Dismissed

Kurukshetra University, Kurukshetra v. Institute of Management and Inf. Tech. & Ors.

Punjab & Haryana HC5 Aug 2009FAO/4199/2007

Case brief

AI extract

What is this about?

Appeal dismissed upholding Additional District Judge's order rejecting challenge to arbitral award on breach of collaboration agreement. Interest rate partially modified for interim period.

What did the court decide?

Award of Rs.5,00,000 with interest affirmed; interest rate of 18% per annum from date of award till realization maintained except for interim period at 8%.

Kurukshetra University, Kurukshetra Vs Institute of… — Arbitration | Punjab & Haryana HC (2009)

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FAO No. 4199 of 2007 1

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT

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CHANDIGARH

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FAO No. 4199 of 2007 Date of decision: August 05, 2009

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Kurukshetra University, Kurukshetra

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Versus

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Institute of Management and Information Technology & others ...Respondent(s)

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Coram: Hon'ble Ms Justice Nirmaljit Kaur

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-.-

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Present: Mr. S C Sibal, Senior Advocate with Mr. V S Rana, Advocate for the appellant

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Mr. S K Pipat, Senior Advocate with Mr. Ramanjeet Singh, Advocate for the respondents

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-.-

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Whether Reporters of local papers may be allowed to see the judgement?

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To be referred to the Reporter or not?

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Whether the judgement should be reported in the Digest?

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Nirmaljit Kaur, J.

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This is an appeal against the order dated 18.05.2007 passed by the Additional District Judge, Kurukshetra, vide which the objections filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (in short 'the 1996 Act') have been dismissed.

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Learned counsel for the appellant has challenged the aforesaid order on the ground that it was specifically mentioned under Clause 4 of the

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FAO No. 4199 of 2007 2

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Collaboration agreement that respondent No. 1 will not authorise any other agency or center other than the center run by it, to enroll students to any course of the University and any violation thereof will lead to cancellation of the collaboration without any notice and no refund of any fee will be allowed. In terms of the agreement, respondent No. 2 deposited a sum of Rs.5,00,000/- with the appellant. However, it was alleged that respondent No. 2 had appointed M/s Alfa Institute of Computer and Management, Jaipur as its franchise. Accordingly, the appellant forfeited the deposited sum of Rs.5,00,000/- by the respondents. A dispute having arisen, the matter was referred to the Arbitrator, who ordered the refund of Rs.5,00,000/- with interest at the rate of 12% per annum from the date of termination of the agreement till the date of the award.

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Learned counsel for the appellant vehemently argued that the Arbitrator has, therefore, failed to consider Clause 4 of the Agreement and award has been passed in violation of terms of the collaboration agreement and has further not appreciated the objections raised by the appellant.

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After having heard the learned counsel for the parties, I find no ground to interfere with the well reasoned order dated 18.05.2007 passed by the Additional District Judge, Kurukshetra, dismissing the objections under Section 34 of the 1996 Act.

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Court's attention was invited by the learned counsel for the respondents to para 24 of the Award. The same is reproduced below:-

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“24. The point that the U.G.C. has closed the Distance Courses of K U K and the said unive4rsity was black listed, it draw my attention to the EX.CW 9 i.e. the News Item dated 06.08.01 published in Times of India and further News Item dated 06.01 published in Hindustan Times in Hindi Edition on

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FAO No. 4199 of 2007 3

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dated 06.08.2001, thereby clarifying the position by the Vice Chancellor, Kurukshetra University and the document EX.CW 14 with the heading U G C bans Distance Education deals with Letter EX CW 15 of IMIT to the Chairman UGC and further Letter dated 22.08.01 EX CW 16 of Chairman, UGC to IMIT with a copy to Vice Chancellor, KUK thereby explaining the complete position and informing that the U G C had decided that any University which proposes to enter into collaboration with any Private Institute would be required to take prior approval of U G C and further Commission deciding thereon that no University should be permitted to go for off campus private education franchise leading to the award of its degrees. Further informing that all the Universities are hereby directed to stop franchising their degrees, education through private Agencies/Establishments with immediate effect.”

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From the perusal of the same, it is evident that there was no breach of the terms and conditions and Clause 4 of the agreement is not attracted in the facts of the present case, inasmuch as, the respondents had no concern or connection with M/s Alfa Institute of Computer and Management, Jaipur and they never authorised or appointed any institute as their sub center except the referred five centers. In fact, the University did not respond to its request to enable them to admit the students. However, a show cause notice dated 08.08.2001, EX RW13 was issued by the University for forfeiture of the amount prior to the execution of the agreement. The aforesaid show cause notice deals with the documents prior to the execution of the agreement. Thus, the termination of the agreement by

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FAO No. 4199 of 2007 4

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invoking Clause 4 was done on the basis of documents prior to the execution of the agreement, which stood already confirmed and approved by the Kurukshetra University. The letter dated 14.07.2001, EX RW4, on the basis of which, termination of the agreement was issued, was not even mentioned in the cancellation letter, EX CW12. The remaining documents pertained to the period after the termination of the agreement. Thus, it was evident that the respondents had not given to franchise in favour of M/s Alfa Institute of Computer and Management, Jaipur and, as such, no fault can be found with the award granting the relief.

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In view of the above, the grounds so raised by the learned counsel for the appellant cannot be made the basis for cancellation of the award as also for setting aside of the order dated 18.05.2007 passed by the Additional District Judge, Kurukshetra, dismissing the petition under Section 34 of the 1996 Act. There is no justification to interfere with the award dated 25.06.2005 as well as the order dated 18.05.2007 passed by the Additional District Judge, Kurukshetra.

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However, learned counsel for the appellant, at this stage, submitted that interest at the rate of 18% per annum, which was ordered to be paid from the date of award till the realisation of the amount is on the higher side.

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I do not find any justification to interfere with the direction to pay interest @ 18% on the awarded amount from the date of award till its realisation, inasmuch as, interest @ 12% per annum has been ordered to be paid from the date of termination of the agreement i.e. 28.08.2001 till the date of award and @ 18% per annum from the date of award till its realisation. The appellant can always avoid the payment of 18% interest by making the payment in time. Therefore, the rate of interest from the date of award till its realisation shall be the same as awarded by the Arbitrator, i.e. 18% per annum, except for the period from the

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FAO No. 4199 of 2007

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date of interim order staying the execution of the award i.e. 15.10.2007 till the passing of the present order, the interest shall be at the rate of 8% per annum. Disposed of in the aforesaid terms.

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(Nirmaljit Kaur) Judge

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August 05, 2009 mohan

Kurukshetra University, Kurukshetra v. Institute of Management and Inf. Tech. & Ors.

Case brief

What is this about?

What did the court decide?

Kurukshetra University, Kurukshetra v. Institute of Management and Inf. Tech. & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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