Kutub Properties Private Ltd. vs C.L. Construction Company
2005 Latest Caselaw 88 Del

JUDGMENT

Vijender Jain, J.

1. This petition has been filed impugning the order passed by the learned Single Judge dated 23rd July, 2003 whereby exercising jurisdiction under Section 11 of the Arbitration and Conciliation Act. The learned Single Judge noticed that there was an arbitration clause which has been reproduced in the impugned order and the work was to be completed in terms of tender/contract clauses which was enclosed to a letter given by the appellant to the respondent. Learned counsel appearing for the petitioner vehemently contended that there was no signed arbitration agreement between the parties, only one letter was given to the respondent and on the basis of said letter, the finding of the learned Single Judge that there was a valid concluded arbitration agreement between the parties was perverse. Mr. Chawla has further contended that the petition under Section 11 filed by the respondent was pre-mature as no request was made by the respondent invoking the arbitration clause. Another ground of attack to the impugned order was on account of lack of jurisdiction. It was contended that the appellant had nothing to do in Delhi, their site was at Gurgaon and their office is at Calcutta. Lastly, it was contended by learned counsel for the petitioner that the learned Single Judge committed an error while appointing a retired Judge of this Court as an Arbitrator as he was not qualified in terms of the arbitration clause. On the other hand, learned counsel for the respondent has contended that at page 164 of the paper book, there was a letter written by the petitioner dated 14th November, 1996 and it cannot be said that there was no written agreement between the parties. It is relevant to quote the aforesaid letter of the petitioner written to the respondent, which is as under:-

14 November 1996

M/s. C L Construction Company

G-1-205, Raj Tower

Alaknanda,

New Delhi - 110 019.

Sub: Construction of site at Plot No. 26, Sector-18, Electronics City, Gurgaon.

Dear Sir,

This has reference to your tender on the above subject and the subsequent discussions / negotiations we had in the office of our Architect, Mr. Arvind Deshraj, we are pleased to inform you that the above tender has been awarded to you.

The original price of the tender was Rs. 1,09,98,950/- as quoted by you. However, as mutually agreed after negotiations the value of the tender is revised to Rs. 1,04,49,002/- after a discount of 5% from you.

As per terms and conditions of the tender (details given in the tender), you are requested to contact our Architect, M/s Arvind Deshraj and Associates for necessary instructions and arrange to start the work at the earliest.

The formal agreement will be signed in due course.

Thanking you,

for RPF HOME FINANCE PRIVATE LIMITED

A.K.DHAWAN"

2. We have perused through the documents which were part of the tender documents which starts from page 39 of the paper book. At page 66 is the arbitration clause. Taking into totality, it cannot be said that there was no agreement between the parties. We have also perused the letter written by the respondent to the architect of the petitioner which is at page 167 of the paper book dated 28th June, 1999. It specifically had requested the architect to intervene in the matter in relation to the claims and specific mention in the said letter have been made to Clause 28 of the General Conditions of the Contract. From the perusal of the said letter which has been acknowledged by the petitioner at page 135 through the reply of the architect, it cannot be said that no dispute was raised, by the architect. The law on this subject is very clear. The Court only performs an administrative function while appointing an arbitrator. If a party to the arbitration agreement does not supply the vacancy within the period of 30 days from the receipt of the notice in writing from the opposite party, other party forfeits its right to appoint the arbitrator. Even otherwise, all the objections which have been taken, can be taken by the petitioner before the arbitrator. We are fortified in our view in view of the judgment of the Supreme Court in State of Orissa and Ors. v. Gokulananda Jena , the relevant paras 10 & 11 are as under:-

"10. The challenge of the appellant in the writ petition against the order of the designated judge is based on the following facts:-

(i) The contract between the parties was executed before the Act came into force, hence, the Act does not apply;

(ii) Dispute is a state one having arisen nearly 20 years ago;

(iii) Clause 23 of the agreement contemplates the adjudication of a dispute by a company arbitrator.

(iv) No person other than an arbitrator nominated in clause 23 of the argument has any jurisdiction to entertain the disputes.

11. All these grounds of attack, in our opinion, can very well be raised before the arbitrator appointed by the designated judge, hence, on the facts of the case, we find the writ petition, of the appellant was liable to be dismissed by the High Court. For this reason, we do not think it appropriate to remand the matter to the High Court. Therefore, we dismiss this appeal permitting the appellant to raise all its contentions before the arbitrator appointed by the designated judge."

3. We find no substance in the argument of the petitioner. Petition is dismissed.