as per statutory
mechanism, the learned Arbitrator has, legally and factually, committed an
error in entertaining the the two issues and by relaxing the provision of MSMED
Act and Indian Contract Act, is is contrary to the above cited judgments of
Apex Court.
17.
It is only when the
interpretation of contractual provisions is patently unreasonable or perverse,
or contradictory to well settled principles governing interpretation of
contracts, that the court would interfere. Further, it is equally well settled
that an arbitral tribunal being a creature of a contract, is bound to act in
terms of the contract. An award can be said to be patently illegal where the
arbitral tribunal has failed to act in terms of the contract or has ignored the
specific terms of the contract. In this regard reference may be made to the judgment
of the Supreme Court in Indian Oil Corpn. Ltd. v. Shree Ganesh Petroleum,
(2022) 4 SCC 463: 2022 LAWPACK(SC) 66156: 2022(2) R.A.J. 100 wherein it has
held as under:
"43. An Arbitral
Tribunal being a creature of contract, is bound to act in terms of the contract
under which it is constituted. An award can be said to be patently illegal
where the Arbitral Tribunal has failed to act in terms of the contract or has
ignored the specific terms of a contract.
44. However, a
distinction has to be drawn between failure to act in terms of a contract and
an erroneous interpretation of the terms of a contract. An Arbitral Tribunal is
entitled to interpret the terms and conditions of a contract, while
adjudicating a dispute. An error in interpretation of a contract in a case
where there is valid and lawful submission of arbitral disputes to an Arbitral
Tribunal is an error within jurisdiction.
45. The Court does not
sit in appeal over the award made by an Arbitral Tribunal. The Court does not
ordinarily interfere with interpretation made by the Arbitral Tribunal of a
contractual provision, unless such interpretation is patently unreasonable or
perverse. Where a contractual provision is ambiguous or is capable of being
interpreted in more ways than one, the Court cannot interfere with the arbitral
award, only because the Court is of the opinion that another possible
interpretation would have been a better one.”
18.
Similar observations have
been made by the Supreme Court in UHL Power Co. Ltd. v. State of H.P., (2022) 4
SCC 116: 2022 LAWPACK(SC) 65937: 2022(1) R.A.J. 193; Dyna Technologies (P) Ltd.
v. Crompton Greaves Ltd., (2019) 20 SCC 1: 2019 LAWPACK(SC) 63557: 2020(1)
R.A.J. 33; State of Chhattisgarh v. SAL Udyog (P) Ltd., (2022) 2 SCC 275: 2021
LAWPACK(SC) 65698: 2021(6) R.A.J. 154; ParsaKente Collieries Ltd. v. Rajasthan
Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236: 2019 LAWPACK(SC) 62577:
2019(5) R.A.J. 1 and South East Asia Marine Engg. & Constructions Ltd.
(SEAMEC LTD.) v. Oil India Ltd., (2020) 5 SCC 164: 2020 LAWPACK(SC) 64119:
2020(3) R.A.J. 234.
19.
It is a well settled
principle of contractual interpretation that if a contractual provision is
unambiguous, the same has to be given effect to. Only if there is any
ambiguity, will it be permissible to resort to internal aids to resolve the
ambiguity. Only if internal aids prove insufficient, recourse to external aids
is permissible. In Pandit Chunchun Jha v. Sheikh Ebadat Ali (supra), it has
been held as under:
"6. The first is
that the intention of the parties is the determining factor: see Balkishen Das
v. Legge. But there is nothing special about that in this class of cases and
here, as in every other case where a document has to be construed, the
intention must be gathered, in the first place, from the document itself. If
the words are express and clear, effect must be given to them and any
extraneous enquiry into what was thought or intended is ruled out. The real
question in such a case is not what the parties intended or meant but what is
the legal effect of the words which they used. If, however, there is ambiguity
in the language employed, then it is permissible to look to the surrounding
circumstances to determine what was intended.”
20.
A document, as is well
known, must primarily be construed on the basis of the terms and conditions
contained therein. It is also trite that while construing a document the court
shall not supply any words which the author thereof did not use.
21.
