Delhi High Court
Gupta Bros Interiors And ... vs Guddu Investmetns (Delhi) Pvt. ... on 25 July, 2017
$~OS-34
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 25.07.2017
+ ARB.P. 260/2017
GUPTA BROS INTERIORS AND
INFRATECH PVT. LTD. ..... Petitioner
Through Mr.S.K.Maniktala, Adv.
versus
GUDDU INVESTMETNS (DELHI) PVT. LTD. ..... Respondent
Through Mr.Sanjiv K.Jha, Adv.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.(Oral)
IA No.4600/2017
Exemption allowed, subject to all just exceptions.
ARB.P. 260/2017
1. This petition is filed under section 11(6)(a) of the Arbitration and
Conciliation Act, 1996 seeking to appoint a nominee arbitrator on behalf of
the respondent. The brief facts as stated in the petition are that the petitioner
is engaged in the business of Civil Constructions and Interiors & Designing.
The petitioner was awarded the work of Construction of Support Staff
Housing at Dadri, Gautam Budh Nagar, Uttar Pradesh. Agreement dated
26.8.2014 was executed between the parties. Thereafter a Settlement
Agreement dated 13.10.2016 was executed between the parties.
2. The respondent has entered appearance and has filed his reply. In the
reply it has been pointed out that pursuant to certain disputes between the
parties, a Settlement Agreement was executed on 13.10.2016 which has
been fully performed by both the parties. The Contract stands discharged by
performance and no dispute survives between the parties. Hence, it is urged
that the present petition be dismissed.
3. I have heard learned counsel for the parties. Learned counsel
appearing for the petitioner has vehemently argued that the Settlement
Agreement between the parties dated 13.10.2016 has not been fully
complied with by the respondent. He further relies upon an alleged draft
invoice dated 14.10.2016 which he submits was transmitted to the petitioner
by the respondent after the Settlement Agreement. He submits that as per the
said draft invoice a sum of Rs.8,34,92,099 crores was due and payable to the
petitioner. He submits that in terms of the Agreement this amount has not
been paid and hence there is a dispute. He further seeks recovery of
Rs.34,24,606/- as retention money said to have been withheld by the
respondent. He further states that a further sum of Rs.46,31,300/- was
withheld on account of deductions made as the petitioner did not furnish
performance bank guarantee. He further submits that these two amounts
form part of the 8.34 crores which are reflected in the draft invoice remitted
by the respondent. Hence, he submits that dispute still persists between the
parties and the matter is liable to be referred to arbitration.
4. Learned counsel for the respondent has stated that pursuant to
Settlement Agreement dated 13.10.2016 no disputes survive between the
parties. He further point out that there is no arbitration agreement between
the parties in the original agreement. The arbitration agreement is contained
in the Settlement Agreement dated 13.10.2016. He submits that in case there
are any differences as wrongly claimed by the petitioner they cannot be
subject matter of the arbitration petition as these alleged claims are not
arising out of or relating to the Settlement Agreement. These alleged claims
pertain to and arise out of the original agreement between the parties.
5. Some of the relevant terms of the Settlement Agreement dated
13.10.2016 read as follows:-
"2. The Company has already paid a sum of
Rs. 6,28,42.394/- (Six Crores Twenty Eight Lacs Forty
Two Thousand Three Hundred & Ninety Four) to the
Contractor under the scope of Contract. The receipt of
which is hereby acknowledged by the Contractor.
3. Company will pay Rs. 125,93,800/- (One Crore
Twenty Five Lacs Ninety Three Thousand & Eight
Hundred) to Contractor (including all taxes & Duties,
VAT/WCT, Service Tax,Labour Cess & other applicable
taxes) as full & final amount on submission of all
documents. The Company will make the necessary
deductions as per the prevailing laws and give the
certificates to the Contractor.
4. This is in accordance to the reconciliation forming part
of this Settlement Agreement signed between both the
parties and as to this Agreement.
