Swastik Pipe LTD vs. Shri Dinesh Sachdeva Sole Proprietor M/S Modern Engineering Works

Facts

The petitioner, Swastik Pipe Ltd., filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking to refer disputes to arbitration. The disputes arose from eight tax invoices issued by the petitioner to the respondent, M/s Modern Engineering Works, totaling ₹ 17,97,274/-. Each invoice contained an arbitration clause. The petitioner issued a notice under Section 21 of the 1996 Act on June 13, 2022, seeking arbitration. This notice was sent to the respondent's last known address, which was also reflected in its GST returns, but it was returned undelivered. Similarly, the court's notice was also returned undelivered. The petitioner contended that service should be deemed effected as the address was the respondent's last known address and corroborated by GST filings.

Held

The Court held that both requirements for a Section 11 petition were satisfied. Firstly, an arbitration agreement was found to exist between the parties, as evidenced by the arbitration clause present in all eight tax invoices. Secondly, the Court found that the petition was filed within the three-year limitation period from the date of the Section 21 notice. The Court also deemed service of the Section 21 notice to have been effected on the respondent, despite the postal returns, reasoning that the notice was sent to the respondent's last known address, which was corroborated by the address in the respondent's GST returns. Consequently, the Court allowed the petition and appointed Mr. Amarjeet Singh, Advocate, as the arbitrator to adjudicate the disputes between the parties. All questions of fact and law were left open to be agitated in the arbitral proceedings.

Key Issues

1. Whether an arbitration agreement exists between the parties, as contemplated by Section 11(6) of the Arbitration and Conciliation Act, 1996? 2. Whether the petition has been filed within the prescribed limitation period of three years from the Section 21 notice, as required under Section 11(6) of the Arbitration and Conciliation Act, 1996? Petitioner's Arguments: The petitioner argued that an arbitration agreement exists as per the clauses in the tax invoices. They also contended that the petition was filed within the limitation period. Furthermore, they argued that service of the Section 21 notice should be deemed effected, despite its return, because it was sent to the respondent's last known address, which was corroborated by the respondent's GST returns. Revenue/State's Arguments: The judgment does not record any specific arguments made by the revenue or state. The respondent did not appear, and the court proceeded based on the petitioner's submissions and the available record.