2012 Supreme(Del) 737
High Court of Delhi
SANJAY KISHAN KAUL & RAJIV SHAKDHER, JJ.
M/S Krishna Construction Co.
Versus
DDA & Another
FAO(OS) NO. 137 OF 2005
Decided on : 02-03-2012
For the Appellants:Harish Malhotra, Sr. Adv. with Rajinder Aggarwal & R.K. Modi, Advocates.
For the Respondents: Saurabh Khanna, Adv. for Gaurang Kanth, counsel for DDA.
The main legal point established in the judgment is that the appellant was not disabled from raising claims in the first round of arbitration, and therefore, the petition under Section 20 of the Act was dismissed.
Headnote:
Arbitration - Dispute Reference - Arbitration Act, 1940 - Section 20
Fact of the Case:
The appellant sought reference of disputes to arbitration nearly two and a half decades after the disputes arose. The appellant's petition under Section 20 of the Arbitration Act, 1940 was dismissed by the Single Judge. The appellant appealed against this judgment.
Finding of the Court:
The court found that the appellant was not disabled from raising claims in the first round of arbitration, which were sought to be raised by way of a petition under Section 20 of the Act. The court concluded that the adjudication between the parties pertained to issues arising out of completed works, and therefore, the appellant was not disabled from raising claims before the arbitrator.
Issues: The issues included the bar of limitation and constructive res judicata, as well as the timing of raising claims and seeking reference to arbitration.
Ratio Decidendi: The court's decision was based on the finding that the appellant was not disabled from raising claims in the first round of arbitration, and therefore, the petition under Section 20 of the Act was dismissed.
Final Decision: The appeal was dismissed, and the parties were ordered to bear their own costs.
Rajiv Shakdher, J.
1. By way of the present appeal, in effect, the appellant is seeking a reference of disputes to arbitration after nearly two and a half decades of the disputes having arisen. The appellant being aggrieved by the judgment of the Single Judge dated 14.3.2005, passed in Suit No.2010-A/1987, has preferred the present appeal. By virtue of the impugned judgment, the learned Single Judge has dismissed the appellant?s petition under Section 20 of the Arbitration Act, 1940 (in short „the Act?).
2. In order to appreciate the rival contentions raised before us, it would be necessary to notice, the essential facts and circumstances, which led to the institution of the petition under Section 20 of the Act, and then, the present appeal.
2.1 On 27.10.1980, the appellant was awarded the contract to construct 200 dwelling units, in phase-II, at the Village complex at Siri fort near Hauz Khas (in short the said works), in connection with the Asian Games, which were to be held in the city.
2.2 It appears that disputes arose between the parties with respect to rates to be awarded qua certain “substituted items” of work and the amounts to be paid vis-à-vis work carried out beyond the „deviation limits?. Consequently, the appellant on 21.4.1982, while the work was still in progress, invoked the arbitration mechanism, provided in clause 25 of its contract with the respondent, for adjudication of disputes inter se the parties.
2.3 The dispute in the first instance was referred to one Shri H. D. Kochar. Since, Shri H.D. Kochar vacated his office; Shri G. Subramanayam was appointed as the Arbitrator. The appellants, apparently challenged the appointment of Shri G. Subramanayam which, ended with, this court appointing Shri D.P. Goyal as the arbitrator, in place of Shri G. Subramanayam.
2.4 In the interregnum, the work assigned to the appellant was completed. There appears to be a dispute with regard to the date of completion of the work. The appellant claims that work got completed on 15.12.1982, while the respondent has asserted that the work was completed in May, 1982.
2.5 In the arbitration, when initially commenced before Shri H. D. Kochar five (5) claims were lodged by the appellant, which were followed by an application dated 5.11.1982, whereby the appellant sought to include two (2) additional claims. These were claims pertaining to, pendente lite and future, interest and, a claim for cost. Thus, in all, the appellant lodged seven (7) claims.
2.6 While, the arbitration before Shri D.P. Goyal was in progress, the appellant notified the respondent qua certain other claims and sought their adjudication, by way of arbitration. This request was made on 7.12.1983. It is not in dispute that the said request was followed by the three letters and a legal notice. None of these communications elicited any response on the part of the respondent. The letters and the legal notice which were evidently sent by the appellant were dated: 1.5.1985; 14.1.1986; 24.4.1986 and 24.7.1987 respectively.
2.7 The respondent, however, based on the office memorandum dated 19.12.1985, followed by a communication dated 18.2.1986, issued by the Executive Engineer of the Department, referred its own counter claims to the Arbitrator, Shri D. P. Goyal, for adjudication along with the claims of the appellant, which were already receiving his consideration.
2.8 Shri D. P. Goyal, the learned Arbitrator, after duly adjudicating upon the claims and counter claims raised before him, made and published his award on 25.1.1987. A formal communication in respect of the same along with copies of the award was dispatched to the parties with copies to the Registrar of this Court and the Engineer-Member of the respondent.
2.9 The appellant, nearly eight months later in September, 1987 approached this court by way of a petition under Section 20 of the Act, with a prayer seeking a direction to the respondent to refer the disputes, raised for the first time, in its commu