Delhi High Court
M/S Sam India Built Well (P) Ltd. vs Union Of India & Anr. on 8 September, 2017
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 08.09.2017
+ ARB.P. 106/2017
M/s SAM INDIA BUILT WELL (P) LTD. ..... Petitioner
Through Mr.Vivekanand, Advocate
versus
UNION OF INDIA & ANR. ..... Respondents
Through Mr.Praveen Kumar Jain, Advocate
with Sh.A.K.Jalan, Executing
Engineer.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.(ORAL)
1. This petition is filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeking
appointment of an arbitrator to adjudicate the disputes between the parties.
2. Some of the relevant facts are that the work for construction of Head
Quarter building of Punjab National Bank, Sector 10, Dwarka, New Delhi
was awarded to the petitioner on 16.06.2012. The work is said to have been
completed on 04.11.2013 against the stipulated date of completion of
26.02.2013. On 23.09.2014, the petitioner requested for arbitration to
adjudicate the disputes that had arisen between the parties. On 22.10.2014,
the concerned authority appointed the sole arbitrator to adjudicate the
dispute/claim of the petitioner. The learned arbitrator entered into reference
and passed the award on 24.08.2015. The respondents had accepted the
award and made payment to the petitioner in terms of the award dated
ARB.P. 106/2017 Page 1 of 5
24.08.2015. Pursuant to this payment, the petitioner had also on 24.10.2015
issued an NOC to the respondents.
3. It is the case of the petitioner that on 08.05.2015, i.e. just three months
prior to the award, the respondent took out a circular pointing out the rates
for the monthly cost indices under clause 10(C)(A) issued for Delhi
including NOIDA, Gurgaon, Faridabad and Ghaziabad by the CPWD
Directorate for TMT 500 bars issued upto May, 2013, which were all based
on the rates of SAIL only. Thereafter from June, 2013 onwards these were
on the basis of the minimum of the rates of JSPL, JSW and SAIL. The
circular further states that some of the officers have not taken action due to
which some ambiguity has arisen in the payment of variation under clause
10(C)(A) in the contracts under their charge, which were entered into before
May, 2013. Relevant provisions of the circular read as follows.
"2. Prior to issue of abovesaid O.M., the rates for the
monthly cost indices of 10 CA issued for Delhi including
NOIDA, Gurgaon, Faridabad and Ghaziabad by the CPWD
Directorate for TMT 500 bars were issued up to May, 2013,
which were all based on the rates of SAIL only. Thereafter from
June, 2013 onwards these were on the basis of the minimum of
the rates of JSPL, JSW and SAIL.
.....
4. It has come to the notice of this Directorate that above
said action has not been taken by many of the SDGs/ADGs/CEs
due to which some ambiguity has arisen in the payment of
variation under clause 10 CA in contracts under their charge,
which were entered into before May, 2013. In such cases
respective SDGs/ADGs/CEs may take the necessary appropriate
corrective action for 10 CA indices on case to case basis if
already demanded by contractors.
5. The rates of SAIL for TMT 500 steel reinforcement as
considered by this office far 10CA for the period from May,
ARB.P. 106/2017 Page 2 of 5
2013 to Feb., 1015 for Delhi NCR Region are given in
Annexure-A to take appropriate necessary action."
6. Based on this circular, it is the contention of the petitioner that as the
contract was completed on 04.11.2013 i.e. after May, 2013, the petitioner is
entitled to the benefits as stated in the circular dated 08.05.2015. He submits
that the circular has come to his knowledge recently after passing of the
award and hence, the new bills based on this circular have been raised on the
respondents. He further submits that this particular dispute may be referred
for arbitration.
7. The learned counsel appearing for the respondents has opposed the
present petition on the following grounds:
i) He submits that the claim of the petitioner is barred under Order 2
Rule 2 CPC inasmuch as the petitioner has raised all the claims at the time
of first invocation of the arbitration clause. He relies upon judgment of the
Division Bench of this court in the case of Delhi Development Authority v.
Alkarma, AIR 1985 Delhi 132 to support his contention.
ii) He further submits that after receipt of the payment pursuant to the
award dated 24.082015, the petitioner has given an NOC on 24.10.2015
based on the entire claims raised by him. He submits that the arbitration
agreement stands merged in the award and nothing survives to adjudicate.
To this effect, he relied upon the judgment of the Calcutta High Court in the
case of Sudhir Kumar Saha And Ors. vs J.N. Chemicals Private Ltd. And
Ors., AIR 1985 Cal. 454.
8. The fact of the matter is that the dispute which is sought to be referred
to arbitration has its genesis in the office memorandum dated 08.05.2015
issued by the respondents themselves. The petitioner is seeking reference of
ARB.P. 106/2017 Page 3 of 5
the dispute which arise out of and relates to the said office memorandum
dated 08.05.2015. When the original claim petition was filed, there was no
occasion for the petitioner to seek adjudication of the disputes which relate
to or arise out of the said Office Memorandum dated 08.05.2015 as this has
been issued subsequently.
Even otherwise, it is settled legal position that successive reference
under the same arbitration agreement is permissible if two separate cause of
action arise at different stages of the arbitration agreement (Ref: Dolphin
Drilling Ltd. v. ONGC, 2010 3 SCC 267).
9. Under amended Arbitration and Conciliation Act, 1996, Section
11(6A) has been added, which reads as follows:
"The Supreme Court or, as the case may be, the High Court,
while considering any application under sub-section (4) or
sub-section (5) or sub-section (6), shall, notwithstanding any
judgment, decree or order of any court, confine to the
examination of the existence of an arbitration agreement."
10. In the above context reference may be had to the judgment of the
Division Bench of the Madras High Court in the case of Jumbo Bags Ltd. v.
The New India Assurance Co.Ltd., 2016 (3) CTC 769/
(MANU/TN/0353/2016), wherein the court in para 20 held as follows:
"20. The relevant submissions of the learned counsel for
the parties have been examined.
I. Whether the amended provisions as per the Arbitration
and Conciliation (Amendment) Act, 2015 will apply?
There can be little doubt, in the context of the pleas
advanced on the issue of reference of disputes to
arbitration as to whether the issue proceeds under the
unamended Act or the amended Act does have an impact.
The introduction of Section 11(6-A) of the Arbitration
and Conciliation (Amendment) Act, 2015 thus seeks to
ARB.P. 106/2017 Page 4 of 5
restrict the scope of scrutiny by the court only in the case
of existence of an arbitral agreement. Thus, in a sense,
whether the particular aspect would fall within the scope
of the arbitration clause or not, or whether arbitration
would be the appropriate remedy itself would be issues to
be placed before the arbitrator. However, while
introducing this amendment, Section 26 makes it quite
clear that unless the parties agree, the provisions of the
principal Act would continue to apply and those
provisions would be applicable only to the arbitral
proceedings commenced on or after 23.10.2015."
11. Under the aforesaid newly added provision, the court has to confine
itself while considering any application under Section 11(6) to the
examination of the existence of an arbitration agreement. The issues which
have been raised by the respondents, namely, about the claim being barred
under Order 2 Rule 2 CPC or in terms of the earlier award an NOC is issued
by the petitioner are left open to be adjudicated upon by the learned
arbitrator.
12. Accordingly, leaving all the issues raised by the respondent open, a
direction is issued to the respondents to appoint an arbitrator in terms of the
arbitration clause within four weeks from today. The petition is disposed of.
JAYANT NATH, J.
SEPTEMBER 08, 2017/v
