Mr. Khub Chand Tyagi vs Delhi Development Authority

Manmohan Singh, J.—By this order I shall dispose of I.A. No. 12154/2007 filed by the plaintiff u/s 89 read with Section 151 of the Code of Civil Procedure, 1908.

Brief facts are that the plaintiff was awarded some construction work at Dwarka vide office letter dated 15 January, 1996. Due to certain problems, the present suit was filed by the plaintiff for recovery of a sum of Rs. 5,70,75,885/- with pendent lite and future interest @ 18 % p.a. The said sum has been claimed for work done and left unpaid, bills, security amount etc. A counter claim has also been filed by the defendant.

In the present application, the plaintiff has contended that the subject matter of the claims is very technical as it requires looking into designs/proposed designs, detailed measurements, calculation of measurements etc. Due to the sheer technicality involved, the plaintiff has prayed that it would be expedient and in the interest of justice to refer the claims and counter claims to arbitration with a technical/engineer background person as the arbitrator.

The said application has been vehemently opposed by the counsel for the defendant.

Both parties have referred to judgments in support of their stance. Counsel for the plaintiff has referred to Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. 2007 (1) Arb. LR 405 (Ker) wherein it has been held that unwilling parties can also be referred to arbitration u/s 89 of the Code of Civil Procedure, 1908. The plaintiff has also referred to two judgments passed by two learned single judges of this Court. However, in view of the judgment referred to by the counsel for the defendant, this question has been decided by the Apex Court in the case of Jagdish Chander Vs. Ramesh Chander and Others, and in view thereof, I cannot accept the contentions of the plaintiff''s counsel. In the above-mentioned case, the Apex Court has held the following, which reads as under:

Learned Counsel for the first respondent next contended that Clause 16 of the deed of partnership discloses a clear intention on the part of the partners to settle their dispute relating to partnership by an alternative dispute resolution process. He pointed out that Clause 16 required the partners to "mutually decide the disputes" or "refer the disputes to arbitration". This, according to him, is in the nature of a con-arb agreement, that is, it requires the parties to settle the disputes by negotiations (conciliation and mediation), and failing settlement by such negotiations, refer the disputes to arbitration for settlement. He submitted that the clause provides what Section 89 CPC now statutorily requires. It is contended that if under 89 CPC, parties can be mandated to have recourse to alternative dispute resolution processes to settle their disputes, there is no reason why the disputes between the parties in this case should not be referred to ADR process including arbitration under Clause 16. This contention, though attractive, has no merit. The object and scope of Section 11 of the Act is specific and narrow. Though the power exercised u/s 11 of the Act has been held to be a judicial power (see SBP & Co. v. Patel Engg. Ltd.) the proceedings relate only to appointment of Arbitral Tribunal. The disputes as such are not before the Chief Justice or his designate for adjudication. Therefore, Section 89 CPC has no application. It should not also be overlooked 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 CPC, unless there is a mutual consent of all parties, for such reference....

The judgment of the Kerela High Court as well as this Court''s judgments referred to by the counsel for the plaintiff have been passed before or concurrently with the Jagdish Chander (supra) judgment. In view of the above-quoted observation reflecting the settled law of the Supreme Court in this regard, this Court cannot allow the plaintiff''s application for reference of the dispute to arbitration as there is no mutual consent for such reference in this case.

Application disposed of accordingly.

List this matter before the Joint Registrar on 18 December, 2009 for fixing a date for the trial.