Delhi High Court
Wishwa Mittar Bajaj & Sons (Const) Pvt ... vs Bptp Ltd on 28 September, 2012
Author: S. Muralidhar
Bench: S.Muralidhar
* IN THE HIGH COURT OF DELHI AT NEW DELHI
$~1 (Not Reportable)
+ ARB.P. 353 of 2011
WISHWA MITTAR BAJAJ & SONS
(CONSTRUCTIONS) PVT LTD ..... Petitioner
Through: Mr. Raghavendra M. Bajaj, Advocate.
versus
BPTP LTD ..... Respondent
Through: Mr. A.K. Thakur and Mr. R.K.
Mishra, Advocates.
CORAM: JUSTICE S.MURALIDHAR
ORDER
% 28.09.2012
1. This is a petition under Section 11 (5) of the Arbitration and Conciliation Act, 1996 ('Act') filed by the Petitioner Wishwa Mittar Bajaj and Sons (Constructions) Private Limited seeking reference to arbitration of its disputes with the Respondent BPTP Limited arising out of a contract awarded by the Respondent to the Petitioner for construction of Towers (G, H, J and K) for Park Grandeura-Group Housing Project at Sector-82, Faridabad to the Petitioner by a letter of intent dated 18th April 2007.
2. The case of the Petitioner was that the non-completion of the work was attributable to the Respondent; payments of outstanding bills/R.A. bills were not made on time and there was delay in supply of ready mix cement as well as steel. According to the Petitioner although it continued to perform its obligations, the Respondent asked it to stop work on 30th April 2010 and ARB.P. 353 of 2011 Page 1 of 7 foreclosed the contract. The Petitioner states that it submitted the final bill for the tower area for a sum of Rs.63,54,506.01 and for the non-tower area for a sum of Rs.9,88,628.71. The Petitioner further states that since it was in desperate need of finances, it accepted the final bill for the tower area for a sum of Rs.16,59,640 and the non-tower area for a sum of Rs. 5,14,106 by letters dated 17th July 2010 addressed to the Respondent. However, despite the Petitioner accepting a substantially reduced amount, the Respondent did not release payments and the final instalment of the payment in terms of the reduced final bill was made only in April 2011.
3. In para 18 of the petition, it is stated by the Petitioner as under:
"18. Thereafter, the Respondent forced the Petitioner to enter into a Settlement Deed whereby the Respondent undertook to pay an amount of Rs.3,07,491/- (Rupees Three Lakhs Seven Thousand Four Hundred and Ninety One Only) to the Petitioner as full and final settlement of all its Bills and also the Petitioner was precluded from raising any further dispute with regard to the Works Contract between the Petitioner and the Respondent. The Petitioner was also forced to execute an Indemnity Bond in favour of the Respondent undertaking to indemnify such Respondent from any claims made by any of the suppliers, labourers, etc employed by the Petitioner."
4. The Petitioner has enclosed with the petition copies of the said settlement deed and indemnity bond dated 11th April 2011. The Petitioner states that immediately thereafter on 21st April 2011 it wrote to the Respondent revoking its undertaking in the settlement deed as it was given under "immense pressure from its suppliers and that the Respondent had refused to allow the Petitioner access to the construction site in order to remove ARB.P. 353 of 2011 Page 2 of 7 machinery, huge quantities of shuttering material as well as equipment belonging to the Petitioner." This was followed by a notice dated 30th July 2011 by the Petitioner to the Respondent invoking the arbitration clause in terms of Clause 67 of the general conditions of contract ('GCC') appended to the work order dated 19th April 2007. Subsequently, the present petition was filed.
5. In its reply filed on 2nd February 2012, the Respondent states that after the parties executed the settlement deed on 11th April 2011 on the basis of the joint measurement of the work, the dues of the Petitioner had been fully and finally settled. Reference is also made to the indemnity bond executed by the Petitioner on the same date. The Respondent denied the allegation that the Petitioner was under pressure to give the undertaking. Reference was made to the decision of the Supreme Court in National Insurance Company Limited v. Boghara Polyfab Private Limited (2009) 1 SCC 267. It is further stated that in its letter dated 23rd April 2011 the Respondent refuted the allegation that the Petitioner was put under duress and coercion to sign the indemnity bond and affidavit.
6. On 28th August 2012 after hearing arguments for some time, the Court passed the following order:
"1. Learned counsel for the Petitioner states that he will file an affidavit within two weeks indicating the bills/final bill raised by the Petitioner during the period when the work was in progress and the total payments received from the Respondent till date, mentioning the dates of receipt of such payment. The Respondent is also be permitted to file an affidavit on similar lines within the ARB.P. 353 of 2011 Page 3 of 7 same period.