The primary rule of
construction of a document is the intention of the executants, which must be
found in the words used in the document. The question is not what may be
supposed to have been intended, but what has been said. We need to carry on the
exercise of construction or interpretation of the document only if the document
is ambiguous, or its meaning is uncertain. If the language used in the document
is unambiguous and the meaning is clear, evidently, that is what is meant by
the executants of the document. Contemporary events and circumstances
surrounding the execution of the document are not relevant in such situations.
22.
If the meaning of the
word or phrase or sentence is clear, extrinsic evidence is not admissible. It
is only when there is latent ambiguity that extrinsic evidence in the shape of
interpreting statement in which both parties have concurred should be
admissible. The parties themselves might not have been clear as to the meaning
of the word or phrase when they entered into the contract. Unanticipated
situation might arise or come into the contemplation of the parties subsequently
which would sharpen their focus and any statement by them which would
illuminate the darkness arising out of the ambiguity of the language should not
be shut out. In the case of an ambiguous instrument, there is no reason why
subsequent interpreting statement should be inadmissible.
23.
That the Petitioner has
drastically failed to point out any ground as stated under Section 34 of the
Act which would attract the interference against the Arbitral Award by this
Hon’ble Court. It is most humbly submitted that the Petitioner has been
unsuccessful in depicting that the interpretation placed by the Ld. Arbitrator
was an impossible or perverse interpretation, thus, failing to fulfil the
pre-requisite of extent of scope under which this Hon’ble Court may interfere
with the Arbitral Award.
24.
That the present Petition
is devoid of any merits and is therefore liable to be dismissed with exemplary
costs. The Respondent has suffered immense financial loss and loss of business
opportunity as well as reputation due to the act of encroachment and consequent
non-payment of outstanding amount by the Appellant.
25.
That the present Petition
has been filed with mala fide intentions to extort money from the Respondent
thereby causing wrongful loss to the Respondent and wrongful gain to the
Petitioner. The entire story connoted by the Petitioner is based on false and
fabricated pretexts; hence, the claim is liable to be dismissed out rightly.
26.
That the present Petition
is not maintainable in the eyes of law and has been filed in complete abuse of
process of law. By way of present proceedings the Petitioner is trying to take
advantage of its own wrong.
27.
That the Petitioner has
not come with clean hands and is trying to mislead the Hon’ble Court therefore
the instant claim is liable to be rejected. The Hon'ble Supreme Court in S.P.
Chengalvarya Naidu vs. Jagannath and others reported at (1994) 1 SCC 1 was
pleased to observe:
“The Courts of Law are
meant for imparting justice between the parties. One, who comes to court, must
come with clean-hands. We are constrained to say that more often than not,
process of the court is being abused. Property-grabbers, tax-evaders, bank-loan
dodgers and other unscrupulous person from all walks 11 of life find the
court-process a convenient lever to retain the illegal-gain indefinitely. We
have no hesitation to say that a person, whose case is based on falsehood, has
no right to approach the court. He can be summarily thrown out at any stage of
litigation. ... A litigant, who approaches the court, is bound to produce all
the documents executed by him which are relevant to the litigation. If he
withholds a vital document in order to gain advantage on the other side then he
would be guilty of playing fraud on the court as well as on the opposite
party."
PARAWISE
REPLY ON MERIT;-
1. That the
content of para 1 of the petition are matter of record, hence need no reply. It
is submitted that the present petition filed by the person who is not competent
and authorized to sign and filed the present petition. However, the contents of
the preliminary submissions and objections be read as and part and parcel as
the same has not been repeated herein for the sake of brevity.
2. That the
content of para 2 of the petition are matter of record, hence need no reply. However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
3. Reply to
brief facts;-
a. That
the content of sub para a) of the brief facts of petition are matter of record,
hence need no reply. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
b. That
the content of sub para b) of the brief facts of petition are denied to the
extent that the goods were supplied and regular payments were made by the
Petitioner on a regular basis. However, the contents of the preliminary
submissions and objections be read as and part and parcel as the same has not
been repeated herein for the sake of brevity.
