Telangana High Court Sanco Infra Projects vs M/S. Trident Sugars Limited on 28 November, 2023 HONOURABLE SRI JUSTICE B. VIJAYSEN REDDY ARBITRATION APPLICATION No.125 OF 2023 ORDER: (ORAL) This application is filed to appoint an Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short 'Act 1996') for adjudicating the disputes between the applicant and the respondent arising out of purchase orders dated 21.05.2018, 25.09.2018, 26.09.2018, 30.11.2018, 17.12.2018, 28.12.2018, 24.01.2019 and 08.03.2019. 2. The brief facts of the case, as set out in the affidavit, are as under: (a) The applicant is a partnership firm engaged in the business of providing work contract services and supply of material for construction, plumbing, civil works, cladding etc. It is stated that the respondent approached the applicant for providing civil works involving the supply of materials and supply of construction services at its factory located at Zaheerabad. In that connection, purchase orders were issued by the respondent to the applicant. It is stated that the applicant issued running account bills/invoices to the respondent towards supply of material and services to the respondent. It is submitted that during the period of May, 2018 to May, 2019, the respondent placed purchase orders for supplying material and rendering services for carrying out 2 BVR,J ARBAPPL.No.125_2023 civil works as set out in paragraph 4 of the affidavit. It is submitted that out of total invoice value of Rs.76,66,714.88, part of the amount has been received and balance receivable by the applicant from the respondent is Rs.72,69,353.42. It is submitted that the respondent was liable to pay 10% on mobilization of material, 75% on prorate basis and 15% on completion of work. The applicant executed all the works by March, 2019. (b) The respondent vide letter dated 03.05.2019 issued a statement as per the books of account as on 31.03.2019, acknowledging the due, and giving the details of the pending payments to be made to the applicant as Rs.82,45,963/ for the period from 14.05.2018 to 14.03.2019 along with details of payments already made. The applicant confirmed the balance pending amount and requested the respondent to made payment of the overdue bills vide their letter dated 03.05.2019. Thereafter, an amount of Rs.11,65,404/ was paid on 29.05.2019 and the respondent failed to pay the balance amount despite several reminders. (c) The applicant was constrained to issue legal notice dated 15.09.2022 to the respondent calling upon them to pay the due amount of Rs.72,45,963/ along with interest at the rate of 24% per annum within a period of 15 days from the date of receipt of the notice. The respondent refused to receive the legal notice dated 15.09.2022 and 3 BVR,J ARBAPPL.No.125_2023 the same was got returned with an endorsement 'addressee left'. The applicant issued another legal notice/reminder dated 13.10.2022 by post and email calling upon the respondent to pay the due amount of Rs.72,45,963/ by further stating that the applicant would initiate arbitration proceedings. The respondent refused to receive the legal notice and the same was returned with an endorsement 'addressee left without instructions'. It is submitted that thereafter the applicant invoked arbitration clause No.11 of the purchase orders and issued notice dated 17.12.2022 as required under Section 11 of Act 1996 through Registered Post to both addresses i.e., the factory address and registered office address, and the notice sent to the factory address was served on 22.12.2012, evidenced by postal track report, but the notice sent to the registered office was returned as 'addressee left'. 3. By order dated 07.07.2023, the applicant was permitted to take out personal notice to the respondent. When the matter was listed on 01.09.2023, it was informed to this Court that notice sent to the respondent was returned with an endorsement 'addressee left' and the applicant was permitted to take fresh steps to serve notice on the respondent within three days by registered post or speed post with acknowledgment due. 4. Learned counsel for the applicant submitted that notice was sent 4 BVR,J ARBAPPL.No.125_2023 to the respondent to their factory address at Zaheerabad, Sa