Parnika Commercial & Estate (P) ... vs Govt. Of Nct Of Delhi
2013 Latest Caselaw 878 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Judgment delivered on: February 21, 2013

+                              Arb.P.No.501/2012

        PARNIKA COMMERCIAL & ESTATE (P) LTD       ..... Petitioner
                    Through  Mr.Sunny Arora, Adv.

                      versus

        GOVT OF NCT OF DELHI                                 ..... Respondent
                     Through              Mr.Vikrant Pachnanda, Adv. for
                                          Mr.Najmi Waziri, Adv.

        CORAM:
        HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (Oral)

1. The present petition has been filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

2. The case of the petitioner is that the petitioner is a building contractor. The respondent invited the tender for the work of the development of "Construction of Integrated Complex for Delhi Judicial Academy, National Law School and National Institute for Mediation and Conciliation at Sector-14, Dwarka, New Delhi". The work was awarded to the petitioner by letter dated 10th September, 2007 for which an agreement No.2/EE/BPD/B- 131/2007-2008 was executed. As per the contract the stipulated date of start and completion for the said work was 25 th September, 2007 and 24th December, 2008.

3. The actual date of completion of the work was 30 th March, 2010. As per the agreement, the respondent was under the obligation to release the

payment within six months after completion of work. The respondent released part payment to the petitioner on 7 th January, 2012 under the tag of 24th and final bill ignoring his various legitimate dues. The petitioner issued the demand notice and alternatively requested the respondent to appoint an arbitrator to adjudicate the disputes between the parties by letter dated 18th September, 2012.

4. Upon notice, the respondent has filed the short affidavit of Sh.Paras Ram who is the Executive Engineer in PWD.

5. After having gone through the arbitration clause 25 of the agreement and the averments made in the petition as well as the short affidavit filed by the respondent, I am of the considered view that the prayer sought in the present petition cannot be allowed on the following reasons:-

(i) As per clause 25 of the agreement entered into between the petitioner and the respondent which provides that if a contractor disputes any decision given in writing by the Engineer-in- Charge on any matter in connection with or arising of the contract to be unacceptable, the contractor shall promptly within a period of 15 days request the Superintending Engineer in writing for written instructions or a decision who shall then do so within a period of one month from the receipt of the same. In the present case, the petitioner disputed the 24th and final bill given by the respondent to it on 6th January, 2012 but the petitioner disputed the same by its letter dated 5th June, 2012 written to the respondent i.e. after approx. 5 months instead of 15 days as stipulated in the said agreement.

(ii) Clause 25 of the agreement also provides that if the contractor does not make any demand for appointment in respect of any

claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-in-Charge that the final bill is ready for payment, then the claim of the contractor shall be deemed to have been waived and absolutely barred and that the respondent shall be discharged and released of all liabilities under the contract in respect of these claims. The final bill was received as stated above by the petitioner on 6 th January, 2012. However, a letter to the Chief Engineer to appoint an Arbitrator was only sent on 18th September, 2012 disputing the final bill.

(iii) Despite of the above, the respondent has appointed Sh.O.P.Bhatia, Addl. Director General (Retd.), CPWD as Arbitrator by exercising the powers conferred under clause 25 of the agreement, to adjudicate upon the disputes between the parties. The said appointment was made on 11 th December, 2012 with regard to the final bill dated 6 th January, 2012. It is admitted by both the parties that the first hearing was conducted by the Arbitrator on 24th January, 2013 which was attended by both the parties, though the contention of the petitioner is that the said appearance was without prejudice.

(iv) In the case of Northern Railway Administration, Ministry of Railways, New Delhi vs. Patel Engineering Company Limited, (2008) 10 Supreme Court Cases 240, it was held as under:-

"12. A bare reading of the scheme of Section 11 shows that the emphasis is on the terms of the agreement being adhered to and/or given effect as closely as possible. In other words, the Court may ask to do what has not been done. The Court must first ensure that the remedies provided for are exhausted. It is true as contended by Mr.Desai,

that it is not mandatory for the Chief Justice or any person or institution designated by him to appoint the named arbitrator or arbitrators. But at the same time, due regard has to be given to the qualifications required by the agreement and other considerations."

(v) In another case titled as SVG Molasses Co. B.V. vs. Mysore Mercantile Co. Ltd. and Ors., reported in 2007(9) SCALE 89, in which it was held as under:-

"11. The 1996 Act envisages party autonomy. The constitution of the arbitral tribunal in the manner it is to be appointed concededly depends upon the type of substantive agreement. When the parties to the agreement are to nominate one arbitrator each on their behalf, the third arbitrator is appointed by the nominated arbitrators.

It is not in dispute that Respondents herein have failed and/or neglected to appoint an arbitrator in terms of the arbitration agreement. A submission was made by the learned Counsel appearing on behalf of Respondents that they would face immense difficulties in proceeding before an arbitral tribunal at Amsterdam in Netherlands; but this Court in exercise of its jurisdiction under Section 11(6) of the 1996 Act cannot supplant the agreement of the parties. The parties entered into the Arbitration Agreement with their eyes wide open. They knew the terms thereof. This Court in exercise of its jurisdiction under Section 11(6) of the 1996 Act cannot alter the terms of the contract.

It is idle to contend that there is no arbitration clause. It is furthermore not in dispute that the applicant is a company carrying on business from Netherlands. The goods are also said to be of Iranian origin. It would, therefore,

not be correct to say that the agreement does not fall within the scope of International Commercial Arbitration as defined in Section 2(1)(f) of the 1996 Act. The identity and location of the Petitioner being a foreign country would bring the case within the purview of International Commercial Arbitration."

6. In view of the settled law, the reliefs sought by the petitioner are hereby rejected, as the Arbitrator is already appointed who will adjudicate the disputes between the parties.

7. The petition is accordingly disposed of.

(MANMOHAN SINGH) JUDGE FEBRUARY 21, 2013/jk/ka