FAO No. 387/2006

Page 1 of 13

*

IN THE HIGH COURT OF DELHI AT NEW DELHI

+

FAO No. 387/2006

%

7^th July, 2017

UNION OF INDIA

..... Appellant

Through:

Mr. Jaswinder Singh, Advocate.

versus

M/s. BAGA BROTHERS & ANR.

..... Respondents

Through:

Mr. Virender Kumar Sharma,

Advocate.

CORAM:

HON’BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1.

This first appeal under Section 37 of the Arbitration and

Conciliation Act, 1996 impugns the judgment of the court below dated

17.8.2006 whereby the objections filed by the appellant/objector under

Section 34 of the Arbitration and Conciliation Act have been

dismissed.

2.

Disputes and differences between the parties arose on

account of a contract work of construction given to the

respondent/contractor by the appellant under the contract agreement

no. 01/EE/CD-VII/96-97 for execution of certain construction work in

136 numbers additional chambers for Supreme Court lawyers at plot

2017:DHC:3359

FAO No. 387/2006

Page 2 of 13

nos. AB 20-21 of Bhagwan Das Road, New Delhi. The contract work

entailed fixing of Aluminum Doors and Windows, Ventilators

Partition, pre-laminated particle Board Glazed Shutters, Fibre Glass

Reinforced Shutters, etc. The contract in question was completed on

1.9.1997 and the final bill finalized on 19.1.1998. Disputes were

referred to arbitration in terms of the order dated 4.4.2002 of a

Division Bench of this Court in a writ petition and by which order the

issues of arbitability of disputes was left open. The issues of

arbitability of the disputes were the issues as regards Clauses 9 and 25

of the contract and these issues were dealt with by the arbitrator in

terms of his interim award dated 27.9.2002 holding that disputes were

alive/not finally settled and hence arbitrable. Final award was

thereafter passed by the arbitrator on 15.12.2004 allowing some of the

claims of the respondent/contractor. These two awards being the

interim award dated 27.9.2002 and the final award dated 15.12.2004

were the subject matter of the objections filed by appellant before the

court below and which has been dismissed in terms of the impugned

judgment dated 17.8.2006.

3.

Two arguments are urged on behalf of the appellant for

setting aside the award and the impugned judgment dated 17.8.2006.

The first argument which is raised is in view of with Clause 9 of the

2017:DHC:3359

FAO No. 387/2006

Page 3 of 13

contract between the parties. On the basis of Clause 9 it is argued that

once a final bill is prepared and amount of the final bill is released to

the contractor/respondent, then no disputes survive which are live

disputes and which will require adjudication in arbitration. The second

argument which is urged is as per the Clause 25 of the contract and

which specifies that arbitration cannot be invoked unless the procedure

of conciliation provided as a pre-condition is resorted to, and since in

the present case, it is argued, that the preliminary procedure of

conciliation was not resorted to before invoking of arbitration, hence,

the disputes in question were not arbitrable.

4.

The main argument as regards Clause 9 have been dealt

with by the court below in paras 19 and 20 of the impugned judgment,

and these paras read as under:-

“19.

Further in the present case, it has been submitted on behalf of the

petitioner that final award dated 15.12.2004 passed by the ld. Arbitrator is

illegal and wrong and is against the terms and condition of the

contract/agreement between the parties. It is further submitted that the

aforesaid final award dt. 15.12.2004 is also violative of the section 34 of the

Arbitration and Conciliation Act and is also against the substantive law. It

has been submitted on behalf of the petitioner that while passing the

impugned award dt. 15.12.2004 ld. Arbitrator has not t