THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.121 of 2010 Date:29th September, 2011 Between: Newstoday (P) Ltd., a company incorporated under the provisions of the Companies Act, 1956, having its office at Eenadu Complex, Somajiguda, Hyderabad, rep. by its authorized signatory Sri V.Nagaiah Choudary. …Applicant A n d 1.Ms.P.Swarupa & Ors. …Respondents *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.121 of 2010 ORDER: This Arbitration Application has been taken out by Newstoday (P) Ltd., under sub-sections (5) and (6) of Section 11 of the Arbitration and Conciliation Act, 1996, (for short, “the Act”), seeking appointment of an arbitrator for resolution of the disputes between the parties relatable to the training-cum-service agreement, dated 25.10.2004. 2. The applicant is engaged, inter alia, in the activity of collection and dissemination of news all over the world through television network etc. The 1st respondent applied to the applicant Organization to undergo Diploma Course in Journalism in Eenadu Journalism School, Ramoji Film City, Hyderabad. The applicant agreed to sponsor the 1st respondent to impart training to her in the said school, for which, the 1st respondent agreed to work as a Sub Editor/Reporter with the applicant Company for a continuous period of four years including the period of diploma course and advanced training on such terms and conditions. Having agreed for the same, the 1st respondent executed a Training-cum-Service Agreement, dated 25.10.2004, with the applicant’s organization along with two sureties. The respondents 2 and 3 are the sureties of the 1st respondent. As per the said agreement, if 1st respondent fails to perform her obligations during the training period, she shall compensate the applicant organization, a sum of R.1,00,000/- vide clause 10(c) of the said Agreement. As per the agreement, after completion of Diploma Course in Eenadu Journalism School, the 1st respondent was appointed as Trainee Sub- Editor/Reporter vide Letter of Appointment, dated 02.01.2006, for a training period of nine months, and after completion of training, the 1st respondent was offered Probationary Employment w.e.f. 01.10.2006 vide Letter of Employment Probationary, dated 01.10.2006 and she accepted the same. The 1st respondent while under 2nd year of service, after completion of training period, vide letter dated 12.12.2007, came to be transferred to Lucknow office w.e.f. 20.12.2007. Since the 1st respondent refused to receive the said transfer order, the same was sent to her by Regd. Post and the same was served on her. In spite of receipt of the said transfer order, the 1st respondent neither reported to duties at Lucknow office nor sent any information to the applicant and absented from duties unauthorisedly without any sanctioned leave or intimation from 20.12.2007. Since the said unauthorized absence from duties amounts to misconduct, the applicant decided to conduct an enquiry and appointed Sri K.Haranadha Rao as Enquiry Officer. The applicant sent a charge- sheet-cum-enquiry notice, dated 31.01.2008. However, the said notice was returned unserved as the 1st respondent refused to receive the same. The 1st respondent failed to attend the enquiry on 25.03.2008 and the Enquiry Officer having no other go conducted the enquiry ex parte and submitted his report dated 01.04.2008 holding that the charges leveled against the respondent No.1 are proved. The copies of the said enquiry report and proceedings were sent to respondent No.1 vide letter dated 10.04.2008 calling upon the respondent No.1 to submit her comments if any, within three days of receipt of the said notice. The respondent No.1 sent her comments vide Fax message dated 25.04.2008 making all false and untenable allegations and expressed her readiness to work with applicant’s organization at Ramoji Film City, Hyderabad and also seeking withdrawal of transfer order to Lucknow. Since the Enquiry Officer had already submitted his report, the applicant did not consider her request and sent a reply dated 02.05.2008. The applicant, taking into consideration the gravity of the proved acts of misconduct, vide letter dated 26.06.2008 dismissed her from service without prejudice to its right to recover the compensation amount of Rs.1,00,000/- as per Clause 10(c) of the said agreement and called the respondents to pay the said amount within seven days from the date of receipt of the said letter. The respondents 1 and 3 received the said letter and the letter sent to the 2nd respondent was neither returned unserved nor the postal acknowledgment was received in proof of service of the said letter. Thereby the 1st respondent committed breach of Clause 10(c) of the training-cum-service agreement, dated 25.10.2004 and consequently, the respondents became liable to pay compensation of Rs.1,00,000/- to the applicant. As per Clause 15 of the agreement, dated 25.10.2004, disputes are required to be referred to the sole arbitrator. The applicant invoked the arbitration clause and issued a notice, dated 25.11.2009 nominating Sri K.Prakash, Advocate, 12-1-1150, Old Mallepally, Hyderabad, as arbitrator and called upon the respondents 1 to 3 to give their consent and agree for the said appointment. The notice sent to the 3rd respondent was served and the notices sent to the respondents 1 and 2 were returned undelivered. The legal notice was sent to the respondents 1 and 2 by ‘registered post with acknowledgment due’ to their correct addresses as per records and therefore, it shall be deemed to have been served on them. Hence, this application by the applicant seeking the relief stated supra. 3. Notice to the respondents came to be issued on 28.07.2011. Notice sent to the 2nd respondent served. Notice sent to the respondent No.3 returned unserved with an endorsement ‘addressee refused’, therefore, notice to the 3rd respondent is deemed to have been served. Notice send to the 1st respondent is returned unserved with an endorsement ‘no such person’. The applicant filed Application No.694 of 2011 seeking permission to take out notice to the respondent No.1 by way of publication in “ANDHRA PRABHA” Telugu Daily Newspaper. The said application came to be allowed on 18.08.2011 permitting the applicant to take out notice to the 1st respondent by way of publication in “ANDHRA PRABHA”, Telugu daily newspaper. The applicant carried out the publication and filed proof of the same. Despite notice being served on the 1st respondent by way of publication, she failed to enter appearance either in person or through a counsel. 4. Heard learned counsel appearing for the applicant and perused the material brought on record. 5. The 1st respondent joined as a Trainee Copy Editor/Reporter in the applicant’s organization after completion of the Diploma Course in Eenadu Journalism School, after duly executing the training-cum- service agreement, dated 25.10.2004. She discontinued the services and failed to join the duty and serve with the applicant. Thereby she committed breach of the terms of the agreement. The disputes between the parties are required to be resolved by taking recourse to arbitration as provided under Clause 15 of the training-cum-service agreement, dated 25.10.2004. Clause 15 of the said agreement, reads as hereunder: “In the event of any dispute (including any Industrial Dispute) or difference which may arise between parties or their representatives with regard to the construction, meaning and effect of this deed or any part thereof or their respective right and liabilities there under, the same shall be referred to the sole arbitration of an arbitrator to be nominated and whose award shall be final and binding on the parties. The provisions of the Arbitration and Conciliation Act, 1996 shall govern the Arbitration Proceedings.” 6. In that view of the matter, I find that the applicant made out valid ground for appointment of an arbitrator for resolution of the disputes between the parties relatable to the training-cum-service agreement, dated 25.10.2004. 7. Accordingly, the Arbitration Application is allowed. Sri M.Bhaskar, Retd. District Judge, is appointed as an arbitrator for resolution of the disputes between the parties relatable to the training- cum-service agreement, dated 25.10.2004. He shall fix his own fee. No order as to costs. ______________________ B.SESHASAYANA REDDY, J. Date:29th September, 2011. cs THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.121 of 2010 Date: 29th September, 2011