Back
IN THE HIGH COURT OF MADHYA PRADESH AT INDORE
PAVAN KUMAR DWIVEDI, J.
Riddhesh Corporation Manawar Private Limited Through Its. Director Riddhesh Agarwal And Others - Applicants
Versus
Tata Motors Ltd. And Others – Respondents
Arbitration Case No. 118 of 2024
Decided On : 11-12-2025
(1) Agreement -- privity of contract -- clearly mentioned in agreement that dealer is not an agent of manufacturer -- agreement executed on principal-to-principal basis -- it is a contract for sale of products and services by company to dealer, and resale thereof by dealer -- there is no express or implied relationship of employer and employee -- dealer does not act as representative of manufacturer -- he acts as a principal completely independent of manufacturer -- this agreement is an agreement for sale of product -- there is no privity of contract between parties. [Para 15]
(2) Arbitration and Conciliation Act, 1996 -- Ss. 11 and 7 -- appointment of arbitrator -- case of applicants is that invoices issued to them by respondent No. 3 contain arbitration clause, respondent No. 3 is a dealer of respondents No. 1 and 2, hence he acts on their behalf and therefore, agreement contained in invoices binds respondents No. 1 and 2 also -- what is required to be seen is the intention of parties to be bound by an arbitration agreement -- for this, conduct of non-signatory becomes most significant -- according to dealership agreement, respondent No. 3 was acting in its own capacity as seller of vehicles as a 'principal' and not as an 'agent' of manufacturer -- as such, conduct of non-signatory party, i.e., respondents No. 1 and 2 does not lead to legitimate inference that it is a veritable party -- on the contrary, terms of dealership agreement and issuance of invoices give inescapable conclusion that transactions are completely independent of each other -- there is no existence of any arbitration agreement between applicants and respondents No. 1 and 2 -- applicants are raising dispute against respondent No. 1 and relying on invoices issued by respondent No. 3 -- essentially dispute is with respect to quality of manufacture of vehicles, for which they have no issue against dealer -- there is no existence of dispute connected to arbitration agreement -- in absence of existence of arbitration agreement, appointment of arbitrator cannot be made. (2024) 4 SCC 1 and (2025) 2 SCC 147 followed. Civil Appeal No. 11067 of 2025 decided on 25.8.2025 distinguished. 2022 SCC Online Bom. 8034 and 2024 SCC Online Del. 6212 relied on. [Paras 22 to 24]
¼1½ djkj & lafonkRed laca/k & djkj esa Li"V mfYyf[kr fd O;ogkjh fuekZrk dk vfHkdrkZ ugha & djkj ekfyd&ls&ekfyd vk/kkj ij fu"ikfnr ugha & ;g mRiknksa vkSj lsokvksa ds foØ; ds fy,] vkSj O;ogkjh }kjk muds iqufoZØ; ds fy,] daiuh vkSj O;ogkjh ds e/; lafonk gS & fu;kstd vkSj deZpkjh dk dksbZ Hkh vfHkO;ä ;k foof{kr laca/k ugha & O;ogkjh fuekZrk ds çfrfuf/k ds :i esa dk;Z ugha djrk & og fuekZrk ls iw.kZr% Lora= ekfyd ds :i esa dk;Z djrk gS & ;g djkj mRikn ds foØ; ds fy, djkj gS & i{kdkjksa ds e/; dksbZ lafonkRed laca/k ughaA ¼iSjk 15½
¼2½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 & /kkjk 11 rFkk 7 & e/;LFk dh fu;qfDr & vkosndx.k dk i{kdFku gS fd çR;FkhZ Øekad 3 }kjk mUgsa tkjh fd, x, chtdksa esa ek/;LFke~ [kaM varfoZ"V gS] çR;FkhZ Øekad 3 çR;FkhZx.k Øekad 1 vkSj 2 dk O;ogkjh gS vr% og mudh vksj ls dk;Z djrk gS vkSj blfy,] chtdksa esa varfoZ"V djkj çR;FkhZx.k Øekad 1 vkSj 2 ij Hkh vkc)dj gSa & tks ns[kk tkuk visf{kr gS og gS ek/;LFke~ djkj }kjk vkc) gksus dk i{kdkjksa dk vk'k; & blds fy,] djkj ij ftuds gLrk{kj ugha mudk vkpj.k lokZf/kd egRoiw.kZ gks tkrk gS & O;ogkjh djkj ds vuqlkj] çR;FkhZ Øekad 3 ;kuksa ds foØsrk ds :i esa viuh Lo;a dh gSfl;r esa ^ekfyd* ds :i esa dk;Z dj jgk Fkk] fuekZrk ds ^vfHkdrkZ* ds :i esa ugha vr% djkj ij ftl i{k ds gLrk{kj ugha vFkkZr~ çR;FkhZx.k Øekad 1 vkSj 2 ds vkpj.k ls ;g fof/klaxr fu"d"kZ ugha fudyrk fd og okLrfod i{k gS & rRçfrdwy] O;ogkjh djkj ds fuca/kuksa ls vkSj chtd tkjh fd, tkus ls vifjgk;Z fu"d"kZ fudyrk gS fd laO;ogkj ,d&nwljs ls iw.kZr% Lora= gSa & vkosndx.k rFkk çR;FkhZx.k Øekad 1 vkSj 2 ds e/; fdlh Hkh ek/;LFke~ djkj dk dksbZ vfLrRo ugha & vkosndx.k çR;FkhZ Øekad 1 ds fo:) fookn mBk jgs gSa vkSj çR;FkhZ Øekad 3 }kjk tkjh fd, x, chtdksa dk voyac ys jgs gSa & lkjr% fookn ;kuksa ds fuekZ.k dh xq.koÙkk ds ckjs esa gS] ftlds fy, mudk O;ogkjh ls dksbZ fookn ugha & ek/;LFke~ djkj ls lacaf/kr fdlh fookn dk vfLrRo ugha & ek/;LFke~ djkj ds vfLrRo ds vHkko esa e/;LFk dh fu;qfä ugha dh tk ldrhA ¼2024½ 4 ,llhlh 1 rFkk ¼2025½ 2 ,llhlh 147 vuqlfjrA flfoy vihy Øekad 11067 lu~ 2025 fu.khZr fnukad 25-8-2025 çHksfnrA 2022 ,llhlh v‚uykbu cacbZ 8034 rFkk 2024 ,llhlh v‚uykbu fnYyh 6212 voyafcrA ¼iSjk 22 ls 24½
ORDER :
PAVAN KUMAR DWIVEDI, J.