c. That
the content of sub para c) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the goods were supplied and regular payments were
made against the same. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
d. That
the content of sub para d) of the brief facts of petition are wrong, incorrect
and denied. It is denied that in January 2020, there was a balance payment of
around Rs.68,00,000 to be paid by the Petitioner to the Respondent No.1, the
Respondent No.1 other than settling the amount amicably threatened to move to
NCLT by invoking the provisions of Insolvency and Bankruptcy Code, 2016 against
the Petitioner and issued a demand notice for an amount of Rs. 1,39,08,017/-, including the balance
amount with an amount of arbitrary interest of Rs. 70,45,069/-. However, the
contents of the preliminary submissions and objections be read as and part and
parcel as the same has not been repeated herein for the sake of brevity.
e. That
the content of sub para e) of the brief facts of petition are matter of fact,
hence need no reply. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
f. That
the content of sub para f) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the cheques bearing numbers xxx and xxx, were
dated xxx and xx respectively, were not deposited and encashed by the Respondent
No. 1 with his bank, due to the advent of the pandemic of Corona Virus had
caused unprecedented disruptions to business operations of the Petitioner. Subsequent
to the clearance of the Afore-mentioned Cheques, the director of Petitioner Company
requested the resumption of business amongst the Parties and again on the
personal assurances and representations as warranted by the Petitioner, the Respondent
Firm once again started the Business Trade inter se between the Parties and on
request, the Cheque No. xxx and xxx were returned back as it was assured by the
Petitioner that said payment shall be made during the course of the running
account as the financial status of Petitioner Company was not that great and
only once the business of Petitioner is restored back to its original then only
the payments shall be released over. However, the contents of the preliminary
submissions and objections be read as and part and parcel as the same has not
been repeated herein for the sake of brevity.
g. That
the content of sub para g) of the brief facts of petition are wrong, incorrect
and denied. It is denied that law of force majeure is applicable in the present
matter, Force Majeure in the context of a contract means, "an unexpected
event or situation that can neither be anticipated nor controlled, which
prevents the person from doing or completing the promise he or she had promised
to under a contract". It is further denied that the conditions imposed
during covid pandemic lockdown was unforeseeable by the Petitioner, henceforth,
on the basis of oral mutual understanding between the parties, it was decided
that the remaining balance of Rs. 34,00,000/- were to be paid by the Petitioner
on a regular basis to the Respondent No.1. It is further denied that the
Respondent No.1 returned the cheques bearing numbers xxx and xxx dated xx and xx respectively to the Petitioner, as per agreed
terms between them, taking into consideration the conditions at the time of
covid pandemic. Owing to the Cordial Business Relationship, inter se, between
the Parties, the Respondent Firm started once again to supply the goods as per
the specifications as rendered down upon by the Petitioner and being satisfied
with the quality of the Goods, the Petitioner once again started making Payments
qua the Running Account basis. That the Payments starting from the 28th of
September 2017 till the last invoice dated the 16th of October 2021, the Petitioner
failed to make the payment of the Amount to the Respondent Firm as required
under the Provision of Section 15 of the MSMED Act. However, the contents of
the preliminary submissions and objections be read as and part and parcel as
the same has not been repeated herein for the sake of brevity.
h. That
the content of sub para h) of the brief facts of petition are wrong, incorrect
and denied. It is denied that consequently, the Petitioner paid the remaining
balance to the Respondent No.1 on regular basis. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
i. That
the content of sub para i) of the brief facts of petition are wrong, incorrect
and denied. It is denied that by way of conduct of the Respondent No.1, it
could be verified that the condition of payment of remaining balance on regular
basis were mutually agreed between the parties. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
j. That
the content of sub para j) of the brief facts of petition are wrong, incorrect
and denied. It is denied that in August 2020 when a meager balance of
Rs.4,00,000 were left to be paid, the Cheque No. xxx and xxx were returned back
by the Respondent No.1 to Petitioner, with a request to commence the business
activities on prior agreed terms of the regular basis. It is further denied that
the Petitioner has always cleared invoices and payments of the outstanding
balances of the Respondent No. 1 in due process of time and upon regular
intervals, without any delay in payments within stipulated time decided by the
parties among each other. However, the contents of the preliminary submissions
and objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
k. That
the content of sub para k) of the brief facts of petition are wrong, incorrect
and denied. It is denied that settlement agreement relied upon by the
Respondent No.1, to substantiate their illegal claim also mentions in clause
3.2. However, the contents of the preliminary submissions and objections be
read as and part and parcel as the same has not been repeated herein for the
sake of brevity.