5. This Agreement is in full and final settlement of any
causes of action whatsoever which the Parties have
against each other and of all the dues in respect of
Construction of Housing for Support Staff at Dadri
Gautam Buddh Nagar,(U.P) rendered by Contractor to
Company as described in the proposal and Contract
Agreement Dated 26th August,2014.
6. In consideration of Company making full and final
payments against all the invoices till date of signing of
this Agreement within the terms of above said Contract
Agreements, Contractor hereby confirms that it does not
have any further claim or demand and releases/discharges
the Company and its Directors, its employees and
consultants from any and all claims and demands with
respect to work and services rendered by Contractor.
7. This agreement supersedes all previous agreements
between the Parties."
6. It is clear from the above that in terms of the aforesaid settlement
dated 13.10.2016 the respondent was to pay a sum of Rs.1,25,93,800/- in
full and final settlement of all dues to the petitioner. Clause 4 of the
agreement notes that this figure has been arrived at in accordance to the
reconciliation which forms part of the Settlement Agreement. Clause 5
further notes that the Agreement is in full and final settlement of any cause
of action whatsoever which the parties have against each other in respect of
Construction of Housing for Support Staff. Clause 7 further notes that this
agreement supersedes all previous agreements between the parties.
7. The admitted position is that the petitioner has received a said sum of
Rs.1,25,93,800/- less deductions as per prevailing law. These deductions are
on account of WCT, TDS and Labour Cess. This is clear from the averments
in para 1, 2 and 3 of the reply filed by the respondent to which there is no
specific denial in the Rejoinder.
8. It is manifest that on execution of the Settlement Agreement and
implementation of the Agreement, no disputes survive between the parties.
Reliance by the petitioner on the alleged final bill said to have been
communicated to the petitioner has no meaning in view of the Settlement
Agreement between the parties. The said final bill does not seek in any
manner to amend, modify or alter the terms of the Settlement Agreement.
There is no such clause in the bill. It is an unsigned document. This
document does not alter the Settlement Agreement. As no dispute survives
between the parties there can be no appointment of an Arbitrator.
9. The Supreme Court in the case of Nathani Steels Ltd. vs. Associated
Constructions, 1995 Supp (3) SCC 324 held as follows:-
"3. .... Even otherwise we feel that once the parties have arrived
at a settlement in respect of any dispute or difference arising
under a contract and that dispute or the difference is amicably
settled by way of a final settlement by and between the parties,
unless that settlement is set aside in proper proceedings, it cannot
lie in the mouth of one of the parties to the settlement to spurn it
on the ground that it was a mistake and proceed to invoke the
Arbitration clause. If this is permitted the sanctity of contract, the
settlement also being a contract, would be wholly lost and it
would be open to one party to take the benefit under the
settlement and then to question the same on the ground of
mistake without having the settlement set aside. In the
circumstances, we think that in the instant case since the dispute
or difference was finally settled and payments were made as per
the settlement, it was not open to the respondent unilaterally to
treat the settlement as non est and proceed to invoke the
Arbitration Clause. We are, therefore, of the opinion that the
High Court was wrong in the view that in took."
10. The aforesaid legal position has also been upheld by the Supreme
Court in the case of Union of India & Ors. Vs. Hari Singh, (2010) 15 SCC
201.
11. In view of the above judgments, once the parties have arrived at a
settlement in respect of their disputes, it does not lie for one of the parties to
spurn the settlement as is sought to be done in the present case. No disputes
now survive between the parties.
It is also noteworthy in the present case that the arbitration clause is
contained in the Settlement Agreement dated 30.10.2016. The claims which
are sought to be raised by the petitioner pertain to the original contract
which does not have an arbitration clause.
12. Accordingly, there is no merit in the petition and same is dismissed.
All pending applications, if any, also stand disposed of.
JAYANT NATH, J.
JULY 25, 2017/n
