Sps Konstruction Konsortium (spv) Pvt. Ltd. v. Himachal Pradesh Bus Stands Management And Development Authority
2018-09-13
VIVEK SINGH THAKUR
body2018
DigiLaw.ai
JUDGMENT Vivek Singh Thakur, J. - Present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of the Arbitrator for resolving the dispute between the parties to the petition. The dispute is alleged to have arisen out of the contract entered between the parties vide Concession Agreement for development, operation and maintenance of integrated Bus Terminal-cum-Commercial Complex at Parwanoo (Annexure P-2)). 2. The main dispute amongst others alleged in the petition is that though the petitioner company had initiated the pre-construction work at the Project Site by removing the over burden of the hillock and leveling the site in order to achieve the construction of the Project timely as per agreement but District Mining Officer on 29.1.2012 had instructed the petitioner company not to carry out any further work for want of written permission from the Department of Mining, Government of Himachal Pradesh to be obtained by the respondent authority and therefore, the respondent has failed to provide the site for work to be undertaken and completed under the agreement, resulting into suspension of pre-construction related activities at the site and thereafter the site was got demarcated by the petitioner company, whereupon it was found that only 947 square meters was available instead of 1795 square meters on the spot. It is alleged that again there was delay on the part of respondent authority with respect to the approval of designs or other necessary acts to be performed by the respondent resulting into the petitioner company to issue the notice of termination of agreement in accordance with Clause 22 of the Concession Agreement, (Annexure P-2). It is further case of the petitioner that after issuing termination notice, a total claims/losses to the tune of Rs. 98,26,454/- suffered by the petitioner company for the omission and commission of the respondent were also submitted vide letter dated 18.11.2013. Whereafter, on the basis of report of the Committee constituted by the respondent authority an amount of Rs. 5,23,745/- was approved to be payable to the petitioner company. Objections against the said report, filed by the petitioner company vide letter dated 20.3.2017, were rejected vide letter dated 25.4.2017, whereupon the petitioner, having left with no other option, requested the respondent authority vide letter dated 16.6.2017 to make payment of Rs.
5,23,745/- was approved to be payable to the petitioner company. Objections against the said report, filed by the petitioner company vide letter dated 20.3.2017, were rejected vide letter dated 25.4.2017, whereupon the petitioner, having left with no other option, requested the respondent authority vide letter dated 16.6.2017 to make payment of Rs. 5,23,745/- as the petitioner company was already suffering huge financial losses with further request to conduct a meeting to settle the remaining issues/claims arising between the parties. However, for receiving an amount of Rs. 5,23,745/-, respondent authority had asked the petitioner company to submit the affidavit and accordingly under duress and in order to cover up the huge financial losses, petitioner company submitted the affidavit desired by respondent vide letter dated 11.7.2017 so as to receive a part of the amount released by the respondent authority. After receiving the said amount, petitioner company vide letter dated 29.11.2017 communicated the respondent authority for withdrawal of the affidavit dated 11.7.2017 claiming that same was submitted under duress and financial pressure and payment of balance amount of Rs. 93,02,709/- was also requested. On receiving no response from the respondent authority, letter dated 20.2.2018 was issued to the respondent authority for invoking the Clause 27.2.2 and when no response thereof was received by the petitioner company, present petition has been filed, wherein an additional ground has been taken that under the provisions of Section 12(5) of the Act read with Schedule 7 of the Act the Secretary (Law) to the Government of H.P. is not a competent person to act as an Arbitrator in present case. 3. Arbitration Clause 27 in the agreement, reads as under:- "27.2.2. Any dispute which is not resolved amicably by conciliation, as provided in Clause 27.1, shall be finally decided by reference to arbitration to the Secretary of the Government of Himachal Pradesh, Department of law. Such arbitration shall be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The venue of such arbitration shall be Shimla and the language of arbitration proceedings shall be English." 4. Learned counsel for the respondent has opposed the appointment of the Arbitrator on the ground that the petitioner itself had issued the notice of termination of the agreement, whereafter as a full and final settlement an amount of Rs.
