Value Added Coating Solutions Pvt Ltd & Ors. v. Mis Shri Balaji Export & Manufacturing

1. This is an appeal under Section 37 ofthe Arbitration and Conciliation Act, 1st 1996 ('Act') challenging an order dated March 2014 passed by the learned Arbitrator in an application filed by the Respondent/Claimant, Mis. Shri Balaji Export & Manufacturing, seeking a direction to permit the Respondent to sell the goods/materials supplied by the Appellants herein to the Respondent for installation of plants at the site of the Respondent. Further, the Appellant has filed IA No. 12873 of 2014 seeking directions to the Respondent to deposit Rs. 20 lakhs as security for the cost of material in its possession. Arb.A. No. 170/2014 Page 1 0/5 2015:DHC:11779

2. The imtUgned order records that while the learned Arbitrator had declined to grant ~ermission to the Respondent to dispose of the goods/materials lying at the site, at the same time, the Respondent was not in a position to instal its plant since the goods/materials supplied by the Appellants were still lying at the site. Accordingly, by the impugned order, the learned Arbitrator granted th,e Appellants one week's time to deposit Rs. 20 lakhs in the form of fixed deposit in the name of the learned Arbitrator and remove the materials,from the site and dispose of the same. In case the Appellants herein failed to do so, then the Respondent was directed to preserve the goods by removing them from the place of erection/installation till the disposal of the claim. The Respondent was given liberty to instal his plant through another contractor.

3. An application filed by the present Appellants on 6th March 2014 seeking - --I recall of the order dated 1st March 2014 was dismissed by the learned Arbitrator on 2ih March 2014. That order has not been challenged by the Appellants.

4. It appears that after passing of the impugned order, with the Appellants having failed to deposit a sum of Rs. 20 lakhs, the Respondent removed the Arb.A. No. 17of2014 Page20f[5] I goods/materials that remained installed at the site and has preserved them in terms oftfat order.

5. Anothe,r fact that requires to be noticed is that the Appellants had also filed an application before the learned Arbitrator under Order VI Rule 15 read with Section 151 cpe seeking dismissal of the claim since the claim was not accompanied by an affidavit of the claimant. That application was dismissed by the learned Arbitrator on 21st April 2014.

6. The ~ubmissions of learned counsel for the Appellants and the Respondent have been heard at length.

7. With the materials supplied by the Appellants, which were lying at the site of the Respondent, already having been removed by the Respondent, it was suggested to the parties by the Court that subject to their sharing the fees, a -, I Valuer could be appointed by the Court to inspect the said materials in the presence of both the parties and submit a report of valuation on the basis of which the sale ofthe said materials, under the supervision ofthe said Valuer, could be permitted, and the sale proceeds kept in a fixed deposit to be kept renewed during the pendency ofthe arbitral proceedings. Arb.A. No. 170/2014 Page30f[5]

8. Howe'jer, leruned counsel for the Appellants did not agree and insisted that the funpugned order dated 15t March 2014 of the learned Arbitrator I I should bd set aside and that the Respondent should be directed to deposit a I sum ofRi. 20 lakhs in the form ofa fixed deposit during the pendency ofthe I arbitral pr,oceedings.

9. With the impugned order dated 15t March 2014 having already been worked out, the Court does not consider it practicable to put the clock back to restore the status quo ante.

10. As regards the second prayer, it is seen that the Respondent has filed its statement of claim and counter-claim has been filed by the Appellants. It is not possible at this stage for the Court to direct the Respondent to provide any security in the form of the fixed deposit for the counter-claims of the Appellants which is yet to be adjudicated. It may be noted that at one stage of the proceedings before the learned Arbitrator, the Respondent had come forward with a cheque in the sum of Rs. 21 lakhs subject to the Appellants completing the project within a period of 45 days. However, the Appellants did not go along with the said proposal.

11. Learned counsel for the Appellants makes a grievance that the further Arb.A. No. 170/2014 Page 4 0/5 applicatiohs filed by the Appellants have not been dealt with by the learned Arbitrato[1] The Court hereby requests the learned Arbitrator to dispose of all the pendtg applications of the Appellants in accordance with law as expeditio*sly as possible and in any event not later than two months from today.

12. The Court is not inclined to interfere with the impugned order dated 1st March 20"14 passed by the learned Arbitrator.

13. The appeal and the pending application are dismissed with the above observations.

S.MURALIDHAR, J JANUAR,Y 14, 2015 Rk