l. That
the content of sub para l) of the brief facts of petition are wrong, incorrect
and denied. It is denied that as on 05.09.2020, when the last installment of
Rs. 4,00,000 from the remaining balance was paid by the Petitioner through
proper banking channels, by virtue of execution of the terms and conditions of
settlement agreement. It is further denied that even otherwise after payment of
the last balance payment of Rs. 4,00,000/- ,the Clause 3.2 made the demand
notice dated 06.01.2020 to be null and void. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
m. That
the content of sub para m) of the brief facts of petition are wrong, incorrect
and denied. It is denied that in September 2020, numerous complaints began to
be reported in respect of the LED lights supplied by the Petitioner to its own
customers. It is further denied that upon the perusal of the assembly line of
manufacturing, it was noticed that the raw material supplied from the
Respondent No.1 was exclusively used to make the LED lights against whom the
complaints were filed. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
n. That
the content of sub para n) of the brief facts of petition are wrong, incorrect
and denied. It is denied that particularly, the raw materials supplied used in
respect of the invoices dated 8th August 2020, 12th August 2020 and 12th
September 2020, was used in the assembling process of the LED lights against
which the Petitioner has received the complaints. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
o. That
the content of sub para o) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Petitioner complained about the same to the
Respondent No.1. It is further denied that the material supplied against these
invoices was of the value amounting to Rs. 22,12,655/-. It is further denied that
the Petitioner on several occasions through oral as well telephonic means
communicated to the Respondent No. 1 about the rejection of these invoices as
well as through a gentle reminder via email dated xxx and again on xx . However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
p. That
the content of sub para p) of the brief facts of petition are wrong, incorrect
and denied. It is denied that rejection of materials against the rejected
invoices was communicated within a statutory and reasonable period of 45 days
of supply of raw materials. However, the contents of the preliminary
submissions and objections be read as and part and parcel as the same has not
been repeated herein for the sake of brevity.
q. That
the content of sub para q) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Respondent No.1 had not taken any steps to
pick up the rejected goods, even after numerous reminders and complaints of the
Petitioner in respect of the same, as well through means of telephonic communication.
However, the contents of the preliminary submissions and objections be read as
and part and parcel as the same has not been repeated herein for the sake of
brevity.
r. That
the content of sub para r) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the business between the parties was running in
the usual manner, as there was complete assurance through oral means from the
representatives of the Respondent No.1, the goods supplied against the rejected
invoices would be soon picked up by the Respondent No. 1. However, the contents
of the preliminary submissions and objections be read as and part and parcel as
the same has not been repeated herein for the sake of brevity.
s. That
the content of sub para s) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the materials against which the complaints were
filed by the Petitioner, were never supplied back by the Respondent No.1. It is
further denied that during the course of the time, owing to previous business
relations and oral assurances no debit note was issued in respect of rejected
materials. It is further denied that the business remained in accordance with
the payment through a regular basis. It is further denied that there were numerous
orders placed and paid by the Petitioner for the material supplied against
other invoices issued by the Respondent No. 1. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
t. That
the content of sub para t) of the brief facts of petition are wrong, incorrect
and denied. It is denied that on 14th June 2022, the total amount of payment
that was outstanding to the was Rs.6,73.957/- which was duly informed to the
Respondent No.1 would be paid to them as soon as they would arrange for pick-up
of the rejected goods. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
u. That
the content of sub para u) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Petitioner was losing lakhs of rupees due to
delay in picking up of the raw material, as it could neither be used in
manufacturing the final goods nor new material could be purchased by the
Petitioner from another supplier as there was a severe shortage of space at the
factory of the Petitioner. However, the contents of the preliminary submissions
and objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
v. That
the content of sub para v) of the brief facts of petition are wrong, incorrect
and denied. It is denied that Petitioner is in business of assembling the
various components of LED lights and delivering the same to government
authorities, due to non-supply of good-grade raw material from the Respondent
