NAV CREATIONS Vs. TRUWORTH IMPEX PVT. LTD.

JUDGEMENT

(1.) This application under section 11 of the Arbitration and Conciliation Act, 1996 has been filed by M/s. Nav Creations for appointment of an independent Arbitrator for resolving its dispute with the respondent-M/s. Truworth Impex Pvt. Ltd. The applicant is a proprietorship firm engaged in the business of selling and marketing of Paints & Coating from last so many years and is having its office situated at 1-E-139, JNV Colony, Bikaner. The respondent is a company registered under the Company Act and is engaged in the business of trading and manufacturing of Paints & Coating and is having its registered office at 10, Dhuleshwar Garden, Ajmer Road, Jaipur.

(2.) According to Shri Devendra Sharma, learned counsel for the applicant, the respondent approached the applicant for selling their products and consequently appointed the applicant as a Stockist for the surrounding areas of Bikaner Division and Punjab for the sale of their products. They entered into the Stockist Agreement with the applicant on 09.08.2014 for a period of one year. At the time of agreement, it was assured by the respondent company that their products are of superior quality as well as cheaper compared to the other brands and they will provide complete assistance for selling the products. The respondent initially sent their products to the applicant for selling but many times such products were sent without placing any order by the applicant. At that time it was assured by the respondent that if such products are not sold, they shall take them back. After selling some of the products in the market, the applicant started receiving complaints regarding its quality. The applicant therefore sent back their remaining products to the respondent in lieu of which, they issued Credit Note in the name of applicant. The respondent again in the years, 2014 started sending products to the applicant without there being any order placed to them, which was objected by the applicant. The respondent however assured the applicant that they will not face any such problem with regard to quality of product now and further that they are going to start advertising their products in that area which will help them in selling the products. However, the assurance made by the respondent were totally fake and they did not do anything regarding issuance of advertisement and the entire product remained with the applicant only and nothing was sold out. The applicant on 08.05.2015 sent the unsold material through Bikaner Golden Transport Company to the respondent. The applicant also sent the Bilty and other relevant documents to the respondent so that they can receive the goods amounting to Rs. 1,38,132/-. Suddenly after a lapse of almost 1 month i.e. on 07.06.2015, the applicant had received a handwritten note on a blank paper wherein it has been mentioned that the respondent is not going to take the delivery of the returned goods and the responsibility of the same shall be of applicant. It is argued that as per clause no.7 of the Stockist Agreement, it has specifically been mentioned that upon the receipt of the order from the Stockist, the company shall supply the goods to the stockist. The respondent, however, sent to the applicant the goods without there being any order placed by applicant, which the applicant has refused to receive.

(3.) Learned counsel for the applicant has argued that the Stockiest Agreement dated 09.08.2014 contains provision for arbitration in the event of any dispute between the parties and accordingly, a notice was sent by the applicant to respondent company, dated 29.07.2015 asking to take back the unsold goods and release an amount of Rs. 1,57,729/- (includes the amount of Unsold Goods + Token Claim + Transportation Charges) along with interest of 18%, failing which arbitration proceedings shall be initiated by the applicant and the name of Mr. Arif Mohd. Madanil, Retd. Additional District Judge, 302, Felicity Tower, Main Sahkar Marg, Jaipur was proposed by the applicant as an arbitrator. The notice dated 29.07.2015 was sent to the respondent and on 108.2015 and replied that the period of the agreement has already been expired therefore no dispute survives between the parties. Reference is made to clause 24 of the stockist agreement dated 09.08.2014 to argue that despite expiry of the term of the agency agreement, the arbitration clause being an independent clause out of the main agreement would still survive and, therefore, an Arbitrator be appointed.