Bridge & Roof Co. (India) Ltd. vs Guru Gobind Singh Indraprasth ...
2017 Latest Caselaw 4827 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                       Date of Decision: 07.09.2017

+     O.M.P. (COMM) 296/2017
      BRIDGE & ROOF CO. (INDIA) LTD.    ..... Petitioner
                   Through    Mr.M.K.Ghosh and Ms.Tina Garg,
                   Advs.

                          versus

      GURU GOBIND SINGH INDRAPRASTH
      UNIVERSITY & ANR.                   ..... Respondent

Through Mr.Mukul Talwar, Sr.Adv. with Mr.Abhay Chattopadhyay, Advs. for R-1

CORAM:

HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.(Oral)

1. This petition is filed under section 34 of the Arbitration and Conciliation Act, 1996 seeking to impugn the order/Award passed by the learned Arbitrator on 17.4.2017 terminating the proceedings on account of the failure of the petitioner in filing the Statement of Claim within the period stated by the learned Arbitrator.

2. Some of the relevant facts are that on 1.11.2006 the Work of Construction and Development of GGSIPU Campus at Sector 16-C Dwarka of the respondent was awarded to petitioner vide Letter of Intent No. GGSIPU/UWD/2006/293-III/3236 dated 01.11.2006. On 20.11.2011 completion certificate was issued by the Engineer-in-charge of the Project. Disputes having arisen between the parties the petitioner invoked the

Arbitration clause on 12.9.2016. On 10.11.2016 the Registrar of the respondent University appointed a Sole Arbitrator. The learned Sole Arbitrator entered into reference on 16.11.2016 and fixed the date for hearing on 21.12.2016. On 21.12.2016 the schedule for completion of pleadings was fixed and the matter was adjourned to 17.4.2017.

3. It is the case of the petitioner that the petitioner on 25.1.2017 raised an objection regarding the appointment of the Sole Arbitrator and sent a letter of protest to the respondent. On 7.4.2017 the Registrar of the respondent has replied to the said communication of the petitioner and has rejected the request of the petitioner.

4. Thereafter on the second hearing on 17.4.2017 the record reveals that none appeared for the respondent and even the Statement of Claim was not filed. Accordingly, the learned Arbitrator has terminated the proceedings. Subsequently, the petitioner also sent a letter to the learned Arbitrator to recall the order of the learned Arbitrator dated 17.4.2017. The learned Arbitrator on 24.6.2017 had rejected the said request of the petitioner noting that the arbitral proceedings have been terminated and there was no valid cause or authority with the learned Arbitrator to recommence the same.

5. I have heard learned counsel for the parties.

6. Learned counsel for the petitioner has urged that the petitioner had raised certain objections about appointment of the learned Arbitrator as is evident from the letter dated 25.1.2017 which has been written to the respondent. Hence, he submits that the claim petition was not filed as the respondent intimated the rejection of the request of the petitioner only a few days before 17.4.2017 i.e. the date of hearing. It is urged that termination of the proceedings has caused grave injustice to the petitioner. Learned

counsel for the petitioner also submits that in the eventuality if this court was to remand the parties back to the learned Arbitrator the petitioner will not raise objections under section 13 of the Act regarding the impartiality of the learned Arbitrator.

7. Learned senior counsel appearing for the respondent has submitted that the present petition is not maintainable under section 34 of the Act and the remedy available to the petitioner was to file a proper petition under section 14(2) of the Act. He relies upon judgment of a co-ordinate bench of this court in Gangotri Enterprises Limited vs. NTPC Tamil Nadu Energy Company Limited, 237(2017) DLT 690 to support his submission. He further points out that the respondents on account of the negligent conduct of the petitioner have been burdened with unnecessary costs. He submits that the respondents have paid the fees of Rs.50,000/- to the learned Arbitrator whereas the petitioner has not paid any fee of the learned Arbitrator. He further submits that even the respondents had to bear the burden of the present proceedings. He further submits that the learned Arbitrator has rightly terminated the proceedings.

8. A perusal of the order of the learned Arbitrator would show that the first hearing took place on 21.12.2016. In the second hearing on 17.4.2017 itself the learned Arbitrator has without giving any further opportunity to the petitioner terminated the arbitral proceedings under section 25(1) of the Act.

9. It is manifest that the petitioner has been pursuing the proceedings. The learned Arbitrator was appointed on the invocation of the arbitration clause by the petitioner. The petitioner has appeared on the first hearing that took place on 21.12.2016 and then there was one default on behalf of the petitioner on 17.4.2017. The action of the Arbitrator in terminating the

proceedings on one default of the petitioner is too harsh. It is in the interest of justice that the petitioner is given an appropriate opportunity to pursue his claim.

10. Regarding the objections of the learned senior counsel for the petitioner about maintainability of the present petition, the Coordinate Bench of this court in Gangotri Enterprises Ltd. v. NTPC Tamil Nadu Energy Company Ltd., 237(2017) DLT 690 held that when the mandate of arbitrator is terminated as herein, the remedy of the aggrieved party is to approach this under Section 14(2) of the Act.

11. This court had relied upon the judgment of the Supreme Court in the case of Lalitkumar V.Sanghavi (D) Th.L.Rs. Neeta Lalit Kumar Sanghavi & Anr. v. Dharamdas V.Sanghavi & Ors., (2014) 7 SCC 255. In that case, the Supreme Court was dealing with a matter where the learned arbitrator had noted that the claimant was taking no interest and the fees of the arbitrator had not been paid. The arbitration proceedings were accordingly terminated. In those facts, the Supreme Court held as follows:

"14. On the facts of the present case, the applicability of Sub- clauses (a) and (b) of Section 32(2) is clearly ruled out and we are of the opinion that the order dated 29th October, 2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, Sub-section (2), Sub- clause (c) i.e. the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the arbitral tribunal also comes to an end. Having regard to the scheme of the Act and more particularly on a cumulative reading of Section 32 and

Section 14, the question whether the mandate of the arbitrator stood legally terminated or not can be examined by the court "as provided under Section 14(2)"."

12. In view of the above legal position and in the interest of justice, I convert this petition into a petition under Section 14(2) of the Arbitration and Conciliation Act, 1996. The petitioner will file on record amended prayer clause of the petition and complete other formalities within one week from today. After completion of the formalities, the Registry may renumber this petition as a petition under Section 14(2) of the Act.

13. In view of the findings above, I set aside the order of the learned Arbitrator dated 17.4.2017, subject to payment of costs of Rs.50,000/-.

14. The matter is remanded back to the learned Arbitrator for commencement of arbitral proceedings. The petitioner will file a Statement of Claim before the learned arbitrator within four weeks from today. No further extension will be sought on this account.

15. Petition stands disposed of. All pending applications, if any, also stand disposed of.

16. A copy of this order be given dasti, as prayed.

JAYANT NATH, J SEPTEMBER 07, 2017 n