MITESH MEHTA Vs. SAREGAMA INDIA LIMITED

JUDGEMENT

(1.) The instant application under Section 34 of The Arbitration and Conciliation Act, 1996 (the Act) has been filed for setting aside an Award dated 28th November, 2012 passed by a learned Sole Arbitrator. By the said Award, the respondent herein (who was the claimant in the arbitration) was found to be entitled to a substantial part of the claims made in the Statement of Claim together with costs and expenses incurred by the respondent in a pending proceeding between the parties before this court. The amount of Rs.1,93,96,735/- was awarded on account of shortage of stocks as per an inventory made, rental charges, power and fuel expenses, labour and monthly general expense, including loss of business, which were computed by the claimant (respondent herein) in paragraph 24 of the Statement of Claim.

(2.) The dispute arose out of an agreement dated 16th May, 2007 between Greenfield Logistics, a firm of which the petitioner herein is the proprietor and Saregama India Limited by which Greenfield Logistics was appointed as logistic service provider to provide services of storing and handling with respect to Saregama's goods, comprising of audio cassettes, CDs, DVDs, in a warehouse located at Turbhe, Navi Mumbai. Saregama terminated the agreement by a letter dated 10th September, 2008 and informed the petitioner that the security deposit together with the interest thereon would be refunded to the petitioner after receiving the goods and documents lying at the warehouse of the petitioner. The petitioner responded to the termination letter by its letters dated 13th September, 2008 and 30th September, 2008, enclosing final bills including refund of security deposit and interest. The respondent/claimant's case before the learned Arbitrator is that the respondent was constrained to terminate the agreement as there was a necessity to appoint a third party who would operate as a complete logistics solution provider throughout India by reason of which the respondent issued the letter of termination dated 10th September, 2008. According to the respondent, the petitioner accepted the termination of the agreement dated 16th May, 2007 in its replies. However, since the letter of 10th September, 2008 had not referred to the contractual period of notice of 30 days, the respondent issued a second letter dated 7th October, 2008. The petitioner replied to the second letter by a letter dated 10th October, 2008 claiming outstanding amounts but accepted the termination which would be evident from a letter dated 11th October, 2008 written by the respondent's lawyer.

(3.) The stand of the petitioner in the arbitration was primarily concerned with the outstanding claims which were disclosed through various letters, enclosing bills for the services rendered by the petitioner for the concerned warehouse including towards labour and security deposit.