National Highways Authority Of ... vs Vinod Goel And Ors.
2006 Latest Caselaw 1807 Del

JUDGMENT

Mukundakam Sharma, J.

1. The present appeal is directed against the impugned order dated 5th October, 2005 passed by the learned Single Judge in IA No. 2931/2005 filed by respondent No. 5 herein under Section 9 of the Arbitration and Conciliation Act, 1996 in OMP No. 316/2003. By the aforesaid order the learned Single Judge appointed a receiver to take charge of the batching plant and other equipments, allegedly belonging to the respondent No. 5, lying at Village Saveli, Opp. Haryana Sheet Glass Factory, Kundali, District Sonepat, Haryana, with a further direction to the receiver to take inventory of the equipments lying at the site. It was also directed that after preparation of the inventory and taking charge of the said equipments, the same shall be handed over to respondent No. 5 on superdari of appropriate amount with a direction to produce the same in court as and when required. The appellant, although was not a party to the said petition under Section 9 of the Arbitration and Conciliation Act, filed this appeal on the ground that the aforesaid order which was passed behind the back of the appellant, has affected adversely the interest of the appellant, inasmuch as the batching plant and other equipments in respect of which the receiver was appointed were in fact lying in the custody and possession of the appellant at the site. It was also submitted before us that the aforesaid order was also passed on a miscellaneous application being IA No. 2931/2005 in OMP No. 316/2003 which was finally disposed of by order dated 4th March, 2005. It was submitted that after passing of the order dated 4th March, 2005, disposing of the petition, there was no scope for entertaining a miscellaneous application being IA No. 2931/2005 and for passing an order on the said miscellaneous application appointing a receiver, thereby affecting the valuable rights of the appellant.

2. We have heard the learned Counsel appearing for the appellant and learned Counsel appearing for respondent Nos. 1, 2 and 4 and also for the respondent No. 5 and have also perused the records.

3. The records placed before us clearly establish that the main contract was between the appellant and M/s. Maharia Raj, who is respondent No. 2 herein, which was entered into by the aforesaid parties on 31st May, 2001 for construction work of six laning of KM 44.300 to KM 66.000 of NH-1 in the State of Haryana. Respondent No. 2 is incidentally a joint venture of respondents 3 and 4 and respondent No. 1 is the managing partner of the respondent No. 2. Respondent No. 5 is the sub-contractor of respondent No. 2 who had alleged in the aforesaid application on which the impugned order was passed, that it is the owner of the batching plant in question. Pursuant to the aforesaid contract dated 31st May, 2001, entered into between the appellant and M/s. Maharia Raj, respondent No. 2 herein, mobilisation advance as well as additional advances were disbursed to respondent No. 2 for mobilisation of equipments which were required for execution of the work, in accordance with the stipulations as contained in the said contract. During the execution of the aforesaid contract, disputes arose between the appellant and respondent No. 2, for which the contract dated 31st May, 2001 entered into between the appellant and respondent No. 2 was terminated on 11th December, 2004. Clause 61.1 of the said contract provided that all materials on the site, plant, equipments, temporary works and works are deemed to be the property of the employer, if the contract is terminated because of contractor's default. In terms of and in accordance with the aforesaid contractual stipulation, the appellant took over all the materials lying at the site including the batching plant, equipments, temporary and other works as the contract was terminated allegedly on the ground of contractor's fault. The appellant submitted that upon termination of the contract, the batching plant and other equipments lying at the site in question would be deemed to be the property of the appellant since advances had already been accepted by respondent No. 2 in respect of the said equipments. In this connection, reference was also made by the appellant to the undertaking given by respondent No. 2 on 22nd April, 2003, which is annexed as Annexure A2. The said undertaking indicates that respondent No. 2 had utilised the mobilisation and equipment advances for purchasing the equipments including the batching plant in question. During the course of arguments, reference was also made by the appellant to the interim order dated 15th April, 2005, passed by the learned Single Judge of this court in OMP No. 119/2005 to the following effect:

Till the next date of hearing, respondents or its agents, officers, assigns, transferees, executors, administrators or any persons are restrained from removing, tampering, alienating, parting away or in anyway disposing of or creating any third party interest in any manner, whatsoever, in all materials, etc. any plant, equipment, machinery, temporary works and works existing at the site, i.e. the stretch of National Highway from KM 44300 to KM 66.000 of NH-1 in the State of Haryana.

The said order is operative as on date as against respondent No. 2.

4. It was submitted before us that in view of the aforesaid position and in accordance with the terms and conditions of the contract agreement between the appellant and the respondent No. 2, no third party could have been allowed to take possession of the said equipments to the detriment of the interest of the appellant.

5. It is also established from the records that the said batching plant in question along with other concerned equipments and materials used for the execution of the subject project are kept at the main camp office which is situated near Haryana Sheet Glass Factory and is approximately 1.4 kilometers away from KM 36.900 of NH-1. There is a letter on the record, namely, letter dated 20th April, 2002, which clearly pinpoints to the fact that an amount of Rs. 22 lacs was used by respondent No. 2 for purchasing the concrete batching plant in question and that the said batching plant along with all other materials and equipments are now in the custody and possession of the appellant herein, which were taken into possession and custody under the provisions of Clause 61 of the contract agreement between the appellant and respondent No. 2 herein.

6. In that view of the matter, the aforesaid plant and machinery, in respect of which the impugned order dated 5th October, 2005 is passed, being already subject matter of a proceeding in OMP No. 119/2005, no interim order appointing a receiver could have been passed without hearing the appellant who has an interim order in its favor and who has the custody and possession of the said equipments.

7. We are also informed that the application under Section 9, on which the impugned order was passed, was filed in OMP No. 3167/2003 which was disposed of on 4th March, 2005. When such an application is filed during the pendency of the arbitration proceeding, the same would be effective till a final award is passed in the arbitration proceeding. We are informed that the arbitration proceeding in respect of which the aforesaid application under Section 9 was filed, has been completed and the award has been passed. In respect of the said award, objections have also been filed under Section 34 of the Act which are pending for consideration in this court. The receiver could not take into his custody and possession the aforesaid machinery and plant in terms of the impugned order as the operation of the said order was stayed by order dated 15th April, 2005. The said equipments and plant continue to be in the custody and possession of the appellant and if any order is required to be obtained by any of the respondents, the same has to be obtained in accordance with law and only after making the appellant a party to the proceeding. The impugned order was obtained without making the appellant a party, who is vitally interested in the custody and possession of the aforesaid plant and machineries. We are of the considered opinion that the appellant herein must be heard before any order in respect of the said equipments and plant is passed, more particularly, in view of the fact that in respect of the same equipments, another proceeding is pending in this court being OMP No. 119/2005.

8. In terms of the aforesaid order and observations made herein, the present appeal is disposed of setting aside the impugned order. We, however, hasten to hold that in case any of the respondents desires to obtain any interim or other order in respect of the said plant and equipments, they could either file an appropriate application in OMP No. 119/2005, which is pending for consideration in this court, or in the objection proceedings which is pending before this court, as an application under Section 9 is maintainable even after the award is passed in arbitration proceedings. But we make it clear that as and when such an application is filed, the appellant has to be made a party and it must be given a reasonable opportunity of hearing before any order is passed in respect of the custody and possession of the aforesaid equipments, including the batching plant. We also clarify that none of the observations made herein shall be construed as opinion or views expressed by this court on the merits of the claims of the parties. The impugned order is set aside on the ground that the appellant herein was deprived of an opportunity of hearing in the matter before the impugned order was passed.

9. In terms of the aforesaid order the appeal stands disposed of.