M/S. Anant Rice Industries vs. State Of Chhattisgarh

Facts

The applicant, M/s. Anant Rice Industries, a partnership firm engaged in rice milling, entered into custom milling agreements with respondent No. 2, Chhattisgarh State Co-Operative Marketing Federation Limited. The applicant alleges that respondent No. 2 failed to make timely payments for custom milling services and made unlawful deductions, including GST deductions. Additionally, the applicant claims to have been forced to pay porterage charges. The total amount claimed as non-payment is Rs. 34,96,488/-. The applicant made several representations for payment and a settlement request under the arbitration agreements, but these were not acted upon. Respondent No. 3, the Collector, is the Settlement Authority appointed under the agreements. As no action was taken by the respondents, the applicant filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of a Sole Arbitrator.

Held

The Court noted that the applicant had previously approached the Court in ARBR No.10 of 2021, which was disposed of with liberty to approach the State forum. Following this, the applicant approached the State forum for settlement, but the matter remained pending before the Collector. The State counsel assured that the pending matter would be considered and decided at the earliest. In light of these submissions, the Court directed the Collector to conclude and dispose of the settlement process within a fixed period of 30 days from the receipt of the order. The arbitration application was accordingly disposed of, with no order as to costs. The Court did not decide on the appointment of an arbitrator but rather directed the existing settlement process to be concluded expeditiously.

Key Issues

1. Whether the Court should appoint a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, given the pending settlement process before the Collector. Petitioner's Arguments: The applicant contends that despite previous attempts to resolve the dispute through arbitration and settlement, no action has been taken by the respondents. They highlight that a prior application to this Court (ARBR No.10 of 2021) was withdrawn with liberty to approach the State forum, but the matter remains subjudice before the Collector, with no dates being given for its disposal since November 23, 2022. Therefore, they seek the appointment of an arbitrator to adjudicate the dispute. Respondent's Arguments: The State counsel submits that if the matter is pending before the Collector, it shall be considered and decided at the earliest in accordance with law.