M/S Dhanraj Bajaj & Company vs Navodaya Vidayala Samiti & Ors.
2014 Latest Caselaw 3467 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 1st August, 2014.

+                                 LPA No.484/2014

       M/S DHANRAJ BAJAJ & COMPANY                ..... Appellant
                    Through: Ms. Richa Kapoor, Adv.

                         Versus
    NAVODAYA VIDAYALA SAMITI & ORS.          ..... Respondents
                 Through: Mr. S.T. Venkatachala, Adv.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. This intra-court appeal impugns the order dated 6th May, 2014 of the

learned Single Judge of this Court of dismissal of W.P.(C) No.6022/2012

preferred by the appellant with costs of Rs.1 lacs payable to the respondents

no.1&2.

2. The facts, succinctly stated are as under:-

(i) the appellant has an Arbitral Award dated 11th July, 2002 in its

favour for recovery of Rs.5,20,240/- as principal and Rs.8,23,074/-

as interest till the date of the award i.e. total Rs.13,43,314/- from

(a) the respondent no.3 herein National Industrial Development

Corporation Ltd. (NIDC); (b) the General Manager, NIDC; and (c)

the Project Manager (NVS), NIDC;

(ii) NIDC, in or about August, 2002, filed a Company Petition for

voluntary winding up;

(iii) the appellant filed objections to the winding up of NIDC but the

same were dismissed and NIDC was on 13 th January, 2005 ordered

to be wound up;

(iv) the appellant appealed against the said order of winding up and

though notice thereof is stated to have been issued but the fate

thereof has not been disclosed; presumably it was dismissed;

(v) the proceedings initiated by the appellant for execution of the

Arbitral Award are pending in the Court of the Addl. District

Judge, Delhi; obviously, owing to NIDC having been ordered to be

wound up, there will be impediments to recovery of the arbitral

award/decretal dues;

(vi) it is the case of the appellant that the respondents no.1&2

Navodaya Vidayala Samiti (NVS), being a Society registered

under the Societies Registration Act and an Autonomous Body

owned and run by Union of India, had in fact engaged the services

of the NIDC for construction of a school building; NIDC had

invited tenders therefor and placed the contract on the appellant;

that dispute and differences having arisen in relation to the said

contract, the appellant had invoked the arbitration clause and

which resulted in the Arbitral Award aforesaid; and,

(vii) it is further the case of the appellant that NIDC was thus only the

agent of the respondents no.1&2 NVS and the liability under the

Arbitral Award is in fact of NVS.

The writ petition from which this appeal arises, was thus filed (i) to issue

show-cause notice to the respondents no.1&2 NVS as to why they were not

owning the responsibility and liability under the Arbitral Award aforesaid; (ii)

for declaration that the respondents no.1&2 NVS as Principal owner are

responsible for all liabilities under the Arbitral Award aforesaid; and, (iii) for

declaration that NIDC was only the agency of the respondents no.1&2 NVS

and thus the liability under the Arbitral Award is that of the respondents

no.1&2 NVS.

3. It was inter alia the contention of the counsel for the appellant before the

learned Single Judge that NIDC itself, before the Arbitral Tribunal, had filed an

application for substituting NVS in its place but the Arbitral Tribunal dismissed

the said application for the reason of the same having been filed at a belated

stage to prolong the matter and for the reason that NVS was not a party or

signatory to the agreement providing for arbitration.

4. The learned Single Judge dismissed the writ petition inter alia observing

that the appellant, if aggrieved from the dismissal by the Arbitral Tribunal of

the application aforesaid of the NIDC, ought to have challenged the award

under the mechanism provided for in the Arbitration & Conciliation Act, 1996

and that correction of the Arbitral Award as was sought, in exercise of

jurisdiction under Article 226 of the Constitution of India is not possible.

Reliance was placed on SBP & Company Vs. Patel Engineering Ltd. (2005) 8

SCC 618.

5. The counsel for the appellant before us also, through lengthy arguments

has attempted to show as to how the contract / order for construction, though

placed by NIDC upon the appellant, was for and on behalf of the NVS and thus

NVS is now liable. It is further contended that the appellant, on account of

NIDC having ordered to be wound up, is in a lurch and has been left merely

with a paper decree.

6. The appellant itself is to blame for the predicament in which it claims to

be today. If it is the case of the appellant that notwithstanding the contract /

order having been placed by NIDC, the liability was of NVS, the appellant at

the time of making the claim ought to have impleaded NVS also as a party

thereto and in which event the adjudication on this aspect also would have

taken place, whether before the Arbitral Tribunal and if not possible before the

Arbitral Tribunal owing to NVS being not a party to the Agreement and NIDC

having not acted on behalf of NVS, in a Civil Court. The appellant having not

done so, cannot, today in writ jurisdiction call upon this Court, to investigate as

to who in fact is liable for the dues of the appellant or to rule upon the nature of

the relationship between NVS and NIDC. Not only so, inspite of the appellant

having not done so NIDC nevertheless is informed to have applied before the

Arbitral Tribunal for substitution of NVS in its place. The appellant then also

did not grab the opportunity and concede to the application. If the appellant had

done so, the Arbitral Tribunal possibly would have allowed the application of

NIDC. Further, the appellant had yet another opportunity to challenge the

Arbitral Award to the said extent under Section 34 of the Arbitration Act. The

appellant failed to do so also. On the contrary, the appellant indulged in

misconceived proceedings of objecting to the winding up of NIDC. The

appellant, after such repeated negligence cannot approach the Court and call

upon the Court to make up for its own negligence, lapses and misconceived

actions.

7. The learned Single Judge is right in holding that the relief as claimed in

the writ petition was in the nature of correcting the Arbitral Award and which is

not permissible in law.

8. This appeal is as misconceived as the writ petition and is dismissed.

9. The counsel for the appellant at this stage states that the impugned order,

in so far as imposing costs of Rs.1 lac on the appellant, be set aside.

10. We notice that the learned Single Judge was constrained to impose the

said costs finding the appellant to have indulged in frivolous and misconceived

litigation at the cost of precious judicial time. The appellant has taken further

time in this appeal. Had the grievance of the appellant been limited to costs

only, the appellant ought to have made a clean breast of affairs. The appellant

has not done so. We therefore though refuse to interfere with the order of

imposition of costs but clarify that it will be open to the appellant to approach

the learned Single Judge if so desires in this regard.

11. Though the counsel for the appellant has not contended but we find that

the Arbitral Award as aforesaid is also against the "the Project Manager (NVS),

the National Industrial Development Corporation Ltd.". We make it clear that

nothing contained in the order of the learned Single Judge or in this order shall

come in the way of the appellant, if able to, contending before the Executing

Court on the basis thereof that the award is also against NVS and which

contention if taken by the appellant shall be dealt by the Executing Court on its

own merits, again without being influenced by any observation herein.

We refrain from imposing further costs on the appellant.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE AUGUST 01, 2014 pp..