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DELHI HIGH COURT
Manmohan, J.
Rush Dairy Limited - Appellant
Versus
H.P.Printers Pvt.Ltd. - Resopndent
CS(OS) 2553/2012
Decided On : 08-04-2013
Arbitration - Agreement - Arbitration and Conciliation Act, 1996 - Section 8, Section 151 CPC - [Arbitration] - [Agreement] - [Arbitration and Conciliation Act, 1996 - Section 8, Section 151 CPC] - The court dismissed the application under Section 8 of the Arbitration and Conciliation Act, 1996, ruling that the defendant's action in filing its own suit amounted to waiving its right to invoke or enforce the arbitration clause.
Fact of the Case:
The defendant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the present suit to arbitration. The court dismissed the application, stating that the defendant's action in filing its own suit amounted to waiving its right to invoke or enforce the arbitration clause.
Finding of the Court:
The court found that the defendant's action in filing its own suit amounted to waiving its right to invoke or enforce the arbitration clause.
Issues: The issues involved the enforceability of the arbitration clause and the defendant's right to invoke it despite filing its own suit.
Ratio Decidendi: The court held that the defendant's action in filing its own suit amounted to waiving its right to invoke or enforce the arbitration clause.
Final Decision: The court dismissed the application under Section 8 of the Arbitration and Conciliation Act, 1996.
Manmohan, J:.—
I.A. 17807/2012
1. The present application has been filed by the defendant under Section 8 of Arbitration and Conciliation Act, 1996 read with Section 151 CPC.
2. Mr. Kirti Uppal, learned senior counsel for the defendant relied upon the arbitration clause contained in the Agreement dated 9th September, 2010 and submitted that the present suit ought to be referred to arbitration.
3. Mr. P.D. Gupta, learned counsel for the plaintiff, though did not deny the existence of the arbitration clause but submitted that the present application is not maintainable inasmuch as the defendant has already filed a suit being CS (OS) 1016/2011 against the plaintiff herein with respect to the same agreement dated 9th September, 2010.
4. Having heard learned counsel for both the parties, this Court is of the view that the action of the defendant in filing its own aforesaid suit amounts to waiving its right to invoke or enforce the arbitration clause.
5. Consequently, the present application is dismissed.
I.A. 18584/2012
1. Present application has been filed by the defendant under Order 37 Rule 3(5) read with Section 151 CPC seeking unconditional leave to defend the present suit.
2. The relevant facts of the present case are that the present suit has been filed by the plaintiff for recovery of Rs. 50,00,000/- under Order 37 of Code of Civil Procedure, 1908.
3. The plaintiff and the defendant entered into an agreement dated 9th September, 2010 in accordance with which the plaintiff was licensed to use the brand name INDANA for manufacturing, marketing and selling dairy and milk products including desi ghee and other food products on payment of monthly license fee for a period of two years. The plaintiff paid a refundable security deposit of Rs. 50,00,000/- to the defendant as interest free security deposit in terms of the said agreement, which was to be refunded at the time of determination of the aforesaid agreement.
6. Mr. Kirti Uppal, learned senior counsel for defendant/applicant stated that with a few months of execution of the agreement dated 9th September, 2010 the defendant started receiving various complaints from the traders as well as customers that the ghee, being sold by the plaintiff, was of poor quality. Mr. Uppal further stated that on 13th April, 2011, the District Supply Office of Alwar, Rajasthan, along with officials of the Food Departments and others raided the plaintiff’s premises at Alwar and one Lakh liter of spurious ghee was seized from plaintiff’s premises. An FIR was lodged by the District Supply Officer, Alwar against the plaintiff for selling spurious material. He stated that following number of tests conducted by the Public Health Laboratory, Allahabad, the plaintiff’s certificate from the Ministry of Agriculture (Agmark License) was suspended on 31st May, 2011 and finally cancelled on 6th June, 2011.
7. Mr. Uppal also stated that in terms of the Clause 5 of the Agreement, the defendant sent three warnings dated 11th January, 2011, 20th January, 2011 and 28th February, 2011 and pursuant to these warnings terminated the agreement with immediate effect. Mr. Uppal submitted that despite notice of termination and calling upon the plaintiff to stop using the brand name INDANA, the plaintiff still continued to use the mark, compelling the defendant to file a suit CS(OS) 1016/2011 against the plaintiff on account of infringement of trade mark, passing of, rendition of accounts, damages etc. In the said suit, Mr. Uppal stated that, this Court by order dated 29th February, 2011 restrained the plaintiff from using the trade mark INDANA. Subsequently, the injunction order was confirmed on 30th August, 2011.
8. Mr. Uppal stated that the plaintiff made no demand upon the defendant prior to filing the suit and that in any event the defendant was claiming damages to the tune of Rs. 1,00,00,000/- and the present demand was liable to be set off against the damages claimed.
9. Mr. Uppal lastly submitted that as the dispute i
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