WATSON YARN COMPANY PVT LTD Vs. SUBHASH MITTAL

JUDGEMENT

(1.) This order shall dispose of petitioner's petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator in respect of disputes which have arisen between the petitioner and the respondent. Brief facts to comprehend the controversies between the parties are that the petitioner entered into an agreement dated 10/10/1998 under which respondent had to spun the raw wool imported by the petitioner from New Zealand. The yarn was to be spun as per the specification to be provided. The petitioner contended that the respondent did not have proper machinery to execute the job undertaken by him and, therefore, requested the applicant to finance him to get the requisite machines in order to perform his part of agreement dated 10/10/1998.

(2.) The averment of the petitioner is that he invested a sum of Rs.5,65,000.00 which was a loan to the respondent for acquiring the requisite machines from Rajiv Tex Machines Industrial Area, Panipat, Haryana and that amount was to be adjusted by deduction of 10% of the amounts from the bills to be raised by the respondent for spinning the yarn of the wool imported by the petitioner. The petitioner also contended that in the facts and circumstances it was agreed that the petitioner will have a charge and lien over the machine which was purchased from the loan advanced by the petitioner to the respondent. The petitioner supplied the raw material to be spun by the respondent pursuant to agreement dated 10/10/1998 and the agreement was to be operative till spinning of 7,20,000 kgs of yarn.

(3.) The complaint of the petitioner is that respondent breached the terms of the agreement and entered into an agreement with some other party for spinning his yarn and in the process neglected spinning of yarn of the petitioner's raw material though the amount for the purchase of the machinery of the respondent was given by the petitioner. The act of the respondent to enter into an agreement with some other party and neglecting spinning of yarn of the petitioner's raw material was violative of the spirit and terms of the agreement.