Delhi High Court
N.N. Buildcon Private Limited vs Hscc(India) Private Limited & ... on 11 November, 2021
$~2(Original Side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 180/2021
N.N. BUILDCON PRIVATE LIMITED ..... Petitioner
Through Mr. Vineet Jhanji and Mr. Imran
Moulaey, Advocates
versus
HSCC(INDIA) PRIVATE LIMITED & ANR. ..... Respondents
Through None.
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT
% 11.11.2021
1. This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 ("the 1996 Act"), seeking appointment of an
Arbitrator to arbitrate on the disputes between the parties.
2. Notice was issued in this petition on 3rd February, 2021. Respondent 2
appeared on 4th May, 2021. Thereafter, there has been no appearance on
behalf of Respondent 2. Respondent 1 has been served, by all modes
including dasti. Respondent 1, however, did not appear before the Court on
any of the dates of hearing.
3. No counter-affidavit has been filed, in response to the petition.
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
4. As such, I have heard Mr. Vineet Jhanji, learned Counsel for the
petitioner, and proceeded to dispose of the petition.
5. The dispute arises out of an agreement dated 29th August, 2016,
between the petitioner and Respondent 1. Respondent 1 executed the
agreement on behalf Respondent 2, All India Institute of Medical Sciences
(AIIMS). Mr. Jhanji has pointed out that, in the agreement, "Department" is
defined as AIIMS, New Delhi/HSCC. As such, the petition has been filed
arraigning HSCC as well as AIIMS as Respondents 1 and 2, respectively.
6. The petitioner was engaged by Respondent 1 for construction of a
hostel in the premises of AIIMS, vide agreement dated 29th August, 2016.
The plaintiff alleges that there had been defaults in payment, by the
respondents, of the final bill raised by the plaintiff.
7. The agreement between the petitioner and the respondents provided,
in Clause 25, thus :-
"CLAUSE 25
SETTLEMENT OF DISPUTES & ARBITRATION
Except where otherwise provided in the contract, all questions
and disputes relating to the meaning of the specifications, design,
drawings and instructions here-in before mentioned and as to the
quality of workmanship or materials used on the work or as to
any other question, claim, right, matter or thing whatsoever in
any way arising out of or relating to the contract, designs,
drawings, specifications, estimates, instructions, orders or these
conditions or otherwise concerning the works or the execution or
failure to execute the same whether arising during the progress
of the work or after the cancellation, termination, completion or
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
abandonment thereof shall be dealt with as mentioned
hereinafter:
(i) If the contractor considers any work demanded of
him to be outside the requirements of the contract, or
disputes any drawings, record or decision given in writing
by the Engineer-in-Charge on any matter in connection
with or arising out of the contract or carrying out of the
work, to be unacceptable, he shall promptly within 15 days
request the authority as indicated in Schedule 'F'
(Reviewing Authority) in writing for written instruction or
decision. Thereupon, the Reviewing Authority shall give
his written instructions or decision within a period of one
month from the receipt of the contractor's letter.
If the Reviewing Authority fails to give his
instructions or decision in writing within the aforesaid
period or if the contractor is dissatisfied with the
instructions or decision of the Reviewing Authority, the
contractor may, within 15 days of the receipt of Reviewing
Authorities' decision, appeal to the authority as indicated
in Schedule 'F' (Appealing Authority) who shall afford an
opportunity to the contractor to be heard, if the latter so
desires, and to offer evidence in support of his appeal. The
Appealing Authority shall give his decision within 30 days
of receipt of contractor's appeal.
If the contractor is dissatisfied with the decision of
the Appealing Authority, the contractor may within 30
days from the receipt of the Appealing Authority's
decision, appeal before the Dispute Redressal Committee
(DRC) along with a list of disputes with amounts claimed
in respect of each such dispute and giving reference to the
rejection of his disputes by the Appealing Authority. The
Dispute Redressal Committee (DRC) shall give his
decision within a period of 90 days from the receipt of
Contractor's appeal. The constitution of Dispute Redressal
Committee (DRC) shall be as indicated in Schedule 'F'.
If the Dispute Redressal Committee (DRC) fails to
give his decision within the aforesaid period or any party is
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
dissatisfied with the decision of the Dispute Redressal
Committee (DRC), then either party may within a period of
30 days from the receipt of the decision of Dispute
Redressal Committee (DRC}, give notice to the Client for
appointment of arbitrator on prescribed proforma as per
Appendix XV, failing which, the said decision shall be
final binding and conclusive and not referable to
adjudication by the arbitrator.
(ii) Except where the decision has become final, binding
and conclusive in terms of Sub Para (i) above, disputes or
difference shall be referred for adjudication through
arbitration by a sole arbitrator appointed by the Client. If
the arbitrator so appointed is unable or unwilling to act or
resigns his appointment or vacates his office due to any
reason whatsoever, another sole arbitrator shall be
appointed in the manner aforesaid. Such person shall be
entitled to proceed with the reference from the stage at
which it was left by his predecessor.
It is a term of this contract that the party invoking
arbitration shall give a list of disputes with amounts
claimed in respect of each such dispute along with the
notice for appointment of arbitrator and giving reference to
the rejection by the Appealing Authority of the appeal.
It is also a term of this contract that no person, other
than a person appointed by the Client, as aforesaid, should
act as arbitrator and if for any reason that is not possible,
the matter shall not' be referred to arbitration at all.
