Delhi High Court
M/S Heritage Conservators ... vs Espire Resorts Private Limited ... on 5 November, 2020
$~13, 14, 15 and 16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on 5th November, 2020
+ ARB.P. 338/2020
+ ARB.P. 339/2020
+ ARB.P. 340/2020
+ OMP(I)(COMM) 326/2020
M/S HERITAGE CONSERVATORS THROUGH: ITS
PROPRIETOR MR. GURPREET SINGH ..... Petitioner
Through: Mr. Sanjay Bansal, Adv.
Versus
ESPIRE RESORTS PRIVATE LIMITED
(FORMERLY KNOWN AS COSMOS
BUILDWELL PRIVATE LIMITED) ..... Respondent
Through: Mr. Sacchin Puri, Sr. Advocate
with Ms. Mahjabeen, Mr.
Brijesh Chaudary, Ms. Pooja
Rani, Mr. Kamil Khan and Mr.
Sandeep Kumar, Advs.
CORAM:
HON'BLE MR. JUSTICE C .HARI SHANKAR
JUDGEMENT (ORAL)
% 05.11.2020
(Video-Conferencing)
C .HARI SHANKAR, J.
ARB.P. 338/2020, ARB.P. 339/2020 and ARB.P. 340/2020
Signature Not Verified 1. These three petitions, under Section 11(6) of the Arbitration and
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Conciliation Act, 1996, seek reference of disputes between the
petitioner and the respondent, which are interconnected and cognate in
nature, to arbitration by a sole arbitrator. Mr. Sacchin Puri, learned
Senior Counsel for the respondent, is agreeable to the disputes being
referred to a single arbitrator, as they are interconnected.
ARB.P. 338/2020
1. This arbitration petition under Section 11(6) of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to as "1996 Act"),
prays for appointment of an arbitrator to arbitrate on the disputes
between the parties.
2. Tenders were invited, by the respondent, for repair/conservation
work at a hotel proposed to be constructed on the Chouth Ka Barwara,
Sawai Madhopur, Rajasthan. The bid of the petitioner was accepted,
resulting in an offer dated 18th July, 2016, followed by Letter of Intent
dated 18th August, 2016. The total value of the contract was ₹
4,64,08,300/-, excluding service tax.
3. Three further work orders were issued by the respondent to the
petitioner, for carrying out additional items of work.
4. The petitioner asserts that the work, as contracted, was
completed by it, but that the respondent defaulted in releasing the
payments to the petitioner. It is averred, in the petition, that an
amount of ₹ 2,04,71,067/-, exclusive of GST, is due to be paid by the
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respondent to the petitioner. A grievance has also been ventilated, in
the petition, regarding the alleged change in the scope of the work
having been affected by the respondent midway, which, according to
the petitioner, resulted in delay in completing the contracted work.
5. As a result, it is averred that arbitrable disputes have arisen
between the parties which are required, as per Clause 44 of the Letter
of Intent dated 18th August, 2016, which is common to all the work
orders issued to the petitioner, to be referred to arbitration. The said
Clause reads thus:
"ARBITRATION
In the event that any dispute arises between the parties out of
or related to the provision to the order, either party may give
notice to the other party of its intention to submit the issues
specified in such notice. Either party may thereafter submit
the unresolved issue to arbitration. Arbitration shall be held
in accordance with the Arbitration and Conciliation Act 1996
by a sole Arbitrator to be Appointed by "COSMOS
BUILDWELL PVT. LTD." The venue of the arbitration shall
be New Delhi. The award will be final and binding between
the parties."
6. The disputes, which the petitioner seeks to refer to arbitration,
have been set out thus, in para 15 of the petition:
"Claim for release of Balance payments towards work done:
Rs.154,66,167/- without GST and GST @ 18% for value of
Rs.27,33,927/- subject to Invoice to be raised.
Claim for interest @18% p.a on this amount of 15466167/-
from the date of submission of bills till date of release of
payments.
