IDEAL MARKETING Vs. NUCHEM LIMITED

JUDGEMENT

(1.) THE petitioner is a partnership firm registered with the Registrar of Firms, Hyderabad and is engaged in the business of marketing and distribution of varied products and financing of marketing operations. The petitioner claims that it has had long term business relations for more than 17 years with the respondent being engaged in the business of manufacture and sale of MDF panels having its manufacturing facility at Tohana, Haryana.

(2.) IN 2006, the Managing Director of the respondent -company is stated to have approached the petitioner seeking assistance in marketing the products of the respondent in South India alongwith financing facility for each sale. A Memorandum of Agreement for marketing was thus executed inter -se the parties on 15.04.2006 whereby the petitioner was appointed as a Selling Agent for Sobha Developers. The petitioner was required to pay 97% of the invoice value in advance to the respondent if a customer being identified placed an order for MDF panels and this money was to be utilized by the respondent for manufacture and delivery of the product. The amount was to be repaid to the petitioner alongwith the balance 3% to be treated as sales commission. However, there was shortage in payments made by the respondent from time to time and by March, 2011, a total amount had accumulated to Rs. 92,30,023/ -. The reminders were sent by the petitioner on 04.07.2011, 25.08.2011, 10.10.2011 and 28.09.2011. On 25.10.2011, the respondent is stated to have enclosed with its letter a statement of accounts admitting that a total sum payable was Rs. 92,30,023/ - but had failed to pay the amount. The petitioner came to know that the respondent was apparently in default of several creditors including I.F.C.I. which had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and had taken control of the property of the respondent situated at Faridabad. This fact came to light on the visit of petitioner 's representative to the factory on 12.02.2012.

(3.) THE petitioner also took steps to seek interim protection qua alienation of assets by filing an Arbitration Petition No. 13 of 2012 under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the said Act ') before District Courts, Faridabad. In reply thereto also, the respondent did not deny the liability and the Arbitration Petition was allowed by the District Judge, Faridabad on 11.10.2012 restraining the respondent from alienating its properties and directing it to furnish the security within a period of one month failing which the petitioner was entitled to take possession of the properties of the respondent. No securities have, however, been forthcoming nor has the petitioner been able to take possession of any assets as the IFCI has exercised its lien. The present petition has been filed under Section 11(6) of the said Act seeking appointment of an Arbitrator in view of the aforesaid facts and circumstances.