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Madhya Pradesh High Court · body

2019 DIGILAW 491 (MP)

Budhiraja Electricals v. Union of India

2019-07-08

SANJAY YADAV

body2019
JUDGMENT : 1. Shri K. N. Gupta, learned Senior Counsel with Shri R. S. Dhakar, learned counsel for the applicant. Shri Vivek Khedkar, learned Assistant Solicitor General for the respondent/Union of India. Vide this application under section 11(6) of the Arbitration and Conciliation Act, 1996, applicant seeks reference of existing dispute to the arbitrator already in seisin with part of dispute. 2. It is borne out from record that for construction of residential and non-residential buildings for RTC ITBP, Karera, M. P (SH: Providing Fans and Fittings in Residential and Non-residential buildings and pumping sets) an agreement was entered into between the applicant and respondent vide Agreement No. 43/EE(E)/GCED/2014-15 dated 22-12-2014. The work order was issued on 12-1-2015 and was completed on 5-4-2016. Certain disputes arose between them as regard to payments. The applicant invoked Clause 25 of the Agreement which lays down the mechanism for resolution of inter se dispute; on 7-12-2016. As no decision was taken on the application, the applicant filed an appeal; whereon, Dispute Resolution Committee (DRC) was constituted on 3-2-2017. The applicant made following claims : Claim No. Particulars of Claim Account of Claim Claim No. 1 Claim on account of 4th and final Bill (Revised) submitted on 24-8-2016 against completed work on 5-4-2016 12,96,310.00 Claim No. 2 Claim on account of interest @ 7.50% under amended Clause 7 of agreement for delay in payment of Running Account Bills. Rs. 11,193.00 Claim No. 3 Claim on account of Labour Escalation payment under clause 10-C of Agreement Note : Escalation Bill of Labour Component duly passed pending for want of funds. Rs. 57,825.00 Claim No. 4 Claim on account of Losses and Damages sustained due to prolongation of contract 6,35,850.00 Claim No. 5 Claim on account of loss of profitability due to prolongation of contract 16,95,600.00 Claim No. 6 Claim on account of interest @ 7.50% w.e.f. 25-11-2016 to 31-10-2018 under amended Clause 9 of agreement for delay in payment of 4th and final Bill of Rs. 12,96,310/- within specified period of time. 1,88,320.00 Claim No. 7 Claim on account of interest @ 10% due to delay in refund of Earnest money and Security Deposit for the work completed on 5-4-2016. (1) Refund of EMD due on 5-4-2017, But refunded on 26-12-2017 Rs. 1,042.00 (2) Refund of Security Deposit due on 5-4-2017, but refunded on 8-7-2018 Rs. 14,768.00 Total Rs. 15,810.00 Rs. 1,88,320.00 Claim No. 7 Claim on account of interest @ 10% due to delay in refund of Earnest money and Security Deposit for the work completed on 5-4-2016. (1) Refund of EMD due on 5-4-2017, But refunded on 26-12-2017 Rs. 1,042.00 (2) Refund of Security Deposit due on 5-4-2017, but refunded on 8-7-2018 Rs. 14,768.00 Total Rs. 15,810.00 Rs. 15,810.00 Claim No. 8 Claim on account of Pendente-lite and future interest @ 10% on the awarded amount Shall be worked out after publication of Award Claim No. 9 Claim on account of Cost of Arbitration (a) In case Sole Arbitrator Min. of Housing and Urban Affairs is appointed Rs. 2,00,000.00 (b) In case Independent Sole Arbitrator is appointed or Sole Arbitrator is appointed through Court. Rs. 4,00,000.00 Total Rs. 39,00,908.00 + Claim No. 8 and 9 3. The DRC by order dated 14-11-2018 appointed Shri A. P. Joshi as sole Arbitrator and referred following 4 claims (out of 9) for adjudication. Four Claims referred to the arbitrator were : Claim No. Particulars of Claim Account of Claim Claim No. 4 Claim on account of Losses and Damages sustained due to prolongation of contract 6,35,850.00 Claim No. 5 Claim on account of loss of profitability due to prolongation of contract 16,95,600.00 Claim No. 8 Claim on account of Pendente-lite and future interest @ 10% on the awarded amount Shall be worked out after publication of Award Claim No. 9 Claim on account of Cost of Arbitration (a) In case Sole Arbitrator Min. of Housing and Urban Affairs is appointed Rs. 2,00,000.00 (b) In case Independent Sole Arbitrator is appointed or Sole Arbitrator is appointed through Court. Rs. 4,00,000.00 Total Rs. 39,00,908.00 + Claim No. 8 and 9 That following claims were declined to be referred : Claim No. Particulars of Claim Account of Claim Claim No. 1 Claim on account of 4th and final Bill (Revised) submitted on 24-8-2016 against completed work on 5-4-2016 12,96,310.00 Claim No. 2 Claim on account of interest @ 7.50% under amended Clause 7 of agreement for delay in payment of Running Account Bills. Rs. 11,193.00 Claim No. 3 Claim on account of Labour Escalation payment under clause 10-C of Agreement Note : Escalation Bill of Labour Component duly passed pending for want of funds. Rs. Rs. 11,193.00 Claim No. 3 Claim on account of Labour Escalation payment under clause 10-C of Agreement Note : Escalation Bill of Labour