No.1, the Petitioner was not able to assemble the lights within a stipulated
time period and lost a lot of orders and reputation in the eyes of its client. It
is further denied due to non-picking up of rejected material by the Respondent
No. 1 has cost a lot to the Petitioner, to calculate the same a table has been
annexed further. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
w. That
the content of sub para w) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Aluminum housing of 110W supplied by the
Respondent No.1 at the rate of Rs.485/- each, to the Petitioner, was used in
manufacturing the finished goods. It is further denied that the same aluminum
housing used to be assembled along with the various components to get the
finished product. It is further denied that the cost borne by the Petitioner in
assembling the finished goods was used to be Rs.1474.40/-, which was further
sold at the price of Rs.2,508/- each, by the Petitioner to their customers. However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
x. That
the content of sub para x) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Aluminum housing of MOW supplied by the
Respondent No.1 at the rate of Rs.755/- each, to the Petitioner, was used in
manufacturing the finished goods. It is further denied that the same aluminum
housing used to be assembled along with the various components to get the
finished product. It is further denied that the cost borne by the Petitioner in
assembling the finished goods was used to be Rs. 2001.80/-, which was further
sold at the price of Rs. 3,935/- each, by the Petitioner to their customers. However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
y. That
the content of sub para y) of the brief facts of petition are wrong, incorrect
and denied. It is denied that upon the purchase of raw material of Rs.
22,12,655/-, the Petitioner would have earned the revenue of Rs. 1,11,89,071/-,
to quantify the same, the Petitioner has lost almost 80% of revenue over the
low-grade quality of raw materials supplied by the Respondent No. 1. However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
z. That
the content of sub para z) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Petitioner and Respondent No.1 had been in
business for the last 5 years, owing to the same, hence the Petitioner did not
file any claim for their loss, in turn, the Petitioner informed the Respondent
No.1 to pick up their damaged and low grade quality goods. However, the
contents of the preliminary submissions and objections be read as and part and
parcel as the same has not been repeated herein for the sake of brevity.
aa. That
the content of sub para aa) of the brief facts of petition are wrong, incorrect
and denied. It is denied that as on 14th June, 2022 the total amount
of payment that was outstanding to the Respondent No. 1 was Rs. 6,73,957/-,
which was duly informed to the Respondent No.1, would be paid as soon as they
would arrange for the Transporter to pick up the low grade material supplied by
them against the aforementioned invoices from the factory of the Petitioner. It
is further denied that the Petitioner was losing lakhs of rupees due to delay
in picking up of the raw material, as it could neither be used in manufacturing
the final goods nor new material could be purchased by the Petitioner from
another supplier as there was a severe shortage of space at the factory of the
Petitioner. However, the contents of the preliminary submissions and objections
be read as and part and parcel as the same has not been repeated herein for the
sake of brevity.
bb. That
the content of sub para bb) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Respondent No.1, rather than picking up the
material, filed a claim under section 18 of MSME Act of Rs. 99,29,933/- which
included a pending amount of Rs.7,21,091/- as principal amount and
Rs.92,08,841/- towards the interest charged for the delayed payments, which is
without any pith and substance, is barred by law of limitation of 3 years to
initiate proceedings. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
cc. That
the content of sub para cc) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the arbitrary interest charged by the Respondent
No. 1, was never agreed between the parties and further, there was no
communication of the same anytime to the Petitioner. It is further denied that
the Petitioner was not under any legal obligation, as no such charge was ever
created by the payments to be made by Petitioner. However, the contents of the
preliminary submissions and objections be read as and part and parcel as the
same has not been repeated herein for the sake of brevity.
dd. That
the content of sub para dd) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the MSME council arrived at the conclusion that
both the parties were not ready for conciliation towards the disputes amount
and felt that conciliation is not possible in this case and decided to
terminate the conciliation proceedings and refer this case U/s 18(3) of the
Micro, Small and Medium Enterprises Development Act, Arbitrator Centre, (DAC)
for initiating arbitration proceedings as per the Arbitration and Conciliation
Act, 1996. However, the contents of the preliminary submissions and objections
be read as and part and parcel as the same has not been repeated herein for the
sake of brevity.
