Welkin Telecom Infra PVT LTD vs. West Bengal State Electricity Distribution Co LTD And Anr
Original PDF →Facts
The petitioner, Welkin Telecom Infra Private Pvt. Ltd., was a contractor engaged by the respondent, West Bengal State Electricity Distribution Co. Ltd. The contract period, extended, concluded on July 31, 2019. The petitioner claims to have completed the work and sought payment for the final bill, escalation, interest, and reimbursement of GST paid. As these claims remained unpaid, the petitioner invoked the in-house dispute resolution mechanism as per Clauses 3.1 and 3.2 of the agreement by a letter dated September 21, 2021. Receiving no response, the petitioner issued a notice invoking arbitration on April 19, 2022. The respondents objected, stating the invocation was premature and that meetings were held on January 6, 2022, and April 27, 2022, to resolve the matter.
Held
The Court held that the invocation of arbitration was not premature. The Court found that the respondent's assertion of meetings held on January 6, 2022, and April 27, 2022, was not supported by any documentary evidence and was specifically denied by the petitioner as relating to a different project. The Court noted that the respondent had not provided any evidence to demonstrate an attempt to resolve the dispute amicably as per Clauses 3.1 and 3.2 of the agreement. The Court was of the prima facie opinion that an arbitration clause existed and a dispute was alive, and it would be unreasonable to expect the contractor to wait indefinitely for the respondent to address the issues through their internal mechanism, thereby frustrating the arbitration process. The Court referred the disputes to Mr. Utpal Bose, learned Senior Advocate, to arbitrate, subject to compliance with Section 12 of the Arbitration and Conciliation Act, 1996. The learned Arbitrator was to fix his remuneration as per the Act's schedule. The application was disposed of.
Key Issues
1. Whether the invocation of arbitration by the petitioner was premature, considering the existence of an in-house dispute resolution mechanism and alleged meetings held by the respondent (Section 11, Arbitration and Conciliation Act, 1996). Petitioner's arguments: The petitioner contended that the in-house dispute resolution mechanism was not adequately pursued by the respondent. They argued that the meetings mentioned by the respondent in their affidavit-in-opposition pertained to a different project and did not address the disputes subject to the present proceedings. The petitioner asserted that they had followed the prescribed procedure by first attempting amicable settlement and then invoking arbitration after the respondent's inaction. Respondent's arguments: The respondent argued that the arbitration clause could not be invoked and that the notice invoking arbitration was premature. They claimed that meetings were held on January 6, 2022, and April 27, 2022, indicating an ongoing attempt to resolve the matter internally.
Sections Cited
Section 11, Section 12
AI-generated summary — verify with the full judgment below
OCD –8
AP/459/2022 IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURI ICTION ORIGINAL SIDE (Commercial Division)
WELKIN TELECOM INFRA PRIVATE PVT.LTD. -VERSUS- WEST BENGAL STATE ELECTRICITY DISTRTIBUTION CO. LTD. AND ANR. BEFORE: The Hon'ble JUSTICE SHAMPA SARKAR Date: 14th November, 2024
Appearance: Mr. Amitava Ghosh, Adv. Mr. Malay Kumar Das, Adv. Mr. Sourav Chatterjee, Adv. Ms. Soumashree Dutta, Adv. …for the Petitioner.
Mr. Supriyo Chattopadhyay, Adv. Mr. Sudip Kumar Maiti, Adv. ...for the respondent.
The Court: This is an application under Section 11 of the Arbitration and Conciliation Act, 1996. The petitioner was employed as a contractor under the respondent. The contract period, upon extension, ended on July 31, 2019. The petitioner claims to have completed the work.
2
The petitioner’s contention is that the non-payment of the final bill, bills raised on account of escalation, the interest component and theclaim on account of reimbursement of GST paid by the petitioner, were, inter alia, the subject-matter of the dispute. Mr. Ghosh, learned Advocate for the petitioner refers to the arbitration clause,being Clause No. 3. 3. Mr. Ghosh submits that the arbitration clause is preceded by an inhouse dispute resolution mechanism. As the claims raised by the petitioner were not paid, by a letter dated September 21, 2021, the petitioner approached the respondents in accordance with Clauses 3.1 and 3.2, for amicable settlement. The document is at pages 38 to 40 of the application. As the petitioner did not hear from the said respondents, notice invoking arbitration was issued on April 19, 2022. Even thereafter, the respondents did not reply. Mr. Supriyo Chattopadhyay, learned advocate for the respondents has filed an affidavit-in-opposition raising objections on the ground that the arbitration clause could not be invoked and that the notice invoking arbitration was premature. It has been stated that meetings were held on January 6, 2022 and April 27, 2022 and the matter would be decided soon. Mr. Ghosh, submits that specific denial to such averments in the affidavit-in-opposition filed by the respondent, is available in paragraph 3(c) at page 6 of the affidavit-in-reply. It has been specifically pleaded that the meetings were relating to another project. On January 6, 2022 and 3
April 27, 2022,the disputeswhich are the subject matter of the present proceedings, were not discussed. Heard the parties. The resolution of dispute by way of arbitration has been provided for and notice invoking arbitration is also on record. A single pleading in the affidavit-in-opposition that on January 6, 2022, the issues were discussed with the authorized representative of the respondents (not supported by any document), cannot be the sole ground for this Court to hold that the invocation of arbitration was premature. Nothing has been put forward in the affidavit-in-opposition which would indicate that the respondents had attempted to resolve the dispute amicably in terms of Clauses 3.1 and 3.2 of the said agreement. Under such circumstances, the question of the invocation of arbitration, being premature, does not arise. In my, prima facie opinion, it is an admitted position that an arbitration clause is in existence and the dispute is alive. However, the respondents may raise their objections before the learned Arbitrator, in accordance with law. It is not expected that the contractor would wait for an unending period, till the respondents decide to address the issue in accordance with the inhouse mechanism, thereby frustrating the entire dispute redressal mechanism by way of arbitration. Under such circumstances, this Court refers the dispute to Mr. Utpal Bose, learned Senior Advocate, Bar Library Club to arbitrate the disputes between the parties. This appointment is subject to compliance
4
of Section 12 of the Arbitration and Conciliation Act, 1996. The learned Arbitrator shall fix his remuneration as per the Schedule of the said Act. Accordingly, AP/459/2022 is disposed of. All parties are to act on the basis of server copy of this order.
(SHAMPA SARKAR, J.)
A/s.
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.