Dismissed

M/S Vir Bhan Mittal v. Lovely International Trust and Ors.

Punjab & Haryana HC10 Aug 2011ARB/23/2009

Case brief

AI extract

What is this about?

The High Court dismissed an application for the appointment of an arbitrator under Section 11. The Court held that a full and final settlement dated 10.10.2008 existed and was not rebutted by the petitioner's unproven allegations regarding missing letterheads, thereby leaving no dispute for arbitration.

What did the court decide?

The petition for appointment of an arbitrator was dismissed as there was no dispute following the full and final settlement.

M/S Vir Bhan Mittal Vs Lovely International Trust and… — Arbitration | Punjab & Haryana HC (2011)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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Arb. Case No. 23 of 2009 Date of decision: 10.8.2011

M/s Vir Bhan Mittal

…..Petitioner

vs.

Lovely International Trust and ors …..Respondents

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CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA

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Present: - M/s K.Sunil, and D.K.Singal, Advocates for the petitioner.

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Mr. R. S. Bajaj, Advocate for respondents.

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HEMANT GUPTA, J

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Petitioner has sought appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) in respect of the dispute arising out of an agreement dated 31.1.2007. Vide the said agreement, petitioner was allotted the construction work of Boys hostel, administrative and academic blocks at Lovely Campus at Jalandhar-Ludhiana Road, Phagwara, District Kapurthala.

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It is the case of the petitioner that the respondents did not provide the congenial environment to complete the work as per the agreement. Many letters were written to set right the things including to make the payment of dues and facilitating the execution of the remaining work. But no reply

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Arb. Case No. 23 of 2009

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was received. On the other hand, petitioner was informed on 13.7.2007 in respect of the slow progress of the work and that no running bill of less than Rs. 15 lacs would be paid. Similar letters were written by the respondents on 28.7.2007. Such letters were replied to by the petitioner but the payment of remaining bill was not paid. The petitioner submitted the final bill upon expiry of the contractual period, requesting to release the outstanding amount of Rs. 1,12,94,749/-. Respondents also transferred the steel, weighing 44 metric tonne, belonging to the petitioner, costing Rs. 14,08,000/- to another contractor. The petitioner demanded the payment of the said amount but the said amount was not released. Since, the dispute has arisen between the parties, the petitioner invoked the arbitration in terms of Clause 32 of the agreement vide the letter dated 9.7.2008. Since, respondents have also failed to appoint an arbitrator, petitioner invoked the jurisdiction of this Court so as to claim a sum of Rs. 2,02,93,151/-

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In response to the petition, respondents filed the reply dated 30.10.2009. It is pointed that in terms of the contract, the petitioner was prohibited from sub-letting the work under the said contract without approval in writing from the respondent but the petitioner played fraud with the respondents and sublet the work to different agencies. The petitioner intentionally failed to abide by the time which was essence of the contract. 541 rooms of the Boys Hostel were to

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Arb. Case No. 23 of 2009

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be completed w.e.f. 7.2.2007 but the petitioner handed over only the incomplete possession of 26 rooms. Even the two levels of the academic block were to be completed by the end of August, 2007 but the petitioner failed to comply with the said part as well.

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It is pointed out that the petitioner has played fraud with the respondents and its subletties had been issuing notice to the respondents and threats. Therefore, respondents were left with no alternative but to get a FIR registered. As per the rough estimate, the loss suffered by the respondents was to the tune of more than Rs. 2.00 crores in the year 2008. Subsequently, the proprietor of the petitioner firm settled all his claims with the respondents when he accepted the cheque bearing No. 663181 for Rs. 4,88,650/- dated 28.11.2007 drawn on Punjab National bank, Defence Colony, Jallandhar. Respondents have executed an acknowledgement receipt that the he has received the said amount of pending payments for the work executed. After receiving the payment, the petitioner again started writing frivolous letters and after prolonged deliberations, it was decided that the petitioner and the respondents shall forego their claims and all disputes between the parties be treated as closed. A letter was issued by Vir Bhan Mittal, proprietor of the petitioner dated 10.10.2008. A copy of the same has been attached with the written statement. Replication was filed by the petitioner that payment of Rs. 4,88,650/- was not in full and final settlement.

