Disposed

SpandanaSphoorty Financial Limited v. Iq Technologies and Another

Telangana HC28 Mar 2022COMCA/6/2022

Case brief

AI extract

What is this about?

Commercial Court Appeal against an ex parte interim order of attachment. The Court declined to interfere on merits as the trial Court was hearing the matter on merits. The appeal was disposed of without costs, directing the trial Court to conclude within 30 days.

What did the court decide?

The appeal was disposed of with liberty to parties to approach this Court after an order is passed by the trial Court.

SpandanaSphoorty Financial Limited Vs Iq Technologies and… — Arbitration | Telangana HC (2022)

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IN THE HIGH^{COURTFORTHE STATE OF TELANGANA} AT HYDERABAD

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[/ONDAY - WO THOUSAND ,THE^{TWENTY AND TWENTY TWOEIGHTH DAY OF NiIARCH}

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PRESENT

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THE HON'BLE^{THE CHIEF JUSTICE SATISH CHANDRA SHARMA} AND THE HON'BLE^{SRI JUSTIiE ABHINAND KUMAR SHAVILI} COMME^{RCIAL COURT APPEALNO: 6OF 2022}

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Commercial^{Court Appeal Under Section37 ofArbitrationand} Conciliation^{Act 't996 readwith Section 13 of the Commercial CourtsAct 2015} aggrieved^{by the orderdated 10'03'2022in C'O'P'No'12 oI 2022 on the file of} the Court^{of the Principal Special Court in the Cadreof District Judge for Trial} and Disposal^{of Commercial Disputesat Hyderabad'}

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Between:

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Soandana^{Sphoorty FinancialLimited'Registeredoffice at PlotNo'3'1 and 32} Rimkv Setenium^{TowerA'';;";;;i;l"bisiirtt.HyOeraOad - 500 032 Rep' bv its} Iriiii iir"o^{s is ;atory,ltrlr'Ra mesh Periasami}

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...APPELLANT/^{ResPondentNo'1}

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AND

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Gandipet

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1 lQ Technologies ,^{Flat No'B-510 Rivera Apartments} -Manchirevula' ir:,i"Zb;":;oo^{oae i"i[v iit'H'r"n'dnsPartner'Mr' c Ramcharan} Reddy

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2 Criss Financial Finrnci^jt District,^{Limited, Plot No 31 and Hyderabad -500032'32 Ramky Selenium TowerA'}

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,..RESPONDENTS/^{Petitioner / Respondent No'2}

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IANO: 2O F²⁰²²

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petition under section 151^{Cpc praying that.,in the circumstances statedin} the affidavit^{filed in suppf; ;; G ;"ii;;ihe^florrCourt mav be pleased to} 1d'n-"ttltar."r'^{2o2i'passedby the Honourable} suspend Principal^{the Special interim Court} "'du;;u"t;'^{in til' *Oi" of District.JuOge for Triaiand Disposal of} Commercial^{Disputes at Hyderabad in COP No lZ iiZOzZ during the pendency of} present APPeal^.

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-7

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lA NO: 1 OF 2022

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Petition under section 151^{CPC praying thatin the circumstancesstated in} the affidavit filed in support^{of the petition, the High courtmay be pleasedto} dispense with filing of original^{certiiicate copy of ihe interimorder dated. 1 6th} Ma,rch 2022^passed by the^{Honourable Principalspecial court in the cadre of} District Judge for Trial and Disposal^{of commercialDisputes at Hyderabad in coP} No.^'12 of 2022in the^{present Appeal.}

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Counsel for the Appellant: SRl.^{N. NAVEEN KUMAR}

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Counsel for the Respondents:^{SRI DISHITBHATTACHARJEE}

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The Court made the following:^ORDER

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THE IION ,BLE THE CHIEF JUSTICE SATISH CHAND RA SIIARMA AND THE HON'BLE^{SRI JUSTICE ABHINANDKUMARSHAVILI}

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COMMER CIAL^COURT No. of2 2

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JUDGMENT, rr.^{t theHo,l'ble the ctuef Justice satishctnndrashama)}

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The present^aPPeal 1S arising out^of an order,^dated 1O.O3.2022^{passed in C.O.P.No.12 of 2022 by the PrincipalSpecial} CourtinthecadreofDistrictJudgeforTrialandDisposalof Commercial^{Disputesat Hyderabad, on an applicationpreferred} under Section^{9 of the Arbitrationand ConciliationAct' 1996'}

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Thefactsofthecaserevealthatl.Q.Technologies,petitioner before the trial^{Court, has enteredinto an agreementoo 16'08'2021} with M/s.Spandana^{SphoortyFinancial Limited' appellantherein} and it is a^{servicesagreement' The terms and conditions of the} aforesaid agreement^{for renderingthe services are reproducedas}

