Sneh Enterprises & Others vs Union Of India & Another
2009 Latest Caselaw 4358 Del

16.
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     W.P.(C) 505/2007

      SNEH ENTERPRISES & ORS.                  ..... Petitioners
                     Through Mr. Amiet Andlay, Advocate.

                    versus

      UOI & ANR.                            ..... Respondents
                         Through Mr. Sanat Kumar, Advocate.

      CORAM:
      HON'BLE MR. JUSTICE SANJIV KHANNA

                  ORDER

% 27.10.2009

1. The petitioners and the respondent No. 2 had entered into a lease

agreement dated 1st July, 1997. The petitioners at that time had made a

collateral security deposit in the form of FDRs, which have matured and

the maturity value of Rs.15,50,957/- was credited in the account of the

respondent No. 2. The petitioners claim refund of the said amount, inter

alia, pleading that they have fully complied with the lease agreement and

have made payments due from them.

2. Respondent No. 2 admits that the lease installments were duly paid

but it is stated that the collateral security deposit stands adjusted towards

Rs.10,08,343/- recoverable from the petitioner towards interest on the

blocked up capital and the balance amount of Rs.5,50,957/- has been

adjusted towards residuary cost of the equipment of Rs.5,16,044/- and

sales tax payable thereon.

WPC No.505-2007 Page 1

3. Learned counsel for the respondent No.2 has further drawn my

attention to the agreement which is an arbitration clause. The said clause

reads as under:-

"31. ARBITRATION: (i) If any dispute or difference arises between the Corporation and the Lessee with regard to the construction, meaning and effect of these presents or any part thereof or any other matter under these presents, interpretation or termination of this agreement, the same shall be referred to the Sole Arbitration of the Chairman of the Corporation or such officer as he may appoint to be the Arbitrator. There would be no objection that the Arbitrator is an employee of the Corporation, that he had to deal with the matters to which this agreement relates or that in the course of his duties as an employee of the Corporation he has expressed his views on all or any of the matters in dispute or difference. The award of the Chairman or the officer so appointed by him shall be final and binding on the parties hereto this agreement.

(ii) The venue of the arbitration shall be at Delhi or at any other place where Regional officers of respective Regional Offices alone shall have exclusive jurisdiction."

4. Learned counsel for the respondent No. 2 on the last date of hearing

was asked to obtain instructions and states that the respondent No. 2 has

no objection to appointment of an arbitrator in terms of the said clause.

5. The writ petition was filed in the year 2007 and has remained

pending since then. In these circumstances and in view of the statement

made by the learned counsel for the respondent No. 2, the parties are not

being relegated to separately invoke Section 11 of the Arbitration and

WPC No.505-2007 Page 2 Conciliation Act, 1996 and the Chairman of the respondent No. 2

corporation is directed to appoint an arbitrator within a period of three

weeks from today. It is noticed that the counter affidavit filed by the

respondent is supported by an affidavit filed by Branch Manager. The

Chairman of the respondent No. 2 corporation will appoint an officer senior

to Branch Manager as the sole arbitrator. As the matter has remained

pending in this Court for over two years, the learned arbitrator so

appointed will make an endeavour and effort to dispose of arbitration

proceedings within a period of four months from the date of entering upon

reference.

6. With the aforesaid observations, the writ petition is disposed of.

There will be no order as to costs.

SANJIV KHANNA, J.

      OCTOBER 27, 2009
      VKR




WPC No.505-2007                                                      Page 3