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Arb. Case No. 23 of 2009

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Still further, the full and final settlement recorded in the letter dated 10.10.2008 is the result of fabrication and misuse of the letter head of the petitioner. It is so stated for the reason that from the camp office in the site of the respondents, some of letter heads have been found missing on 28.11.2007 and a complaint (Annexure P-3) to this effect was also lodged to the concerned police station. It is pointed out that there is every likelihood that the letter heads of the respondents must have been caught hold by the respondents and subsequently misused. It is pointed out that the payment of Rs. 4,88,650/could not be constituted as full and final payment.

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Annexure P-23 attached with the replication was a typed copy of the letter, wherein, the S.H.O., police station, Kotla Mubarakpur, New Delhi was allegedly informed that 12 nos. of letter pads were missing from the car on 28.11.2007. The petitioner was called upon to produce the original of the said letter on 29.4.2011. The petitioner produced the same on 18.5.2011. Learned counsel for respondents disputed the genuineness of the said communication. In view of the said fact, the S.H.O., police station, Kotla Mubarakpur, New Delhi or any other responsible police officer was called upon to appear before this Court along with the original Rojnamcha dated 29.11.2007.

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In terms of the said order, Shri Deepak Panwar, Sub Inspector posted at Police Station Kotla Mubarkpur, New Delhi appeared with the original Rojnamcha dated

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Arb. Case No. 23 of 2009

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29.11.2007. He stated that there is no entry in the Rojnamcha in respect of the communication mark ‘A’ dated 29.11.2007. Copy of which was produced as Anneuxre P-23. He could not recognize the person who has initialed the said communication in token of its receipt nor could confirm the seal on the said communication is that of police station Kotla Mubarkpur, New Delhi. He disclosed the names of the officers who were on duty on 29.11.2007 in the cross-examination conducted by the petitioner.

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Petitioner has not disclosed in the petition under Section 11 of the Act that his letter heads were misplaced in the month of November, 2007. Still further, in the replication, it is asserted that the letter heads were found missing on 28.11.2007 from his camp office in the site of the respondents i.e. in District Kapurthala. The report of the missing letter heads have been allegedly lodged with the police station, Kotla Murbarkpur, New Delhi on 29.11.2007. The payment of Rs. 4,88,650/- is acknowledged and were received by the same person on 28.11.2007 who has lodged the report on 29.11.2007. Keeping in view the fact that the letter heads went missing from Kapurthala but report was lodged at New Delhi and even, the said report is not recorded in the daily Rojnamcha, therefore it cannot be said that the story of missing letter heads is correct and reliable story. Even if, the Sub Inspector has not been able to identify the signatures as that of any of the police officials but the fact remains that all

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such communications are required to be entered in the daily diary report. Since, there is no entry in the Rojnamcha of the said date, the correctness of the receipt of the said letter by Police Station, Kotla Mubarkpur, New Delhi cannot be accepted.

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The full and final settlement relied upon is of 10.10.2008. The said settlement is on the letter head and signed by two persons including by the person who has signed the receipt dated 28.11.2007 and the complaint dated 29.11.2007. It is not the case of the petitioner that the said letter does not bear the signatures of the proprietor of the petitioner. The present petition for appointment of an arbitrator has been filed on 28.11.2008 i.e. after the full and final settlement was arrived at on 10.10.2008. Since, the signatures on the aforesaid document are not disputed and the loss of letter heads on 28.11.2007 having been not proved, I find that the stand of the petitioner that there was no full and final settlement, cannot be accepted. The parties have arrived at a settlement on 10.10.2008. Therefore, I find that there is no dispute which is required to be decided by an arbitrator.

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Dismissed.

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(HEMANT GUPTA) JUDGE

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10.8.2011 preeti

M/S Vir Bhan Mittal v. Lovely International Trust and Ors.

Case brief

What is this about?

What did the court decide?

M/S Vir Bhan Mittal v. Lovely International Trust and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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