Claim for release of Retention amount of Rs.2414424/- as
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deducted from R/A Bills.
Claim for Interest on delay in release of payments for running
bills, as stipulated time was 28 days for release of payments
from the date of submission of bill, but respondents had failed
to release the payments within stipulated period, hence
claimants are entitled to claim interest @ 18% from the date of
submission of running bill till date of release of payments:
Rs.3448505/-.
Claim for payment for the work of three sided North Boundary
wall for Value of Rs.52,78,371/-, for which the bill was
submitting upto 17th R/A bill, but the payments were not
released and had withhold the payments which was released
against the work of Boundary wall upto 14th R/A Bill. Further
interest @ 18% p.a is claimed on this amount from the date of
amount released was hold and further from the date of
submission of 17th R/A bill.
Claim for Damages under Doctrine of Damages and
Mitigation of Losses due to delay and prolongation of work
period beyond stipulated period i.t after 01.02.2018 till
25.07.2020 i.e about 30 months @ Rs 198500/- Per month
towards establishment, infrastructure and over heads: Rs
5955000/-.
Claim for escalation in the material as well as Labour cost on
the amount of work done beyond stipulated period @ 15% on
an average which comes to Rs.58,12,455/-.
Claim for Loss of profit @ 15% on the value of work
remained unexecuted at site which is taken at 15% of One
Crore which comes to Rs 15 lacs only.
Claim for interest @ 18% p.a on all above claims for pre-
reference, Pendent lite and future period and cost of
Arbitration. Claimants had already asked for release of all our
legitimate payments along with interest @ 18% p.a towards
work done in scores of letters and also informed that in case of
non-release of payments he shall take recourse to legal actions.
Claim for cost of arbitration and other legal and litigation
expenses as per actual is claimed in the present arbitration."
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
7. Vide letter, dated 29th July, 2020, addressed to the respondent,
the petitioner invoked the afore-extracted Clause 44 of the Letter of
Intent, and sought reference its claims for arbitration.
8. On 24th August, 2020, the respondent wrote to the petitioner,
stating that, vide letter dated 18th August, 2020, the respondent had
appointed an arbitrator to arbitrate on the disputes raised by the
petitioner.
9. The petitioner has approached this Court, under Section 11(6)
of the 1996 Act, citing the judgment of the Supreme Court in Perkins
Eastman Architects DPC v. HSCC (India) Ltd1, as well as Section
12(5) of the 1996 Act, to contend that the respondent could not be
empowered to appoint any arbitrator to arbitrate on the disputes, raised
by the petitioner.
10. Consequent to issuance of notice, a reply, to this petition, was
filed by the respondent, in which the applicability of Section 12(5) of
the 1996 Act and the decision of the Supreme Court in Perkins
Eastman Architects DPC1, has been contested on the ground that, by
writing on 29th July, 2020, to the respondent, requesting the
respondent to appoint an arbitrator, the petitioner had effectively
waived its right under Section 12(5) of the 1996 Act.
11. This contention, submits Mr. Sanjay Bansal, learned counsel for
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the petitioner, is not correct in law and cites in that regard, the recent
decision of this Court in JMC Projects (India) Ltd. v. Indure Private
Ltd2, in which this Court went into the issue of waiver of Section
12(5) of the 1996 Act, and held that the proviso to Section 12(5)
required express waiver of the applicability of the said provision.
12. In view thereof, Mr. Sacchin Puri, learned Senior Counsel
appearing for the respondent, on instructions, very fairly submits that
he did not seek to join issue on this aspect and that the disputes raised
by the petitioner could be referred to adjudication to a learned retired
Judge of this Court. He only submits that his rights to raise counter-
claim(s), before the learned sole arbitrator, should remain reserved.
13. In view thereof, the aforesaid disputes, raised by the petitioner,
stands referred to the arbitration of Hon'ble Mr. Justice Kailash
Gambhir, a learned retired Judge of this Court and an experienced
arbitrator. The address and mobile number of the learned arbitrator are
W-67,Greater Kailash Part -I, New Delhi-110048 and 9871300033
respectively.
