Natconn Engineering Pvt. ... vs Jitf Water Infrastructure ...
2016 Latest Caselaw 3399 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    Judgment delivered on May 09, 2016
+      O.M.P.(T) (COMM.) 34/2016

       NATCONN ENGINEERING PVT. LTD.
       (NEPL)                          ..... Petitioner
                   Through: Mr. A. Mishra,Adv.

                        versus


    JITF WATER INFRASTRUCTURE
    LIMITED                             ..... Respondent
                  Through: Mr. A.S. Chandiok, Sr. Adv.
                           with Mr. Rajesh Chhetri, Mr.
                           Upadhyay, Mr. Rajeev
                           Chhetri, Mr. Akash, Mr. R.
                           Sharma, Ms. Meenakshi
                           Rawat,Advs.
CORAM:
HON'BLE MR. JUSTICE V.KAMESWAR RAO
V.KAMESWAR RAO, J. (Oral)

1. This Petition has been filed under Section 14 of the

Arbitration and Conciliation Act, 1996 challenging the order dated

16th April, 2016 passed by the learned Arbitrator with the following

prayers:

"a. Allow the present petition by setting aside the impugned order dated 16.04.2016 passed by the Ld. Sole Arbitrator Shri V K tyagi in the arbitration proceedings between M/s JITF Water Infrastructure Limited vs M/s Natconn Engineering Private Limited and decide on the

OMP (T) Comm. 34/2016 Page 1/9 termination of the mandate of the Ld. Sole Arbitrator.

b. Replace the Ld. Arbitrator by the new arbitrator duly appointed by this Hon'ble Court in exercise of its powers under section 14 of the Act.

c. Pass any such further and/ or other orders as this Justice Hon 'ble Court may deem fit and proper in the interest of justice."

2. In the impugned order, learned Arbitrator has rejected I.A.

1/2016 filed by the petitioner herein challenging the very

appointment of learned Arbitrator on the ground that the

appointment was not by the Vice-Chairman and Managing Director

of the respondent company.

3. The petitioner's contention was letter dated 2nd November,

2015 appointing Mr. V.K. Tyagi as the sole Arbitrator by

Mr. Indresh Batra, who is admittedly not the Managing Director of

the respondent Company. Petitioner also contended that even if

Indra Batra is not the Managing Director of the respondent Company

and even assuming that he is the Vice-Chairman of the respondent

Company, the Arbitrator could not have been appointed without the

Managing Director of the respondent Company and in that

OMP (T) Comm. 34/2016 Page 2/9 eventuality, the mandate of the learned Arbitrator shall be terminated

if he becomes de-jure unable to perform functions.

4. The respondent's case was that Mr. Rakesh Grover serves as

the Managing Director and Vice-Chairman of the respondent

company and clause 20.3 of the agreement empowers the Vice-

Chairman / Managing Director of the respondent company to

appoint a sole Arbitrator.

5. It was also the stand of the respondent that Mr. Rakesh Grover

being the Vice-Chairman and Managing Director of the Company

had duly appointed Mr. V.K. Tyagi as the sole Arbitrator on 30th

October, 2015. It was also the stand that Mr. Indresh Batra who

while sending the communication dated 2nd November, 2015 has

inadvertently referred that the learned Arbitrator has been appointed.

However, immediately noticing the anomaly, rectification in this

regard was issued on 3rd November, 2015 by Mr. Rakesh Grover,

Vice-Chairman / Managing Director of the respondent Company.

6. The reasoning of the learned Arbitrator while rejecting the

application is mentioned in Para 19 and 20 of the order of the

learned Arbitrator, which I reproduce as under:-

OMP (T) Comm. 34/2016 Page 3/9 "19. I have considered all the documents and submissions made by the parties with regard to my appointment as Arbitrator. As narrated here-in-before, the Claimant through their reply have clarified the entire position leading to the appointment of myself as Arbitrator. The claimant has also filed the copy of the letter dated 15th March, 2016 from Shri Rakesh Grover, VC & MD of the Claimant Company reiterating and reaffirming the appointment of myself as Sole Arbitrator which in the first instance had been communicated vide Shri Indresh Batra's letter dated 3rd November, 2015. After this submission dated 15th March, 2016 from Shri Rakesh Grover, who is the Vice-Chairman and Managing Director of the Company, no controversy really remains to be resolved in respect to the appointment of myself as Arbitrator. The IA-1/2016 does not merit any consideration on this account as well.

20. With the aforesaid facts of the case, I V.K. Tyagi did not consider it necessary to recuse and withdraw from the present arbitral proceedings as Sole Arbitrator as no case has been made out by the Respondent in I.A.- 1/2016 either under law or facts as narrated here-in- below."

7. During the course of the submissions, learned counsel for the

petitioner has reiterated the stand as was taken before the learned

Arbitrator. That apart he has drawn my attention to various

documents.

8. It is the contention of the learned counsel for the petitioner

that appointment of Mr. V.K. Tyagi, as the sole Arbitrator by Mr.

Indresh Batra is illegal and the mandate of the learned Arbitrator

needs to be set aside in terms of prayer made in the petition.

OMP (T) Comm. 34/2016 Page 4/9

9. Mr. Amarjeet Singh Chandiok, learned Sr. Counsel appearing

on behalf respondent relied upon the documents, i.e., Board

Resolution dated 21st September, 2015 and as per resolution Mr.

