Delhi High Court
B K Structural Contracts Pvt. Ltd. vs Gati Kausar India Ltd. on 9 October, 2018
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 9.10.2018
+ ARB.P. 372/2018
B K STRUCTURAL CONTRACTS PVT. LTD. ..... Petitioner
Through: Mr. L.B. Rai and Mr. Mohit Kumar
Sharma, Advs.
versus
GATI KAUSAR INDIA LTD. ..... Respondent
Through: Mr. Koonal Tanwar, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J. (ORAL)
1. This is a petition filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (for short '1996 Act') for appointment of an
Arbitrator.
2. Notice in this petition was issued on 21.5.2018.
2.1 Notice was made returnable on 27.7.2018.
2.2 On that date, the respondent was given time to file a reply to the
petition.
2.3 Despite time having been given, no reply has been filed.
2.4 Mr. Tanwar, who, appears for the respondent, seeks another
opportunity to file a reply.
2.5 According to me, no further opportunity can be given as nearly five
(5) months have passed since notice was issued and nearly two and half
(2½) months have passed since opportunity was given to file a reply.
3. The record shows that the respondent had invited a tender for
construction of a Cold Storage Plant, which, appears, had to be constructed
at Shamirpet, Hyderabad.
3.1 Pursuant to the tender, bids were invited by the respondent via its
Architect, one, M/s. Aashray Design and Consultant Pvt. Ltd. (in short
'ADCL').
3.2 The bids were to be filed with ADCL at its office located at K-8, First
Floor, South Extension, Part-I, New Delhi-110049.
4. The record shows that the petitioner was declared successful and,
accordingly, a Letter of Intent (LOI) dated 26.11.2016 was issued in its
favour.
4.1 The total value of the contract was pegged at Rs.3,50,00,000/-. The
petitioner gave its formal acceptance vide communication dated 28.12.2016.
4.2 The record also shows that pursuant to the aforesaid steps having been
taken an agreement dated 29.12.2016 was executed between the parties.
5. According to the petitioner, it was paid a sum of Rs.13 lacs against
the 1st R.A. Bill raised for a sum of Rs.13,25,000/-.
6. The petitioner's grievance principally is that its 2nd R.A. Bill was not
paid and that the respondent, instead, proceeded to terminate the contract.
7. To ventilate its grievance, the petitioner issued a legal notice dated
17.11.2017. Via this notice, demand for payment of outstanding amount is
made.
7.1 The respondent, however, vide its reply dated 4.12.2017 disputed the
demand raised by the petitioner.
7.2 The petitioner followed the aforementioned legal notice with another
notice dated 13.12.2017 which was served on ADCL.
8. Since, as per the Clause 6.29 of the agreement obtaining between the
parties, the notice had to be served on the Principal Architect i.e., M/s.
Aarch Associates, Architects and Engineers. A fresh notice dated 3.3.2018
was taken out and served on the aforementioned Principal Architect.
8.1 It appears that the Principal Architect did not take the matter further.
Being aggrieved, the petitioner approached this Court via the instant
petition.
9. As indicated above, the respondent has chosen not to file a reply.
10. The respondent, however, is represented by Mr. Tanwar.
10.1 The learned counsel has raised two objections.
10.2 Mr Tanwar's first objection is pivoted on the provisions of Clause
6.12 of the agreement. It is submitted that the respondent had the right to
terminate the uncompleted part of the Contract under the said clause and in
case such a situation the petitioner was disentitled from claiming
compensation.
10.3 Mr Tanwar's second objection is with regard to the jurisdiction of this
Court to entertain the instant petition.
10.4 According to me, both the objections are untenable for the reason that
Clause 6.12 only states that if in any unforeseen circumstance the owner
decides to cancel/or postpone the execution of the project it would be
entitled to terminate the contract for the uncompleted part without being in
any way liable for the payment of compensation to the petitioner i.e., the
contractor.
10.5. Furthermore, the clause says that the contractor shall prepare the final
bill of all completed works and the work in progress for final settlement.
The clause also says that the decision of the owner i.e., the respondent, in
such a situation shall be final and binding on the parties.
10.6 This clause, to my mind, cannot impede the appointment of an
Arbitrator.
10.7 In my opinion all that can be said in favour of the respondent is that
the aspect concerning the purported bar to claim for compensation under
clause 6.12 of the agreement obtaining between the parties may form part of
the defence that the respondent may likely take before the Arbitrator but
surely it cannot come in way of the petitioner seeking relief from this Court
that an Arbitrator ought to be appointed.
11. Insofar as the second objection is concerned, which is, that this Court
has no jurisdiction, I may only advert to the averments made in paragraph 22
of the petition with regard to jurisdiction.
11.1 For the sake of convenience, the averments made therein are extracted
hereafter:
"22. That the Petitioner submits that the tender was
invited by the Architect of the Respondent at Delhi. The
Petitioner participated in the tender at Delhi. The tender of the
Respondent was accepted by the petitioner at Delhi, after
detailed discussions with the Architect in his office at Delhi,
after which the Architect gave the sanction for commencement of
the work. The work was thus awarded to the Petitioner at Delhi.
The office of the respondent is situated in Delhi. Therefore this
Hon'ble Court has got jurisdiction to try and entertain the
present Petition at Delhi."
11.2 The record shows, as indicated above, that the bids were, in fact,
invited by the respondent via ADCL, which is located in Delhi.
11.3 The contract was also executed in Delhi as is evident from a bare
reading of the agreement obtaining between the parties.
12. Under these circumstances, as indicated above, I have no hesitation in
saying that this objection is also misconceived.
13. Accordingly, the petition is disposed of with the following directions:
(i) Mr. A.K. Garg, former Additional District Judge, (Cell
no.9871158800) is appointed as an Arbitrator in the matter.
(ii) The learned Arbitrator will be paid a fee as per the provisions of the
Fourth Schedule of the 1996 Act.
14. The Registry will dispatch a copy of this order to the learned
Arbitrator.
RAJIV SHAKDHER, J
OCTOBER 03, 2018
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