Himachal Pradesh High Court
__________________________________________________________________ vs M/S Ncc Ltd. And Another on 21 July, 2017
Author: Sandeep Sharma
Bench: Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arb. Case No. 8 of 2017 Decided on: July 21, 2017 __________________________________________________________________ M/s CGMP Projects Pvt. Ltd. ...Petitioner .
Versus
M/s NCC Ltd. and another ...respondents
__________________________________________________________________ Coram:
Hon'ble Mr. Justice Sandeep Sharma, Judge.
__________________________________________________________________ Whether approved for reporting? 1 For the Petitioner : Mr. Anuj Gupta, Advocate.
For the Respondents : Mr. Aman Sood, Advocate.
__________________________________________________________________ Justice Sandeep Sharma, Judge.
By way of instant petition under Section 11 (5) of the Arbitration & Conciliation Act, having been filed by the petitioner, prayer has been made to appoint an arbitrator in terms of clauses 13 and 17 of the purchase/supply orders (Annexures A-2 and A-3, respectively).
2. It emerges from the record that petitioner-company, which is engaged in the execution of air conditioners and allied works all over the country, was awarded certain contracts involving supply of air conditioning equipments and allied installations of air conditioning works, which amongst other also involved installation/testing, commissioning including supply of HVAC systems for respondent at ESIC Hospital, Mandi, HP. It further emerges from the record that petitioner was executing work for National Building Construction Corporation (NBCC) (principal 1 Whether reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 2contractor for the works for ESIC vide aforesaid contracts).
Followng works were awarded to the petitioner:
S. Date Description Scope of work
No
.
.
1 06.08.2015 P.O. CRSSG- Supply of HVAC Items at
NCC(JV)/NBCC/ESI Mandi site as per the
C/PO/018/14-15 specifications/ Bill of
Quantities & Rates (BOQ)
indicated in the
Annexure-1
2. 06.08.2015 W.O. No. NCC/ Installation, testing and
NCBB/ESIC/WO/01 commissioning of HVAC
8/14-15 Work at Mandi site as per
the specifications/ Bill of
Quantities & Rates (BOQ)
indicated in the
Annexure-1.
3. Perusal of Annexures A-2 and A-3, suggests that, while awarding aforesaid purchase order/ supply orders, for HVAC Systems at ESIC Mandi site, certain terms and conditions were agreed to by both the parties. Vide Clauses 13 and 17 of annexure A-2 and A-3, respectively, it was resolved that in the event of dispute inter se parties, matter shall be referred to arbitrator to be appointed by mutual consent of the parties, whose decision shall be final and binding upon both the parties. At this stage, it would be relevant to take note of arbitration Clauses 13 of Annexure A-2, which is para-materia to Clause 17 of Annexure A-3, as follows:
"13. ARBITRATION: To prevent disputes and litigation, it shall be accepted as an inseparable part of the Purchase Order that in matter regarding workmanship, interpretation of contract, mode of procedure and carrying out the work, the decision of CRSSG-NCC(JV) shall be binding on the contractor and if any technical/ contractual dispute which may arise touching the contract the matter shall be referred ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 3 to an arbitrator appointed by mutual consent of both the parties whose decision is final and binding on both parties."
4. It appears from the averments contained in the pleadings adduced on record by respective parties that there is some dispute .
with regard to payment qua the bills furnished by the petitioner. It also emerges from the record that on 24.5.2016, both the parties agreed to settle the matter amicably and accordingly, dues of petitioner were finalized on certain terms and conditions as specified in para-10 of the petition.
5. However, the fact remains that despite aforesaid agreement having been arrived inter se parties, they could not settle the matter, as a result of which, petitioner issued a legal notice on 15.7.2016, calling upon the respondent to settled final bill of the petitioner and to return tools and tackle of petitioner, lying at the site. Subsequently, petitioner, vide letter dated 12.8.2016, informed the respondent of certain disputes, allegedly having arisen between the petitioner and the respondent of the works done by the petitioner under aforesaid orders and invoked arbitration clause 13 of annexure A-2 and clause 17 of annexure A-3. Respondents, by way of communication dated 21.9.2016, disputed the fact that there had arisen certain disputes inter se parties as far as execution of works contracted to the petitioner.
