IN THE HIGH COURT OF DELHI AT NEW DELHI
Suresh Kumar Kait, Neena Bansal Krishna, JJ.
Delhi Development Authority - Appellant
Versus
M/s. Gupta And Co . & Anr. - Respondents
FAO (COMM) 24 of 2023 & CM APPL. 3376 of 2023
Decided On : 02-11-2023
Arbitration and Conciliation Act - Maintainability of Objections under Section 34 - Section 42, Commercial Courts Act, 2015 - 13(1)(A) of the Commercial Courts Act, 2015
Fact of the Case:
The appellant-DDA filed an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the Order dismissing its Objections under Section 34 of the Act, 1996 by the learned District Judge (Commercial Court). The court considered the confusion regarding the maintainability of the petition under Section 34 due to a change in pecuniary jurisdiction and the filing of objections by both parties in different courts.
Finding of the Court:
The court found that the Commercial Division of the District Courts had the pecuniary jurisdiction to entertain the Objections under Section 34 of the Act, 1996 filed by the appellant-DDA, as the specified value of the claim fell within its jurisdiction.
Issues: The main issue was the maintainability of the Objections under Section 34 of the Act, 1996 before the learned District Judge (Commercial Court) due to the change in pecuniary jurisdiction and the filing of objections by both parties in different courts.
Ratio Decidendi: The court's decision was based on the interpretation of Section 42 of the Act, 1996 and the Commercial Courts Act, 2015, which determined the pecuniary jurisdiction of the courts to entertain objections under Section 34. The court emphasized that the jurisdiction to entertain the objections was parallel between the High Court and District Court and was determined by the specified value.
Final Decision: The court remanded the case to be placed before the learned District & Sessions Judge, Rohini, Delhi to assign it to a Commercial Judge for adjudication on merits.
JUDGMENT
Neena Bansal Krishna, J. - The Appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act, 1996') read with Section 13(1)(A) of the Commercial Courts Act, 2015 has been filed by the appellant-DDA for setting aside the Order dated 14.09.2022, passed in OMP(COMM) 5 of 2021, by of the learned District Judge (Commercial Court), whereby the Objections preferred by the appellant under Section 34 of the Act, 1996 were dismissed on the ground of maintainability.
2. Facts in brief are that the respondent No.1-M/s. Gupta & Co. (Claimant before the learned Arbitrator) was awarded a Tender by the appellant-DDA (Respondent before the learned Arbitrator) vide Letter dated 10.03.1986, whereby the work awarded was to be completed by 20.03.1987. The work contract got completed on 29.08.1989. However, the completion of works was not recorded and the respondent No.1's Final Bill was not prepared. The respondent No. 1 continued to pursue with appellant-DDA for the finalization of its bills and eventually, after much effort, Final Bill was prepared. The intimation regarding the same was given to the respondent No. 1 vide Letter dated 17.01.2011. However, the Bill was not in conformity with the measurements recorded by the DDA in various Measurement Books. Consequently, the amount was accepted by the respondent No. 1 under protest and thereafter, it submitted a Final Bill dated 31.01.2011 in accordance with its calculations and the measurements recorded in various measurement books. The appellant-DDA released the part payment in the sum of Rs.1,64,000/- vide cheque dated 16.03.2011.
3. The disputes persisted between the parties and the respondent No. 1 served a Legal Notice dated 11.07.2011 for recovery of the balance amount and raised 13 claims. The appellant-DDA responded to the said Notice admitting two of the claims, but denying the others vide its Letter dated 18.07.2011.
4. Consequently, the respondent No. 1 invoked Arbitration Clause and filed a petition under Section 9 of the Act, 1996, being OMP No. 514/2013, before this Court seeking directions to deliver the Measurement Books in the custody of the Chief Engineer, DDA. The petition under Section 9 of the Act, 1996 was disposed of by this Court vide Order dated 09.09.2013, inter alia recording the submissions of the appellant-DDA that six of the given Measurement Books would be produced before the learned Arbitrator while the balance three Measurements Books would be produced as and when directed by the learned Arbitrator. Vide its letter dated 12.07.2013, the appellant-DDA appointed Sh. Lakhvinder Chaudhary, S.E. (Arbitration), DDA as the Sole Arbitrator and subsequently, on his transfer Sh.S.K.Jain, S.E.(Arbitration) was appointed as the Sole Arbitrator on 14.02.2014. The learned Sole Arbitrator vide his Award dated 09.06.2016 dismissed the claims of the respondent No. 1 on the ground of limitation.
5. The respondent No. 1, vide petition being OMP (COMM) 443/2016, challenged the arbitral Award dated 09.06.2016 under Section 34 of the Act. 1996, before the learned Single Judge. The Objections were allowed on 27.03.2019 and the first Award dated 09.06.2016 was set aside, granting liberty to the respondent No. 1 to take recourse an appropriate remedy in accordance with law.
6. The appellant-DDA filed an Appeal under Section 37 of the Act, 1996, being FAO(OS)(COMM) 275/2019, challenging the Order dated 27.03.2019 passed by the Learned Single Judge, but the same was also dismissed by the Division Bench of this Court.
7. The second round of litigation commenced and the appellant-DDA appointed the Learned Arbitrator on 23.05.2019 to adjudicate the disputes between the parties. The second Award in this matter came on 02.12.2020 whereby, against the claim amount of Rs.87,20,342/- along with cost and interest, the learned Arbitrator passed an Award in the sum of Rs.1,40,93,828/-.
8. The appellant-DDA, aggrieved by the said Award dated 02.12.20
The main legal point established in the judgment is the determination of the pecuniary jurisdiction of the courts to entertain objections under Section 34 of the Arbitration and Conciliation Act, 199....
The jurisdiction of courts over arbitration applications must adhere to specified pecuniary thresholds established by law, and errors in this regard can invalidate decisions.
Venue of arbitration does not equate to its jurisdictional seat; petitions under the Arbitration Act must be filed where arbitration took place, as established in prior Supreme Court rulings.
The court affirmed that judicial intervention in arbitral awards is limited to grounds of public policy or patent illegality, emphasizing respect for the Arbitrator's findings.
The main legal point established in the judgment is the limited scope for interference with arbitral awards under the Arbitration and Conciliation Act, 1996, and the discretion of the Arbitrator in a....
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