IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.243/2019 BETWEEN:
M/s. URC CONSTRUCTIONS PRIVATE LIMITED A company incorporated as per The provisions of the Companies Act, 1956 and Existing under the provisions of The Companies Act, 2013 Having its Corporate Office at No.810, 1st Cross, 7th Main H.A.L. 2nd Stage, Indiranagar Bengaluru – 560 038 Represented by its Authorized Signatory V.Ganesan S/o R.Veerasamy ... Petitioner (By Sri Abhilash Raju, Advocate) AND:
M/s HINDUSTAN AERONAUTICS LIMITED A company incorporated as per The provisions of the Companies Act, 1956 and Existing under the provisions of The Companies Act, 2013 Having its Corporate Office at 15/1, Cubbon Road Bengaluru – 560 001 Represented by its Additional General Manager(Works)-PE Facilities Management Division Vimanapura Post, Post Box No.1703 Bengaluru – 560 017 (By Sri Pramod Nair, Advocate) ... Respondent This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act 1996, read with the Arbitration and Conciliation (Amendment) Act, 2015, praying this Court to appoint an Arbitrator in terms of the clause 49 of Conditions of Contract (Annexure-D) and work order dated 17.09.2013 vide Annexure-C entered into between the petitioner and respondent to resolve the disputes that have arisen, etc.
This Civil Miscellaneous Petition coming on for admission this day, the Court made the following:
ORDER The petitioner has filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) for appointment of Sole Arbitrator to adjudicate the dispute between the parties in terms of clause 49 of Annexure-C the work order dated 17.09.2013 & Annexure-D bearing contract No.HAL/FMD/C-329/11-12.
2. It is the case of the petitioner that in the year 2013, the respondent/Hindustan Aeronautics Limited (‘HAL’ for short) floated an e-tender inviting bids from contractors for the construction of “Integrated Campus for Centre of Aerospace Management Excellence & Leadership with Civil, Electrical (External & Internal), Air-Conditioning, Fire protection, Water supply and Recycling works in Roads, Drains and Sewage disposal system including all other utility services and allied facilities etc., in HAL, Bengaluru. Pursuant to the discussions and meetings held on 29.08.2013, the petitioner submitted letter of acceptance. After accepting the same, HAL issued work order dated 17.09.2013, which was treated to be a binding contract until the formal contract documents were prepared and executed between the petitioner and the respondent. On 12.01.2016, 03.02.2016 and 29.06.2016, the petitioner issued different letters to the respondent seeking payments. On 14.07.2016, the respondent issued a letter agreeing to settle claims through discussions. According to petitioner, on 30.04.2018, the project was completed and handed over the premises to the user i.e., department of HAL. On 18.09.2018, the petitioner wrote a letter informing the respondent that Snag list has been attended to. On 08.05.2019, the petitioner issued letter to the Director (HR) of respondent and requested for appointment of Arbitrator as per clause 49 of the Contract. Since the respondent has not replied within the time, the petitioner filed this CMP on 08.07.2019 before this Court for the relief sought for. Thereafter, reply came to be issued on 24.07.2019 to the legal notice issued by the petitioner. Therefore the petitioner is before this Court for the relief sought for.
3. The respondent has filed objections to the petition and contended that the petitioner has not completed the work and disputed the document at Annexure-K dated 18.09.2018 and further contended that on 06.05.2019, the respondent informed the petitioner about the balance works to be completed by 26.05.2019 at the least. However, the petitioner continues delay and several works remained to be completed. Therefore, the petitioner raised untenable claim against the respondent in the pre-final bill which is contrary to the terms of the agreement and in contravention to the provisions of the Contract Act. Therefore sought to dismiss the Civil Miscellaneous petition.
