EXTREME COMMERCIALS LLP Vs. UNITED TRADERS

JUDGEMENT

(1.) This application is filed seeking to appoint a sole arbitrator to adjudicate the disputes between the applic and the respondent in terms of the contract agreement dtd. 10/6/2017.

(2.) The case of the applicant is that it has entered into agreement dtd. 10/6/2017 (hereinafter referred to as 'the agreement') to facilitate the respondent to secure the order in the tender floated by the Commissioner of School Education, Government of Andhra Pradesh, Vijayawada under Tender No.CSCE-MDM/100. That as per Clause 2 of the terms of the agreement, the respondent shall pay a share of profit to the applicant at the rate of 2% on the total value of the contract awarded to the respondent in the above tender. It is submitted that accordingly, the applicant made all efforts for securing the contract by the respondent through various modes. Due to the efforts of the applicant, respondent was awarded the contract by the School Education Department vide order dtd. 28/6/2017 and the respondent was allotted 35% of the total contract for supply of eggs under MDM scheme and ICDS scheme to Vishakapatnam, West Godavari, Kadapa and Kurnool Districts. As per the agreement, the respondent is liable to pay 2% of the contract value i.e. 9 paise per egg to the applicant. Respondent has not made the payment even after repeated oral requests but requested the applicant to reduce the charges from 2% to 0.7% (from 9 paise to 3 paise per egg). The applicant agreed for request of the respondent vide letter dtd. 30/7/2018 and requested them to make payment of the reduced charge at the rate of 3 paise per egg as one time settlement within a period of fifteen (15) days of the payment received by the respondent from the concerned Department. It is submitted that the respondent has not replied to the demand letter dtd. 30/7/2018; the applicant sent several reminders and also notice to the contractual address of the respondent mentioned in the agreement but the said notice was not served on the respondent. That subsequently, through various other sources, the present address of the respondent was traced out and the notice dtd. 14/9/2023 was issued invoking Arbitration Clause of the agreement and the said notice was received by the respondent on 25/9/2023 to which respondent issued reply on 18/10/2023 declining to make payment alleging that the claim of the applicant is barred by limitation.

(3.) It is submitted that the respondent supplied 31,05,12,057 (thirty one crores five lakhs twelve thousand and fifty seven only) eggs under the tender for a total value of Rs.1,45,31,96,427.00 (Rupees one hundred and forty five crores thirty one lakhs ninety six thousand four hundred and twenty seven only) at the rate of Rs.4.68 paise per egg and is liable to pay Rs.83,15,362.00 (Rupees eighty three lakhs fifteen thousand three hundred and sixty two only) to the applicant at the rate of 0.7% reduced rate of charges i.e. 3 paise per egg. As the respondent failed to make the payment within 15 days, it is liable to pay twice the amount of the original 2% as per Clause 6 of the agreement i.e. 9 paise per egg i.e. Rs.5,81,27,857.00 (Rupees five crores eighty one lakhs twenty seven thousand eight hundred and fifty seven only) along with interest at the rate of 18% i.e. Rs.5,49,30,825.00 (Rupees five crores forty nine lakhs thirty thousand eight hundred and twenty five only) from 15/8/2018 which comes to the total amount that is liable to be paid Rs.11,30,58,682.00 (Rupees eleven crores thirty lakhs fifty eight thousand six hundred and eighty two only).