Failure to disclose material facts and relevant documents may lead to dismissal of a petition seeking relief under Section 11 of the Arbitration and Conciliation Act, 1996.

1. This is a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Act’) filed by Ascent Construction Private Ltd. (‘ACPL’) seeking reference of the disputes that has arisen between the parties to arbitration.

2. The background to the present petition is that the Respondent Parsvnath Buildwell Pvt. Ltd. (‘PBPL’), a subsidiary of Parsvnath Developers Limited, entered into an agreement dated 10th May 2011 with ACPL for execution of certain works at Parsvnath Exotica, Mohan Nagar, Ghaziabad, UP. The value of the contract on the basis of the bill of quantity was Rs. 21,70,76,177. Clause 4.7.2.1 of the 'conditions of contract', which were treated as part of the agreement, is the arbitration clause.

3. In the present petition under Section 11 of the Act, it is stated by ACPL that they sent notice dated 8th October 2013 to the Respondent PBPL informing that they had already appointed an Arbitrator in terms of the agreement and called upon PBPL to nominate its Arbitrator in terms of clause 4.7.2 of the agreement. It is stated that PBPL failed to appoint any Arbitrator on its behalf. Para 7 of the petition sets out the details of the disputes that had arisen between the parties. Para 8 of the petition gives the value of the subject matter of the disputes and states that the cause of action had arisen in Delhi.

4. The petition was filed on 20th December 2013 along with four documents i.e. the copy of the agreement, copy of the notice dated 28th October 2013, copy of the proof of service and a copy of the board resolution. Notice was issued in the petition on 13th January 2014. In response to the notice, a reply was filed by PBPL on 24th May 2014 in which, inter alia, in para 5 of the preliminary submissions it was stated as under:

“5. The Petitioner herein has approached this Hon’ble Court with a malafide intent as documents relevant for the adjudication of the present ‘lis’ have not been placed on the record of this Hon’ble Court by the Petitioner. It is submitted that there has been protracted correspondence exchanged between the parties in the subject matter and the Petitioner herein has, after accepting the full and final settlement, has also received the amount accepted as fully and finally as payable to the Petitioner. The Petitioner herein, after receipt and realization of the full and final settlement amount, has illegally invoked the arbitration clause in order to attempt and gain wrongfully from the Respondent herein. It is submitted that the Petitioner herein had in a meeting dated 26th February 2013 agreed to a full and final payment of an amount of Rs.47,10,230 (Rupees Forty Seven Lakh Ten Thousand Two Hundred and Thirty Only) and has thereafter also received the aforementioned full and final amount. In view of the aforementioned, it is clear that the contract has been fully and finally discharged by performance of all obligations and accord and satisfaction and the claims sought to be raised by the Petitioner by virtue of the present petition is therefore not liable to be referred to arbitration. A copy of the reconciliation sheet prepared in the meeting on 26th February 2013, wherein the Petitioner has acknowledged the aforementioned amount of Rs.47,10,230 (Rupees Forty Seven Lakhs Ten Thousand Two Hundred and Thirty Only) as full and final amount payable to the Petitioner is annexed hereto and marked as Annexure R-2. Copy of Payment Proof is annexed hereto and marked as Annexure R-3.”

5. It was further stated in para 8 of the preliminary submissions as under:

“8. That the present petition is also liable to be dismissed for non-disclosure of true and correct facts before this Hon’ble Court. The Petitioner herein has concealed from this Hon’ble Court, the fact that an amount of Rs.47,10,230 (Rupees Forty Seven Lakh Ten Thousand Two Hundred and Thirty Only) has already been received by the Petitioner in the subject matter after issuance of full and final discharge and the petition is liable to be di