Dr Suresh @ Suryakant R Duggani vs. M/S Carl Zeiss INDIA Bengaluru PVT LTD
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The petitioner, Dr. Suresh @ Suryakant R Duggani, a neurosurgeon, purchased medical equipment from the respondent, M/s Carl Zeiss India Bengaluru Pvt. Ltd. The equipment supplied was refurbished, defective, and had technical issues. Despite attempts to resolve these issues, the respondent was unsuccessful. The petitioner returned the equipment, and the respondent refunded a portion of the payment, retaining ₹53,00,000/- which represented the GST component of the invoice. The petitioner invoked an arbitration clause in the tax invoice dated 17.12.2022, issuing a notice on 11.11.2024. The respondent replied, refusing the appointment of an arbitrator, leading the petitioner to file this Civil Miscellaneous Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Held
The Court held that the petitioner had made out a ground to refer the matter to arbitration. The existence of an arbitration clause in the Tax Invoice dated 17.12.2022 was undisputed. A dispute had arisen between the parties concerning the refund of ₹53,00,000/- which the respondent had withheld. The Court found that this dispute was to be resolved through arbitration as per the terms of the invoice. Consequently, the Court allowed the petition and nominated Hon’ble Justice Smt. Rathnakala, retired Judge of the High Court of Karnataka, as the sole arbitrator to resolve the disputes. The Court directed the office to communicate this order to the arbitrator and the Arbitration and Conciliation Center, Bengaluru.
Key Issues
1. Whether the petitioner has made out a ground to refer the matter to an Arbitrator for resolution of disputes between the parties, in terms of Clause (17) of the Tax Invoice dated 17.12.2022, as per the provisions of the Arbitration and Conciliation Act, 1996? Petitioner's arguments: The petitioner contended that the respondent withheld ₹53,00,000/-. An arbitration clause exists in the tax invoice. Despite the petitioner invoking this clause and issuing an arbitration notice, the respondent did not respond appropriately, necessitating the present petition. Respondent's arguments: The learned counsel for the respondent stated that there was no objection to allowing the petition.
Sections Cited
Section 11(6), Section 21
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Cause title — parties, addresses and appearances
ORAL ORDER
This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for the appointment of an Arbitrator to resolve the disputes between the parties to the petition in terms of Clause (17) of the Tax Invoice dated 17.12.2022 vide Annexure “A”.
Brief facts leading rise to the filing of this petition are as follows:
The petitioner—a Neurosurgeon, had purchased medical equipment from the respondent. The respondent supplied refurbished equipment, which was defective and had several technical issues. The respondent was unable to resolve the technical issues. The equipment was returned by the HC-KAR NC: 2025:KHC:22527 petitioner. The respondent accepted the return of equipment and refunded only a part of the sum paid by the petitioner and has withheld a sum of ₹53,00,000/- which represented GST component in the invoice. Despite repeated requests, the respondent has refused to return the sum of ₹53,00,000/-.
The petitioner invoked an arbitration clause by issuing an arbitration notice on 11.11.2024. The respondent replied to the arbitration notice, refusing the appointment of an arbitrator and hence, this petition.
Heard the learned counsel for the petitioner and the learned counsel for the respondent.
Learned counsel for the petitioner submits that the respondent has withheld a sum of Rs.53,00,000/-. There is an arbitration clause in the Tax invoice dated 17.12.2022. Though, petitioner invoked an HC-KAR NC: 2025:KHC:22527 arbitration clause by issuing arbitration notice, the respondent did not respond to it. Hence praying to allow the petition.
The learned counsel for the respondent submits no objection to allow the petition.
Perused the records. Considered the submissions made by the learned counsel for the parties.
The point that arises for consideration in this petition is: “Whether the petitioner has made out a ground to refer the matter to the Arbitrator for resolution of the disputes between the parties to the petition in terms of Clause (17) of the Tax Invoice dated 17.12.2022 vide Annexure “A” as per the provisions of the Arbitration and Conciliation Act, 1996.”
There is no dispute that the petitioner had purchased medical equipment from the respondent HC-KAR NC: 2025:KHC:22527 and the respondent supplied the equipment which was defective and the petitioner had returned the defective equipment to the respondent. The petitioner demanded a return of the amount ₹1,80,00,000/- paid by him. The respondent had made a part payment of ₹1,29,00,000/- and did not make payment of the balance sum of ₹53,00,000/-.
There is an Arbitration Clause in the Tax Invoice dated 17.12.2022, which reads as follows:
“17. Dispute Resolution: Any dispute in respect of sales made or services provided by Zeiss to the Customer shall be settle by mutual negotiation on its reference within a period of 30 days, failing which the same shall be referred to the sole arbitrator nominated by Zeiss in accordance with the provision of the Arbitration and Conciliation Act, 1996. The seat of arbitration shall be at Bengaluru and shall be conducted in English, arbitration award rendered by the arbitral tribunal shall be final and binding on the Parties.” HC-KAR NC: 2025:KHC:22527
Clause (17) provides that any dispute in respect of the sales made or services provided by the respondent shall be settled by mutual negotiation, failing which the same shall be referred to the Arbitrator. After the mutual negotiations failed, the petitioner issued a demand notice dated 22.06.2024, demanding to pay the aforesaid amount.
The respondent replied to the said legal notice vide Annexure “C” dated 03.09.2024, denying the payment of balance amount demanded by the petitioner. Hence, The petitioner by invoking the Arbitration Clause under Tax invoice dated 17.12.2022 issued an arbitration notice dated 11.11.2024 vide Annexure “D” as per Section 21 of the Act. The respondent replied to the arbitration notice vide communication dated 16.12.2024 as per Annexure “E”, wherein the respondent has refused to nominate the arbitrator proposed by the petitioner. HC-KAR NC: 2025:KHC:22527
As there is an arbitration clause in the Tax Invoice dated 17.12.2022 vide Annexure “A” and the dispute arose between the parties to the petition, the same has to be resolved through an arbitration. Hence, the petitioner has made out a ground to refer the matter to the Arbitration.
In view of the above discussion, I answer the point for consideration in the affirmative and accordingly, I proceed to pass the following order: ORDER (i) The Civil Miscellaneous Petition is allowed. (ii) Hon’ble Justice Smt. Rathnakala, retired Judge, the High Court of Karnataka, is nominated as an arbitrator to resolve the disputes between the parties to the petition in terms of Clause (17) of the Tax Invoice dated 17.12.2022 vide Annexure “A” as per the provisions HC-KAR NC: 2025:KHC:22527 of the Arbitration and Conciliation Act, 1996 and the Rules. (iii) The Office is directed to communicate this order to the learned Arbitrator as well as to the Arbitration and Conciliation Center, Bengaluru. (iv) The Office is directed to return the original copies, if any, to the petitioner after retaining a photocopy of the same. (v) In view of the disposal of the petition, pending interlocutory applications, if any, stand disposed of. (ASHOK S.KINAGI) JUDGE RK CT:KHV List No.: 2 Sl No.: 16
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.