The present application has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act of 1996') for appointment of Arbitrator.
Facts of the case in brief are as under:
2. The applicant No. 1 is a private limited company and has been engaged in the business of trading, consultancy, C&F agency and transportation since the year 2017 having its registered office at Jawahar Marg, Manawar, District Dhar (MP). Applicant No. 2 is a proprietorship concern having its office at Krishi Upaj Mandi Pragan, Dhar Road, Manawar, District Dhar (MP). The respondent No. 1 - Tata Motors Ltd. is a registered company and manufacturer of goods carriage vehicles. The respondent no. 2 is the office bearer of respondent No.1 and respondent No.3 is a dealer selling vehicles manufactured by respondent No.1.
3. The applicants purchased 22 trucks from respondent No. 3 in the months of January to March, 2023. Out of the 22 trucks, 17 were purchased in the name of applicant No.1 and 05 were purchased in the name of applicant No.2 and for the said purchase, sale consideration of Rs. 4,29,25,000/- and Rs. 1,26,25,000/-, respectively was paid.
4. As it has been stated in the application, there were some manufacturing defects as the engine of the trucks frequently got broken down, tyres started wearing down, gearboxes were defective and there were multiple body defects leading to leakage and water seepages during rain. As such complaint was raised by the applicants before the respondents. After initial repair, there was no proper response. Some work was carried out on the vehicles in question for welding the leakages on 23.08.2023 but the same was without applicants' permission. The meeting which happened on 01.08.2023 at the office of respondent no.3 remained unfruitful as even after a promise of permanent solution within six days, nothing was done. The retrofication work done on 23.08.2023 was without permission. In such circumstances, a notice was sent by the applicants to the respondents on 06.03.2024 raising a claim of Rs. 5,28,00,000/-. In addition, reimbursement of expenses incurred in the repair of trucks and other direct and indirect consequential losses were also claimed. The total compensation of Rs.19,28,41,855/- was claimed. However, no response was forthcoming from the respondents. Therefore, the applicants sent a notice invoking arbitration on 24.06.2024. The respondent No. 3 replied to the said notice through its counsel on 16.07.2024 thereby denying its liability as also the availability of arbitration proceeding. The respondents No. 1 and 2 through their reply dated 03.08.2024 denied any liability whatsoever and have also denied existence of any arbitration agreement between the applicants and the respondents no. 1 and 2. Thus, the present application for appointment came to be filed on the strength of invoices issued by respondent no.3.
5. The case of the applicants is that Clause 8 and 9 contained in the invoices issued to applicant No.1 provide that all the dispute arising between the parties shall be referred to arbitration and the Courts at Indore shall have jurisdiction in relation to any such proceedings. Same is the case for the invoices issued to applicant No. 2 in which Clause 7 and 8 were there to the same effect.
Submissions of learned counsel for the parties
6. The learned counsel for the applicants submits that there is a clear dispute between the parties as they have failed to fulfill their contractual obligation of sale as they have not only sold defective vehicles but then failed to respond for redressing the grievance of the applicants. Learned counsel also submits that there is a clear existence of an arbitration agreement in view of the fact that specific arbitration clause has been inserted in invoices by respondent No.3 to both the applicants. He thus submits that the ingredients which are required in terms of Section 7 of the Act of 1996 are presen
Arbitration agreement - Appointment of Sole Arbitrator - If there is sufficient material on record to establish that condition/clause in invoices were accepted and acted upon, parties would be ad ide....
An arbitration agreement under the Arbitration and Conciliation Act, 1996, does not require signatures if parties' intent to arbitrate can be inferred from conduct or written documentation.
The main legal point established is that lack of consensus ad idem on the arbitration procedure can justify court appointment of an arbitrator, and previous adjudication does not necessarily bar arbi....
The main legal point established in the judgment is that the existence of an arbitration agreement can be inferred through a series of correspondence or on the demur of one of the parties to an arbit....
An enforceable arbitration agreement requires mutual consent evidenced by signed documents; mere communications cannot establish such consent.
The main legal point established in the judgment is that the existence of a valid and enforceable arbitration agreement is essential for the appointment of a sole arbitrator under Section 11 (6) of t....
The existence of a dispute under the dealership agreement justifies the appointment of an arbitrator, even without a termination order being issued.
A non-signatory to an arbitration agreement cannot invoke the arbitration clause of the agreement to which it is not a party.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
