Delhi High Court
M/S Harvinder Singh And Co. vs Chief Engineer (I & Fc), Govt. Of ... on 17 September, 2012
Author: S. Muralidhar
*IN THE HIGH COURT OF DELHI AT NEW DELHI
#3 (Reportable)
+ ARB.P. 104 of 2012
M/S HARVINDER SINGH AND CO. ..... Petitioner
Through: Mr. Sandeep Sharma, Advocate.
Versus
CHIEF ENGINEER (I & FC), GOVT. OF NCT OF DELHI
& ANR ..... Respondents
Through: Mr. Amiet Andlay, Advocate.
CORAM: JUSTICE S. MURALIDHAR
ORDER
% 17.09.2012
1. By this petition under Section 11 of the Arbitration and Conciliation
Act, 1996 ('1996 Act') the Petitioner M/s Harvinder Singh & Co. seeks
the appointment of an Arbitrator to adjudicate the disputes between the
parties.
2. The case of the Petitioner is that pursuant to a tender floated by
Respondent No. 1 Government of the National Capital Territory of
Delhi, through the Irrigation & Flood Control ('I & FC') Department,
for construction of Pucca section of Band Drain in a length of 185 m,
the Petitioner submitted an offer which was accepted by the
Respondents by a letter dated 14th December 2009. The Petitioner was
called upon by the Respondents to furnish a Performance Bank
Guarantee ('PBG') within fifteen days of the issue of the said letter.
The Petitioner states that the said PBG was furnished on 28th December
2009.
3. Pursuant to a letter dated 29th December 2009, the Petitioner was
asked to attend the office of the Executive Engineer ('EE') CD-IV, to
complete the formal agreement within seven days from the stipulated
date of start of work. The said letter reads as under:
"To
M/s Harvinder Singh & Co.
7-a Taimur Nagar Opp. Gurdwara,
New Friends Colony, New Delhi-110065
Sub:-Construction of pucca section of Bund Drain in a length
of 185m from RD 45m to RD 190m and RD 220m to RD
260m.
H.O.A. 4711-Plan (Flood Sector)
Stipulated date of start : 05.01.2010
Stipulated date of completion : 04.09.2010
Ref:- 1. Performance guarantee submitted by you vide your
letter No.Nil dated 29.12.2009, for above mentioned work.
2. This office letter of intent/acceptance of tender No.
EE.IV/Acs.2(19)/2008-2009/4600-4605 dated 14.12.2009.
Dear Sir(s)
1. In continuation of the letter referred above, you are requested
to attend this office to complete the formal agreement within
seven days from stipulated date of start.
2. You are requested to contact the Assistant Engineer-II, Civil
Division No.IV, for taking possession of site and starting the
work.
3. If you fail to sign the agreement and start the work within
seven days as stipulated above, this award of work shall be
deemed to have been cancelled leading of forfeiture of your
earnest money and performance guarantee deposit.
Yours faithfully,
Sd.
(Rajesh Singh)
Executive Engineer, CD-IV"
4. The admitted position is that the Petitioner did not sign the
agreement. Later on 4th February 2010, the Respondents wrote to the
Petitioner stating that since he had failed to sign the agreement and start
the work, within seven days, "this award of work shall be deemed to
have been cancelled leading to forfeiture of your earnest money and
performance guarantee deposit".
5. The question that arises is whether it can be said, in the
circumstances, that there is an arbitration agreement between the
parties in terms of Section 7 of the 1996 Act which reads as under:
"7. Arbitration Agreement--(1) In this Part, "arbitration
agreement" means an agreement by the parties to submit to
arbitration all or certain disputes which have been arisen or
which may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate
agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained
in--
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the
agreement; or
(c) an exchange of statements of claim and defence in which
the existence of the agreement is alleged by one party and
not denied by the other.
(5) The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the
contract is in writing and the reference is such as to make
that arbitration clause part of the contract."
6. Section 7(3) of the 1996 Act makes it clear that there has to be a
written arbitration agreement entered into between the parties. There
could also be a written agreement signed by the parties, or exchange of
documents, containing an arbitration clause. In the present case, there is
neither a signed arbitration agreement nor an agreement signed by the
parties containing an arbitration clause.
7. Mr. Sandeep Sharma, learned counsel for the Petitioner referred to
the decision in M/s. Finnpap (Finish Paper Mills Association) v. The
STC of India Ltd. 118 (2005) DLT 748 to urge that in similar
circumstances, the Court had inferred an arbitration clause.
8. A perusal of the said decision in M/s. Finnpap shows that it was in
the context of the Arbitration Act, 1940. The case before the Court was
at the stage of challenge to an Award that had already been passed. The
Court found that in the said case the Contractor had effected supplies of
newsprint after the acceptance of its offer by the STC. The said
decision is distinguishable on facts.
9. The present case is governed by the 1996 Act. Section 7(3) of the
1996 Act mandates that there must be a written arbitration agreement
signed by the parties. It is not denied that there is no such written
arbitration agreement. Therefore, the relief sought by the Petitioner
cannot be granted.
10. The petition is dismissed with liberty to the Petitioner to pursue any
other remedy that may be available to it in accordance with law.
S. MURALIDHAR, J
SEPTEMBER 17, 2012
bs
