Himachal Pradesh High Court
Pankaj Gupta vs Of on 11 August, 2023
Author: M.S. Ramachandra Rao
Bench: M.S. Ramachandra Rao
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Arb. Case No.62 of 2023
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Decided on: 11.08.2023
Pankaj Gupta ...Applicant
Versus
of
H.P. State Industrial Development Corporation ...Respondent
Coram
The Hon'ble Mr. Justice M.S. Ramachandra Rao, Chief Justice
rt
Whether approved for reporting?
For the applicant: Mr. Suneet Goel, Advocate.
For the respondent: Mr. Mehar Chand, Advocate.
M.S. Ramachandra Rao, Chief Justice (Oral)
This application is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, "the Act") to adjudicate the disputes and differences between the parties.
2. The applicant was awarded work of construction of ITI building at Patli Kuhal, District Kullu, Himachal Pradesh for Rs.2,93,06,338/- which was to be completed in 12 months under a letter of award dt. 17th August, 2016. Thereafter, an agreement was entered into between the parties. Disputes arose between the parties ::: Downloaded on - 14/08/2023 20:33:33 :::CIS 2 and according to the applicant the following claims made by the applicant have to be paid by the respondent.
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Sr. No. Claims Amount
1 Claim No.1: Balance Payment for work Approx. Rs.13.00 lacs
done in Nov. 2016 for 1st approach road (unmeasured work)
2. Claim No.: Prolongation of the work Rs.1,39,20,510/-
beyond stipulated date w.e.f. 02.09.2017 to May, 2022 i.e. 57 months under Hudson of Engineering Formula
3. Claim No.3: 10CC of work done of Rs.70.00 lacs approx Rs.3.83 crores
4. Claim No.4: Wrong deduction of Royalty Rs.1,81,919/-
rt (1,05,208+76711)
5 Claim No.5: Release of security from Rs.19,39,624.90
various running bills.
6. Claim No.6: GST on the claimed amount as per applcable rates of 18%
7. Claim No.7 and 8: Interest Pendente-lite To be actually calculated at the rate of 18% upon claim No.1 to 5 and supplied to Ld. under Section 31 7(a) and cost of Arbitrator at the time of litigation under Section 31(1) of the filing of claims. Arbitration and Conciliation Act, 1996 (amended up to date)
3. Notice dt. 5th August, 2022, was issued by the applicant seeking appointment of an Arbitrator on the basis of Clause 25 of the agreement between the parties.
4. Response is filed by the respondent stating that there was a slip affixed on Clause 25 of the agreement and the arbitration Clause itself has been cancelled and thus, there is no arbitration ::: Downloaded on - 14/08/2023 20:33:33 :::CIS 3 Clause between the parties and Clause 25 therefore cannot be invoked.
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5. The execution of the agreement dt. 26th August, 2016 between the parties in respect of subject work is not in dispute.
The question is as to whether Clause 25 of the agreement which contains the arbitration Clause is to be enforced or not.
of
6. It is not possible, at this stage, to arrive at a positive finding whether the agreement was executed between the parties rt with or without the affixed slip. It is to be noticed that the original agreement is a typed one and did contain an arbitration agreement/Clause, and the slip has been affixed thereafter over Clause 25 of the agreement without there being any initials or signatures of the parties on the same, though their initials are found at each page of the agreement
7. Prima facie therefore it has to be held that the original Clause 25 of the agreement would govern the parties without slip.
8. In Uttrakhand Purv Sainik Kalyan Nigam Limited vs. Northern Coal Field Limited1, it has been held that the Arbitral Tribunal may rule on its own jurisdiction, including any objections 1 (2020) 2 SCC 455 ::: Downloaded on - 14/08/2023 20:33:33 :::CIS 4 with respect to the existence or validity of the arbitration agreement.
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9. In Vidya Drolia and others versus Durga Trading Corporation2, it has been held by the Supreme Court that Sections 8 & 11 of the Arbitration and Conciliation Act, 1996 have the same ambit with respect to judicial interference and when in doubt, do of refer to arbitration, if the validity of the arbitration Agreement cannot be determined on a prima facie basis.
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10. Having regard to the law laid down by the Supreme Court in the aforesaid cases, the issue whether or not there exists an arbitration Agreement between the parties can be determined by the Arbitrator. This issue can be decided as a preliminary issue, unless the parties agree otherwise before the Arbitrator.
11. In the circumstances, a case has been made out by the petitioner for this Court to exercise jurisdiction under Section 11(6) of the Act. Hence, the following order:
ORDER
(i) Mr. Naresh Kumar Sood, Senior Advocate, is appointed as a sole Arbitrator to adjudicate the disputes and differences between the parties 2 (2021) 2 SCC 1 ::: Downloaded on - 14/08/2023 20:33:33 :::CIS 5 which has arisen under Agreement, as this Court is informed that there is another arbitration .
proceeding between the parties, wherein Mr. Naresh Sood, Senior Advocate, is also the Arbitrator;
(ii) The learned Arbitrator, before entering the of arbitration reference, shall forward a statement of rt disclosure as per the requirement of Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996, to the Registrar (Judicial) of this Court (to be placed on record of this application) and a copy thereof be forwarded to the parties;
(iii) The parties shall appear before the prospective Arbitrator on a date which may be mutually fixed by the learned sole Arbitrator, not later than four weeks today;
(iv) The Arbitrator shall decide as as preliminary issue whehter the arbitration agreement existed ::: Downloaded on - 14/08/2023 20:33:33 :::CIS 6 between the parties, unless otherwise agreed to by the parties before the Arbitrator;
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(v) The fees payable to the Arbitral Tribunal shall be as prescribed in the 4th Schedule appended to the Arbitration and Conciliation Act, 1996;
(vi) Office to forward a copy of this order to the of learned Arbitrator on the following address:
rt "Mr. Naresh Kumar Sood,
Senior Advocate
4, Pandit Padem Dev Complex,
Phase-1,The Ridge
Shimla, H.P. "
9. The application is disposed of accordingly.
( M.S. Ramachandra Rao ) Chief Justice August 11, 2023 (vt) ::: Downloaded on - 14/08/2023 20:33:33 :::CIS