IMPORTANT POINT
The court established that arbitration can proceed independently of criminal proceedings, emphasizing the importance of resolving disputes as per the arbitration agreement.

ORDER :

1. The present petition has been preferred under section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as Act of 1996) seeking following reliefs:

(a) Filing of certified copies of ANNEXURE P-1 to P-5 be disposed with.

(b) This Hon’ble Court may kindly be pleased by appointing any independent arbitrators in terms of arbitration agreement clause 14.7.

(c) That, this court has the territorial jurisdiction to appoint an independent Sole arbitrator.

(d) Pass such further or other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case and thus render justice.

2. Precisely stated facts of the case are that an agreement dated 7-10-2016 was executed between the petitioner and respondent in which petitioner was Supplier of Electricity and respondent was the Purchaser of it. The electricity was to be suplied through execution of a tripartite agreement between the Supplier, The Madhya Pradesh Power Management Company Ltd. (M.P.P.M.C.L.), Jabalpur and Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. (M.P.P.K.V.V.C.L.), Indore, and Purchaser whereby applicant had to supply the electricity generated through Solar Plant to the M.P.P.M.C.L. and M.P.P.K.V.V.C.L. and in turn, they had to supply the electricity to respondent. Respondent had to pay tariff/charges to applicant.

3. After some time, some dispute arose between the parties regarding payment of some amount due over respondent. A demand notice was issued on 2-6-2021 (Annexure P/5) at the instance of applicant but the same was not responded by respondent affirmatively. Thereafter, a legal notice invoking arbitration was issued on 7-2-2022 (Registered A.D.) and same was received by respondent, but no affirmative steps have been taken. Therefore, this application has been preferred for invocation of arbitration clause for dispute resolution. Arbitration Clause is part of agreement by way of Clause 14.7. Applicant is seeking appointment of arbitrator because respondent is not reacting to the demand/legal notice issued by applicant.

4. Learned counsel for respondent opposed the prayer on the ground that cheques were issued by respondent in favour of applicant vide Cheque No. 203979 (worth Rs. 3,41,252/-), Cheque No. 203983 (worth Rs. 4,34,829/-), Cheque No. 3984 (worth Rs. 4,59,262/-), Cheque No. 101306 (worth Rs. 4,69,377/-), Cheque No. 101305 (worth Rs. 4,20,524/-), thus totaling Rs. 21,25,244/-. According to learned counsel for respondent, when this amount was paid through cheques and when cheques got dishonored, then applicant initiated proceedings under section 138 of the Negotiable Instruments Act, and once proceedings as per Negotiable Instruments Act have been initiated, then applicant has no locus to file application under section 11 of the Act of 1996 for appointment of arbitrator. Application suffers from maintainability. He is ready to pay the cheque amount.

5. At this stage, learned counsel for applicant submitted that dispute is much deep rooted. Not only cheque amount, but other expenses and recoveries are also required to be made which respondent is avoiding.

6. Heard learned counsel for the parties and perused the documents appended thereto.

7. This is an application for appointment of arbitrator at the instance of applicant (Supplier of Electricity) and parties are guided by the agreement dated 7-10-2016 executed between them. The agreement was primarily in the form of Power Purchase Agreement. Dispute resolution mechanism has been provided in clause 14.7 of the said Agreement. The Same is reiterated herein for ready reference:

14.7 DISPUTE RESOLUTION

If any dispute, difference or claim arises between the Parties hereto in connection with this Agreement or the Validity, interpretation, implementation or breach of this Agreement or anything done or omitted to be done pursuant to this Agreement, the Parties shall make a good faith effort in the first instance to resolve the same through negotiation. If the d