RANA CASE: ARBITRATOR'S AWARD

RANA CASE: APPOINTMENT OF ARBITRATOR

IN THE HIGH COURT OF DELHI AT NEW DELHI

SUBJECT: ARBITRATION AND CONCILIATION ACT


ARB. PET.No.22/2004


Date of Decision : 11th August, 2004



SHRI A.S. RANA, PROPRIETOR,
M/S RANA CONSTRUCTION CO.


Through


Mr. B.K. Dewan, Advocate ...Petitioner


versus


DIN COOP GROUP HOUSING SOCIETY LTD


Through


NEMO ...Respondent


MUKUL MUDGAL, J.(ORAL)

1. This is a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an independent arbitrator.

2. The parties entered into a Contract dated 25th February, 1996 for construction of 166 Dwelling Units at Plot No.7, Sector 4, Phase 1, Dwarka, New Delhi-110075. The petitioner is the contractor of M/s Rana Construction Company. Clause 22 of the Agreement between the parties providing for settlement of disputes by way of arbitration reads as follows:-
"Clause 22. ARBITRATION:

(A) If any dispute arises and persists between the contractor and society the same shall be referred to the sole arbitrator to be appointed by the President, Din Coop. Group Housing Society Ltd., whose award shall be final and binding on both parties. The arbitrator shall submit his award within six months of his entering on the reference. This period may be extended by the arbitrator with the consent of both the parties.

(B) Only that Court within whose jurisdiction the administrative office of the society is located will have jurisdiction on any matter requiring reference to Court ."

3. There is no dispute about the existence of the agreement and the arbitration clause. The petitioner has sent a legal notice dated 9th December, 2002, as well as letter dated 24th November, 2003, requesting the respondent Society to appoint the arbitrator to adjudicate the disputes between the parties. However, no response has been received. Accordingly, the petitioner has approached this Court on 19th January, 2004 by filing this petition under Section 11(6) of the Act. On 23rd January, 2004, notice was issued to the respondent. On 8th April, Shri Sanjiv Gupta, Advocate has entered appearance on behalf of the respondent Society and sought time to file reply. On 9th August, 2004, the matter was again adjourned on the respondent counsel's request. However, no reply is filed upto date.

4. Learned counsel for the petitioner has relied upon a judgment of the learned Single Judge of this Court in A.A.No.235/2003 entitled as "M/s Associated Builders Vs Delhi Development Authority & Others", delivered on 17th December, 2003 to contend that this case warrants appointment of an independent arbitrator in view of the recalcitrant attitude of the respondent. The relevant portion of the aforesaid judgment reads as follows:-
"Mr. K.K. Bhhuchar who appears on behalf of the respondent-DDA persuasively seeks adjournment by saying that he has just been appointed and is awaiting instructions by the Department. Normally, I may have been persuaded to grant such a request, but in this case, where the petitioner has been kept at bay since 1997, no further indulgence should be shown. Petitioner had to file a petition for appointment of an arbitrator and thereafter two arbitrators have relinquished their charge. In my view this case warrants appointment of an independent arbitrator following the judgment in Datar Switchgears Ltd. Vs TATA Finance Ltd. & Anr. (2000) 8 SCC 151."

5. Accordingly, following the above position of law, the petition is allowed and Shri V.D. Tewari, IES, Chief Engineer, CPWD (Retd.) is appointed as an Arbitrator to adjudicate upon the disputes between the parties sought to be raised in this petition. Arbitrator to fix his fees in consultation with the parties. Parties to appear before the Arbitrator on 2nd September, 2004. Arbitrator to give his award within 6 months from the date of entering upon reference.

6. This petition stands allowed and disposed of accordingly in the above terms.

August 11, 2004 (MUKUL MUDGAL)
Judge

RANA CASE VERDICT

* IN THE HIGH COURT OF DELHI AT NEW DELHI

+ FAO(OS) NO. 154/2007

Date of Decision : November 03, 2009

DIN Cooperative G/H Society Ltd. .....Appellant

Through : Mr. Anil Nag, Advocate.

versus

Sh. A.S. Rana .....Respondent

Through : Mr. B.K. Dewan, Advocate.


CORAM:

HON'BLE MR. JUSTICE MUKUL MUDGAL

HON'BLE MS. JUSTICE REVA KHETRAPAL


1. Whether the Reporters of local papers may be allowed to see the judgment? NO

2. To be referred to the Reporter or not? YES

3. Whether the judgment should be reported in the Digest? YES

% JUDGMENT (ORAL)
MUKUL MUDGAL,J.

1. This appeal challenges the judgment of the learned Single Judge dated 19th February, 2007 by which the learned Single Judge was pleased to dismiss the objections preferred by the appellant to the award dated 24th October, 2005 given by Sh. V.D. Tiwari, the Sole Arbitrator, who was appointed by this Court, as the appellant had failed to act on the request of the respondent to appoint an Arbitrator.