14. The parties are directed to contact the learned sole arbitrator, as
per the aforesaid contact details, within two days, so that the
willingness of the learned sole arbitrator could be ascertained and
schedule of arbitration could be drawn up.
15. The learned sole arbitrator would furnish the requisite
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disclosure under Section 12 of the 1996 Act within a week or entering
on the reference.
16. The right of the respondent, to raise counterclaims before the
learned sole arbitrator, in accordance with law, stands reserved.
17. The learned sole arbitrator would be entitled to charge fees in
accordance with the Fourth Schedule to the 1996 Act.
18. This petition is disposed of accordingly.
ARB.P. 339/2020
1. This is an arbitration petition under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as
"1996 Act"), which prays for appointment of an arbitrator to arbitrate
on the disputes between the parties.
2. The dispute between the parties relates to a work order, dated
19th April, 2018, issued by the respondent to the petitioner, for casting
and finishing of a dome for Fort Barwara resort at Chouth Ka Barwara
Sawai Madhopur, Rajasthan. Urging that, despite completion of work,
several payments remained to be released by the respondent to the
petitioner, it is asserted that arbitrable disputes had arisen between the
parties. Clause 43 of the Letter of Intent/work order, which provides
for arbitration to resolve disputes between the parties, reads thus:
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
"ARBITRATION
In the event that any dispute arises between the parties out of
or related to the provision to the order, either party may give
notice to the other party of its intention to submit the issues
specified in such notice. Either party may thereafter submit
the unresolved issue to arbitration. Arbitration shall be held
in accordance with the Arbitration and Conciliation Act 1996
by a sole Arbitrator to be Appointed by "ESPIRE RESORTS
PVT. LTD." The venue of the arbitration shall be New Delhi.
The award will be final and binding between the parties."
3. The petitioner has set out its claim against the respondent, thus,
in para 16 of the petition:
"Claim for release of Balance payments towards work done:
Rs.930525/- without GST and GST of Rs 97186/- @ 18% on
Rs 539920/- subject to Invoice to be raised.
Claim for interest @18% p.a on this amount of 930525/- from
the date of submission of bills till date of release of payments.
Claim for release of Retention amount of Rs.342502/- as
deducted from R/A Bills.
Claim for Interest on delay in release of payments for running
bills @18% from the date of submission of running bill till
date of release.
Claim for payment for the work of water proofing on domes:
Rs 780,000/-.
Claim for increased rates for the value of work done beyond
Stipulated date of completion as well as beyond the stipulated
contractual value for an amount of Rs 7 lacs approximately.
(to be calculated)
Claim for Damages under Doctrine of Damages and
Mitigation of Losses due to delay and prolongation of work
period beyond stipulated period i.e after 18.06.2018 till
28.02.2019 @ Rs 40,000/- Per month towards establishment,
infrastructure and over heads: Rs 320000/-.
Claim for interest @ 18% p.a on all above claims for pre-
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reference, Pendent lite and future period.
Claim for cost of arbitration and other legal and litigation
expenses as per actual is claimed in the present arbitration."
4. Vide letter dated 29th July, 2020, the petitioner invoked the
afore-extracted Clause 43 of the Letter of Intent, and sought reference
of the claims of the petitioner to arbitration.
5. On 24th August, 2020, the respondent wrote to the petitioner,
stating that, vide letter, dated 18th August, 2020, the respondent had
appointed an arbitrator to arbitrate on the disputes raised by the
petitioner.
6. The petitioner has approached this Court, under Section 11(6)
of the 1996 Act, citing the judgment of the Supreme Court in Perkins
Eastman Architects DPC1, as well as Section 12(5) of the 1996 Act,
to contend that, in view thereof, the respondent could not be
empowered to appoint any arbitrator to arbitrate on the disputes raised
by the petitioner.