2. List on 28th September 2012."
7. Pursuant to the above order, the Petitioner filed an additional affidavit on 11th September 2012 reiterating that the No Claim Certificate dated 11th April 2011 was signed by the Petitioner under extreme duress and coercion. In addition, it is also submitted by Mr. Raghavendra M. Bajaj, learned counsel appearing for the Petitioner, that the Petitioner's claims are not limited to the final bill but also on account of losses and damages suffered including loss of profit on account of delay by the Respondent in supplying ready mix cement and steel and the Petitioner being required to complete certain unfinished works.
8. The Respondent filed an affidavit on 21st September 2012 setting out in para 3 in a tabular form the payments made to the Petitioner in relation to the total value of the work certified for the tower area and non-tower area. Mr. A.K. Thakur, learned counsel appearing for the Respondent, referred to the fact that out of the total certified value of work of Rs.5,71,32,988 payments had already been made up to 31st March 2011 to the extent of Rs.5,27,00,393 leaving a balance of Rs.4,27,971.96. After negotiations, a settlement was arrived at between the parties and Rs.3,07,491 was paid to the Petitioner on 31st March 2011 as full and final settlement of its claims. Thus, the total amount paid to the Petitioner worked out to Rs.5,30,07,884. He referred to the actual final bills drawn up both for the tower and non- tower area and the letter dated 17th July 2010 which reflected the ARB.P. 353 of 2011 Page 4 of 7 negotiations between the parties.
9. In Union of India v. Master Construction Company (2011) 12 SCC 349, the Supreme Court discussed its earlier judgment in Boghara Polyfab and in paras 18 and 19 observed as under:
"18. In our opinion, there is no rule of the absolute kind. In a case where the claimant contends that a discharge voucher or no-claim certificate has been obtained by fraud, coercion, duress or undue influence and the other side contests the correctness thereof, the Chief Justice/his designate must look into this aspect to find out at least, prima facie, whether or not the dispute is bona fide and genuine. Where the dispute raised by the claimant with regard to validity of the discharge voucher or no-claim certificate or settlement agreement, prima facie, appears to be lacking in credibility, there may not be a necessity to refer the dispute for arbitration at all.
19. It cannot be overlooked that the cost of arbitration is quite huge-most of the time, it runs into six and seven figures. It may not be proper to burden a party, who contends that the dispute is not arbitrable on account of discharge of contract, with huge cost of arbitration merely because plea of fraud, coercion, duress or undue influence has been taken by the claimant. A bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up such a plea must prima facie establish the same by placing material before the Chief Justice/his designate. If the Chief Justice/his designate finds some merit in the allegation of fraud, coercion, duress or undue influence, he may decide the same or leave it to be decided by the Arbitral Tribunal. On the other hand, if such plea is found to be an afterthought, make-believe or lacking in credibility, the matter must be set at rest then and there."ARB.P. 353 of 2011 Page 5 of 7
10. The question that arises in the present case is whether the Court can come to a definite conclusion at this stage one way or the other that the Petitioner was made to sign the settlement deed, indemnity bond and affidavit dated 11th April 2011 under duress and coercion. Given the documents and affidavits filed by the parties, it appears to the Court that the answer to that question will necessarily involve examination of witnesses as well as the documents in light of their depositions. Since it is not possible for the Court to conclusively hold at this stage that the Petitioner's plea is "an afterthought, make-believe or lacking in credibility", the appropriate course would be to permit the parties to raise this as one of the first issues to be decided in the arbitral proceedings. In other words, the learned Arbitrator to be appointed by the Court will first determine whether there was a full and final settlement of the Petitioner's claims as contended by the Respondent, or whether the settlement deed, indemnity bond and the affidavit were executed under duress and coercion as contended by the Petitioner. Depending upon the answer to the said issue, the learned Arbitrator will proceed further to consider the claims of the Petitioner.
11. Learned counsel for the Petitioner pointed out that in Clause 67 of the contract a three member arbitral Tribunal is envisaged whereas under the work order the disputes are to be referred to a sole Arbitrator. With a view to minimizing the costs of arbitration, the Court considers it appropriate to refer the parties to a sole Arbitrator. This Court appoints Justice R.C. Chopra, a former judge of this Court (Mob. No. 9818097777, r/o N-113, ARB.P. 353 of 2011 Page 6 of 7 Greater Kailash-I, New Delhi), as sole Arbitrator to adjudicate the disputes between the parties including their claims and counter-claims. The parties are agreed that arbitration can take place under the aegis of and as per the Rules of the Delhi High Court Arbitration Centre ('DHCAC'). The fees of the learned Arbitrator will be in terms of the DHCAC (Arbitrators' Fees) Rules.
12. The petition is disposed of in the above terms. A copy of this order be communicated to the learned Arbitrator as well as Co-ordinator DHCAC forthwith.
S. MURALIDHAR, J.
SEPTEMBER 28, 2012 AK ARB.P. 353 of 2011 Page 7 of 7