Delhi High Court
M/S Harvinder Singh And Co. vs Chief Engineer (I & Fc), Govt. Of Nct Of ... on 17 September, 2012
Author: S. Muralidhar
Bench: S. Muralidhar
*IN THE HIGH COURT OF DELHI AT NEW DELHI
#3 (Reportable)
+ ARB.P. 104 of 2012
M/S HARVINDER SINGH AND CO. ..... Petitioner
Through: Mr. Sandeep Sharma, Advocate.
Versus
CHIEF ENGINEER (I & FC), GOVT. OF NCT OF DELHI
& ANR ..... Respondents
Through: Mr. Amiet Andlay, Advocate.
CORAM: JUSTICE S. MURALIDHAR
ORDER
% 17.09.2012
1. By this petition under Section 11 of the Arbitration and Conciliation Act, 1996 ('1996 Act') the Petitioner M/s Harvinder Singh & Co. seeks the appointment of an Arbitrator to adjudicate the disputes between the parties.
2. The case of the Petitioner is that pursuant to a tender floated by Respondent No. 1 Government of the National Capital Territory of Delhi, through the Irrigation & Flood Control ('I & FC') Department, for construction of Pucca section of Band Drain in a length of 185 m, the Petitioner submitted an offer which was accepted by the Respondents by a letter dated 14th December 2009. The Petitioner was called upon by the Respondents to furnish a Performance Bank ARB.P. 104 of 2012 Page 1 of 5 Guarantee ('PBG') within fifteen days of the issue of the said letter. The Petitioner states that the said PBG was furnished on 28th December 2009.
3. Pursuant to a letter dated 29th December 2009, the Petitioner was asked to attend the office of the Executive Engineer ('EE') CD-IV, to complete the formal agreement within seven days from the stipulated date of start of work. The said letter reads as under:
"To M/s Harvinder Singh & Co.
7-a Taimur Nagar Opp. Gurdwara, New Friends Colony, New Delhi-110065 Sub:-Construction of pucca section of Bund Drain in a length of 185m from RD 45m to RD 190m and RD 220m to RD 260m.
H.O.A. 4711-Plan (Flood Sector) Stipulated date of start : 05.01.2010 Stipulated date of completion : 04.09.2010 Ref:- 1. Performance guarantee submitted by you vide your letter No.Nil dated 29.12.2009, for above mentioned work.
2. This office letter of intent/acceptance of tender No. EE.IV/Acs.2(19)/2008-2009/4600-4605 dated 14.12.2009.
Dear Sir(s)
1. In continuation of the letter referred above, you are requested to attend this office to complete the formal agreement within seven days from stipulated date of start.ARB.P. 104 of 2012 Page 2 of 5
2. You are requested to contact the Assistant Engineer-II, Civil Division No.IV, for taking possession of site and starting the work.
3. If you fail to sign the agreement and start the work within seven days as stipulated above, this award of work shall be deemed to have been cancelled leading of forfeiture of your earnest money and performance guarantee deposit.
Yours faithfully, Sd.
(Rajesh Singh) Executive Engineer, CD-IV"
4. The admitted position is that the Petitioner did not sign the agreement. Later on 4th February 2010, the Respondents wrote to the Petitioner stating that since he had failed to sign the agreement and start the work, within seven days, "this award of work shall be deemed to have been cancelled leading to forfeiture of your earnest money and performance guarantee deposit".
5. The question that arises is whether it can be said, in the circumstances, that there is an arbitration agreement between the parties in terms of Section 7 of the 1996 Act which reads as under:
"7. Arbitration Agreement--(1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have been arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.ARB.P. 104 of 2012 Page 3 of 5
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in--
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract."
6. Section 7(3) of the 1996 Act makes it clear that there has to be a written arbitration agreement entered into between the parties. There could also be a written agreement signed by the parties, or exchange of documents, containing an arbitration clause. In the present case, there is neither a signed arbitration agreement nor an agreement signed by the parties containing an arbitration clause.
7. Mr. Sandeep Sharma, learned counsel for the Petitioner referred to the decision in M/s. Finnpap (Finish Paper Mills Association) v. The ARB.P. 104 of 2012 Page 4 of 5 STC of India Ltd. 118 (2005) DLT 748 to urge that in similar circumstances, the Court had inferred an arbitration clause.
8. A perusal of the said decision in M/s. Finnpap shows that it was in the context of the Arbitration Act, 1940. The case before the Court was at the stage of challenge to an Award that had already been passed. The Court found that in the said case the Contractor had effected supplies of newsprint after the acceptance of its offer by the STC. The said decision is distinguishable on facts.
9. The present case is governed by the 1996 Act. Section 7(3) of the 1996 Act mandates that there must be a written arbitration agreement signed by the parties. It is not denied that there is no such written arbitration agreement. Therefore, the relief sought by the Petitioner cannot be granted.
10. The petition is dismissed with liberty to the Petitioner to pursue any other remedy that may be available to it in accordance with law.
S. MURALIDHAR, J SEPTEMBER 17, 2012 bs ARB.P. 104 of 2012 Page 5 of 5