7. Consequent to issuance of notice, a reply, to this petition, was
filed by the respondent, in which the applicability of Section 12(5) of
the 1996 Act and the decision of the Supreme Court in Perkins
Eastman Architects DPC1, has been contested on the ground that, by
writing on 29th July, 2020, to the respondent, requesting the
respondent to appoint an arbitrator, the petitioner had effectively
waived its right under Section 12(5) of the 1996 Act.
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
8. This contention, submits Mr. Sanjay Bansal, learned counsel for
the petitioner, is not correct in law and cites, in that regard, the recent
decision of this Court in JMC Projects (India) Ltd.2, in which this
Court went into the issue of waiver of Section 12(5) of the 1996 Act,
and held that the proviso to Section 12(5) required express waiver of
the applicability of the said provision.
9. In view thereof, Mr. Sacchin Puri, learned Senior Counsel
appearing for the respondent, on instructions, very fairly submits that
he did not seek to join issue on this aspect and that the disputes raised
by the petitioner, could be referred to adjudication to a learned retired
Judge of this Court. He only submits that his rights to raise
counterclaim(s) before the learned sole arbitrator, should be reserved.
10. In view thereof, the aforesaid disputes, raised by the petitioner,
stand referred to the arbitration of Hon'ble Mr. Justice Kailash
Gambhir, a learned retired Judge of this Court and an experienced
arbitrator. The address and mobile number of the learned arbitrator are
W-67,Greater Kailash Part -I, New Delhi-110048 and 9871300033
respectively.
11. The parties are directed to contact the learned sole arbitrator, as
per the aforesaid contact details, within two days, so that the
willingness of the learned sole arbitrator could be ascertained and
schedule of arbitration could be drawn up.
12. The learned sole arbitrator would furnish the requisite
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
disclosure under Section 12 of the 1996 Act within a week or entering
on the reference.
13. The right of the respondent, to raise counter-claims before the
learned sole arbitrator, in accordance with law, stands reserved.
14. The learned sole arbitrator would be entitled to charge fees in
accordance with the Fourth Schedule to the 1996 Act.
15. This petition is disposed of accordingly.
ARB.P. 340/2020
1. This is an arbitration petition under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as
"1996 Act"), prays for appointment of an arbitrator to arbitrate on the
disputes between the parties.
2. The dispute between the parties relates to a work order, dated 1st
August, 2019, issued by the respondent to the petitioner, for works to
be carried out at Chouth Ka Barwara Sawai Madhopur, Rajasthan.
The petitioner alleges that the respondent has defaulted in making
payments against works carried out by it, resulting in arbitrable
disputes having arisen between the petitioner and the respondent.
Clause 43 of the Letter of Intent/work order, which provides for
arbitration, to resolve disputes between the parties, reads thus:
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
"ARBITRATION
In the event that any dispute arises between the parties out of
or related to the provision to the order, either party may give
notice to the other party of its intention to submit the issues
specified in such notice. Either party may thereafter submit
the unresolved issue to arbitration. Arbitration shall be held
in accordance with the Arbitration and Conciliation Act 1996
by a sole Arbitrator to be Appointed by "ESPIRE RESORTS
PVT. LTD." The venue of the arbitration shall be New Delhi.
The award will be final and binding between the parties."
3. The petitioner has set out its claim against the respondent, thus,
in para 16 of the petition:
"Claim for release of Balance payments towards work done:
Rs.2075888/- without GST and GST of Rs 373659/- @ 18%
on Rs 2075888/- subject to Invoice to be raised.
Claim for interest @18% p.a on this amount of 2075888/-
from the date of submission of bills till date of release of
payments.
Claim for release of Retention amount of Rs.61147/- as
deducted from 01st R/A Bill.
Claim for Interest on delay in release of payments for running
bills, Please appreciate that the stipulated time was 28 days for
release of payments from the date of submission of bill, but
Respondents had failed to release the payments within
stipulated period, hence claimants are entitled to claim interest
@18% from the date of submission of running bill till date of
release of payments.