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under:-

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(i) Services^{pertaining tofunctionalityenhancements'} maintenance,^{hosting of applicationand database'server} and storage^{architecture, networking,security'Platform} management,^{disaster recovery'MIS includingpayroll'} business^{intelligence, advanced datavisualization'} application^{anddata base;} (ii) Build an^{ERP/Applicationfor thebenelit ofthe} respondents; (iii ) Maintenance^{of theapplicationand data forthe} respondents^{to ensurethe smooth functioning of the} bu siness^{of the resPondents'}

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The IQ Technologies/petitioner^{has agreed to provide all} services under the same^{services agreementto M/s.CrissFinancial} Limited/ respondent No.2 herein, the^{wholly owned subsidiaryof} M/s.Spandana Sphoorty Financial^{Limited/appellanthereinon} similar terms as^provided under^{the ServicesAgreement.}

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The petitioner, as stated in the^{petition underSection 9 of the} Arbitration and Conciliation Act, 1996, is required to^provide multiple services pertaining to loan restructuring,^{excess interest} calculation, interest capitalization and^{collection module} restructuring apart from building new^{functionalitiesand to} complete some incorriplete modules of M/s.Spandana^Sphoorty Financial Limited/appeliant herein. A serious dispute^{arose between} the parties and the agreement between the^{parties providesfor} dispute resolution mechanism.

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Clause 16 of the aforesaid agreement between the^partiesis reproduced as under:-

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" 16. Disoute Resolution

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a. Any dispute(s) arising out of this Agreement shall, as far as possible, be settled amicably between the Parties hereto failing which the follo*'ing shall applv: b Any dispute under this Agreement shall be referred to arbitration by a sole arbitrator to be appointed jointly by the Parties.

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{

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C The Arbitration Proceedings shal1 be held in Hyderabad in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory re-enactment or modification thereof for the time being in force.

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d The Parties agree that the arbitration award shall be final and may be enforced as a decree.

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C The Parties further agree that subject to the above only the competent courts at Hyderabad shall have jurisdiction in all matters ar.ising hereunder.

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t. The Parties further agree to keep the arbitration proceedings and arbitral award confidential."

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The petitioner has raised various invoices from time to time and as the amount was not being paid to the petitioner, legal notice was served on 07 .01.2022 and the petitioner came to know that M/s.Spandana Sphoorty Financial Limited/ appellant herein have started looking out for other vendors. As per the petition, an amount of Rs.6,89,42,680/ - (Rupees six crore eighty nine lakh forty two thousand six hundred and eighty only) was outstanding by M/s.Spandana Sphoorty Financial Limited/ appellant herein and a prayer was made for attachment of two bank accounts, one with the State Bank of India and another with the Kotak Mahindra Bank. The application was preferred under Section 9 of the Arbitration and Conciliation Act, 1996 and the trial Court in order to safeguard the interest of the petitioner has attached only one bank account till 24.03.2oo2, which is with the State Bank of^{India. The order passed} by the Court below is an ex parte order and a notice^{was also issued}

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returnable by 24.O3.2022.^{The M/s.Spandana SphoortyFinancial} Limited/ appe llant herein^{instead of hling a replyto the application} fi1ed under Section 9 of^{the Arbitration and ConciliationAct,1996} or filing an application ior^{vacating the stayhas rushed to this court} and the fact remains that^{the trial Court has grantedonly an} ex parte interim order. It is certainly open^{for M/s.Spandana} Sphoorty Financial Limited/appellant^{herein to raise all the grounds} raised in the present appeal before the trial^{Court' At this juncture,} it has been brought to^{the notice of} this^{Court that the appellant} has already marked its^{presencebefore the trial Court and the} matter has to be heard.

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In the considered opinion of this Court, as the^{matter has to} be heard on merits by the trial^Court, this^{Court is refraining itself} from passing any order on merits and the^{present appeal stands} disposed of^giving liberty to the^{parties to approachthis Courtafter} an order is passed in the matter by the trial Court. At this^juncture, this Court does not lind any reason to interfere with the order passed by the trial Court. The triai Court is directed to hear both the parties and to pass an order as expeditiously as possible preferably within a period of thirty (30) days from the date of receipt of a certified copy of this order.

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The Commercial Court Appeal is accordingly disposed of.

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Pending miscellaneous applications, if any, shall stand closed.

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There shall be no order as to costs.

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SD/.M.SANTHI VARDHANI JOIN REGIST

,TRUE COPY//

SECTION OFFICER

To,

t. The Principal Special Court in the Cadre of District Judge for Trial and Disposal of Commercial Disputes at Hyderabad.

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One CC to SRl. N NAVEEN KUMAR Advocate [OPUC]

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One CC to SRl. DISHIT BHATTACHARJEE Advocate IOPUCI

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Two CD Copies

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One Spare Copy

IMIVA

l.\&

HIGH COURT

DATED:2810312022

ORDER

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COMCA.No.6^{of 2022}

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DISPOSING OF THE GOMMERCIAL^{COURT APPEAL}

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CI,,

SpandanaSphoorty Financial Limited v. Iq Technologies and Another

Case brief

What is this about?

What did the court decide?

SpandanaSphoorty Financial Limited v. Iq Technologies and Another

Case brief

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What did the court decide?

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