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M/S Thermal Engineers And Insulators ... vs Delhi Tourism And Transportation ... on 28 February, 2022

Author: Mukta Gupta

Bench: Mukta Gupta

                         $~3
                         *      IN THE HIGH COURT OF DELHI AT NEW DELHI
                         +      ARB.P. 1097/2021
                                M/S THERMAL ENGINEERS AND INSULATORS
                                PVT. LTD.                           ..... Petitioner
                                          Represented by: Mr.Shubham Jaiswal, Adv.
                                                   Versus
                                DELHI TOURISM AND TRANSPORTATION
                                DEVELOPMENT CORPORATION LTD. ..... Respondent
                                         Represented by: Mr. Siddhant Nath, Advocate.

                                CORAM:
                                HON'BLE MS. JUSTICE MUKTA GUPTA
                                                   ORDER

% 28.02.2022 The hearing has been conducted through Video Conferencing.

1. By this petition, the petitioner seeks appointment of a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short „A&C Act‟).

2. According to the petitioner, despite having made claims before the Executive Engineer, Superintending Engineer and also before the Chief Engineer and thereafter, representation made to the CEO and MD of the respondent, the claim of the petitioner has been rejected and thus, the petitioner is constrained to approach this Court for appointment of an Arbitrator in terms of Clause 25(i) of the general terms and conditions of the Agreement between the parties.

3. Learned counsel for the respondent refuting the claim of the petitioner states that in terms of the Clause 25 (i) of the Agreement between the parties, before the petitioner could approach this Court for appointment of an Arbitrator, he was required to file an appeal before the Chief Engineer and thereafter to the Dispute Redressal Committee, whereas the petitioner has preferred the present petition under Section 11(6) of the A&C Act without availing the said remedies and hence, the present petition is pre-mature. Though learned counsel for the respondent states that the petitioner has received all his claims and he has already furnished „No Dues Certificate‟, however the said issue is not required to be looked into by this Court at this stage. Learned counsel for the respondent relies upon the decision of this Court in ARB.P.110/2022 titled "M/S Raghav Engineers vs. Delhi Tourism And Transportation Development Corporation Limited."

4. Clause 25(i) of the Agreement between the parties relating to Settlement of Disputes and Arbitration reads as under:

"CLAUSE 25 Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, Signature Not Verified Signed ARB.P. 1097/2021 Page 2 of 5 By:JUSTICE MUKTA GUPTA termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:

(i)If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor‟s letter.

If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer‟s decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor‟s appeal. If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 30 days from the receipt of the Chief Engineer decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee (DRC) shall give his decision within a period of 90 days from the receipt of Contractor‟s appeal. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule „F‟. If the Dispute Redressal Committee (DRC) fails to give his decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC), then either party may Signature Not Verified Signed ARB.P. 1097/2021 Page 3 of 5 By:JUSTICE MUKTA GUPTA within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer for appointment of arbitrator on prescribed proforma as per Appendix XV, failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator.

It is a term of contract that each party invoking arbitration must exhaust the aforesaid mechanism of settlement of claims/disputes prior to invoking arbitration."

5. In the present case, as per the petitioner, it was awarded a contract vide the letter dated 25th January, 2016 for construction, up- gradation, face lifting of Government Sarvodaya Co-ed Vidyalaya, Sector 9, Rohini, New Delhi and the said project was to be completed within six months from the date of issue of the letter, however, the project was completed on 14th January, 2019. The petitioner thereafter raised a claim in regard to the delay and stoppage of work due to non- finalisation of the drawings of electrical, plumbing etc. In this regard, letters were first sent to the Executive Engineer on 26th October, 2020 and thirty days‟ time was given to respond in terms of Clause 25(i) Agreement between the parties. Vide letter dated 11th November, 2020, the respondent denied the claims of the petitioner, whereafter the petitioner sent a letter to the Superintending Engineer dated 20th November, 2020, where again time of thirty days was granted to respond, however no reply was received and thus, the petitioner approached Managing Director and CEO on 17th December, 2020.

6. According to the petitioner, in between the petitioner also appeared before the Chief Engineer, however, no relief was granted Signature Not Verified Signed ARB.P. 1097/2021 Page 4 of 5 By:JUSTICE MUKTA GUPTA by the Chief Engineer. Admittedly, no appeal in writing was presented to the Chief Engineer who could have decided the same in terms of Clause 25(i). Thereafter, the petitioner has a further remedy of filing a further appeal before the Dispute Redressal Committee which remedy has also not been availed by the petitioner.

7. Thus, the petitioner in terms of the decision in Raghav Engineers (Supra) is required to first file an appeal before the Chief Engineer, failing which the petitioner has the remedy of a further appeal before the Dispute Resolution Committee and thereafter would be at liberty to file a petition under Section 11 of the A&C Act.

8. The petition is dismissed as pre-mature with liberty to the petitioner to avail the remedies available in the first instance. .

9. Order be uploaded on the website of this Court.

MUKTA GUPTA, J.

FEBRUARY 28, 2022 PB Signature Not Verified Signed ARB.P. 1097/2021 Page 5 of 5 By:JUSTICE MUKTA GUPTA