Ahuja Builders vs Doonvalley Technopolis Pvt Ltd

Manmohan, J

I.A.Nos.12362-12363/2017

While I.A.No.12363/2017 has been filed seeking leave to leave the instant suit, I.A.No.12362/2017 has been filed seeking condonation of delay of

271 days in re-filing the I.A.No.12363/2017.

In the leave to defend application, it has been averred that the present suit is not maintainable as the contract dated 08th December, 2008 executed

between the parties contains an Arbitration Clause. It is further contended that the amount claimed in the present suit has been deducted by the

defendant from the bills of the plaintiff for defect and delay in completion of contractual work and also for charging wrongful amounts in prior bills.

The learned predecessor of this Court by a detailed judgment and order dated 23rd August, 2017 dismissed the defendant’s application under

Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 holding that their existed no disputes between the parties for reference to Arbitration. The

relevant paras of the said judgment and order dated 23rd August, 2017 is reproduced hereinbelow:-

“16. The defendant has not denied its letter dated 01.04.2013 which is reproduced as under:-

 “ Date: 1st April 2013

 ToÂ

 M/s Ahuja Builders

 X-3 Hauz KhasÂ

 New Delhi 110016

Sub: Party Account balance confirmation

Dear Sir,

We wish to confirm that as on 31/03/13 we have an outstanding of Rs. 2,72,04,349/- (Rs. Two crore seventy two lac four thousand thee

hundred & forty nine only) towards you running bill for the civil work of Hotel & Mall. We wish to undertake that these dues shall be

cleared by us latest by 15th May, 2013.

Thanking you,

Yours sincerely

For Doonvalley Technopolis Pvt. Ltd.

Sd/-

(Sanjeev Srivastava)

Directorâ€​

xxx xxx xxx xxx

In view of these facts, it is clear that none of the parties has raised any dispute arising out of the said Contract. When there is no dispute

between the parties relating to the contract containing an arbitration clause, the arbitration clause cannot be invoked. There has to be

dispute arising out of the contract for invoking the arbitration agreement. The findings in the cases relied upon by the defendant are given

on different set of facts. The facts in ION case (supra), relates to liabilities under a letter of intent, containing arbitration clause. There

arose a dispute between the parties as to the acceptance or non-acceptance of the liability or the acknowledgment of the liability and it was

on these facts that the Court held that the suit CS(OS) 3205/2015 Page 10 under Order XXXVII was not maintainable. In Branch Manager

case (supra), the Court laid down the proposition of law that even on termination of the Contract Agreement, the Arbitration Agreement

survives and binds the parties and where the conditions mentioned in Section 8 of Arbitration and Consultation Act are satisfied, the matter

needs to be referred for Arbitration and the Civil suits are not maintainable. The Court discussed Section 8 of Arbitration and Conciliation

Act and has laid down the principle of law as under:-

“21. xxx xxx xxx xxx

An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an

arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c)

that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his

first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application

the other party tenders the original arbitration agreement or duly certified copy thereof.

Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as aforestated are satisfied, the court

must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court

has to refer the parties to arbitration.

(emphasis supplied)â€​

xxx xxx xxx xxx xxx

21.From the facts of this case which are akin to Nathani Steels case (supra) and National Insurance case (supra), it is clear that on

completion of the Contract between the parties after negotiation, the defendant/applicant calculated the payable amount as 2,72,04,349/-

and the said calculation of the payable amount was accepted by the plaintiff. There is thus a voluntary settlement between the parties and

the letter dated 01.04.2013 of defendant clearly shows that there was no outstanding claim or pending dispute between the parties. On the

settlement of accounts, there is no existing dispute or outstanding claim under the contract and so the contract stands discharged to the

satisfaction of both the parties. It therefore is apparent that there is no arbitrable dispute arising out of the contract.

(emphasis supplied)

In view of the above facts and circumstances of the case, there exists no dispute to refer for arbitration in terms of Section 8 of the

Arbitration and Conciliation Act.â€​

Even a Special Leave petition being SLP (C) No.27750/2017 against the judgement and order dated 23rd August, 2017 has been dismissed by the

Apex Court on 30th October, 2017.

Keeping in view the aforesaid findings by the learned predecessor of this Court as well as the fact that the defendant has admitted that it was liable

to pay Rs.2,72,04, 349/- to the plaintiff, this Court is of the view that the present application being I.A.No.12363/2017 is bereft of any merits.

Accordingly, the leave to defend application is dismissed.

CS(OS) No.3205/2015

Since today the defendant’s application for leave to defend has been refused, the plaintiff is entitled to a judgment in its favour forthwith.

Consequently, the present summary suit is decreed for Rs.2,72,04,349/- in favour of the plaintiff and against the defendant along with the interest

@18% per annum from 15th May, 2013 till the date of actual payment along with the costs. Registry is directed to prepare a decree sheet

accordingly.