M/S. Dsc Limited & Anr v. M/S. S. P. Singla Constructions Pvt. Ltd

NAVIN CHAWLA, J NOVEMBER 20, 2018/Arya

OMP(COMM) 356/2018 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 13.09.2018 Date of decision : 20.11.2018 + O.M.P. (COMM) 356/2018 M/S. DSC LIMITED & ANR. ..... Petitioners Through: Mr.Ashish Dholakia, Mr.Gautam Bajaj & Mr.Rohan Chawla, Advs. versus M/S. S. P. SINGLA CONSTRUCTIONS PVT. LTD... Respondent Through: Mr.Rajshekhar Rao & Mr.Sameer Dawar, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as the "Act") has been filed by the petitioners challenging the Interim Award dated 09.06.2018 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the Work Order dated 07.03.2008. The Interim Award has held that the Claim of the respondent for payment of the amount due in terms of the reconciliation statement dated 02.08.2010 executed between the parties, is not barred by the Law of limitation. OMP(COMM) 356/2018 Page 2 2. The petitioner no.1 vide Letter of Intent dated 07.01.2008 and subsequent Work Order dated 07.03.2008 awarded the work for Design and Construction of Grade Separator at NH-1 and Grade Separator at NH-10 on the Kundli-Manesar-Palwal Expressway to the respondent. 3. Clause 13 of the Work Order dated 07.03.2008 provides for payment of bills by the employer, that is the petitioner no.1, within 14 days of submission of such bills by the contractor, that is the respondent. The Final Bill is to be paid within 30 days of completion of work/ submission of bill by the contractor. Clause 13 is quoted hereinbelow:- "(13)Payment Terms The Employer shall pay to the contractor the amounts certified by the Engineer within 14 days of the date of submission of bills by the Contractor. The final bill will be paid within 30 days of the completion of the work / submission of bill by contractor. Interest at the rate of 12 percent per annum will be payable to the contractor by the employer in case of delayed payments." 4. The respondent vide letter dated 14.02.2010, while giving a proposal on revised contract price, called upon the petitioner No.1 to make payment of the outstanding interim bills of Rs.83.21 lacs for the disputes to be amicably resolved and for it to continue the work with required diligence. 5. The respondent vide letter dated 06.04.2010 reiterated the request and also showed an intent to invoke arbitration incase the interim bills remain unpaid. The letter is quoted hereinbelow:- OMP(COMM) 356/2018 Page 3 "Our relations in the past have always been friendly. It is therefore, now we are making final request for release of immediate payment and amicable settlement based on our proposal vide our letter No.SPS/P-163/44 dated 14.02.2010 within 45 days from date of this letter. In performance of work with required diligence during aforesaid notice period, immediate payment of outstanding payments in full is to be taken requirement precedent in view of financial crunch arisen in the contract on account of persistent state of outstanding payments, breach of contract, and continuing effect of inordinate prolongation of the contract attributable to the Employer. Should we not receive satisfactory response and outstanding payments in full, we will finally elect to treat this as referable dispute to arbitration and the matter would be referred to arbitration." (Emphasis supplied) 6. Though, the learned counsel for the respondent sought to urge that this be treated as a letter invoking arbitration, I cannot agree with the same. This letter only states that in case the petitioner no.1 does not release the payment, the respondent "will elect" to treat the dispute having arisen as referable to arbitration and such dispute "would be referred to arbitration". This letter was, therefore, a notice to the petitioner no.1 that the respondent would invoke the arbitration in case the payment as demanded is not made. It was envisaging an intent to invoke arbitration in future