SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2002 Supreme(Del) 889

High Court Of Delhi
SETHI CONSTRUCTION COMPANY - Appellant
Versus
CHAIRMAN AND MANAGING DIRECTOR, NTPC - Respondent
Decided On : 07/09/2002

Headnote:The case debated on whether the applicant had the locus standi to file an application for the appointment of arbitrator – In a dispute over payment of work done by the applicant arisen between the applicant and the National Thermal Power Corporation (NTPC), the applicant had requested for the appointment of arbitrator – There was no response by the NTPC –In view of the circumstances and clause 37 of the general condition of the contract, it was ruled that there was no privity of contract between the applicant and the NTPC – Accordingly, the application under Section 8 and 11 of the Arbitration and Conciliation Act, 1996 was misconceived and was liable to be dismissed -

D. K. JAIN

( 1 ) THIS is an application under section 8 and 11 of the Arbitration and Conciliation Act, 1996 ( (for short the Act), praying for appointment of an arbitrator to resolve the disputes and differences, which are stated to have arisen between the applicant and National Thermal Power Corporation, hereinafter referred to as NTPC, the respondent herein.

( 2 ) SHORN of unnecessary details, the material facts leading to the filing of the present application are:

A works contract for the construction of a school building was awarded by the NTPC to one m/s. Gangotri Enterprises Limited (hereinafter referred to as the GEL), vide letter dated 1 July 1998. Since the GEL could not complete the work on time, the said work is stated to have been assigned to the applicant by GEL with the consent of the respondents. According to the applicant, the NTPC vide its office note dated 7 September 1999, finally approved on 7 October 1999, had agreed that the balance work could be entrusted to the applicant. In terms of the said arrangement, the applicant was to execute the work, as per the contract of GEL with NTPC; get the work executed measured; submit the bills as per the rates settled in terms of the contract and the NTPC was to make direct payment of the running bills to the applicant in their name. It is also averred that for documentation of this arrangement an agreement was also entered into on 31 august 1999 between GEL and the applicant. Disputes relating to payment for the work done by the applicant having arisen between the applicant and the NTPC, the applicant claims to have requested the NTPC to get these settled by appointing an arbitrator in terms of clause 56 of the General Conditions of Contract, governing the contract between GEL and NTPC. The said clause provides that all questions and disputes relating to the designs, drawings, quality of workmanship or any other question, claim or right etc, shall be referred to the sole arbitration of the general Manager, NTPC and if he is not willing to act as such, to the sole arbitration of some other person, appointed by the Chairman and Managing Director of NTPC. Having failed to get any response from the NTPC, the present application was filed.

( 3 ) IN the reply filed on behalf of NTPC, the application is resisted mainly on the ground that there is no privity of contract between the applicant and the NTPC nor is there any arbitration agreement between them and, therefore, the present application is misconceived. It is also stated that the NTPC has not given any approval to GEL to sub-contract any portion of the contract to the applicant. It is pointed out that the applicant was only a piece rate worker (PRW) of GEL and the engagement of the applicant cannot be considered as sub-contracting of the work in favour of the applicant in terms of clause 37 of the agreement. It is asserted that NTPC is not a party to the agreement dated 31 August 1999 between the applicant and GEL and the NTPC had only agreed to release payments to the applicant directly for the work which was to be executed by the applicant on behalf of GEL.

( 4 ) I have heard learned counsel for the parties.

( 5 ) IT is submitted by learned counsel for the applicant that GEL having assigned the contract in favour of the applicant and NTPC having accepted the applicant as the sub-contractor, the applicant has stepped into the shoes of GEL insofar as the rights and obligations under the contract dated 1 July 1998 are concerned qua NTPC, and, therefore, the present application is maintainable. Relying on the decision of the Constitution Bench of the Supreme Court in konkan Railway Corporation___ltd. v. Rani construction. (2002) 2 SCC 388, it is also urged that while dealing with this application under section 11 of the Act, this court is not supposed to go into any contentious issues which may be raised by the respondent in defence.

LEARNED counsel for the NTPC, on the other hand has vehemently submitted that from the
































Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top