Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
M/s CCC Builders Merchant Private Limited - Petitioner
Versus
Container Corporation of India Limited - Respondent
ARB P. 747 of 2017, IA No. 287 of 2018
Decided On : 18-01-2018
Arbitration - Contract Dispute - Arbitration and Conciliation Act, 1996 - Section 9, Section 11 - Clause 64(1)(i), Clause 36.1 - The court held that the arbitration clause is applicable as the petitioner restricted its claim to 20% of the value of the contract. The court also noted that it need not go into the question of limitation at this stage, as per Section 11(6A) of the Arbitration and Conciliation Act, and appointed an arbitrator.
Fact of the Case:
The petitioner was awarded a contract for civil works, completed the project, and raised a final bill. The respondent rescinded the contract, withheld payment, and refused to initiate arbitration proceedings. The petitioner sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The court found that the arbitration clause was applicable as the petitioner restricted its claim to 20% of the contract value. It also held that it need not consider the question of limitation at this stage and appointed an arbitrator.
Issues: Dispute over contract payment, invocation of performance bank guarantees, refusal to initiate arbitration proceedings, and applicability of arbitration clause.
Ratio Decidendi: The court decided that the arbitration clause was applicable as the petitioner restricted its claim to 20% of the contract value and that it need not consider the question of limitation at this stage, as per Section 11(6A) of the Arbitration and Conciliation Act, 1996.
Final Decision: The court appointed an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.
Yogesh Khanna, J.
1. The brief facts as alleged by the petitioner are:
a. The respondent awarded the LOI dated 09.09.2009 in favour of the petitioner for civil works of "strengthening of existing pavement with M-50 Grade CC Block Pavement at ICD, Balasore, (Orissa)";
b. the petitioner company submitted performance bank guarantees dated 15.09.2009 for a sum of Rs. 11,07,398/- and 08.10.2009 for a sum of Rs. 2,56,000/- respectively, issued by Axis Bank Limited, amounting to 5% of the contract value, equivalent to a total sum of Rs.13,63,398/-;
c. on 30.10.2009 the petitioner and the respondent executed the Contract;
d. the petitioner completed and handed over the project to the Respondent, within the extended period of the Contract, i.e. on 08.11.2010;
e. the petitioner, raised the 3rd and final bill dated 03.02.2011 amounting to Rs.1,25,00,000/-;
f. on 09.02.2011 the 3rd and final bill was forwarded to the respondent by M/s RITES Limited, the project management consultant of the respondent company;
g. on 10.09.2012 the respondent illegally rescinded the Contract on false and baseless grounds and threatened to forfeit the security deposit and encash the performance bank guarantees of the petitioner;
h. on 18.09.2012 the Petitioner duly replied to the aforesaid letter of the Respondent, urging the Respondent to revoke the illegal rescission of the Contract.
i. the respondent wrote to Axis Bank Limited on 21.09.2012 to invoke the Performance Bank Guarantees submitted by the Petitioner, without giving any reasons whatsoever for invocation of the same;
j. on 24.09.2012 the petitioners filed an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996, bearing no. O.M.P. No. 907 of 2012, seeking stay of the invocation of the performance bank guarantees by the respondent. This Hon'ble Court was pleased to grant stay of invocation of the performance bank guarantees, through its Order dated 24.09.2012;
k. on 03.10.2012 this Court disposed of O.M.P. No. 907 of 2012 since the performance bank guarantees had already been invoked and granted liberty to the petitioner to seek interim relief in arbitral proceedings, as and when commenced, in accordance with law;
l. on 10.01.2013, the Respondent unilaterally transferred an amount of Rs. 63,36,522/-, to the account of the Petitioner and intimated the Petitioner vide its letter dated 14.01.2013 that the said payment was made against the gross bill of Rs. 1,08,42,722/-, settled by the Respondent. The Respondent had however had illegally and arbitrarily deducted monies under various heads such as recovery for rejection of blocks, recovery for lower grade blocks, etc. The Respondent deducted TDS on the said amount and furnished the return in respect of the same on 07.05.2013, which has been disclosed in Form 26AS of the Petitioner Company for the Assessment Year 2013-14;
m. on 25.03.2013 the petitioner sent a Notice of Arbitration dated 25.03.2013, calling upon the respondent to make payment of the legitimate dues payable to the petitioner company, and invoking arbitration to resolve the disputes and differences between the parties in terms of Clause 64 of the Contract. This was received by the respondent on 28.03.2013;
n. on 23.04.2013 the respondent replied to the said Notice of Arbitration vide letter dated 23.04.2013, denying all the claims made under the said Notice of Arbitration of the Petitioner on false and baseless grounds;
o. the petitioner company sent letters dated 23.04.2013 and 02.08.2013, reiterating its stand, and urged the Respondent to appoint an arbitrator for resolution of the disputes between the parties;
p. the respondent refused to accede to the request of the petitioner to initiate arbitration proceedings vide its reply letters dated 01.05.2013 and 21.08.2013;
q. on 07.11.2014 the petitioner approached this Court for appointment of an Arbitrator by way of arbitration petition under Section 11 of the Arbitration and Conciliation Act, 1996 bearing Arb. Pet. N
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
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