Component duly passed pending for want of funds. Rs. 57,825.00 Claim No. 6 Claim on account of interest @ 7.50% w.e.f. 25-11-2016 to 31-10-2018 under amended Clause 9 of agreement for delay in payment of 4th and final Bill of Rs. 12,96,310/- within specified period of time. 1,88,320.00 Claim No. 7 Claim on account of interest @ 10% due to delay in refund of Earnest money and Security Deposit for the work completed on 5-4-2016. (1) Refund of EMD due on 5-4-2017, But refunded on 26-12-2017 Rs. 1,042.00 (2) Refund of Security Deposit due on 5-4-2017, but refunded on 8-7-2018 Rs. 14,768.00 Total Rs. 15,810.00 Rs. 15,810.00 Aggrieved, the applicant has filed present application. It is urged that since dispute still subsists qua Claim No. 1, 2, 3, 6, 7(a) and 7(b) and since it arose from the agreement containing arbitration clause, incumbent it was upon the respondent to have referred the dispute to arbitrator already appointed. 4. The respondent, however, has opposed the claim. It is urged that the DRC after taking into consideration of compliance done by respondent decided all the claims conveyed vide their order No. WZII/CandA/15(154)/2018/9036-40-H dated 10-10-2018 (Exhibit R-6) wherein claim No. 1 for 4th and final bill is accepted before DRC is Rs. 12,96,310/- duly conveyed to respondent by claimant vide his letter dated 20-10-2018. According to the orders the payments were made to the claimant long back as also intimated to them vide respondent letter No. 54(184)/GCED/18/2438 dated 16-11-2018 (Exhibit R-7) indicating that gross work done of 4th and final bill paid is Rs. 14,44,355/- after adjustment of secured advance of Rs. 3,24,579/- net gross of 4th and final bill paid Rs. 11,19,776/- claim of claimant of balance payment of Rs. 1,76,534/- is baseless and bogus. Moreover, interest Rs. 1,52,716/- has been paid against claim No. 6 and no interest is due for claim No. 2 in view of respondent letter No. 54(184)/GCD/18/2555 dated 10-12-2018 (Annexure-4) of further as claim No. 7 no interest is payable EMD and Security Deposit was in FDR shape wherein interest was allowed by bank itself. 5. It is urged that after getting the claims settled in DRC the claimant has again approached the competent authority for reviewing their claims for appointment of an Arbitrator. 5. It is urged that after getting the claims settled in DRC the claimant has again approached the competent authority for reviewing their claims for appointment of an Arbitrator. The competent authority after due consideration appointed Shri A. P. Joshi as a Sole Arbitrator for adjudication of the Claim No. 4, 5, 8 and 9 vide letter No. 55(L-83)/ARB/CE(CZ)/18-19/3665 dated 14-11-2018 amounting to Rs. 27,31,450/- + simple interest (Exhibit R-8) for which the case is under process with the Arbitrator. It is urged, Claim No. 1, 2, 3, 6, 7 were not forwarded to Arbitrator because the applicant vide his letter dated 20-10-2018 has accepted the fact that these claims/disputes are already decided by DRC in his favour. Thus, no dispute remains with respect to these claims. It is contended that the applicant has unnecessarily dragged the respondent to the legal proceedings on unjustified, baseless grounds though the respondent has already settled justified claims of the applicant. It is contended that the applicant is not justified in filing the application and the doctrine of res jdicata is applicable in this matter as in accordance with the provisions of agreement all the disputes referred to the DRC were duly settled and even payment made to the claimant long back. 6. Considered the rival contentions and perused the cogent material on record. 7. Evidently, four claims were referred to for adjudication out of 9 claims put forth by the applicant; however, no plausible reasons have been assigned for not referring the remaining five disputes to the arbitrator. Except that the applicant was satisfied with the decision taken by the DRC, which does not tantamount to settling of disputes in the wake of the fact that the resolution passed by the DRC has not been implemented by the respondent in the terms as resolved by the DRC. Thus, the disputes qua Claim No. 1, 2, 3, 6, 7 remain unresolved. The plea of res judicata, thus, fades in the air. 8. In view whereof, this Court is of the considered opinion that the remaining disputes deserve to be referred to the arbitrator duly appointed by the competent authority. 9. Consequently, present application is disposed of with a direction to the respondent to refer the disputes, namely, Claim No. 1, 2, 3, 6, 7 to the arbitrator. On being referred, the arbitrator shall dwell upon the same in accordance with law. 10. 9. Consequently, present application is disposed of with a direction to the respondent to refer the disputes, namely, Claim No. 1, 2, 3, 6, 7 to the arbitrator. On being referred, the arbitrator shall dwell upon the same in accordance with law. 10. Application is disposed of finally in above terms. No cost. Order accordingly.