Delhi High Court
M/S Third Wave Services vs M/S Selene Constructions Limited ... on 23 November, 2021
$~3(2021)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 23.11.2021
+ ARB.P. 967/2021
M/S THIRD WAVE SERVICES ..... Petitioner
Through: Mr. Sandeep Sharma,
Mr.AmitChoudhary, Ms.Kanchan
Semwal & Mr.Gurjas S. Narula,
Advocates
Versus
M/S SELENE CONSTRUCTIONS LIMITED & ANR.
..... Respondents
Through: Mr. Dhruv Mohan, Advocate for
respondent No.2
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
J U D G M E N T (oral)
1. The present petition has been filed by petitioner seeking appointment
of a Sole Arbitrator under the provisions of Section 11(6) of the Arbitration
and Conciliation Act, 1996.
2. Petitioner, a private limited company, claims to be registered under
the Micro Small and Medium Enterprises Development (MSMED) Act,
2006, claims to be engaged in the diverse businesses pertaining to providing
permanent Civil, electrical and Mechanical infrastructure.
3. According to petitioner, respondent No.1 is a public limited company
engaged in real estate activities, who develops offices, housing, hotels and
othr industrial projects. Respondent No.2 is also engaged in real estate
development services.
4. Petitioner claims to have received a work order No. 3228105854
dated 12.07.2013 for work of internal electrical works of Building G1,2,3,
K1,2,3, B & EWS at Centrum Park, Phase-ll, Gurgaon from respondent
No.2 (as a sub-contractor) for a contractual amount of Rs.8,76,05,494.61/-,
which was later enhanced to Rs.9,16,24,074.35/-. It is further claimed that
the work was to commence on 01.07.2013 and the stipulated time for
completion of work was 12 months i.e. till 30.06.2014. However, due to late
handing over of site by respondent No.2, the work period had to be extended
time to time i.e. from 31.03.2016 till 31.03.2017. Also, the work order was
amended and enhanced on 07.06.2017 to Rs.9,33,18,103.05/.
5. At the hearing, learned counsel for petitioner has submitted that due to
implementation of the Goods and Services Tax Laws, the terms and
conditions of work had to be reassessed and revised vide post GSI Work
Order No. 0330110049 and under the amended contract, respondent No.1
became the employer and petitioner the contactor, instead of respondent
No.2. Further submits that owing to failure on the part of respondents in
adhering to the terms and conditions of the agreement, the work was delayed
and time ceased to be essence of the contract and therefore, work to the tune
of Rs.2,96,52,939.32, as against the awarded value of Rs.9,18,72,965.59,
could be executed by the petitioner.
6. It is further submitted by learned counsel that respondent vide its
email dated 22.03.2018, admitted the claim of petitioner, however,
respondent has agreed to pay only Rs.70,00,000/-, whereas in the
'completion certificate' issued by respondent No.1, the work executed by
petitioner has been mentioned as "good". It is also averred on behalf of
petitioner, that against the final bill dated 05.04.2019 amounting to
Rs.1,32,50,052.21, respondent No.1 approved amount of Rs.1,05,94,359.07
and out of the said amount too, amount of Rs.56,70,074.00 only was
released to petitioner till 14.02.2020 and out of the remaining amount of Rs.
49,24,285.07, further amount of Rs.11,83,311/ was released by respondent
No.1, leaving the balance amount of Rs. 37,40,974.07 still unpaid.
7. Petitioner claims to have sent various e-mails to the respondent No.1
for clearance of outstanding dues, however, upon failure to make the
payment, petitioner invoked arbitration vide notice dated 10.06.2021. In
response to the aforesaid notice dated 26.06.2021, respondent unilaterally
appointed its Arbitrator, which is impermissible in law and hence, the
present petition has been filed.
8. To the contrary, learned counsel appearing on behalf of respondents
has opposed the present petition while submitting that the claims raised by
the petitioner in the present petition are frivolous and this petition deserves
to be dismissed. However, learned counsel has not disputed invocation of
arbitration vide Notice dated 10.06.2021 and also that any dispute inter se
parties have to be resolved in terms of Clause-37(b) of the amended post
GST Work Order No. 330110049.
9. Upon hearing learned counsel appearing from both the sides this
Court finds that disputes between the parties are required to be adjudicated
by an Arbitrator in terms of Clause-37(b) of the amended post GST Work
Order No. 330110049. Vide notice dated 10.06.2021, petitioner has invoked
arbitration, however, respondent has gone ahead appointing Arbitrator of its
choice, which in the considered opinion of this Court cannot be permitted.
10. The Hon'ble Supreme Court's in Perkins Eastman Architects DPC &
Anr. vs. HSCC (India) Ltd. 2019 SCC Online SC 1517, has categorically
stated that no single party can be permitted to unilaterally appoint the
Arbitrator, as it would defeat the purpose of unbiased adjudication of
dispute between the parties. The aforesaid decision in Perkins (Supra) has
been followed by a Coordinate Bench of this Court in Proddatur Cable TV
Digi Services Vs. Citi Cable Network Limited: (2020) 267 DLT 51. Thus,
the Arbitrator either has to be appointed with the consensus of the parties or
by this Court.
11. Concurring with the decisions as noted above, the present petition is
allowed. Accordingly, Ms. Madhrima Panwar Mridul, Advocate (Mobile
9810175151) is appointed sole Arbitrator to adjudicate the dispute between
the parties.
12. The fee of the learned Arbitrator shall be governed by the Fourth
Schedule of the Arbitration and Conciliation Act, 1996.
13. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration.
14. A copy of this order be sent to the learned Arbitrator for information.
(SURESH KUMAR KAIT)
JUDGE
NOVEMBER 23, 2021
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