Delhi High Court - Orders
Akash Builders Through Its Prop. ... vs Union Of India on 30 June, 2020
Author: Rekha Palli
Bench: Rekha Palli
Via Video Conferencing
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 199/2020
AKASH BUILDERS THROUGH ITS PROP. GULSHAN KUMAR
....Petitioner
Through: Mr.Amit Dubey with Mr.Dilip Kumar
Rana, Advs.
Versus
UNION OF INDIA .....Respondent
Through: Mr.J.K.Singh, Adv.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
ORDER
% 30.06.2020
1. The present petition under Section 11 (4) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) seeks appointment of an independent Arbitrator for adjudication of disputes and differences, which have arisen between the parties in relation to the contract awarded to the petitioner vide letter of acceptance dated 24.11.2015.
2. Upon notice being issued in the petition, though reply is stated to have been filed by the respondent, but the same is not on record. Learned counsel for the petitioner submits that in any event the only two objections raised by the respondent in its reply are that the claim was sought to be raised by the petitioner after the prescribed period of 120 days' and that the petitioner having already signed a no claim certificate was estopped from invoking arbitration. He further submits that pursuant to the last order, the respondent had also furnished a list of retired officers on the panel of Arbitrators maintained by it and the petitioner is agreeable for the appointment of Mr.Bhuvnesh P Khare (IRSE) Retd. as the sole Arbitrator.
3. On the other hand, learned counsel for the respondent while not disputing that the petition is being opposed only on the aforesaid two grounds submits that once the petitioner has given a no claim certificate, it is estopped from invoking arbitration.
4. Before dealing with the rival submissions of the parties, it may be appropriate to refer to the respondent's letter dated 13.02.2020 in response to the petitioner's request for appointment of an Arbitrator. The said letter is reproduced hereinbelow clearly shows that the respondent did not deny that the matter was required to be adjudicated through arbitration, but had only directed the petitioner to furnish its waiver under Section 12(5) of the Act, which the petitioner refused.
(BY SPEED POST) NORTHERN RAILWAYS Headquarters Office, Baroda House, New Delhi Dated: 13.02.2020 No. 63-W/5/1178 -WA M/s. Akash Builders, 15-C, Shivam Enclave, DDA Flats (MIG), Shahadara, Delhi-11 0032.
Sub:- Agreement towards Waiver under Section 12(5) of Arbitration and Conciliation (Amendment ) Act against Arbitration in connection with : "Repair & maintenance of staff quarters and service buildings etc. in the jurisdiction of SSE/W/SNP on DUK section & JHI-PNP section under ADEN/PNP". Ref :-(i) Indian Railway Standard General Conditions of Contract, September 2019 issued under Railway Board's letter No. 2018/CE- I/CT/37/GCC/Policy dated 06.09.2019.
(ii) Your letter No. Nil. dated 05 .02.2020 addressed to GM/N. Rly. Regarding Appointment of Arbitrator.
**** In reference to· your request for appointment of Arbitrator, the case is under process. As per clause 64(1 )(ii)(b) of Indian Railway Standard General Conditions of Contract, September 2019 issued under Railway Board's letter No.2018/CE-I/CT/37/GCC/Policy dated 06 .09 .2019, parties may waive off the applicability of Sub- Section 12(5) of Arbitration & Conciliation Act 2015, if they agree for such waiver in writing, after dispute having arisen between them, in the format given under Annexure XV of these conditions (format enclosed).
You are therefore, requested to fill up the Annexure-XV, if you agree for waiver of clause 12(5) of Arbitration & Conciliation Act and send it back to this office for appointment of Sole Arbitrator/Arbitral Tribunal consisting of Railway's Gazetted Officer (JAG/SAG) within 30 days from the date of dispatched.
Your reply is urgently requested for early appointment of Arbitrator.
DA: As above Signed (N.K. Deswal) AXEN/Genl.
For General Manager/Engg.
5. In light of the aforesaid letter, wherein the respondent had expressed its willingness for the matter to be referred for arbitration, the respondent's objection is wholly unmerited and deserves to be rejected. Even otherwise while exercising power under Section 11 of the Act, the Court is primarily required to consider only the existence of an arbitration clause/agreement. In this regard reference may also be made to the decision dated 24.09.2019 of a Coordinate Bench of this Court in M/S Makro v. M/S The New India Assurance Co. Ltd. & Anr. [Arb. P.416/2019], wherein the learned Judge while relying on the decision of the Supreme Court in Mayavati Trading(P) Ltd. V. Pradyuat Deb Burman, [(2019) 8 SCC 714 ], observed as under :-
"5. The only objection raised by the respondent to the appointment of the Arbitrator is that the petitioner without any fraud/undue influence/coercion had settled the matter with the respondent and this was a full and final settlement. There is no denial or dispute to the existence of the Arbitration Agreement between the parties. In a recent judgment by the Apex Court in the case of M/s. Mayavati Trading Pvt. Ltd. vs. Pradyuat Deb Burman, (Civil Appeal No.7023/2019 decided on 05.09.2019) has overruled the judgment in the case of United India Insurance (supra) and has held that the defence of full and final settlement of a claim will not be considered by the Court while examining the petition under Section 11(6) of the Act. The Apex Court has held that all that needs to be seen at the time of deciding Section 11(6) of the Act is the existence of the Arbitration Agreement and no more and nothing else. The relevant paras of the judgment are extracted hereunder:
"10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgment as Section 11(6A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment Duro Felguera, S.A. (supra) - see paras 48 & 59.
11) We, therefore, overrule the judgment in United India Insurance Company Limited (supra) as not having laid down the correct law but dismiss this appeal for the reason given in para 3 above."
6. For the aforesaid reasons, the petition is allowed. Mr.Bhuvnesh P Khare (IRSE) Retd., (Mobile No.7042300388), is appointed the sole Arbitrator for adjudication of the disputes and differences which have arisen between the parties in relation to letter of acceptance dated 24.11.2015.
7. It is made clear that this Court has not considered the rival claims of the parties on merits as also the objections raised by the respondent. It will, therefore, be open for the learned Arbitrator to consider all pleas permissible in law as raised by the parties including the respondent's objection that the petitioner's claim was barred by time. It will also be open for the respondent to file a counter claim, if any, before the learned Arbitrator, which will be considered by the learned Arbitrator as per law.
8. Before commencing arbitration proceedings, the Arbitrator will ensure compliance of Section 12 of the Act. The fees of the learned arbitrator shall be in accordance with the Schedule-IV of fees prescribed under the Delhi High Court Arbitration Centre (Administrative Costs and Arbitrators' Fees) Rules.
9. A copy of this order be sent to the learned Arbitrator through electronic means.
10. The petition stands disposed of.
REKHA PALLI, J JUNE 30, 2020/sr