2. The appellant is a Cooperative Group Housing Society. The admitted case of the parties is that the Society had invited offers from contractors to construct 156 residential flats on the land allotted to the Society. The offer of the respondent was accepted and a formal contract was executed between the parties on 25th February, 1996. The work was to commence on 1st March, 1996 and was to be completed within 24 months. However, disputes arose between the parties and the work remained suspended for a long period of time. Eventually, after negotiations, the respondent was allowed to continue with the work and the work was completed somewhere in the year 2002. The claim of completion of work by the contractor was disputed by the Society and Sh. V.D.Tiwari was appointed by the Court as the sole arbitrator to adjudicate upon the disputes between the parties. The learned Arbitrator vide his award dated 24th October, 2005 awarded a sum of Rs.75,19,230/- to the respondent.

3. The main plea urged by Sh.Nag, the learned counsel for the appellant is that as per Clause 17 of the contract, the appellant was entitled to liquidated damages @ Rs.1 lakh per week for the delay caused in the completion of the work. A perusal of the judgment of the learned Single
Judge shows that this plea has not been dealt with by the learned Single Judge in the judgment. We have asked the learned counsel for the appellant whether this plea was urged before the learned Single Judge, who submitted that this plea was not dealt with by the learned Single Judge. He was then asked to show us the pleading in the memo of appeal and also show that such a plea though urged was not dealt with by the learned Single Judge. Apart from showing the general pleading that the learned Single Judge erred in not appreciating the issue of liquidated damages, the learned counsel for the appellant was unable to demonstrate to us from the memo of appeal that such a plea was raised. Instead, the learned counsel for the appellant submitted that the appellant had filed a 30 page written submission before the learned Single Judge and the issue was contained therein.

4. In our view, if a plea is not addressed before the learned Single Judge, the learned Single Judge is not bound to deal with each and every plea taken in the written submissions before the learned Single Judge. The mere fact that it is taken in the written submissions is of no avail to the appellant, particularly in view of the fact that no specific averment is made on oath before us that the plea urged was raised before the learned Single Judge. Accordingly, we decline to permit the appellant to raise such a plea before us.

5. We have also perused the prolix objections preferred by the appellant before the learned Single Judge as well as equally prolix written submissions. A perusal of the objections and the written submissions shows that the main thrust of the appellant was on the issue of limitation, which issue has not been addressed before us, and the objections pertaining to the rejection of the counter claim though raised in the objection petition were obviously not pressed before the learned Single Judge. Even the objections raised before the learned Single Judge are as follows: - “5.6 BECAUSE the learned Arbitrator erred in law in over-looking the fact that out of 166 flats, the Respondent completed only 53 flats and 113 flats were left unfinished. Out of the 113 flats the Respondent, under a separate Agreement/Understanding completed 70 flats in 2001 and 43 flats still remained unfinished and the balance work was got done either by the Petitioner Society or the individual flat owner at its/his own cost.”

6. The above averments made before the learned Single Judge itself show that for the completion of the contract, a separate agreement/understanding was required to be entered into. Such an understanding or agreement has not been shown to us and accordingly, reliance by the appellant on the erstwhile Clause 47 of the earlier agreement, even if permitted to be raised is of no avail to the appellant.

7. Accordingly, we find no merit in this appeal and the same stands disposed of. All the pending applications also stand disposed of. (MUKUL MUDGAL) JUDGE (REVA KHETRAPAL) JUDGE November 03, 2009 sk

EXPENDITURE FOR THE MONTH OF OCT 2009

1. Expenditure / Cash Outgo from 1st to 31st October 2009:

(a) Smt. Kamlesh Sethi’s case :
“Out of Court” settlement for refund of Rs.5,50,000/- in four installments without interest. Second Installment paid on 26.10.2009 Rs.1,00,000/-

(b) Electricity expenses for common area during Sep 09 - Rs. 38,970/-*

(c) Repair & Servicing of generator Rs. 18,289/-

(d) Purchase of new Generator of 200 KVA Rs. 9,00,000/-@

(e) PVC Pipe 4” dia for the cables of generator Rs. 700/-

(f) Diesel for generator Rs. 1,000/-

(g) Security Bill for September 2009 for 13 days. Rs. 18,831/-

(h) Advance to Security Agency to be adjusted next month Rs. 1,000/-

(i) Gas for Guard Room Rs. 200/-

(j) MTNL/Airtel telephone bill Rs. 971/-

(k) Salary for Society’s employees Rs. 21,200/-

(l) Overtime paid @ Rs 400/- each Rs. 1,600/-

(i) Shri Narayan
(ii) Shri Gauri Shankar
(iii) Shri Sharad
(vi) Shri Ram Kishan

(m) Dewali Bonus to Staff @ 75% of salary Rs. 15,900/-

(n) Advance to Shri Ram Kishan, Electrician against salary Rs. 1,000/-

(o) Magazines for Library Rs. 650/-

(p) AMC - Quarterly payment (Oct. to Dec.2009) for Lifts Rs. 57,674/-

(q) E & AO Svy. (Air & DGDC) for coordinates & site elevation
of the Society for completion certificate Rs. 10,000/-

