THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.113 of 2010 Date:29th September, 2011 Between: Newstoday (P) Ltd., T.V. Division, a company incorporated under the provisions of the Companies Act, 1956, having its office at Ramoji Film City, Hyderabad, rep. by its authorized signatory Sri V.Nagaiah Choudary. …Applicant A n d 1.Ms.Shilpa Mohan Gujar D/o.Mohan Kisan Gujar & Anr. …Respondents *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.113 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 agreement, dated 11.09.2007. 2. The applicant is engaged, inter alia, in the business of collecting news items and selling the same to print and electronic media. The applicant vide its letter dated 01.09.2007 offered the 1st respondent the position of Trainee News Caster/Copy Editor with a training period of one year on a monthly stipend of Rs.7,500/-. As per the terms of the letter, the 1st respondent was required to execute an agreement along with a person, preferably a Government Servant, standing as surety for the due performance and observance of the terms and conditions of the agreement. The 2nd respondent herein stood as surety for the 1st respondent. The respondents 1 and 2 executed an agreement, dated 11.09.2007, whereunder the 1st respondent agreed to complete the training period and to work thereafter for a continuous period of two years in the applicant’s Organization. The 1st respondent joined in the training in applicant’s organization at Ramoji Film City, Hyderabad, on 13.09.2007. As per the terms of the agreement, in the event of the 1st respondent committing breach of the terms, she shall compensate the applicant Company a sum of Rs.75,000/-. After successful completion of the training, the 1st respondent was offered the position of “Newscaster/Copy Editor, Grade-III” on probation period of one year w.e.f. 01.09.2008, vide letter of Employment-Probationary, dated 01.09.2008 and the 1st respondent accepted the same. The 1st respondent, while under 1st year of service, after completion of training, continuously absented from duties without any sanctioned leave or intimation w.e.f. 28.02.2009. The applicant sent a letter, dated 31.03.2009, advising the 1st respondent to report to duty. Despite receipt of the said letter, the 1st respondent neither reported to duty nor sent any communication to the applicant. On 20.04.2009, the 1st respondent sent e-mail to the applicant tendering her resignation due to her personal problems and requested to accept the same. Since the resignation of the 1st respondent during the 1st year of service after completion of the training period amounts to violation of the terms and conditions of agreement, dated 11.09.2007, the applicant vide letter dated 29.04.2009 advised the 1st respondent neither to pay the compensation amount of Rs.75,.000/- or to continue in the service withdrawing her resignation and advised her to inform her decision within three days of receipt of the said letter. In spite of receipt of the said letter, the 1st respondent failed to inform anything to the applicant. The said letter was sent to the 2nd respondent also, which was returned undelivered. Thereupon, the applicant vide letter dated 23.07.2009 accepted the resignation of the 1st respondent without prejudice to their right to recover the compensation amount of Rs.75,000/- and called upon both the respondents to pay the said amount either jointly or severally within ten days of receipt of the said letter. But, there was no reply from the respondents. As per Clause 16 of the agreement, dated 11.09.2007, disputes are required to be referred to the sole arbitrator. The applicant invoked the arbitration clause and issued a notice, dated 17.05.2010 nominating Sri K.Prakash, Advocate, 12-1-1150, Old Mallepally, Hyderabad, as arbitrator and called upon the respondents 1 and 2 to give their consent and agree for the said appointment. The notice sent to the 1st respondent was neither returned un-served nor postal acknowledgement was received in proof of service of the said notice and the notice sent to the 2nd respondent was returned un-served. The notices were sent to the respondents 1 and 2 to their correct addresses as per records by registered post with ack. due, and therefore, it shall be deemed to have been served on them. Despite the said notice, the respondents did not choose to give any reply. Hence, this application by the applicant seeking the relief stated supra. 3. Notice to the respondents came to be issued on 06.09.2010. Notice sent to the 1st respondent returned unserved with an endorsement ‘refused’. Notice sent to the 2nd respondent returned unserved. The applicant filed Application No.693 of 2011 seeking permission to take out notice to the 2nd respondent by way of publication in “PUNYA NAGARI” Marathi Daily Newspaper. The said application came to be allowed on 18.08.2011 permitting the applicant to take out notice to the 2nd respondent by way of publication in “PUNYA NAGARI” Marathi daily newspaper. The applicant carried out the publication and filed proof of the same. Despite notice being served on the 2nd respondent by way of publication, he 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 News Caster/Copy Editor in the applicant’s organization after duly executing the agreement, dated 11.09.2007. She discontinued the services while under 1st year of service, 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 16 of the agreement, dated 11.09.2007. Clause 16 of the 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 agreement, dated 11.09.2007. 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 agreement, dated 11.09.2007. 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.113 of 2010 Date: 29th September, 2011