M/S Techno Prints vs. Chhattisgarh Textbook Corporation

Facts

The applicant, M/s Techno Prints, a proprietorship firm, was empanelled with the Chhattisgarh Textbook Corporation (Respondent No. 1) for printing and publishing. The applicant was awarded a work order dated January 20, 2020, for printing and distribution of module booklets for the State Council for Educational Research and Training (SCERT) under the "Nishtha" Training Program. The work order specified the material, quantity, specifications, and cost per booklet (excluding GST) at Rs. 165.58. Payment was to be made after testing, approval, and receipt of funds by the Corporation from the concerned institution. After the applicant completed the printing and supplies, the Managing Director of the Chhattisgarh Textbook Corporation, on March 13, 2020, cancelled the work order without assigning reasons or providing a hearing. Subsequently, on March 18, 2020, the Corporation terminated the E-Tender Notice under which the work was awarded. The applicant's previous writ petition challenging these actions was dismissed for want of prosecution and on merits. The Supreme Court directed the applicant to approach the High Court for restoration, which was granted, but the restored writ petition was again dismissed on merits. A subsequent SLP before the Supreme Court led to a direction to withdraw and file an application under Section 11 of the Arbitration and Conciliation Act, 1996.

Held

The Court held that it had the power to appoint an Arbitrator under Sections 11(4) and 11(6) of the Arbitration and Conciliation Act, 1996. This was based on the consensus between the parties that an arbitration was the appropriate recourse, especially following the Supreme Court's direction. The Court noted the respondents' submission that they had no objection to the appointment of an Arbitrator. The primary issue was not the merits of the underlying dispute, but the procedural step of appointing an Arbitrator to adjudicate those merits. Given the parties' agreement on the need for arbitration and their consensus on a specific retired Judge of the High Court to act as the Sole Arbitrator, the Court found no impediment to appointing one. The Court's reasoning was driven by facilitating the resolution of disputes through arbitration as agreed upon by the parties and directed by the higher court. The operative direction was the appointment of the Sole Arbitrator.

Key Issues

1. Whether the Court has the power to appoint an Arbitrator under Sections 11(4) and 11(6) of the Arbitration and Conciliation Act, 1996, given the prior dismissal of the applicant's writ petitions on merits and the Supreme Court's direction to seek arbitration? Applicant's argument: The applicant contended that the work order dated January 20, 2020, contained an arbitration agreement and reflected the mutual intention of the parties to arbitrate. They argued that the ongoing disputes necessitated judicial intervention to constitute an Arbitral Tribunal for resolving claims and safeguarding their rights, as directed by the Supreme Court. Respondents' argument: The respondents opposed the arbitration request application but stated they would have no objection if the Court appointed an Arbitrator to resolve the dispute.