Shri S.B. Verma Construction Co. vs Teknow Consultants and Engineers Pvt. Ltd. and Another

S.N. Aggarwal, J.—This order shall dispose of the petition filed by the petitioner u/s 9 of the Arbitration & Conciliation Act, 1996 seeking following reliefs:

Secure the amount of the petitioner till the 9th running bill which have already been submitted with the respondent No. 1 amounting to Rs. 23,83,573/-.

Appoint an independent person/agency to measure and record the work carried out by the petitioner till date, after the 8th running bill which have already been verified by the respondents, and also to prepare an inventory of the materials, tools and machinery of the petitioner lying at the site.

Restrain the respondents from taking over the site and carrying out any work at the site till the final measurement is conducted by an independent person/agency.

Briefly stated the facts of the case giving rise to this petition are that the respondent No. 2 had awarded a contract to respondent No. 1 for construction of certain villas at Babar Pur Mandi, Eledeco Estate-I, G.T. Karnal Road Sector No. 40, Panipat Haryana. The respondent No. 1 in turn awarded the sub-contract to the petitioner for construction of 9 villas out of the total construction work awarded by respondent No. 2 to respondent No. 1.

The contract between the petitioner and respondent No. 1 contained an Arbitration Clause being Clause No. 9 which reads as follows:

In the event of any dispute arising out of this sub-contract, the parties hereto agree that the matter shall be referred to the Director (Project) or Managing Director of the company and any further unresolved issue shall be referred to Arbitration under the Arbitration Act, 1940 and amendments thereto. The venue of such Arbitration shall be New Delhi only.

In terms of the construction contract between the petitioner and the respondent No. 1, the petitioner had been submitting running bills for payment to respondent No. 1. The grievance of the petitioner is that the respondent No. 1 had not cleared 4 out of total 9 running bills so far submitted by the petitioner to respondent No. 1. Even with regard to the remaining 5 running bills, it is submitted that the complete payment has not been made. Mr. Moni Cinmoy, learned Counsel appearing on behalf of the petitioner contends that the payment with regard to the last 4 running bills has not been made by the respondent No. 1 because according to respondent No. 1 the measurement at site does not match with the measurement mentioned by the petitioner in the running bills. The counsel appearing on behalf of the petitioner therefore requests that this Court may direct respondent No. 1 to take measurement at site and to clear the running bills of the petitioner pending for payment.

Per contra Mr. R.P. Kapur, learned Counsel appearing on behalf of the respondent No. 1 has argued that the measurement mentioned by the petitioner in the running bills is not correct as per site and therefore, according to him, the payment of the running bills could not be made by the respondent No. 1 to the petitioner. The counsel appearing on behalf of the respondent No. 1 says that in fact it is respondent No. 1 who has to make recovery from the petitioner under the sub-contract awarded to him. The counsel appearing on behalf of respondent No. 1 has raised an objection to the maintainability of the present petition and also to the reliefs claimed by the petitioner in this petition.

I have given my anxious consideration to the above rival arguments advanced by the counsel for the parties. From the submissions made by the counsel for the parties, it appears to me that there is a dispute regarding the payment of running bills of the petitioner. According to the counsel appearing on behalf of the petitioner, the running bills were not paid by the respondent No. 1 because of dispute regarding the measurement of the work done by the petitioner at site. From the rival submissions of the counsel for the parties, it appears that the parties are at issue regarding payment of running bills of the petitioner. This Court is of the opinion that the dispute regarding the payment of running bills cannot be addressed by this Court on the face of arbitration agreement between the parties. The parties while entering into the contract had decided for a mechanism for addressing the dispute that may arise between them. This mechanism as agreed upon between the parties under Clause 9 of the Contract referred herein above provides that in the first instance the petitioner has to approach the Director (Project) or the Managing Director of respondent No. 1 for redressal of his grievance. During arguments, learned Counsel appearing on behalf of the petitioner has handed over a letter dated 05.02.2009 received by his client asking him to appear before the Managing Director on 11.02.2009 in connection with payment of his running bills.

Having regard to the submissions made by the counsel for the parties, I am of the view that the petitioner has to approach the Managing Director of the respondent No. 1 on the date already fixed before him i.e., 11.02.2009 and make his grievance with regard to the non-payment of his running bills. In case the petitioner is not satisfied with the decision of the Managing Director, then in that event the petitioner can invoke the arbitration clause and demand arbitration from respondent No. 1. This Court in exercise of its jurisdiction u/s 9 of the Arbitration & Conciliation Act, 1996 cannot direct the respondent No. 1 to take measurement or to clear the running bills of the petitioner because the dispute in that regard has to be adjudicated through the process agreed upon between the parties in Clause 9 of the arbitration agreement referred herein above.

In view of the above, I do not find any merit in this petition, which fails and is hereby dismissed leaving the parties to bear their own costs.