Delhi High Court
Cxl Titon Electronics Pvt Ltd vs The Joint Secretary Ministry Of ... on 18 January, 2022
$~1(2021)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision:18.01.2022
+ ARB.P. 766/2021
CXL TITON ELECTRONICS PVT LTD. ..... Petitioner
Through: Mr. Sanjay Goswami, Advocate
Versus
THE JOINT SECRETARY MINISTRY OF FISHERIES, ANIMAL
HUSBANDRY AND DAIRYING & ANR. ..... Respondents
Through: Mr. Vinod Diwakar, CGSC with
Mr.Vishal Kumar Singh, Advocate
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 the petitioner under the
provisions of Section 11(5) and 11(6) of the Arbitration and Conciliation
Act, 1996 seeking appointment of Arbitrator to adjudicate the disputed with
respondent.
2. Petitioner is a Private Limited company dealing in RO Systems,
Water Purifiers, Effluent Treatment Plants, Sewerage Treatment Plants and
Water Softening Plants, who was awarded work under tender No.7-15/2013
-14/PUR/DES/73 dated 18.09.2013 for installation, commissioning,
operation and ultimately transfer of Reverse Osmosis Plants etc. capable of
supplying minimum 7-12 lacs liters of treated RO water per day, by the
respondents. Under the said work, petitioner was obliged to fulfil
requirements of respondent No.2- DMS by installing two machines which
could provide approximately 12 lacs litres RO water per day, for which
Respondent No.2 (DMS) had agreed to provide petitioner two Borewell for
24 hours each. For accomplishing the work, petitioner had to provide shed,
RO machines, two tube wells and pipe lines etc. at its own costs and had to
invest Rs.3.5 Crores for installation of machinery, furniture and fixture to
meet out the requirements of respondent No.2. The work tender was for a
period of five years to recover its investments and operational costs at the
optimum supply of minimum 7 lacs litres of treated RO water on daily basis
in the said operation period of five years.
3. According to petitioner, it was agreed that the said agreement was for
5 years @ Rs.99/- per kiloliter of treated water being paid by the respondent
No.2 DMS to the petitioner for the first year and thereafter to be increased at
the rate of 5% for every subsequent year. However, for reasons know to
respondent No.2, it could not get the permission from the Delhi Jal Board
for extraction of ground water from the borewell made available to the
Petitioner to an extent as was stipulated to be supplied for generation of 12
Lac liters of treated RO water. On 24.04.2014, respondent No.2- DMS
issued an amendment letter to revise the minimum and maximum uptake of
the treated water from the petitioner, whereunder petitioner was required to
supply minimum 4.375 lacs litres RO water per day and up to a maximum of
7 lacs litres of RO water per day to the Respondent No.2- DMS a revised
period of 8 years.
4. During the course of hearing, learned counsel for petitioner has
submitted that the petitioner was already suffering loss due to non-
availability of the untreated water and the objections of the Delhi Jal Board
to Respondent No.2-DMS, however, it accepted the amended work order as
it has already invested on operations and machinery. Further submitted that
despite this, respondent No.2 vide its letter dated 10.10.2019 pre-terminated
illegally the said agreement without assigning any reason and that the
petitioner had incurred expenses of more than Rs.11 Crores on the said
project. According to petitioner, against the pre-mature termination of the
contract, petitioner made several representations and held meeting with the
senior officers of DMS, but to no avail.
5. Learned counsel for petitioner has submitted despite a series of
writing letters when matter could not be resolved, petitioner vide Notice
dated 12.03.2021 under Section 80 of the CPC asked the respondents to pay
compensation of Rs.3,14,18,580 /- along with interest i.e. the amounts due
towards the monthly invoices, but neither the said notice was replied nor
payment was made. So, petitioner was constraint to send Notice dated
07.06.2021 to the respondent invoking arbitration and also proposed names
of panel of five arbitrators, which was also not replied to.
6. According to learned counsel for petitioner, as per Clause-18 of
second Schedule of the tender, which stipulated "that in case of any disputes
concerning the agreement, the Secretary, Ministry of Law Department of the
Legal Affairs Govt. of India shall nominate the Sole Arbitrator and the
Petitioner shall have no right to object to the same", however, since by
virtue of decision of Hon'ble Supreme Court in Perkins Eastman Architects
DPC & Anr. vs. HSCC (India) Ltd. 2019 SCC Online SC 1517, the aforesaid
clause has become null and void, therefore, the present petition has been
filed seeking appointment of arbitrator.
7. At this stage, learned CGSC appearing on behalf of respondent has
submitted that the averments made in the present petition are disputed
however, invocation of arbitration by petitioner by virtue of notice dated
07.06.2021 and existence of arbitration Clause-18 in the second schedule of
tender, is not disputed. Learned CGSC submitted that the disputes are
arbitrable and this Court may appoint an Arbitrator for adjudication of
disputes.
8. Accordingly, Mr.D.C. Anand, DHJS (Retd.) (Mobile: 9910384644)
is appointed the sole Arbitrator to adjudicate the dispute between the parties.
9. The fee of the learned Arbitrator shall be governed by the Fourth
Schedule of the Arbitration and Conciliation Act, 1996.
10. The learned Arbitrator shall ensure compliance of Section 12 of
Arbitration and Conciliation Act, 1996 before commencing the arbitration.
11. The present petition and pending application, if any, are accordingly
disposed of.
(SURESH KUMAR KAIT)
JUDGE
JANUARY 18, 2022/r