ee. That
the content of sub para ee) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Respondent No. 2 did not take into
consideration the relevant grounds, that were contented by the Petitioner at
the time of arbitration proceedings. It is further denied that the Respondent
No. 2 vide the impugned order awarded the Respondent No.1 wrongly. However, the
contents of the preliminary submissions and objections be read as and part and
parcel as the same has not been repeated herein for the sake of brevity.
ff. That
the content of sub para ff) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Respondent No.2 failed to take into account
that die alleged claim of the Respondent No. 1 filed before the MSME Council as
well as Respondent No.2 was time barred. It is further denied that the claim
included charging the interest at an arbitrary rate. It is further denied that the
Respondent No. 2 has failed to appreciate the facts of the case, that there
were losses which were borne by the Petitioner, due to inferior goods supplied
by the Respondent No.1. It is further denied that there has not been an iota of
evidence produced by the Respondent No. 1 in the claim, which stated that there
were any steps taken by the Respondent No.1 to pick up the inferior quality of
goods. It is further denied that there has not been any proof produced by the
Respondent No.1 through which the arbitrary rate of interest charged could have
been substantiated. However, the contents of the preliminary submissions and
objections be read as and part and parcel as the same has not been repeated
herein for the sake of brevity.
gg. That
the content of sub para gg) of the brief facts of petition are wrong, incorrect
and denied. It is denied that the Respondent No.2, vide the impugned order
failed to take account of these facts and awarded the Respondent No.1, accordingly.
It is further denied that the Respondent No. 2 failed to appreciate the
contentions of the Petitioner vide passing the impugned order. However, the
contents of the preliminary submissions and objections be read as and part and
parcel as the same has not been repeated herein for the sake of brevity.
4. That the
content of para 4 of the petition are wrong, incorrect and absolutely denied. However,
the contents of the preliminary submissions and objections be read as and part
and parcel as the same has not been repeated herein for the sake of brevity.
REPLY
TO GROUNDS:-
It is denied that the impugned Award
passed by the Ld. Arbitrator under Section 18 of the MSME Act,2006 is bad in
the eyes of law as well as in the facts and circumstances of the case and is
liable to be set aside.
I.
That the content of para I
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator failed to consider that the Statement of claim filed by the
Respondent No. 1, is in itself not maintainable in the eyes of the law as per
Section 69 of Indian Partnership Act.
II.
That the content of para II
of the ground are wrong, incorrect and denied. It is denied that the Ld. Arbitrator has failed to consider
that the bill invoices claimed by the Respondent are not genuine and bogus.
III.
That the content of para III
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator has failed to consider that the claim is time barred.
IV.
That the content of para IV
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator has failed to consider that the respondent will have no liability to
honour settlement agreement under effect of contract being resumption of
business by Respondent as per section 62 of the Indian Contract Act, 1872.
V.
That the content of para V
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator has failed to consider that the claim petition was not filed by the
authorized person.
VI.
That the content of para VI
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator has failed to consider that the goods delivered by the Respondent
No.1 were of inferior quality, which has led to complaints from customers and
the same has resulted in rejection of invoices dated 8th August 2020, 12th
August 2020 and September 12, 2020 amounting to Rs 22, 12, 655/-. It is further
denied that lack of reply from the Respondent No. l's side with regard to the
emails sent twice on 21.09.2020 and 27.10.2020 implies an admission of guilt by
the claimant.
VII.
That the content of para VII
of the ground are wrong, incorrect and denied. It is denied that the Ld.
Arbitrator has failed to consider that the counter claim seeking a claim of Rs.80,00,000/-.
It is further denied that the rejected goods of inferior quality was not taken
back by the claimant so it caused loss of lakhs of rupees to the Petitioner
because the premises could not have been used for manufacturing the final goods
and new materials could not be purchased, as upon the purchase of material of
Rs.22,12,655/- the Petitioner earns a revenue of Rs 1,11,89,071/- and the
Petitioner accrued a revenue loss of 80% due to non supply of good quality raw
material by claimant. It is further denied that since the Petitioner was not
able to assemble the lights within a stipulated time period, he lost lots of
orders and reputation in the eyes of its client. It
is most humbly submitted that the Ld. Arbitrator has rightly rejected the
counter claim of the pet on the basis of correct understanding and
interpretation of law and after carefully considering the pleadings giving due
weightage to the evidence adduced by both the parties.
