HONOURABLE SRI JUSTICE B. VIJAYSEN REDDY ARBITRATION APPLICATION No.144 OF 2023 ORDER : (ORAL)

This application is filed by the applicant to appoint an arbitrator to adjudicate and decide the disputes between the applicant and the respondent in respect of tax invoices dated 19.01.2021 and 20.03.2021 in terms of purchase orders dated 31.01.2020 and 05.02.2021.

2. It is stated that the applicant is a private limited company engaged in manufacturing electronic and industrial equipment business and also undertakes supply, erection, installation, commissioning and maintenance of equipments to its clients in India and abroad as per the Articles and Memorandum of Association. The respondent is a company dealing in the supply and distribution of Electronic/Industrial Equipment for its clients at Meerut namely M/s Jai Narain Fabtech Private Limited (JNFB), M/s Meerut Packaging Industries and for their other clients in India. Respondent approached the applicant and orally enquired for the supply of UPS equipment for its client JNFB on 23.09.2019. It is stated that thereafter, the applicant issued Commercial Offer Document bearing No.TMIND/ND/RA/JNFB dated 26.01.2020 to the respondent.

The respondent modified the template offer in terms of applicant commercial offer excluding its commission charges and placed the first purchase order (PO) bearing No.201/HK/U-TMEIC/371 dated 31.01.2020 for its client JNFB for the supply of the equipment for a total amount of Rs.33,00,000/- (Rupees Thirty Three Lakhs only) excluding GST of 18% on the materials purchased. It is stated that the payment terms with regard to the PO was in terms of commercial offer document bearing No.TMIND/ND/RA/JNFB dated 26.01.2020 being 30% advance with PO and rest on delivery. It is stated that the equipment supplied by the applicant was delivered to the respondent in good condition and no complaint was raised by the respondent or its client JNFB. It is learnt by the applicant that respondent’s client JNFB released full payment in favour of the respondent after receipt of the product. It is stated that the applicant raised tax invoice No.60591 dated 19.01.2021 for an amount of Rs.38,96,921/- (Rupees Thirty Eight Lakhs Ninety Six Thousand Nine Hundred and Twenty One only) [including GST] on the respondent requesting for payment. The respondent did not release the payment and defaulted in not remitting the said amount despite several requests made by the applicant.

3. It is stated that the respondent placed second purchase order bearing No.20/KH/MP/717 dated 05.02.2021 for its client M/s Meerut Packaging Industries for supply of equipment for a total amount of Rs.34,30,000/- (Rupees Thirty Four Lakhs Thirty Thousand only) excluding GST of 18% on the material purchased. It is stated that the payment terms were as per PO 20% Advance payment, 60% payment before dispatch and 20% after commissioning within thirty (30) days. The product was delivered to the respondent by the applicant in good condition and was successfully completed on 07.06.2021and the warranty certificate dated 23.06.2021 was issued in favour of the respondent’s client M/s Meerut Packaging Industries. The applicant raised tax invoice No.61438 dated 20.03.2021 for an amount of Rs.40,50,436/- (Rupees Forty Lakhs Fifty Thousand Four Hundred and Thirty Six only) on the respondent for payment but the respondent released only Rs.32,30,000/- (Rupees Thirty Two Lakhs Thirty Thousand only) and defaulted in not remitting the balance payment of Rs.8,20,436/- (Rupees Eight Lakhs Twenty Thousand Four Hundred and Thirty Six only) despite several requests made by the applicant.

4. It is submitted that the applicant issued several letters/emails to the respondent requesting to release the payment of Rs.38,96,921/- (Rupees Thirty Eight Lakhs Ninety Six Thousand Nine Hundred and Twenty One only) + Rs.8,20,436/- (Rupees Eight Lakhs Twenty Thousand Four Hundred and Thirty Six only) [Tax invoice No.60591 dated 19.01.2021 + Tax invoice