Claim for interest @ 18% p.a on all above claims for pre-
reference, Pendent lite and future period and cost of
Arbitration. Claimants had already asked for release of all our
legitimate payments along with interest @ 18% p.a towards
work done in scores of letters and also informed that in case of
non-release of payments claimants shall take recourse to legal
actions.
Claim for cost of arbitration and other legal and litigation
expenses as per actual is claimed in the present arbitration."
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
4. Vide letter, dated 29th July, 2020, the petitioner invoked the
afore-extracted Clause 43 of the Letter of Intent, and sought reference
of the claims of the petitioner to arbitration.
5. On 24th August, 2020, the respondent wrote to the petitioner,
stating that, vide letter, dated 18th August, 2020, the respondent had
appointed an arbitrator to arbitrate on the disputes raised by the
petitioner.
6. The petitioner has approached this Court, under Section 11(6)
of the 1996 Act, citing the judgment of the Supreme Court in Perkins
Eastman Architects DPC1, as well as Section 12(5) of the 1996 Act,
to contend that, in view thereof, the respondent could not be
empowered to appoint any arbitrator to arbitrate on the disputes, raised
by the petitioner.
7. Consequent to issuance of notice, a reply, to this petition, was
filed by the respondent, in which the applicability of Section 12(5) of
the 1996 Act and the decision of the Supreme Court in Perkins
Eastman Architects DPC1, has been contested on the ground that, by
writing on 29th July, 2020, to the respondent, requesting the
respondent to appoint an arbitrator, the petitioner had effectively
waived its right under Section 12(5) of the 1996 Act.
8. This contention, submits Mr. Sanjay Bansal, learned counsel for
the petitioner, is not correct in law and cites in that regard, the recent
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
decision of this Court in JMC Projects (India) Ltd.2, in which this
Court went into the issue of waiver of Section 12(5) of the 1996 Act,
and held that the proviso to Section 12(5) required express waiver of
the applicability of the said provision.
9. In view thereof, Mr. Sacchin Puri, learned Senior Counsel
appearing for the respondent, on instructions, very fairly submits that
he did not seek to join issue on this aspect and that the disputes raised
by the petitioner could be referred to adjudication to a learned retired
Judge of this Court. He only submits that his rights to raise counter-
claims before the learned sole arbitrator, should be reserved.
10. In view thereof, the aforesaid disputes, raised by the petitioner,
stand referred to the arbitration of Hon'ble Mr. Justice Kailash
Gambhir, a learned retired Judge of this Court and an experienced
arbitrator. The address and mobile number of the learned arbitrator are
W-67, Greater Kailash Part -I, New Delhi-110048 and 9871300033
respectively.
11. The parties are directed to contact the learned sole arbitrator, as
per the aforesaid contact details, within two days, so that the
willingness of the learned sole arbitrator could be ascertained and
schedule of arbitration could be drawn up.
12. The learned sole arbitrator would furnish the requisite
disclosure under Section 12 of the 1996 Act within a week or entering
on the reference.
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
13. The right of the respondent, to raise counter-claims before the
learned sole arbitrator, in accordance with law, stand reserved.
14. The learned sole arbitrator would be entitled to charge fees in
accordance with the Fourth Schedule to the 1996 Act.
15. This petition is disposed of accordingly.
OMP(I)(COMM) 326/2020
1. In view of the fact that the disputes between the parties stand
referred to the arbitration of Hon'ble Mr. Justice Kailash Gambhir, a
retired Judge of this Court, by the present order, learned counsel for
the parties are ad idem that the learned Sole Arbitrator may be
requested to decide this petition, treating it as an application under
Section 17 of the 1996 Act.
2. The request is justified. Ordered accordingly.
3. This petition stands disposed of.
C. HARI SHANKAR, J.
NOVEMBER 5, 2020
r.bararia
Signature Not Verified
Digitally Signed By:SUNIL
Signing Date:09.11.2020
19:13:44