4. I have heard the learned counsel for the parties to the lis.
5. Sri Abhilash Raju, learned counsel for the petitioner reiterating the averments made in the petition has contended that there is no dispute with regard to letter of acceptance given by the petitioner on 29.08.2013 and issuance of work order by the respondent on 17.09.2013 as per the tender document and the petitioner after completion of the work has intimated the completion of works i.e., “Integrated Campus for Centre of Aerospace Management Excellence & Leadership with Civil, Electrical (External & Internal), Air-Conditioning, Fire protection, Water supply and Recycling works in Roads, Drains and Sewage disposal system including all other utility services and allied facilities etc., in HAL, Bengaluru” vide acceptance letter dated 18.09.2018 as per Annexure-K. The respondent has not replied to the said intimation for having completed the work and having handing over the same to the respondent. Therefore the petitioner has issued legal notice on 08.05.2019 invoking the arbitration clause 49 of the work order and the tender document entered into between the parties. Therefore he sought to allow the petition.
6. Per contra Sri Pramod Nair, learned counsel for the respondent reiterating the objections filed to the petition contended that the very petition filed by the petition for appointment of arbitrator is not maintainable as the petitioner has not completed the work as agreed and the same was intimated to the petitioner on 06.05.2019. In the absence of acceptance of completion of the work by the respondent, the very petition is not maintainable. Therefore he sought to dismiss the petition.
7. Having heard the learned counsel for the parties, it is undisputed fact that the respondent/HAL floated e-tender from the contractors for executing the construction work “Integrated Campus for Centre of Aerospace Management Excellence & Leadership with Civil, Electrical (External & Internal), Air-Conditioning, Fire protection, Water supply and Recycling works in Roads, Drains and Sewage disposal system including all other utility services and allied facilities etc., in HAL, Bengaluru” in the year 2013. It is also not in dispute that after discussions and meetings the petitioner has submitted letter of acceptance on 29.08.2013. It is also an undisputed fact that both the parties entered into the binding contract as per the work order issued on 17.09.2013 wherein the Arbitration clause mentioned at Clause 49 which reads as under:
49. ARBITRATION h. Except where, otherwise provided for in the contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other contract, designs drawings to the specifications, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute, the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Director (HR) and if the Director (HR) is unable or willing to act, to the sole arbitration of some other persons appointed by the Director (HR) willing to act as such Arbitrator. The Arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Director (HR) as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as Arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage of which it was left by his predecessor.
i. Subject as aforesaid the provision of the Arbitration and Conciliation Act, 1996, or any statutory modification or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under this clause.
j. It is a term of the contract that the party involving arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute.
k. The Arbitrator(s) may from time to time with consent of the parties enlarge the time, for making and publishing the award.
l. The work under the contract shall, if reasonably possible, continue during the arbitration proceedings and no payment due or payable to the contractor shall be withheld on account of such proceedings.
m. The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties fixing the date of the first hearing. The Arbitrator shall give a separate award in respect of each dispute or difference referred to him.
n. The venue of arbitration shall be such place as may be fixed by the Arbitrator in his sole discretion o. The award of the Arbitrator shall be final, conclusive and binding on both the parties to the contract.
8. According to petitioner he has completed the work and intimated the same to the respondent on 18.09.2018. But according to the respondent the petitioner has not completed the work and intimated the same as per letter dated 06.05.2019. But the fact remains the respondent has not replied the intimation made by the petitioner with regard to completion of work and handing over possession on 18.09.2018. It is also not in dispute that the petitioner issued legal notice as contemplated under Section 11(5) of the Act on 08.05.2019. It is also not in dispute that the respondent has not replied to the legal notice within the time, but the reply came to be issued after the petition filed i.e., only on 24.07.2019.
9. In view of the disputed fact that according to petitioner he has completed the work in terms of the work order and according to respondent the petitioner has not completed the work, the disputed facts requires evidence, which has to be recorded and examined by the learned Arbitrator after giving opportunity to both the parties.
10. In view of the afore said circumstances, there is no impediment for this Court to appoint Sole Arbitrator to adjudicate the dispute between the parties.
11. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Dr. Justice N.Kumar, Former Judge of this Court is appointed as sole Arbitrator to adjudicate the dispute in terms of clause 49 of the Work Order dated 17.09.2013 and tender document as per Annexure-D bearing No.HAL/FMD/C-329/11-12 entered into between the parties.
12. Registry is directed to send a copy of this order to Dr. Justice N.Kumar, Former Judge of this Court as well and Arbitration Centre forthwith for reference.
Ordered accordingly.
SD/- JUDGE KMV*