6. Since, no steps were taken by the respondents to appoint arbitrator in terms of aforesaid arbitration clauses contained in purchase orders, petitioner approached this Court, by way of ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 4 instant proceedings, detailing therein its claims, with the further prayer to refer the matter to arbitrator, in terms of clauses contained in purchase/supply order.
.
7. Respondent, though by way of reply, acknowledged the factum with regard to issuance of work order, annexures A-2 and A-3 to the petitioner for execution of HVAC and MEP work for installation, testing, commissioning, including supply of HVAC systems at ESIC Hospital Mandi, HP, but specifically objected to the prayer of petitioner for appointment of arbitrator in terms of arbitration clauses contained in annexure A-2 and annexure A-3.
Respondents specifically stated that as per clause 18 of the work order, petitioner and respondents have agreed to jurisdiction of Courts at Delhi, in respect of any dispute(s), with regard to interpretation of terms of "order" or any other matter relating to or arising out of "work orders" and as such, prayed that the application be dismissed being not maintainable before this Hon'ble Court.
8. At this stage, it would be profitable to take note of Clause 18 of annexure A-3, which is reproduced herein below:
"18. Not withstanding anything contained in any other Agreement, contract or other document entered into or executed whether prior to or subsequent to this ORDER, the courts in the city of Delhi shall alone have jurisdiction to try any dispute or difference between the parties to this ORDER with regard to the interpretation of the terms of ORDER or any other matter relating to or arising out of this ORDER and this shall be treated as a separate contract."::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 5
9. After having gone through aforesaid clause 18 as contained in purchase/work order, this Court finds no force in the arguments of Mr. Aman Sood, learned counsel representing the respondent that .
this Court has no jurisdiction to appoint Arbitrator to adjudicate the dispute, if any, inter se parties, in view of specific bar contained in Clause 18. Needless to say, jurisdiction of this Court is not to be ascertained /conferred from the terms and conditions contained in work/purchase order.
10. Documents available on record prove it beyond doubt that the work orders, annexures A-2 and A-3, pertain to ESIC Hospital, Mandi, Himachal Pradesh. It is also not in dispute that vide aforesaid purchase/work orders, work is/was to be executed at ESIC Hospital Mandi, which definitely falls within territorial jurisdiction of this Court. Apart from above, it clearly emerges from the record that respondent is registered with Sales Tax authorities in Himachal Pradesh and has its local office at Mandi, details whereof find mention in work orders, annexures A-2 and A-3.
Clause 12 of aforesaid purchase order clearly provides that billing qua work done by the petitioner was required to be done by the petitioner at site address given in the contract order itself. Hence, mere conditions i.e. clause 18 contained in purchase order, can not exclude jurisdiction of this Court, especially when site of construction/work falls within territorial jurisdiction of this Court.
Though, respondent by way of reply, have disputed the claim as set out in the petition, but, definitely, there is no denial, if any, to the ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 6 effect that dispute inter se parties, is required to be referred to arbitrator in terms of clauses 13 and 17 of the aforesaid work orders. Since, respondent has failed to appoint arbitrator with the .
consent, in terms of Clauses 13 and 17 of annexures A-2 and A-3, respectively, despite there being notice, this Court sees substantial force in the submission of Mr. Anuj Gupta, learned counsel representing the petitioner, that this Court is required to appoint Arbitral Tribunal under Section 11 (5) of the Arbitration & Conciliation Act.
