Delhi High Court
Jag Parvesh Sura vs Uppal Engineering Co Pvt Ltd & Anr. on 24 May, 2022
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 24th May, 2022
+ ARB.P. 685/2020 & CRL.M.A. 17662/2021, I.A. 14565/2021
JAG PARVESH SURA ..... Petitioner
Through: Mr. Sameer Jain & Ms. Anu Sura,
Advocates.
versus
UPPAL ENGINEERING CO PVT LTD & ANR. ..... Respondents
Through: Mr. Ritesh Khatri, Advocate.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
NEENA BANSAL KRISHNA,J. (ORAL)
I.A. 11891/2021 (U/s 148 read with Section 151 of CPC for condonation
of delay in filing the amended memo of paties)
1. This application has been filed under Section 148 read with Section
151 of the Civil Procedure Code, 1908 by the petitioner seeking condonation
of delay 42 days in filing the amended memo of parties.
2. For the reasons stated in the application, the delay of 42 days in filing
the amended memo of parties is condoned.
3. Amended memo of parties has already been taken on record.
4. Application is disposed of.
ARB.P. 685/2020
1. A petition under Section 11 of the Arbitration & Conciliation Act,
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1996 read with Section 151 of CPC has been filed on behalf of the
petition seeking appointment of an Arbitrator.
2. In 2005 the respondent No.1 Uppal Engineering Co. Pvt. Ltd. was
awarded a contract by Northern Railways in relation to "Earthwork in
filling in embankment & cutting, provision of blanketing material,
construction of minor bridges, major bridges with PSC Slab and other
allied works between Samargopalpur (excluding)-Kinana (Excluding)
Stations". The Respondent No.1 approached the petitioner for sub-
contracting the works under the main contract awarded to it by
Northern Railway. Accordingly, an Agreement dated 10 th March,
2005 was entered into between the petitioner's erstwhile
proprietorship firm M/s Sura Construction Co. with respondent no.2
(Director of the Respondent No.1/Company) on behalf of respondent
No.1 Company for sub-contracting the work under the main contract
awarded to respondent No.1.
3. The sub-contract Agreement required respondent No.1 to take up any
dispute arising out of execution of Works including the payment in
terms of "price variation clause" with the Employer. Further, since the
work had been executed by the petitioner, the sub-contracting
Agreement contained the provisions with respect to distribution of the
claim amount in case of a successful outcome and contained a
provision for settlement of disputes through arbitration.
4. The petitioner completed the work under the main contract as per the
terms set out in the sub-contract Agreement to the satisfaction of the
respondents and the Employer and final Bill under the main Contract
was released in October, 2008 to respondent No.1.
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5. The respondent No.1 around the same time was pursuing the claim
against the Employer for payment under "price variation clause"
under the main contract with respect to the works executed by the
petitioner as per sub-contracting Agreement. The arbitration in
respect of said claims was invoked some time in 2009. The said
matter involving claims arising out of "price variation claim" PVC
was finally taken out by Civil Court at Patiala House Courts as
informed to the petitioner by respondent No.2.
6. At the time of settlement of amounts in 2008 an amount of
Rs.12,00,000/- was due and payable by the petitioners to the
respondent from the final bills. The respondent No.2, however,
expresses his inability to pay and it was settled that the said amount
will be paid to the petitioner as and possible and latest upon the
completion of the "price variation claim" PVC claim proceedings
initiated against the Employer. The petitioner agreed to the same and
in good faith and in the light of amicable settlement between the
parties.
7. The petitioner was informed about the matter having been decided in
favour of the respondents and an amount of Rs.88,59,790.00 being
released in favour of respondent No.1. The petitioner share of monies
came to Rs.57,58,350.00 from the amount received by respondent
No.2 which was 65% of Rs.88,59,790.00 and the balance amount of
Rs.12,00,000.00 from the final bills.
8. A Legal Notice dated 15th June, 2020 was served upon the
respondents seeking the amount but the respondent vide email dated
24th June, 2020 denied the petitioner's claim on the basis of limitation.
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9. It is claimed that the aforesaid amounts became due and payable to
the petitioner only towards the end of 2017 when the amounts were
credited to the account of respondent No.1. The limitation started
running only when it came to the knowledge of the petitioner that the
payments have been made by Northern Railway in favour of
respondent No.1. Thus, petitioner in terms of sub-contracting
Agreement invoked arbitration against the respondent by issuing
Notice dated 30th July, 2020. The respondent again refused to take the
services of Arbitrator. Left with no option, the petitioner has filed the
present petition under Section 11 of Arbitration & Conciliation Act,
1996 for appointment of an Arbitral Tribunal for adjudication of the
disputes as mentioned herein.
