Delhi High Court
M/S Satpal Sharma & Sons vs Union Of India & Anr on 28 July, 2015
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Arb. P. No. 65/2015
% 28th July, 2015
M/S SATPAL SHARMA & SONS ..... Petitioner
Through: Mr. R.Rajappa, Adv.
versus
UNION OF INDIA & ANR ..... Respondents
Through: Mr. Rajeev Sharma, Adv.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This is a petition filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 for appointing an Arbitrator to decide the disputes
which have arisen between the parties under the Agreement dated 10.2.2010
for construction of Metro Staff Quarters at Kingsway Camp, Delhi, Phase-II.
2. On behalf of the respondents it is not disputed that there is an
Arbitration Clause 25, however, it is stated that the arbitration clause has
lapsed because the petitioner did not invoke the arbitration within 120 days
Arb. P. No. 65/2015 Page 1 of 4
of receiving an intimation from the Engineer-in-Charge that the final bill is
ready for payment.
3. The contention urged on behalf of the respondents is misconceived in
view of an amendment brought about to Section 28 of the Indian Contract
Act, 1872 and which specifies that any one party to a contract cannot destroy
rights which the other party has, merely because those rights are not
exercised within a specified period of time as stated under the contract.
Section 28 of the Indian Contract Act was specifically amended by
Amendment of the year 1997 and before which the legal position was that
parties by agreement could have destroyed rights if not exercised in a
particular period of time. Therefore, in view of the amended position of
Section 28 of the Indian Contract Act, it is no longer possible for the
respondents to contend that arbitration cannot be invoked merely because
the same was not invoked within 120 days of receiving an intimation from
the Engineer-in-Charge that the final bill is ready for payment.
4. Petitioner has given a notice for appointment of the Arbitrator to the
respondents on 14.1.2014. Respondents did not appoint the Arbitrator and
therefore in view of the judgment of the Supreme Court in the case of Deep
Trading Company Vs. Indian Oil Corporation and Ors. (2013) 4 SCC 35
Arb. P. No. 65/2015 Page 2 of 4
respondent has lost the right to appoint an Arbitrator and this Court has to
appoint an independent Arbitrator.
5. The contention of the counsel for the respondents that petitioner has
not invoked the disputes redressal mechanism as specified in the agreement
is also disputed on behalf of the petitioner, however, in view of the judgment
in the case of Ravindra Kumar Verma Vs. BPTP Ltd. 2015 (147) DRJ 175,
it is ordered that before the effective commencement of arbitration,
petitioner will take steps for enforcing the disputes redressal mechanism as
specified in the contract, if not so already done.
6. Counsel for the parties state that since disputed amount is not large in
this case, the matter be not referred to the Delhi High Court International
Arbitration Centre and an independent Arbitrator be appointed.
7. Accordingly, I appoint Sh. P.K. Saxena, ADJ (Retd.), Mobile
No.9910384668 as an Arbitrator to decide the disputes and differences
between the parties which are the subject matter of the present petition.
Arbitrator will be paid a lumpsum fee of Rs.1,10,000/- plus out of pocket
expenses provided the parties ensure that the entire arbitration proceedings
are concluded within 15 hearings. Costs of arbitration will be shared
equally. 50% of the fee will be payable at the initial stage and balance 50%
Arb. P. No. 65/2015 Page 3 of 4
will be payable on completion of evidence. With consent it is recorded that
in case any of the parties seeks unnecessary adjournments, the Arbitrator
will be entitled to impose costs on the party seeking unnecessary
adjournments.
8. The petition is allowed and disposed of accordingly.
9. Parties to appear before the Arbitrator for further proceedings on 25th
August, 2015 at 4.00 PM. Arbitrator will endeavour to complete the
arbitration proceedings within one year of receipt of the copy of the present
judgment.
JULY 28, 2015 VALMIKI J. MEHTA, J.
ib
