1 arbap121-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO.121 OF 2009 Mehul J. Gala ....Applicant V/s. Nilima Traders & Ors. ....Respondents Mr.P. Majumdar i/b M/s.M.P. Savla & Co. for the Applicant. Mr.S.G. Shirsat for Respondent Nos.1 to 3. CORAM : S.J. VAZIFDAR, J. DATE : 26TH AUGUST, 2010. P.C. :- 1. This is an application under section 11 of the Arbitration and Conciliation Act, 1996. 2. The Applicant’s case is that the parties had executed a deed of assignment dated 31.3.2008, whereunder the Applicant sold, conveyed, assigned, transferred and delivered to the Respondents as a going concern for a total consideration of Rs.86,82,998=72 ps. the undertaking i.e. the operation and activities of the pharmaceuticals business carried on by the Applicant. Clause 14 of the Deed of Assignment contains an arbitration agreement. 3. Further the Applicant’s case is that the Respondents paid a sum of Rs.48,00,000/- on 17.4.2008, a sum of Rs.12,00,000/- on 17.5.2008 and Rs.10,00,000/- on 30.7.2008 leaving the balance of Rs.16,82,998=72 ps. The Applicant therefore, called upon the Respondents to pay the 2 arbap121-09 balance amount with interest at 18% p.a. 4. The Respondents by their letter dated 12.11.2008 admitted the receipt of the notice dated 8.11.2008. There is only a general denial of allegations of the Applicant’s letter. The Respondents stated that a detailed reply from their advocate would be sent later. 5. The Respondents having failed to send any further reply, the Applicant by a letter dated 26.5.2009 reiterated his contentions and sated that he would be constrained to invoke the arbitration clause. 6. It is only thereafter that the Respondents’ advocate addressed a letter dated 15.6.2009. For the first time, the Deed of Assignment dated 31.3.2008 was denied. 7. Only defence to this application is that the Deed of Assignment was not entered into. This contention taken across the bar must be rejected for more than one reason. Firstly, there is no affidavit in reply. The contention that the Deed of Assignment was never executed was for the first time stated across the bar. Secondly, the letter dated 12.11.2008 which was addressed by the Respondents personally did not deny the existence of the Deed of Assignment. Even though it was merely a general denial, if the document was fabricated, the normal course of conduct would have been to at least deny the document. As stated above, the existence of the document was denied only in the advocate’s letter dated 15.6.2009 i.e. after a period of seven months. 8. It is equally important to note that the Respondents have not denied having made the payment of Rs.70,00,000/-. Despite repeated questions, the learned counsel appearing on behalf of the Respondents 3 arbap121-09 was unable to explain as to under which agreement, oral or in writing the said sum of Rs.70,00,000/- was paid. 9. Further it is not denied that the Respondents have availed of the benefit of the assignment of the undertaking. 10. In the circumstances, the contention that the Deed of Assignment was not executed, is therefore rejected. 11. The application is accordingly disposed of by appointing Ms.J.M. Sidhwa, an advocate of this Court as a sole arbitrator.