10. The respondent has contested the application essentially on the three
grounds :
i) The first ground is that the Agreement dated 10th March, 2005
was entered into with petitioner's partnership firm and the respondent,
as is evident from the Agreement dated 10th March, 2005, where the
petitioner is so defined. Moreover, the Agreement has a stamp of the
name of the petitioner wherein as well he is defined as the partner of
M/s Sura Construction Co. The learned counsel has further referred
to the Legal Notice dated 15th June, 2020 wherein also the petitioner
has been described as "M/s Jag Parvesh Sura (earlier sole proprietor
now partner of the firm M/s Sura Construction Co.)". Not only this,
the description of the plaintiff has been given in the Notice dated 2nd
July, 2020 invoking the arbitration Agreement. Also, in the email
dated 19th July, 2020 written by the petitioner, similar description has
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been given.
The documents of the petitioner show that it was a partnership
firm which had entered into the Agreement, but the claim has been
filed by Jag Parvesh Sura in his individual capacity with whom the
respondent had no Agreement. It is submitted that the petitioner has
no locus to file the present petition.
ii) The second ground agitated on behalf of the respondent is that
the petition is barred by limitation. It is asserted that as per the
submissions of the petitioner himself, the work under the contract was
completed in the year 2008. However, the present petition has been
filed in the year 2017 and the claim of the petitioner is barred by
limitation.
iii) The third ground agitated by the respondent is that the
Agreement was with the partnership form in the name of M/s Jag
Parvesh Sura Co. which was an unregistered partnership firm and the
present petition by unregistered partnership firm is not maintainable.
11. The petitioner in his rejoinder has explained that M/s Sura
Construction Co. was the sole proprietorship concern of the petitioner
at the time of entering into the Agreement dated 10th March, 2005
which is further corroborated by the Bank Statement and the Income
Tax Returns wherein M/s Sura Construction Co. has been described
as sole proprietorship concern. The description of the petitioner as a
partner in the Agreement dated 10th March, 2005 is an inadvertent
error as can be made out from the documents filed by the petitioner.
At the relevant time, the petitioner was a sole proprietorship Firm and
thus, the petitioner has the locus to file the present suit.
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12. In regard to the objections of claim being barred by limitation, it has
been reasserted that the petitioner came to know about the outcome
of "price variation clause" claim proceedings in the end of 2017 and
the notice of Arbitration was issued in July, 2020 which is within the
period of limitation. In view of the limited scope of the jurisdiction
under Section 11 of the Arbitration & Conciliation Act, 1996, any
preliminary question in regard to limitation has to be decided by the
Arbitrator.
13. It is further stated that since the petitioner was the sole proprietor of
M/s Sura Construction Co., the objections taken that it is an un-
registered partnership Firm, is baseless and is misconceived in law.
14. It is thus, reasserted that the sole arbitrator may be appointed to
adjudicate the disputes which have arisen out of the Agreement dated
10th March, 2005.
15. Submissions heard.
16. Learned counsel for the respondent had reasserted his three grounds
for resisting the application under Section 11 of the Arbitration &
Conciliation Act. However, after some arguments, it was conceded
that the respondent shall be at liberty to raise these objections before
the learned Arbitrator to be adjudicated by the learned Arbitrator.
17. There is a valid Arbitration Clause in the Agreement dated 10 th
March, 2005. Given the limited scope of examination under Section
11 of the Arbitration & Conciliation Act, 1996, this court considers it
apposite to allow the present petition.
18. Accordingly, Mr. Anil Kher (Mob. No.9810072729), Advocate is
appointed as the Sole Arbitrator to adjudicate the disputes between the
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parties.
19. This is subject to the learned Arbitrator making the necessary
disclosure as required under Section 12(1) of the Arbitration &
Conciliation Act and not being ineligible under Section 12(5) of the
Arbitration & Conciliation Act.
20. The parties are at liberty to approach the learned Arbitrator for further
proceedings.
21. It is clarified that all rights and contentions of the parties are reserved.
22. The petition is disposed of in the aforesaid terms. All pending
applications, if any, also stand disposed of accordingly.
NEENA BANSAL KRISHNA, J
MAY 24, 2022
va
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