It is also a term of this contract that if the contractor
does not make any demand for appointment of arbitrator in
respect of any claims in writing as aforesaid within 120
days of receiving the intimation from the Engineer-in-
charge that the final bill is ready for payment, the claim of
the contractor shall be deemed to have been waived and
absolutely barred and the Department/Client/Government
shall be discharged and released of all liabilities under the
contract in respect of these claims.
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
The arbitration shall be conducted in accordance
with the provisions of the Arbitration and Conciliation Act,
1996 (26 of 1996) or any statutory modifications or re-
enactment thereof and the rules made thereunder and for
the time being in force shall apply to the arbitration
proceeding under this clause.
It is also a term of this contract that the arbitrator
shall adjudicate on only such disputes as are referred to
him by the appointing authority and give separate award
against each dispute and claim referred to him and in all
cases where the total amount of the claims by any party
exceeds Rs. 1,00,000/-, the arbitrator shall give reasons for
the award.
It is also a term of the contract that if any fees are
payable to the arbitrator, these shall be paid equally by
both the parties.
It is also a term of the contract that the arbitrator
shall be deemed to have entered on the reference on the
date he issues notice to both the parties calling them to
submit their statement of claims and counter statement of
claims. The venue of the arbitration shall be such place as
may be fixed by the arbitrator in his sole discretion. The
fees, if any, of the arbitrator shall, if required to be paid
before the award is made and published, be paid half and
half by each of the parties. The cost &f. the reference and
of the award (including the fees, if any, of the arbitrator)
shall be in the discretion of the arbitrator who• may direct
to any by whom and in what manner, such costs or any part
thereof shall be paid and fix or settle the amount of costs to
be so paid."
8. In accordance with the protocol prescribed in Clause 25 of the
agreement, the petitioner first wrote, on 6th December, 2019, to the
Executive Director and Chief General Manager of HSCC, seeking disbursal
of its outstanding claims. Thereafter, on 10th January, 2020, the petitioner
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
wrote to the Director (Engineering) and the Chief General Manager of
HSCC, for written instructions/decisions of the reviewing authority, in terms
of Clause 25 of the agreement. An appeal was preferred, to the Appellate
authority on 24th February, 2020.
9. No response was received by the petitioner, to any of these
communications.
10. In the circumstances, and further in accordance with Clause 25, the
petitioner requested the respondent to constitute a Disputes Redressal
Committee (DRC) to examine the petitioner's claim. A further
communication dated 8th May, 2020 was also addressed by the petitioner to
the Director, AIIMS, drawing his attention to the pendency of the
petitioner's claims.
11. These communications, too, elicited no response.
12. In these circumstances, on 10th June, 2020, a notice, invoking the
arbitral process, was issued by the petitioner to the respondent. The
petitioner received a reply, from AIIMS, on 16th June, 2020, informing the
petitioner that AIIMS had approved the constitution of a three-member
DRC. The petitioner, vide letter dated 19th June, 2020 requested for the
contact details of the members of the DRC. Despite not receiving any
response to this request either, on 30th June, 2020, the claim of the petitioner
was submitted to the DRC.
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
13. The DRC, it is alleged, failed to take any decision on the petitioner's
claims within the prescribed period of 90 days, as mentioned in Clause 25 of
the contract.
14. In these circumstances, the petitioner addressed a fresh notice,
invoking the arbitration in terms of the Clause 25 of the contract through its
letter dated 3rd October, 2020. It was also correctly pointed out by the
petitioner in the said letter, that, though Clause 25 empowered AIIMS to
appoint the Arbitrator, in the event of failure of the pre-arbitral dispute
resolution process, the said clause was not legally enforceable, in view of
Section 12(5) of the 1996 Act, read with the judgments of the Supreme
Court in Bharat Broadband Network Ltd. v. United Telecoms Ltd.1,
Perkins Eastman Architects DPCC v. HSCC (India) Ltd.2, TRF Limited v.
Energo Engg. Projects Limited3 and Haryana Space Application Centre v.
Pan India Consultants Pvt Ltd.4
15. No response having been received to the said communication either,
the petitioner has moved this Court.
16. As no response has been filed by either of the respondents, these
assertions stand admitted by non-traverse.
17. Before this Court, too, the respondents have been unresponsive. There
has been a sporadic appearance on behalf of Respondent 2; however, the
(2019) 5 SCC 755
2019 SCC OnLine SC 1517
(2017) 8 SCC 377
(2021) 3 SCC 103.
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
said respondent also remained absent after 4th May, 2021.
18. The recitals in the plaint clearly make out the existence of a dispute,
arbitrable in accordance with the arbitration clause in the contract between
the parties.
19. In the circumstances, I deem it appropriate to refer this matter to the
Delhi International Arbitration Centre (DIAC) to appoint a suitable
arbitrator to arbitrate on the dispute, especially as Mr. Jhanji submits that the
disputes are technical in nature and that it would, therefore, be more
appropriate that the arbitrator be a person with the requisite technical
knowledge. It shall be open to the petitioner to make this request before the
DIAC so that DIAC could appoint a suitable arbitrator.
20. The arbitration would take place under the aegis of the DIAC and
would abide by its rules and regulations. The Arbitrator would be entitled to
fees as per the schedule of fees fixed by the DIAC.
21. With the aforesaid directions, this petition stands disposed of.
C.HARI SHANKAR, J
NOVEMBER 11, 2021
d.negi
Signature Not Verified
By:SUNIL SINGH NEGI
Signing Date:13.11.2021
18:37:35