11. Leaving everything aside, mere condition contained in the order i.e. conditions No.14 and 18 of annexure A-2 and annexure A-3, respectively, can not exclude jurisdiction of this Court, especially when site of construction/work falls within territorial jurisdiction of this Court. Respondents, by way of reply, have disputed the claims as set out in the petition but there is no denial, if any, to the effect that dispute inter se parties is required to be referred to arbitrator in terms of Clauses 13 and 17 of the work orders.
12. The Hon'ble Apex Court in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. (2013)9 SCC 32 held as under:
"21. In Harshad Chiman Lal Modi, the clause of the plot buyer agreement read, "Delhi High Court or courts subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction." This Court held that the suit related to specific performance of the contract and possession of immovable property and the only competent court to try such suit was the court where the property was situate and no other court. Since the property was not situated in Delhi, the Delhi Court had no jurisdiction though the agreement provided for jurisdiction of the court at Delhi. This Court found that the agreement conferring ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 7 jurisdiction on a court not having jurisdiction was not legal, valid and enforceable."
13. The Hon'ble Apex Court in Patel Roadways Limited, Bombay vs Prasad Trading Company, 1992 AIR 1514 .
"In Hakam Singh v. M/s. Gammon (India) Ltd., [1971] 3 SCR Page 314 it was held that "corporation" referred to in Section 20 meant not only a statutory corporation but also a company registered under the Indian Companies Act. It was also held that it is not open to the parties by agreement to confer jurisdiction on any court which it did not otherwise possess under the Code. But where two courts have jurisdiction under the Code to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to public policy nor does such an agreement contravene Section 28 of the Contract Act.
In that case also there was a clause in the agreement being clause No. 13 which provided that notwithstanding the place where the work under the contract was to be executed the contract shall be deemed to have been entered into between the parties at Bombay and the court in Bombay alone shall have jurisdiction to adjudicate thereon. The trial court had held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the courts at Bombay which they did not otherwise pos- sess. In a civil revision filed by the respondent the Alla- habad High Court held that the courts at Bombay had also jurisdiction and in view of clause 13 of the agreement the jurisdiction of the courts at Varanasi stood ousted.
It is in the appeal against the said judgment of the High Court that the propositions of law referred to above were laid down by this Court. It was held that since the respondent had its head office at Bombay the courts at Bombay also had 'jurisdiction by virtue of Section 20 of the Code read with its Explanation and in view of clause 13 of the agreement between the parties the courts in Bombay alone had jurisdic- tion in the matter. The appeal was accordingly dismissed. This view was reiterated by this Court in Globe Transport Corporation v. Triveni Engineering Works and Another, [1983] 4 SCC Page 707."
14. Since respondent has failed to appoint arbitrator with mutual consent, in terms of clauses 13 and 17 of the annexures A-2 and A-
3, respectively, despite there being notice, this Court sees substantial force in the submissions of Mr. Anuj Gupta, learned counsel representing the petitioner, that this Court has power to ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP 8 appoint Arbitral Tribunal, under Section 11 (5) of the Arbitration & Conciliation Act.
15. Accordingly, Mr. Justice A.K. Goel (Retired) is appointed as .
the sole Arbitrator. He is requested to enter into reference within a period of two weeks from the date of receipt of a copy of this order.
Thereafter, petitioner is directed to file claim petition within a period of three weeks. Reply be filed by the respondents within a further period of three weeks. Pleadings, including rejoinder and counter-claims shall also be completed by the parties within a period of eight weeks after entering into reference by the Arbitrator. It shall be open to the Arbitrator to determine his own procedure with the consent of the parties. It shall also be open to the Arbitrator to fix his fee. Award shall be made strictly as per the provisions of Arbitration & Conciliation Act, within six months.
Needless to add that the Arbitrator shall pass a speaking order.
16. A copy of this order shall be made available to the Arbitrator, named above, by the Registry of this Court, within a period of two weeks, enabling him to take steps for commencement of the arbitration proceedings.
17. The petition is disposed of.
(Sandeep Sharma) Judge July 21, 2017 vikrant ::: Downloaded on - 27/07/2017 23:57:02 :::HCHP