Calcutta High Court
M/S. Sambhav Enterprises vs Simplex Infrastructures Limited on 11 March, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-8
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/161/2025
M/S. SAMBHAV ENTERPRISES
VS
SIMPLEX INFRASTRUCTURES LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 11th March 2025.
Appearance:
Mr. Pratip Mukherjee, Advocate
Mr. Arpit Agarwal, Advocate
Mr. YashashwiSundariya, Advocate
Mr. Purnankar Biswas, Advocate
...for petitioner.
Mr.Ratul Das, Advocate
Mr. Roshan Sengupta, Advocate
...for respondents.
1. This is an application for appointment of a learned arbitrator in terms of
the arbitration clause contained in the work order dated February 27,
2016. The parties entered into a business relationship. The respondent
was engaged as a contractor, by Bhilai Steel Plant. The respondent
engaged the petitioner as a sub-contractor to undertake certain works
with regard to installation of false ceilings, aluminum doors and windows,
flooring and other associated tasks at Bhilai Steel Plant. Disputes and
differences arose over payment of the money, on the basis of the invoices,
raised by the petitioner. The petitioner’s case is that 49 invoices covering
the period between February 29, 2016 and October 5, 2023 had been
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raised in respect of the works executed. The petitioner offered 30 days
credit period, which was later extended to 60 days on the basis of the
respondent’s requests. According to the petitioner, the total amount
payable against the 49 invoices was Rs.2,27,54,990/-. Part payments
were allegedly made and, according to the petitioner, Rs.26,12,433/- was
the balance outstanding. Apart from the said amount, the security
deposit and interests etc. were also payable, according to the petitioner.
The total amount due, as on 26th August 2024, was Rs.51,40,398/-. As
the demand notice was not responded to, the petitioner invoked
arbitration. The arbitration clause is contained in Clause 24 of the work
order, which is quoted below:-
24) In the event of any difference or dispute arising out of or in
connection with this work order, the same shall be first amicably
settled by mutual dialogue. If the parties fail to settle their
difference or dispute arising out of or in connection with this work
order (including interpretation of the terms thereof), the same shall
be referred to arbitration. The Arbitration proceedings shall be
conducted by a single Arbitrator appointed by the Company
Secretary of Simplex Infrastructures Limited, and the
award/decision of such arbitrator shall be final and binding upon
both the parties. The venue of the arbitration shall be Kolkata.
However, the work shall not be stopped during the pendency of
the proceedings and it shall be ensured that such work is
proceeded uninterruptedly.”
2. The venue of the arbitration, according to the said clause, is Kolkata.
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3. Mr. Das, learned advocate for the respondent submits that before
invocation of the arbitration clause, the petitioner ought to have tried to
settle the dispute amicably. Without exhausting the alternative redressal
mechanism i.e., amicable settlement, the arbitration clause could not be
invoked. Thus, the application before this Court is premature. The next
contention is that the claims were not only time barred, but also
inadmissible. It is denied that part payments on the basis of the invoices,
had been made within the period of limitation.The applicability of Section
18 of the Limitation Act, in the computation of the period of limitation, is
denied.
1. Mr. Das’s contention that the application is premature and that the
petitioner should be asked to explore the possibility of an amicable
settlement, is not accepted. The fact that correspondence had been made
by the petitioner for payment of the dues, is available from record. In my
opinion, relegating the petitioner to another round of meetings and
discussions, would be an exercise in futility and will only cause further
wastage of valuable time. Reference is made to the decision of Visa
International Ltd. v. Continental Resources (USA) Ltd., reported
in(2009) 2 SCC 55.The Hon’ble Apex Court held that if the referral Court
finds from the records that despite the parties communicating with each
other, the dispute continued, relegating the parties to the process of
conciliation and/or amicable settlement would be an empty formality. The
relevant portion is quoted below:-
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“38. It was contended that the pre-condition for amicable
settlement of the dispute between the parties has not been
exhausted and therefore the application seeking appointment of
arbitrator is premature. From the correspondence exchanged
between the parties at pp. 54-77 of the paper book, it is clear that
there was no scope for amicable settlement, for both the parties
have taken rigid stand making allegations against each other. In
this regard a reference may be made to the letter dated 15-9-2006
from the respondent herein in which it is inter alia stated “… since
February 2005 after the execution of the agreements, various
meetings/discussions have taken place between both the parties
for furtherance of the objective and purpose with which the
agreement and the MoU were signed between the parties. Several
correspondences have been made by CRL to VISA to help and
support its endeavour for achieving the goal for which the
abovementioned agreements were executed”. In the same letter it is
alleged that in spite of repeated requests the petitioner has not
provided any funding schedules for their portion of equity along
with supporting documents to help in convincing OMC of financial
capabilities of the parties and ultimately to obtain financial closure
of the project. The exchange of letters between the parties
undoubtedly discloses that attempts were made for an amicable
settlement but without any result leaving no option but to invoke
the arbitration clause.”
4. The existence of the arbitration clause is not in dispute. The fact that the
parties were in a business relationship, is available from the documents
on record. The fact that composite payments were made by the
respondent against the tax invoices raised by the petitioner, is also
available from records. Part payment was made sometime in April 2023.
The last invoice raised by the petitioner, is dated October 5, 2023.
5. Thus, the issue of limitation, in my view, is a mixed question and has to
be decided by the learned arbitrator upon weighing the evidence to be
adduced by the parties. With regard to the admissibility of the dues, the
learned Arbitrator shall decide the matter.
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6. Under such circumstances, the application is disposed of without going
into the merits of the rival claims of the parties.
7. Accordingly, the Court appoints Ms. Suchishmita Ghosh Chatterjee,
learned Advocate (Mob. No.7980857275), Bar Library Club as the learned
Arbitrator, to arbitrate upon the disputes between the parties. This
appointment is subject to compliance of Section 12 of the Arbitration and
Conciliation Act, 1996.The learned Arbitrator shall fix her own
remuneration as per the Schedule of the Act.
8. AP-COM/161/2025 is, accordingly, disposed of.
(SHAMPA SARKAR, J.)
S. Kumar / R.D. Barua / bp