Bharat Traders And Suppliers vs. Braithwaite And Company Limited

OCD-24 ORDER SHEET

IN THE HIGH COURT AT CALCUTTA COMMERCIAL DIVISION ORIGINAL SIDE

AP-COM/543/2026 BEFORE: The Hon’ble JUSTICE GAURANG KANTH Date : 5th August, 2026. Appearance: Mr. Sourav Kumar Mukherjee, Adv. Ms. Sahana Pal, Adv. ..for the petitioner

Mr. Sayan Banerjee, Adv. ..for the respondent

The Court: Affidavit of service and the notice of motion are taken on record. The petitioner has preferred the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole Arbitrator to adjudicate the disputes and differences that have arisen between the parties out of the purchase order dated 19.07.2024. It is the case of the petitioner that the respondent has emerged as a successful bidder for supplying of Naturally Ventilated Poly House. Consequently, the parties entered into a purchase order dated 19.07.2024 valued at Rs.1,04,86,07,000/-, inclusive of GST pursuant to which the petitioner furnished a fixed deposit of Rs.39,36,0465/- as security.

2 According to the petitioner, execution of the project was delayed due to circumstances beyond its control, including difficult terrain, adverse weather, logistical constraints and delayed availability of project site. The petitioner raised invoices which were not paid by the respondent partly, leading to invocation of arbitral disputes in terms of the purchase order. It is the case of the petitioner that he had validly issued notice under Section 21 invoking the Arbitration and Conciliation Act, 1996 vide notice dated 27.03.2026. At the threshold, learned counsel for the respondent states that the notice under Section 21 of the Arbitration and Conciliation Act, 1996 is faulty and cannot be construed as a notice under the said provision of the Act. Learned Counsel for the respondent states that the notice under Section 21 records that “the dispute now has to be settled as per said arbitration clause of the said purchase order/agreement and hence the same shall be settled as per the Arbitration and Conciliation Act with the venue/seat of Arbitration proceedings to be held at Dehradun as per the address mentioned in the said purchase order dated 19.07.2024 to be the address of you noticee at Uttarakhand and not at Kolkata”. He states that in relied on M/s. Bhagheeratha Engineering Ltd. vs. State of Kerala necessary pre-condition for filing of an application under Section 11 of the Arbitration and Conciliation Act, 1996. He states that the purchase order dated 19.07.2024 itself shows that the place of arbitration is Kolkata and the arbitration clause is self-contained in the said purchase order. He further states that since it has been wrongly mentioned in the arbitration notice under Section 21 that the venue would be Uttarakhand will not disentitle him from invoking the arbitral proceedings in terms of Section 11 of the Arbitration and Conciliation Act, 1996. 4 This Court has heard the arguments advanced by learned Counsel for the parties and perused the materials on record. Before proceeding further, it is necessary to advert to the object and purpose underlying the requirement of a notice under Section 21 of the Act. A notice under Section 21 is not a mere procedural formality but performs several distinct and important functions: firstly, it places the recipient on notice of the nature and particulars of the claim sought to be referred to arbitration; secondly, it affords the recipient a fair opportunity to accept, dispute, or narrow the scope of such claim at the threshold; thirdly, it enables the recipient to raise, at the earliest, any objection touching upon the arbitration agreement, including the forum, seat, and venue at which the arbitral proceedings are proposed to be conducted; and fourthly, it fixes the date from which the arbitral proceedings are deemed to commence for the purposes of limitation. It is for these reasons that courts have consistently held that a notice under Section 21 is a mandatory precondition to the invocation of the juri iction of this Court under Section 11 of the Act, and that the said requirement cannot be treated as a mere formality to be dispensed with or presumed to have been complied with. Since the notice under Section 21 is the very document by which the respondent is called upon to submit to the juri iction of a particular forum and to participate in the constitution of the Arbitral Tribunal at that forum, it is essential that the said notice correctly and accurately reflect the terms of the arbitration agreement between the parties, particularly with reference to the seat and venue of arbitration. Where the notice misstates such material particulars, the recipient is misled as to the forum before which it

5 is expected to respond, object, or participate, and is thereby denied the very opportunity that the notice is intended to secure. A party cannot be permitted to invoke the juri iction of this Court under Section 11 on the strength of a notice which is, on its own showing, inconsistent with the arbitration clause it purports to invoke, nor can such a party be heard to contend that the error in its own notice ought to be overlooked by reference to the correct position appearing from the underlying contract. To hold otherwise would render the requirement of a Section 21 notice illusory and would permit a party to unilaterally alter, through an erroneous notice, the very terms of the arbitration agreement it seeks to enforce. This Court is further of the view that the judgments relied upon by learned Counsel for the petitioner, namely Adavya Projects Private Limited (Supra), ASF Buildtech Private Limited (supra) and M/s. Bhagheeratha Engineering Ltd. (Supra), are distinguishable on facts and do not assist the case of the petitioner. The said judgments were rendered in the context of either the complete absence of a notice under Section 21 to a non-signatory sought to be impleaded in an ongoing arbitration, or the question of whether claims set out in a Section 21 notice restrict the scope of claims that may subsequently be raised before the Arbitral Tribunal. None of the said judgments countenance a situation, as in the present case, where a notice under Section 21 has in fact been issued between the very parties to the arbitration agreement, but affirmatively misstates the seat and venue of arbitration contrary to the express terms of the purchase order governing the parties.

6 This Court finds guidance instead in the line of authority of the Hon'ble Supreme Court itself. In Adavya Projects Private Limited (Supra), the Hon'ble Supreme Court held that a notice invoking arbitration under Section 21 of the Act is mandatory, inasmuch as it fixes the date of commencement of the arbitral proceedings, which is essential for determining the applicable limitation period and the law governing the dispute, and that such a notice is a pre-requisite to the filing of an application under Section 11 of the Act. The said position was reiterated in Bharat Sanchar Nigam Ltd. & Anr. vs. Nortel Networks India Pvt. Ltd., reported as (2021) 5 SCC 738, wherein the Hon'ble Supreme Court held that an application under Section 11 can be filed only after a notice invoking arbitration in respect of the particular claim(s)/dispute(s), as contemplated by Section 21 of the Act, has been issued, and there is a failure to make the appointment of an arbitrator pursuant thereto. While exercising juri iction under Section 11 of the Act, this Court is entitled to conduct a prima facie scrutiny to satisfy itself that the pre-conditions for reference, including a valid invocation of the arbitration agreement, stand fulfilled, so as to weed out invocations that are manifestly non-existent, invalid, or inconsistent with the terms of the arbitration agreement itself. Applying the aforesaid principles, this Court holds that a notice under Section 21 which, on its face, sets out a seat and venue of arbitration contrary to the arbitration clause contained in the purchase order dated 19.07.2024, cannot be said to be a notice issued with reference to, and in terms of, the said arbitration clause. Such a notice fails to satisfy the mandatory requirements of Section 21 of the Act inasmuch as it deprives

7 the recipient of a fair and accurate basis on which to assess the invocation and to determine the forum before which its rights and objections, including as to seat and venue, are required to be raised. The defect as noted above is one that goes to the content and clarity of the notice itself. Thus, this Court holds the Section 21 notice to be faulty and the present petition is dismissed. The petitioner is at liberty to issue a fresh notice under Section 21, if so advised.

(GAURANG KANTH, J.)

R.Bhar