Madhya Pradesh High Court
Jupiter International Sales vs The Union Of India on 24 November, 2022
Author: Vijay Kumar Shukla
1
IN THE HIGH COURT OF MADHYA PRADESH, AT
JABALPUR
BEFORE
(HON'BLE SHRI JUSTICE VIJAY KUMAR SHUKLA)
ON THE 24nd OF NOVEMBER, 2022
Arbitration Case No. 94/2019
Between:-
1. JUPITER INTERNATIONAL (SALES),179,
SAKET NAGAR, INDORE, A PARTNERSHIP
FIRM, THR. ITS PARTNER B.K. KHERIA, AGED
ABOUT 66 YEARS, S/O LATE SHRI
GOURISHANKAR KHERIA .
2. B.K.KHERIA, AGED ABOUT 66 YEARS S/O
LATE SHRI GOURISHANKAR KHERIA,R/O 179,
SAKET NAGR, INDORE (MADHYA PRADESH).
.....APPLICANTS
(SHRI AKHILESH JAIN, LEARNED COUNSEL
FOR THE APPLICANTS).
AND
1. THE UNION OF INDIA, THR. CHIEF
SECRETARY, MINISTRY OF DEFENCE
NEW DELHI (DELHI)
2. THE CHIEF ENGINEER, JABALPUR
ZONE, MILITARY ENGG.SERVICES,
BHAGAT MARG , P.B. NO. 84, (M.P)
Signature Not Verified
Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
2
3. ENGINEER IN CHIEF, INTEGRATED-HQ
OF MOD(ARMY), KASHMIR HOUSE,
RAJAJI MARG, NEW DELHI-110011
.....NON-APPLICANTS
(MS. KANAK GARWAR, LEARNED
COUNSEL FOR THE NON-APPLICANTS).
........................................................................................
This petition coming on for final hearing this day, the court passed
the following:
ORDER
The petition is filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996(in short hereinafter referred as "Act") for
appointment of Arbitrator to resolve the disputes between the parties.
Facts of the case adumbrated in nutshell are, that the applicant
entered into a contract with the non-applicants for "Provision of
Training Hall Cum Research Centre at INF School, Mhow". The non-
applicant No.2 invited tenders for the said purpose and the applicants
being eligible, their tender was accepted and the work order was issued.
As per the work order, the subject work was required to be completed
by 28/2/2011 but the same could be completed by 09/4/2015 because of
the delay and hindrance on the part of the non-applicants in execution
and completion of the work. There was delay in handing over the
buildings, change in scope of work, delay in taking decisions on various
Signature Not Verified
Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
problems like finalization of design of trusses and other steel items.
Although department granted time extensions without levy of
compensation but failed to pay escalation beyond contract period. The
applicants made repeated requests for early resolution of the problems
of the work but the non-applicants failed to take any early action which
caused delay in execution of the work.
The applicants completed the work on 9/4/2015 but because of
delay, the payment could not be released. The applicants submitted final
bill which was forwarded for audit but certain claims were not
incorporated in the final bill. Then on 29/5/2017 he withdrew "no claim
certificate" signed by them and stated that payment of final bill shall be
received under protest. The aforesaid claim was not accepted by the
non-applicants on the ground that the claims were not raised during the
currency of work and disputed the claims.
As per Clause 70 of the agreement, the applicants demanded
amicable settlement of the dispute, however, the said request was turned
down for appointment of Arbitrator on the ground that the applicants
signed the final bill without protest and received the final bill, therefore,
claims of the applicants are deemed to be waived and extinguished.
Counsel for the applicants referred Clause 70 of the agreement
which provides for arbitration by reference to sole arbitration for
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Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
resolving dispute between the parties. As per condition No.70, sole
arbitration of a serving officer to be appointed by Engineer-in-Chief.
It is further submitted that in view of the amended provisions of
Sub-section 5 of Section 12 of the Act,1996, a serving officer of the
non-applicants cannot act as sole arbitrator and, therefore, the present
application is filed under Section 11(6) of the Act for appointment of
Sole Arbitrator.
Counsel for the non-applicants did not dispute the existence of
"the dispute" and "arbitration clause", however, submits that since the
applicants have received the final bill without any protest, therefore,
they cannot seek appointment of Arbitrator under Section 11 of the Act,
1996. It is not disputed that the applicants had withdrawn "no claim
certificate" before the final payment. He had withdrawn the same on
29/5/2017 whereas undisputed part of final bill was paid on 28/4/2018.
After hearing learned counsel for the parties and taking into
consideration the Arbitration Clause 70 between the parties and
amended provisions of Sub-section 5 of Section 12, I find that the
application deserves to be allowed. There is no dispute regarding
existence of "arbitration clause" and "dispute" between the parties. The
law is no longer res-integra that the applicant cannot be denied the
appointment of Arbitrator only on the ground that they have received
certain payment in pursuance to the bill. The Apex Court in the case of
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Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
National Insurance Company Limited Vs. Boghara Polyfab Pvt. Ltd.
(2009) 1 SCC 267 and in the case of Oriental Insurance Co. Ltd. and
another Vs. Dicitex Furnishing Ltd. (2019) Vol. 16 scale 242 allowed
the application for appointment of Arbitrator despite receiving the part
payment of the bill.
Para 21 of the judgment in the case of Dicitex Furnishing Ltd. is
reproduced as under:-
An overall reading of Dicitexs application under
Section 11(6) clearly shows that its grievance with
respect to the involuntary nature of the discharge
voucher was articulated. It cannot be disputed, that
several letters spanning over two years stating that it
was facing financial crisis on account of the delay in
settling the claim, were addressed to the appellant.
This court is conscious of the fact that an application
under Section 11(6) is in the form of a pleading which
merely seeks an order of the court, for appointment of
an arbitrator. It cannot be conclusive of the pleas or
contentions that the claimant or the concerned party
can take, in the arbitral proceedings. At this stage,
therefore, the court which is required to ensure that an
arbitrable dispute exists, has to be prima facie
convinced about the genuineness or credibility of the
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Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
plea of coercion; it cannot be too particular about the
nature of the plea, which necessarily has to be made
and established in the substantive (read:arbitration)
proceeding. If the court were to take a contrary
approach and minutely examine the plea and judge its
credibility or reasonableness, there would be a danger
of its denying a forum to the applicant altogether,
because rejection of the application would render the
finding(about the finality of the discharge and its
effect as satisfaction) final, thus, precluding the
applicant of its right event to approach a civil court.
There are decisions of this court (Associated
Construction v Pawanhans Helicopters Ltd. (2008) 16
SCC 128 and Boghara Polyfab(supra) upheld the
concept of economic duress. Having regard to the
facts and circumstances, this court is of the opinion
that the reasoning in the impugned judgment cannot
be faulted.
In view of the facts of the present case and the law laid down by
the Apex Court, I deem it proper to appoint Hon'ble Shri Justice H.P
Singh(former Judge) r/o Bungalow No.139, Priyadarshini Colony,
Dumna Road, Jabalpur(M.P) Pin-482001 as an arbitrator to resolve the
dispute between the parties.
Signature Not Verified
Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
After obtaining consent in writing from Hon'ble Shri Justice H.P
Singh, copy of this order be sent to him for initiating the proceedings
between the parties.
Accordingly, arbitration case stands allowed and disposed off.
(Vijay Kumar Shukla)
JUDGE
Pramod
Signature Not Verified
Signed by: APARNA TIWARI
Signing time: 11/24/2022
5:11:55 PM
