The main legal point established in the judgment is that disputes should be adjudicated through arbitration as per the arbitration clause in the PATSER Agreement, even after the agreement's expiry.

JUDGMENT

V. Kameswar Rao, J. This is a petition filed under Section 11 (6) of the Arbitration & Conciliation Act, 1996 (`Act of 1996', for short) with the following prayers:

"IN THE PREMISES STATED ABOVE, IT IS, THEREFORE, RESPECTFULLY PRAYED THAT THIS HON'BLE COURT MAY BE PLEASED TO:

a). allow the present petition and appoint a Sole Arbitrator to adjudicate upon the disputes-between the parties;

b). pass such further orders or directions as this Hon'ble Court may deem fit, appropriate and proper in the facts and circumstances of the present case."

2. The Petitioner No.1 is a Government of India Enterprise working in the field of Research & Development of indigenous technology and processes. It grants licenses upon payment of royalty for using such technology/processes by entrepreneurs. It is an admitted position that an agreement dated March 06, 2002 was executed between the petitioners and the respondent (which is an incorporated entity under the Companies Act, 1956) for a period of twelve years. Vide the agreement the respondent was given financial assistance to the tune of Rs.92 Lacs under the `Programme Aimed at Technological Self Reliance' Scheme (`PATSER Agreement', hereinafter) for the development of Mak World Tracker (`Project', hereinafter). According to the PATSER Agreement the respondent had to enter into an agreement with the petitioner No.1 for payment of royalty on behalf of petitioner No. 2 for an annual lump sum amount of Rs.24 Lacs for the products sold and manufactured for its own use by the respondent during the preceding year ending March 31st. In terms of the PATSER Agreement another agreement was signed between the petitioner No. 1 and the respondent on March 06, 2002 which provided for details regarding the payment obligations (`Royalty Agreement', hereinafter).

3. It is the case of the petitioners and so contended by Mr. Joydeep Sarma, Advocate appearing on behalf of the petitioners that on April 19, 2004 the officials of petitioner No.1 wrote a letter No. NRDC(R)//M-317/4320/2003-2004 to the respondent for the payment of the royalty for the year ending on March 31, 2004 to which the respondent had replied that since the Project is yet to be completed, "Nil" royalty return was filed for the year ending on March 31, 2004. On April 8, 2005 the officials of petitioner No.1 again wrote a letter No. NRDC(R)//M-317/4320/2004-2005 to the respondent for payment of royalty for the year ending March 31, 2005; again a similar reply was sent by the respondent stating that since the project is yet to be completed a "Nil" royalty return was filed for the year ending March 31, 2005. Letters seeking royalty payments were issued every year by the petitioner No.1 which were replied to in similar manner by the respondent, that is, no royalty return could be filed since the Project is yet to start. This process of sending letters and not receiving royalty continued up to the year 2014, as the last intimation sent by the respondent was on July 19, 2014. Even after the year 2014 the petitioner No.1 continued to follow up with the respondent for filing royalty returns and seeking the amount due. Mr. Sarma stated that the respondent replied on few occasions but did not file any royalty return. It is the case of Mr. Sarma that the respondent has made a conscious attempt to conceal the actual position of their production status.

4. Mr. Sarma has argued that the liability to pay the royalty was to continue for a period of five years from the date of commercial production which may include the period after the expiry of twelve years. As the period of five years from the last verified "royalty return" (which was filed by the respondent on July 19, 2014) was coming to a close, the petitioners, on June 24, 2019, invoked the Arbitration Clause in the PATSER Agreement. The respondent replied to the said legal notice on July 2, 2019 wherein, it reiterated its previous stand that there is no liability to pay any royalty since there was