The venue of such arbitration shall be Shimla and the language of arbitration proceedings shall be English." 4. Learned counsel for the respondent has opposed the appointment of the Arbitrator on the ground that the petitioner itself had issued the notice of termination of the agreement, whereafter as a full and final settlement an amount of Rs. 5,23,745/- has been received by the petitioner company by filing an affidavit accepting the said amount full and final settlement towards its all claims, and therefore, there is no dispute pending between the parties and further in any case, matter is referred to the Arbitrator, the Secretary (Law) to the Government of H.P., as agreed upon between the parties under Clause 27.2.2 of Concession Agreement, is the competent, independent and impartial person to act as an Arbitrator as he is neither employee of State of H.P. nor having the control over the respondent authority or any business relations with the respondent authority, but a Judicial Officer of High Court of Himachal Pradesh. 5. During hearing, learned counsel for the petitioner, under specific instructions of the petitioner, submits that keeping in view the fact that the Secretary (Law) to the Government of H.P. is not an employee of the State of H.P., but is a Judicial Officer appointed and controlled by the High Court of H.P., petitioner now agrees that he is not incompetent to be appointed as Arbitrator as he does not suffer disqualification under Section 12(5) of the Act read with Schedule 7 of the said Act for such appointment in present case and thus has communicated consent of petitioner company for referring the dispute to the Secretary (Law) to the Government of H.P. under Clause 27.2.2 of the agreement (Annexure P-2). 6. Petitioner is claiming that despite termination of the contract, the claim with respect to the damages, losses suffered by the petitioner company is yet to be determined in terms of the agreement having the Arbitration Clause. Notably, no reply was intended to be filed on behalf of respondent authority rather prayer for referring the dispute to the Secretary(Law) to Government of H.P. was made. However, now learned counsel for respondent authority has denied the existence of any such dispute particularly on account of affidavit furnished by the petitioner company at the time of release of amount of Rs.
However, now learned counsel for respondent authority has denied the existence of any such dispute particularly on account of affidavit furnished by the petitioner company at the time of release of amount of Rs. 5,23,745/- accepting the same as full and final payment towards all claims. He has relied upon ONGC Mangalore Petrochemicals Limited vs. ANS Constructions Ltd and another , (2018) 3 SCC 373 wherein it is observed that in case the party alleging the fraud, coercion, undue influence etc. practiced by the other party is not able to establish such a claim or appears to be lacking in credibility, then it is not open to the Courts to refer the dispute to the arbitration at all. 7. Interestingly, this plea has been raised during the course of hearing on 4.9.2018, whereas initially it was communicated by the respondent authority that as per Clause 27.2.2 of the Agreement, parties have agreed that Secretary (Law) to the Government of H.P. is to be appointed as Arbitrator for resolution of dispute and therefore, the Secretary(Law) to the Government of H.P. be directed to enter into reference in accordance with the arbitration agreement. 8. Petitioner is claiming undue pressure and financial duress for settling the claim for Rs. 5,23,745/-, a reason for filing an affidavit to settle the claim against Rs. 5,23,745/-, whereas, the respondent authority is claiming that petitioner has failed to establish such claim of financial duress and the pleadings of the petitioner are not trustworthy. 9. Respective claims are yet to be established by the parties and keeping in view the consent of parties, as referred supra, it would be appropriate to refer the dispute to the Secretary (Law) to the Government of H.P. to act as the Arbitrator, as agreed between the parties in the agreement as well as herein present proceedings to resolve all disputes as claimed in present petition including the plea of respondent authority raised on the basis of ONGC Mangalore Petrochemicals Limited vs. ANS Constructions Ltd and another , (2018) 3 SCC 373 . 10.
10. Accordingly, without expressing any comment on the merit of respective claims of the parties and leaving all issues raised herein open to be decided by learned Arbitrator, the Secretary (Law) to the Government of H.P. is appointed as Arbitrator who shall enter into the reference within two weeks from the receipt of copy of order and parties shall appear before him on the date fixed by him, who shall proceed further in accordance with law in terms of arbitration agreement to resolve the dispute(s) between the parties arising out of the agreement. He shall be entitled for fee as per Schedule provided in the Act as admissible to him. Petition stands disposed of. Registry is directed to transmit the copy of this order to learned Arbitrator.