Delhi High Court
Hotel Corpn. Of India Ltd. vs M/S. Continental Furnishers, New on 25 March, 2009
Author: Mukul Mudgal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) 46/2003
Date of Decision: 25rd March, 2009
HOTEL CORPN. OF INDIA LTD. ..... Appellant
Through: Ms. Padma Priya, Advocate.
versus
M/S. CONTINENTAL FURNISHERS, NEW ..... Respondent
Through: Mr. Sandeep Sharma, Advocate.
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE VIPIN SANGHI
1. Whether the Reporters of local papers may
be allowed to see the judgment? No
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
% JUDGMENT (Oral)
MUKUL MUDGAL, J.
1. This appeal is directed against the orders dated 3.10.2001 and
31.10.2001 passed by the learned Single Judge setting aside the
awards dated 31.5.1995 made and published by the Arbitrator and
appointing a new Arbitrator. The learned Arbitrator rejected the claims
of the respondent as being barred by time on the ground that the
notice asking for reference of disputes to arbitration had not been
given by the respondent within 28 days of the issuance of the
Architects Certificate as provided in Clause 48 of the agreement. The
learned Single Judge, by relying upon the decision in 77 (1999) DLT
165 M/s. Hindustan Construction Corporation Vs. DDA set aside
the award on the ground that the reference cannot be rejected merely
because the arbitration was not invoked within the time stipulated by
such a clause.
2. The appeal is preferred on the ground of violation of Clause 48 of
the agreement between the parties. Clause 48 of the agreement reads
as under:
48. SETTLEMENT OF DISPUTES:
All disputes and differences of any kind
whatever arising out of or in connection
with the contract or carrying out of the
works (whether during the progress of
the works or after their completion, and
whether before or after the
determination, abandonment or breach o
the contract) shall be referred to and
settled by the Architects, who shall state
his decision, in written. Such decisions
may be in the form of a final certificate or
otherwise. The decisions of the
Architects with respect to any or all of
the following matters shall be final and
without appeal:
(a) The variation or modification of the
design;
(b) The quality or quantity of works or the
additions/alterations, omissions, or
substitutions of any work;
(c) Any discrepancy in the drawings or
between the drawings and/or
specifications, and schedule of
quantities;
(d) The removal and/or re-execution of
any works executed by the contractor;
(e) The dismissal from the works of any
person employed thereupon;
(f) The opening up for inspection of any
work covered up;
(g) The amending and making good of
any defects under defects liability
period;
(h) Acceptability of materials, equipment
and workmanship;
(i) Materials, labour, tools, equipment,
and appurtenances necessary for the
proper execution of work;
(j) Assignment of sub-letting;
(k) Delay and extension of work;
(l) Termination of contract by the
Employer.
But if either the Employer or the
contractor be dis-satisfied with the
decision of the Architects or any
matter, question or dispute of any
kind except the matters listed
above, then and in any such case,
either party (the Employer or the
contractor) may within twenty eight
(28) days, after receiving notice to
such decision, give a written notice
to other party through the
Architects requiring that such
matters which are in dispute or
difference of which such written
notice has been given and no other
shall be and is hereby referred to
the Arbitration and final decision of
a single Arbitrator being a person
who is a Professional
Engineer/Chartered
Architect/Chartered Surveyor
(Building and Quantities/Land
Surveying), to be agreed upon and
appointed by both the parties or in
the case of disagreement as to the
appointment of a single Arbitrator to
the arbitration of two Arbitrators
both being persons who are
professional Engineers/Chartered
Architects/Chartered Surveyors
(Building and Quantities/Land
Surveying), one to be appointed by
each party, which Arbitrators shall,
before taking upon themselves the
burden or reference appoint an
Umpire, who must also be
Professional Engineer/Chartered
Architect/Chartered surveyor, as
described earlier.
The Arbitrator, the Arbitrators or the
Umpire shall have power to open up,
review and revise any certificate,
opinion, decision, requisition or notice
pertaining to the matters referred to
them, and to determine the same by
his/their award. Upon every or any such
references the cost of and incidental to
the reference and award respectively
shall be at the discretion of the Arbitrator
or Arbitrators or Umpire, who may
determine the amount thereof, or direct
the same to be taxed as between
Attorney and Client or as between party
and party, and shall direct by whom and
to whom and in what manner the same
shall be borne and paid. This submission
shall be deemed to be submission to
Arbitrator within the meaning of the
Indian Arbitration Act, 1940 or any
statutory modifications thereof. The
award of the Arbitrator or Arbitrators or
the Umpire shall be final and binding on
the parties. The Employer and the
Contractor hereby also agree that the
Arbitration under this clause shall be a
condition precedent to any right of action
under the contract."
3. It is contended that the certificate of the architect was
questioned only on 12.05.1992, whereas the architect's certificate was
issued on 22.09.1986. For this purpose reliance has been placed on
the judgment of the Hon'ble Supreme Court titled as R. Reddy &
Bros. Vs. Maharashtra Krishna Valley Development Corporation
And Others (2009) 2 SCC 494 in which reliance has been placed on
Clause 54 in the Contract before the Hon'ble Supreme Court which was
in terms para materia with present Clause 48. The above decision
holds that for purposes of invocation of arbitration, the contractual
term binds the parties.
4. Mr. Sharma, who appears on behalf of the respondent, submits
that in the facts of the present case the decision of the Hon'ble
Supreme Court has no application, as aforesaid, the architects
certificate dated 22.09.1986 was indeed questioned and arbitration
invoked on 18.10.1986 i.e. within 28 days.
5. A perusal of the record of the Arbitrator demonstrates that it was
the appellant who had admitted before the Arbitrator the fact that the
notice dated 18.10.1986 was issued by the respondent. Now from a
perusal of the letter dated 18.10.1986 it is evident that the arbitration
was indeed invoked by the respondent and the arbitration commenced
upon issuance of the said notice by virtue of Section 37 of the
Arbitration Act, 1940. The judgment relied upon by the appellant is not
applicable in the facts and circumstances of the present case and the
appeal accordingly stands dismissed.
MUKUL MUDGAL, J.
VIPIN SANGHI, J.
MARCH 25, 2009
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