GLOBAL CEMENTS LTD. Vs. ASSOCIATED CEMENT COMPANIES LTD

JUDGEMENT

(1.) These proceedings arise out of an application under Section 11 of the Arbitration and Conciliation Act, 1996.

(2.) On 16 December 1989, the Applicant entered into an agreement for sale with the Respondent by which the Respondent agreed to transfer lands, plant and machinery, structures and buildings and fixed and current assets situated on the lands for consideration. On 24 January 2002 and 3 February 2003 an order was passed by the Collector, Porbunder and by the Secretary (Appeals) in the Revenue Department of the State of Gujarat that some part of the land has been resumed by the State Government as a result of a breach by the Respondent of certain terms and conditions of a lease agreement and that by entering into an agreement with the Applicant, the Respondent had committed a breach of the terms of the lease. The Respondent filed writ proceedings (Special Civil Applications 1975 of 2003 and 1992 of 2003) challenging the order passed by the Collector and Secretary (Appeals) before the High Court of Gujarat. Those proceedings were dismissed by a judgment dated 15 December 2009. On 17 May 2011, the Applicant addressed a letter of demand to the Respondent stating that it had been induced to part with a huge sum by way of consideration though it had neither obtained a conveyance, nor had it obtained land of which possession had been resumed by the Collector, Porbunder. On 20 July 2011, the Applicant addressed a notice invoking the arbitration agreement contained in Clause 21 of the Agreement dated 16 December 1989. Eventually, these proceedings were instituted on 8 December 2011 under Section 11 of the Arbitration and Conciliation Act, 1996.

(3.) Clause 21 of the Agreement dated 16 December 1989 is to the following effect :