Bhandari Builders Pvt. Ltd. vs Delhi Development Authority

Rajiv Sahai Endlaw, J.—The plaintiff in this suit for recovery of money seeks reference u/s 89 of the CPC to Arbitration of a retired Judge of this Court or of any technical engineer from the Institute of Arbitrators. The Defendant/DDA has opposed the application and has refused to consent to Arbitration.

The senior counsel for the plaintiff has on the basis of orders dated 22nd March, 2007 in CS (OS) No. 134/2006, 5th May, 2008 in CS (OS) No. 1385/1998, 6th August, 2007 in CS (OS) No. 139/2002 of this Court contended that reference to Arbitration can be made by the court in exercise of powers u/s 89 of the CPC. However, I find that in each of the said cases, the parties had conveyed their consent to Arbitration. In the present case, the counsel for the Defendant has conveyed that the Defendant/DDA is not agreeable to Arbitration. The counsel for the plaintiff also relies upon two judgments of the Kerala High Court reported in Basheer Vs. Kerala State Housing Board, and Afcons Infrastructure Ltd. Vs. Cherian Varkey Construction Co., However, I find that while in Basheer Vs. Kerala State Housing Board, the request for reference to Arbitration was not acceded, in the other judgment a single Judge did take the view that in appropriate case, the option of referring unwilling parties to Arbitration is certainly available with the court.

The counsel for the Defendant has on the other hand urged that the Apex court in Jagdish Chander Vs. Ramesh Chander and Others, has held that even though Section 89 mandates courts to refer pending suits to any of the several alternative dispute resolution processes mentioned therein, there cannot be a reference to Arbitration even u/s 89 of the CPC, unless there is a mutual consent of all the parties for such reference. The Apex court further held that it was not open to the court to appoint the Arbitrator in the absence of an Arbitration Agreement.

In view of the dicta aforesaid of the Apex court, the question need not to be delved into any longer. In the absence of consent of the Defendant to Arbitration, the parties cannot be referred to Arbitration in exercise of powers u/s 89 of the CPC. The application is dismissed.