Rakesh Grover, whole-time Director was re-designated as Vice-

Chairman and Managing Director and has referred to ROC

(Registrar of Companies) Form DIR-12 to contend that Mr. Rakesh

Grover was appointed as the Managing Director on 15 th October,

2015 itself. In other words, it is his case that Mr. Rakesh Grover,

being the competent authority has rightly issued the appointment

letter of Mr. V.K. Tyagi as the sole Arbitrator.

10. On 2nd May, 2016, learned counsel for the petitioner was

granted time to file response to the documents filed by

Mr. A.S. Chandiok, which were not a part of the arbitral record.

11. In his submission, learned counsel for the petitioner would

submit that Board Resolution dated 21st September, 2015 was

allegedly available with the respondent and was not filed with the

reply before the Arbitrator. Hence the said document cannot be

allowed to be relied upon by the respondent at this stage under the

alleged ground of inadvertent error.

OMP (T) Comm. 34/2016 Page 5/9

12. He also states even the document dated 28th November, 2015

was signed by Mr. Rakesh Grover as whole-time Director when on

that date Resolution dated 21st September, 2015 was already in

place. He states similar is the position with Extraordinary General

Meeting held on 15th October, 2015, wherein Mr. Rakesh Grover had

signed the document as a whole-time Director. In order words, it is

his submission that in terms of documents dated 15th October, 2015

and 28th November, 2015, which were executed after 21st September,

2015, when Mr. Rakesh Grover was alleged to have been designated

as Vice-Chairman and Managing Director, yet he signs the

documents dated 15th October, 2015 and 28th November, 2015 as

whole-time Director warrants consideration and cannot be left in

abeyance.

13. It is also stated there was no reasoning given as to why these

documents were not filed along with the reply on 17th March, 2016.

It is also his submission, the document dated 3rd November, 2015 on

which reliance was placed was not in-existence as on that date and

has been prepared afterwards.

14. Having considered the submissions both oral and written

submission of the learned counsel for the petitioner and Mr. A.S.

OMP (T) Comm. 34/2016 Page 6/9 Chandiok, learned Sr. Counsel for the respondent, the plea raised by

the learned counsel for the petitioner is that Mr. Rakesh Grover was

not the Vice-Chairman and CMD of the respondent Company and

such the appointment of Mr. V.K. Tyagi as the sole Arbitrator by

Mr. Indresh Batra is not proper and the mandate of the Arbitrator

needs to be set aside.

15. Suffice to state that the respondent has relied upon the Board

Resolution dated 21st September, 2015. Pursuant thereto, the

documents of the Registrar of the Companies shows the appointment

of Mr. Rakesh Grover as the Managing Director on 15th October,

2015. In the written submissions now filed by the learned counsel

for the petitioner the resolution dated 21st September, 2015 re-

designating Mr. Rakesh Grover as Vice-Chairman and MD of the

Company has not been disputed. Even the record of the ROC has

not been disputed. The only contention is that when in the

subsequent documents of 15th October, 2015 and 28th November,

2015, Mr. Rakesh Grover had signed them as a whole-time Director

of the Company, the same would nullify the documents dated 21st

September, 2015 and ROC record. I am unable to agree with the

learned counsel for the petitioner.

OMP (T) Comm. 34/2016 Page 7/9

16. The signing of the documents dated 15th October, 2015 and

28th November, 2015 by Mr. Rakesh Grover as a whole-time

Director would not imply that he was not re-designated as Vice-

Chairman and Managing Director of the Company. That apart, I

note before appointment of Mr. V.K. Tyagi as the Arbitrator, Mr.

Rakesh Grover addressed a letter dated 31st October, 2015 to Mr.

Indresh Batra wherein he states as under:

"Date: October 30/31, 2015 Dear Batraji,

Since Sri V K Tyagi has given his consent to act as Sole Arbitrator in respect of dispute between JWIL and NATCONN, I hereby appoint him a Sole Arbitrator to adjudicate upon the dispute. I will request Sri V K Tyagi to make an endeavour to finalise the dispute at the earliest.

You, may accordingly send a letter to Sri Tyagi, intimating his appointment as Arbitrator with a copy to me."

17. It appears that Mr. Indresh Batra issued a letter dated 2nd

November, 2015 on the basis of this communication of Mr. Grover.

In the said communication, i.e., 30/31st October, 2015, Mr. Rakesh

Grover, has clearly stated that Mr. V.K. Tyagi has given his consent

to act as a sole Arbitrator and it is Mr. Rakesh Grover, who is

appointing him as the sole Arbitrator to adjudicate upon the disputes.

OMP (T) Comm. 34/2016 Page 8/9

18. If this letter is read in conjunction with the Minutes of the

Board resolution dated 21st September, 2015 and the ROC record, it

is clear that Mr. V.K. Tyagi, was rightly appointed by Mr. Rakesh

Grover, who was the Vice-Chairman / MD of the Company.

19. In view of above, I do not find any merit in the instant

petition. Same is accordingly dismissed.

I.A. No. 5362/2016

Dismissed as infructuous.

                                               (V.KAMESWAR RAO)
                                                    JUDGE

MAY 09, 2016
jg




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