Dismissed

Avi India Initernational LLP v. State of Chhattisgarh

Chhattisgarh HC18 Oct 2021WPC/4013/2021

Case brief

AI extract

What is this about?

Petitioner challenged a penalty order imposed for non-performance of a rice purchase contract, citing financial distress. The High Court held the petition was not maintainable as the agreement provided an arbitration route, disposing it at the motion stage while granting liberty to approach the arbitration tribunal.

What did the court decide?

Liberty to file fresh representation to the Managing Director and avail remedy under clause 13 of the agreement.

Avi India Initernational LLP Vs State… — Contract and Commercial Disputes | Chhattisgarh HC (2021)

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WPC No. 4013 of 2021

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NAFR

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HIGH COURT OF CHHATTISGARH, BILASPUR

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WPC No. 4013 of 2021

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AVI India International L.L.P. Registered OfÏce At Shanti Colony, Dhamtari, District Dhamtari Chhattisgarh.

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---- Petitioner

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Versus

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State Of Chhattisgarh Through The Secretary, Department Of Food, Civil Supplies And Consumer Protection, Indravati Bhawan, Atal Nagar, District Raipur Chhattisgarh.

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Chhattisgarh State Civil Supplies Corporation Limited Through Its Managing Director, Block-7A, Second Floor, Sector 24 OfÏce Complex, Atal Nagar, District Raipur Chhattisgarh.

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Deputy General Manager/ Manager, Balod, Chhattisgarh State Civil Supplies Corporation Limited, District Balod Chhattisgarh.

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---- Respondent

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For Petitioner Mr. YC Sharma, Senior Advocate with Ms. Shaileja Shukla, Advocate For Respondent No.1 Mr. Anmol Sharma, Panel Lawyer For Respondent Nos.2&3 Mr. Vivek Ranjan Tiwari, Senior Advocate with Mr. Anish Tiwari, Advocate

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SB.: Hon'ble Mr. Justice Rajendra Chandra Singh Samant

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Order On Board

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WPC No. 4013 of 2021

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18/10/2021

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Heard.

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This petition has been brought challenging the impugned order dated 6.9.2021-Annexure P/1 passed by respondent No.2.

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It is submitted by learned counsel for the petitioner that the petitioner and respondent No.2 entered into an agreement on 1.4.2021, by which, the petitioner was required to make purchase of 10,000 MT of rice from respondent No.2 within a period starting from 1.7.2021 to 23.7.2021. The petitioner-firm lifted 3500 MT of rice by making payment of Rs.7,74,20,000/-. During this time, the partner of the firm Vijay Kumar Khandelwal got infected with Corona Virus and he expired on 8.4.2021 The petitioner-firm suffered badly because of the loss of one of the partners and also suffered financially. The petitioner-firm was then issued a notice vide Annexure P/5 by respondent No.2 directing to lift the remainder rice within a stipulated period.

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Learned counsel for the petitioner submits that the petitioner made a representation on 31.7.2021 requesting to permit lifting of the rice equivalent to the value of the security deposit and give exemption of lifting of the remainder rice. The request of the petitioner was not considered and the impugned order was passed on 6.9.2021, by which, the penalty of Rs.60,76,237/- has been imposed upon the petitioner. The petitioner then moved a second representation on 20.9.2021 mentioning that the

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WPC No. 4013 of 2021

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petitioner-firm is unable to perform the remaining part of the contract because of the financial reasons and a prayer was made for cancellation of the contract and also granting relief from the penalty imposed upon the petitioner. It is further submitted that respondent No.2 has not considered the representation of the petitioner so far, therefore, a direction may be issued to respondent No.2 to consider his representation at the earliest.

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Learned counsel for the State raises formal objection.

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Learned Senior Counsel for respondents 2 & 3 opposes the submissions and submits that respondent No.2 has acted in accordance with clause 12 of the agreement as respondent No.2 has entitlement to recover costs and damages from the petitioner on account of non-compliance of the contract. It is further submitted that according to clause 13 of the agreement, the petitioner has option to make representation to the Managing Director of respondent No.2 and consequent to which, he has option to approach the Arbitration Tribunal, therefore, the present writ petition is not maintainable.

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Considering that clause 13 of the agreement provides for dispute resolution mechanism, the petition is disposed of at the motion stage. The petitioner is granted liberty to file fresh representation raising a dispute before the Managing Director of respondent No.2 and the petitioner shall also have liberty to avail the remedy as provided under Clause 13 of the agreement.

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In case any such representation is filed by the petitioner within a

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WPC No. 4013 of 2021

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period of 7 days from today, the Managing Director of respondent No.2 is directed to consider and decide the same within the stipulated time as provided under clause 13 of the agreement.

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The writ petition is disposed of.

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Sd/-

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( Rajendra Chandra Singh Samant)

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Judge

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Shyna

Avi India Initernational LLP v. State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

Avi India Initernational LLP v. State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

What the court decided

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