5-6. That the
content of paras 5-6 of the petition are legal paras, need no reply.
7. That the
content of para 7 of the petition are wrong, incorrect and denied. The present
petition is barred by limitation.
8-9. That the
content of paras 8-9 of the petition are legal paras, need no reply.
Prayer clause of the petition
is vague, frivolous, baseless and misconceived hence strongly opposed. The petition
of the petitioner is liable to be rejected in the interest of justice.
It is, therefore, most respectfully prayed
that this Hon'ble Court may be pleased to dismiss the petition of the petitioner
in favour of the respondent no.1, with interests and costs.
It is prayed accordingly.
RESPONDENT
NO.1
Through
XXX
XXX
ADVOCATES FOR
XXX
LAW FIRM AT
xxx
XXX
DELHI
DATED
IN THE COURT OF LD. DISTRICT JUDGE;
(COMMERCIAL COURT); DISTT. CENTRAL; xx, DELHI.
OMP (COMM.) NO. _____ OF 2024.
IN THE MATTER OF:-
XX
: PETITIONER
XXX. :
RESPONDENTS
AFFIDAVIT
Affidavit of xx, Partner ofxxxs, having their address at
xxxx , do hereby solemnly affirm
and declare as under:-
1. That I
am Partner / AR of the respondent no.1 in the above noted matter and am well
conversant with the facts of the case and am also competent to swear the
present affidavit.
2. That the
contents of the accompanying reply to the petition have been drafted by my
counsel as per my instructions and the contents of the same have been duly read
over and understood by my vernacular language and after fully understanding the
contents of the therein are all true and correct to my knowledge.
DEPONENT
VERIFICATION :-
Verified at Delhi on this
___ day of August, 2024. That the
contents of my above Affidavit are true and correct to my knowledge and nothing
material has been concealed therefrom.
DEPONENT
IN THE COURT OF LD. DISTRICT JUDGE;
(COMMERCIAL COURT); DISTT. CENTRAL; TIS HAZARI COURTS, DELHI.
OMP (COMM.) NO. _____ OF 2024.
IN THE MATTER OF:-
XX
INDUSTRIES LTD. : PETITIONER
XXX. :
RESPONDENTS
STATEMENT
OF TRUTH
Affidavit
of xx , Partner of xxx s, having their address
at xx., do hereby solemnly
affirm and declare as under:-
1.
That I, the Deponent, the
Partner / AR of the Respondent no.1 company, and hence, I, the Deponent am
competent to swear this statement of truth. That I, the Deponent, am well
conversant with the facts and circumstances of the case, and hence competent to
swear this Affidavit.
2.
I am sufficiently
conversant with the facts of the case and have also examined all relevant
documents and records in relation thereto.
3.
I say that the statements
made in 1 to ….. paragraphs are true to my knowledge, and statements made in ….
to …..paras are based on information received & available which I believe
to be correct, and statements made in ……. to …… paragraphs of are based on legal
advice and no part of it is false nor anything material has been concealed
therefrom.
4.
I say that there is no
false statement or concealment of any material fact, documents or record, and I
have included information that relevant for the captioned reply.
5.
I say that the
above-mentioned suit comprises of a total of 1 to …… pages, each of which has
been duly signed by me.
6.
I say that all documents
in my power, possession, control, or custody, pertaining to the facts and
circumstances of the proceedings initiated by me have been disclosed and copies
thereof annexed, and that I do not have any other documents in my power,
possession, control or custody as of now.
7.
I state that the
Annexures hereto are true copies of the documents referred to and relied upon
by me.
8.
I say that I am aware
that for any false statement or concealment, I shall be liable for action taken
against me under the law for the time being in force.
VERIFICATION :-
Verified at Delhi on this
___ day of August, 2024. That the contents
of my above Affidavit are true and correct to my knowledge and nothing material
has been concealed therefrom.
DEPONENT
