The main legal point established is that disputes of a civil nature, even when subject to arbitration, should not be construed as criminal offenses without clear evidence of fraudulent or dishonest intent.

ORDER :

Leave granted.

2. Since the matter was fixed for final hearing, we have heard the learned counsel for the parties at length.

3. The facts which are required to be taken note of, in brief, are that appellant No. 1 (hereinafter referred to as the 'appellant company') is a company incorporated under the laws of the United States of America and is having its head office in New York. It is engaged in the business of offering data base services internationally for the last several years. Appellant No.2 is the Chairman and Chief Executive Officer of appellant-company and appellant No.3 is its executive Vice-President. Respondent is a company registered under the Indian Companies Act, 1956, having its registered office in Pudducherry, India. It is engaged in the business of providing quality knowledge based back and works (KPO) and software solutions to various enterprises in the World from its centers based in India.

4. Negotiations took place between the respondent-company and the appellant-company as the appellant-company expressed its willingness to utilise the services of the respondent, i.e., knowledge based back and works and software development skills as well as professional services capabilities. In this behalf, an agreement dated 01.05.2009 was entered into between the appellant-company and the respondent whereby the respondent agreed to provide the aforesaid services on certain remuneration, terms whereof were also stipulated in the said agreement.

5. According to the respondent, the appellant company was irregular in making payments. As on November, 2010, under the said agreement, for the services rendered by the respondent, the appellant-company had to make a total payment of USD 316,513 and as against this, the appellant-company had made payment of USD 207,558.05. In this manner, a sum of USD 108,954.95 remained due to be paid by the appellant-company to the respondent. On the other hand, the appellant-company took up the position that it is the respondent which did not provide adequate services to the appellant-company as per the terms and conditions of the agreement dated 01.05.2009 and for this reason the appellant-company cancelled the said agreement dated 01.05.2009. After the cancellation, the parties again negotiated the matter which resulted into second agreement dated 01.12.2010. Under this agreement, it was agreed that the appellant-company shall make payment of outstanding dues of USD 108,954.95 under the first agreement in six monthly instalments from December, 2010 to May, 2011. It was also agreed that no party shall institute any proceedings in any Court to resolve any dispute with the other party and if any case arises in future, the same shall be resolved by the parties amicably by a dispute resolution procedure, mechanism whereof was provided in clause 1.8 of Article 8 of the agreement. In fact, this clause is an arbitration clause as per which parties agreed to settle their disputes peacefully by means of arbitration.

6. Unfortunately, in spite of the aforesaid second agreement entered into between the parties, the working relationship between them could not be carried out satisfactorily and disputes again arose between them. As per the appellant, the respondent again committed breach of material terms of the second agreement in respect to quality and timely providing of services and failed to discharge its contractual obligations which resulted in suffering of losses by the appellant-company. On the other hand, the respondent-company maintained that it had provided satisfactory and complete quality services as per the agreement and it is the appellant-company which failed to make payment of the services provided as per the second agreement and, also, they did not discharge their obligation to pay the outstanding amount of USD 108,954.95 as well which was due in the first agreement. According to the respondent, only two payments in the sum of USD 24,735 and USD 122,997 were made which were not comple