( r) Paid to DDA for approval of ‘as built’ & ‘revised’ building
plans for completion certificate Rs. 40,488/-

(s) Repair of garden benches Rs. 2,900/-

(t) Dewali expenditure (Sweet distribution to staff) Rs. 2,090/-

(u) Electrical spares for the Society. Rs. 2,013/-

(v) Purchase of 8’ aluminum ladder with cartage Rs. 2,310/-

(w) Replacement of battery for UPS of office Rs. 700/-

(x) Battery Cells for Electrician Rs. 65/-

(y) Cleaning material for the Society. Rs. 1,586/-

(z) Making of 15 perforated drain covers Rs. 4,000/-

(aa)Advance paid to Ramesh against making of drain covers Rs. 1,000/-

(ab)Repair of walls and replacement of two glass panes of Water
Pumping station Rs. 750/-

(ac)Conveyance to staff Rs. 355/-

(ad)Trash Removal charges (MCD) Rs. 500/-


(ae) Postage Rs. 12/-

(af) Photocopy charges Rs. 74/-

(ag) Stationery for office. Rs. 560/-

(ah)One padlock Rs. 60/-

------------------
Total Expenditure: Rs.12,45,138/-
------------------

2. Amount Received:

(a) Maintenance/BMF (including recoveries) Rs 98,800/-

(b) Water Charges Rs 10,575/-

(c) Ground Rent Rs 2,935/-

(d) DDA Architect’s fee (Complete Certificate) Rs. 96,000/-

(e) Generator Fund Rs. 26,400/-

(f) Power Back up Rs. 82,000/-

(g) Shifting Charge Rs. 3,000/-

(h) Other recoveries. Rs 1,749/-
-----------------
Total Receipt: Rs. 3,21,459/-
- ----------------

* Total electricity bill for the month Rs. 2,62,755/-

@ Loan of Rs. 9,00,000/- from SB of Indore @ 8.25% p.a.

3. Members desirous of checking details are welcome to the Society’s office and check accounts on any working day between 10 AM to 5 PM. The right of the Members to demand inspection of all Society’s accounts maintained by the MC will be respected at all cost.

4. Suggestions / recommendations to improve accounting procedures and introduce transparency are welcome and shall be taken in the right spirit.

OBITUARY: SHRI MADAN SHARMA

Shri Madan Sharma, the first Honrary Secretary and one of the founding fathers of DIN Cooperative Group Housing Society, passed away on the morning of 16th Nov 2009. A serene and grand old man, Shri Madan Sharma always spoke softly and worked tirelessly to build the Society. The unfortunate subsequent developments and the lenghty legal hassels being faced by the Society at present notwithstanding, we all offer our sincere prayers for the eternal peace of the departed soul. May God grant him what he sought in his life on this planet !

POWER BACKUP CAPACITY FOR FLATS

1. The existing 63 KVA Generator is of 1998 vintage and recently faced far too frequent break downs and expensive repairs. Continuance with the same equipment is likely to prove prohibitive in terms of repair costs and the resultant inconvenience to members. Since the Society’s security, lifts and water supply system depend upon this generator during power cuts / failures, the SGBM held on 30 Aug 2009 approved replacement of the generator by a new one. Creation of a ‘Generator Fund’ to be built up with members contributing Rs 200/- p.m. was also approved.

2. Considering the need for provision of power backup to members and upgrading the facilities in the Society, the MC decided to buy a new 200 KVA DG, instead of a 63 KVA DG set. Accordingly, it was decided to buy a 200 KVA Silent DG set manufactured by Cummins India Limited and bids were invited from two suppliers. Upon receipt of the letters of offer from M/s Sudhir and M/s Trishul Enterprises, the same were got technically evaluated by experts for suitability to the Society’s requirements.

3. Having confirmed that the technical parameters of the same equipment offered by M/s Sudhir and M/s Trishul Enterprises matched perfectly, the MC negotiated terms of payment to the potential suppliers. The costs negotiated with M/s Trishul Enterprises and the payment of last Rs 1, 35, 000/- in three monthly installments offered a more advantageous deal for the Society and was concluded after making an open offer to anyone who could get the Society a better deal. The offer letters from the dealers and relevant documents / records are available in the Society office for anyone wishing to examine the same.

4. The installation of the new 200 KVA DG was completed on 10 Nov 2009 and work to provide connections to individual homes is scheduled between 12th Nov to 15th Nov 2009. Since central procurement of equipment in bulk makes better economic sense, members / residents were offered the connection from the Electric Sub Station (ESS) to their respective flats @ Rs 2000/- per flat. Thus far 58 members have applied for the same and are being given the power backup at the rates quoted above.

5. It may please be noted that although power backup to flats will remain open even after 15th Nov 2009, the rates are likely to vary substantially. Members, who are yet to apply for power backup, may like to avail of the opportunity now rather than having to pay much more for the facility at a later stage.

6. Last date for accepting the request for power backup facility for individual flats at the current rates is 14th Nov 2009.