High Court of Delhi was dealing with the petition challenging order dated 21.02.2015 whereby the objections filed by the appellant under section 34 of the Arbitration and Conciliation Act, 1996 against the ‘Nil’ award dated 30.03.2012 have been dismissed.
Brief Facts:
Between 17.11.2000 and 02.01.2001 three work orders were granted to late Sh. P.K. Jain, the husband of appellant No.1 and father of appellant Nos.2 to 4 with the stipulated period of completion being four months. Late Sh. P.K. Jain requested for handing over of the sites for execution of the work, however, prior to the work to being completed he expired. Appellants sought release of the payments for the executed work. There were certain disputes between the parties with regard to the said works and the payments to be made to the appellants. Accordingly, appellants invoked the arbitration. By order dated 02.04.2009 appellants application under Section 11(6) of the Arbitration Act was allowed and a sole arbitrator was appointed for adjudication of the disputes. The arbitrator passed a ‘Nil’ award on 30.03.2012 holding the claims to be barred by time.
Appellant’s Contention:
Learned counsel for the appellant submitted that on merits the arbitrator found in favour of the appellants, however, passed a ‘Nil’ award solely on the ground of delay. It was contended that appellants thereafter filed objections to the award under Section 34 of the Arbitration Act which were disposed of by the impugned order. It was submitted that though the challenge to the award was only on the ground of passing of a ‘Nil’ award because of delay.
Respondent’s Contention:
Learned Counsel for the respondent submitted that they had required the legal heirs i.e. the appellants to approach the department for receiving the amount on producing the certificate of succession and as nobody approached them the amount was not released.
Trial Court’s Decision:
Trial Court has proceeded on a completely different premise and dismissed the objections under Section 34 holding that since Late Sh. P.K.Jain had expired before the alleged completion of the work and that there was no fresh award of work to the legal heirs, there was no subsisting contract after the death of late Sh. P.K.Jain which could be enforced by the appellants. Trial Court held that as there was no subsisting contract, appellants had no right in the contract as they were not privy to the contract and thus could not make any claim. Further the Trial Court has held that the award is vitiated, not for the reason that the award is barred by time but on the ground that there was no subsisting contract between the legal heirs and the Corporation which could have been enforced.
HC’s Observations:
After hearing both the sides Court stated that it is not in dispute that Sh. P.K.Jain expired before the work was completed and the work was executed and also allegedly completed by the appellants after his demise. HC stated that it is also not in dispute that the Corporation at no point of time raised any objection with regard to the right of the legal heirs to execute the contract and claim payment. The dispute is only with regard to the alleged amount due under the contract.
HC stated that it is an admitted position that the Corporation has never taken any objection that the contract did not survive after the demise of late Sh. P.K.Jain. Even an arbitrator was appointed by this Court under Section 11 of the Arbitration Act on a petition filed by the appellants.
HC Held:
After evaluating submissions made by both the parties the Court held that “Clearly, Trial Court has committed an error in dismissing the objections under Section 34 of the Arbitration Act, on a ground which was neither pleaded nor urged before the Court. The question before the Trial Court was as to whether the claim petition filed by the appellants was within time or not and as to whether the award was liable to be set aside on the grounds mentioned under Section 34 of the Arbitration Act. The Trial Court has not even adverted to the questions raised before it but has proceeded on a completely different premise, which was not even the case of the Respondents. Accordingly, the impugned order is liable to be set aside and the matter remitted to the Trial court for fresh consideration of the objections filed by the appellants under Section 34 of the Arbitration Act.”
Bench: Hon’ble Mr. Justice Sanjeev Sachdeva
Case Title: Late Sh Pramod Kumar Jain Proprietor Of M/S Jain Enterprises Thr His Legal Heirs v. North Delhi Municipal Corporation & Anr
Case Details: FAO 255/2015
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