BEFORE THE HON'BLE HIGH COURT OF DELHI AT NEW DELHI

B
FAO (COMM.) No. 14 of2023

IN THE MATTER OF:

Late Sh. Pramod Kumar Jain & Ors
Proprietor of Mis Jain Enterprises
Through his Legal Heirs, ..... Appellants

Versus

Municipal Corporation of Delhi

Fornerly North Delhi Municipal Corporation & Anr. . .... Respondents

WRITTEN SUBMISSION ON BEHALF OF THE APPELLANTS

1. That the Appellants had preferred 15 claims before the Ld. Arbitrator out of which
the Ld. Arbitrator was pleased to allow 8 claims and rejected 7 claims of the
Petitioner. However, after deciding the Claims the Arbitrator ruled that the Claims
were barred by limitation and hence passed a nil award.

2. The fact facts leading to the present Petition is that the Appellants was granted three
work orders by the Respondent MCD during the year 2000-2001 as per the details
given below:
SI. Work Order No. Date of Contractua Earnest
No grant of I Amount in Money
. the Work Rs . deposited
Order
1. D/EE/(XVI)/2000-01/426 17/11/2000
4,57,866.00 10,500.00
(pg,43)
2. D/EE/(XVI)/2000-01/427 17/11/2000 4,57,532.00 10,500.00
(pg;. 44)
3. D/EE/(XVI)/TC/ 2000- 02/01/2001 4,98,747.00 11,500.00
01/536 (og. 45)

3. That after the mobilization of the resources at the three work sites, the Petitioners
came to know that the work cannot be executed at the respective work sites due to
the non availability of each of the work sites. In case of the Work Order No. 426 and
427 the works were to be executed from the factory plots no. 115 to 118 and 118 to
120 respectively. However there was great opposition from the factory owners of the
plots No. 115 to 120, as it would have blocked the entry to their respective factories.
It was only in the month of June 2001 that the work site in respect of the Work Order
No. 427 was changed and the Petitioners were directed to execute the work from the
factory plot no. 140 to M.C. Primary School but even this site was partially provided.
In respect of the Work Order No. 536 clear site was never provided to the Petitioners
at the time of the grant of the work order and the partial site was provided to the
Petitioners only in June 2001. It is pertinent to mention at this stage that in respect of
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Work Order No. 426, the original or the alternate site was never provided by the
Respondent even after repeated requests made by the Appellants to the Respondent's
official and consequently the work in respect of said work order could not be
executed by the Petitioner.

4. That in the meanwhile, even before the changed work sites could be granted to the
Petitioners, Sh. P. K. Jain died on 08/05/2001. This was accordingly informed to the
concerned officials of the Respondent by the Petitioner. That since there was great
pressure from the factory owners and the shopkeepers of the area at the changed
sites, the officials of the Respondent requested the Petitioners to complete the work
because of the approaching Diwali festival and assured them that they would be paid
on the completion of the work.

5. That in Oct. 2001 partial work was executed in respect of the W. 0. Nos. 427 & 536.
However after the execution of the work to the extent possible the Appellants had to
run from pillar to post to get the same entered in the measurement book ("MB").
After following with the officials of the MCD to get the work recorded in the MB,
the Petitioners wrote a letter dated 20/06/2003 (Page 215-217), however there is no
response. The Appellants again followed-up with the officials of the MCD and wrote
again on 10/05/2007, 16/05/2007 and 12/07/2007 (Page 215-221). Again there was
no response. It is pertinent to mention that for the first time the Petitioners
asked for the payment from MCD only on 16/05/2007. That thereafter, the
Petitioners in compliance with the Clause 25 of the agreement relating to the
invocation of the arbitration wrote to the officials of the MCD on 11/12/2007 to
Executive Engineer, 28/12/2007 to the Suppt. Engineer, 14/01/2008 to the Chief
Engineer and finally to the Commissioner on 18/02/2008 giving the details of each of
their claims. (Pages 222-256).

6. That when the MCD was not responding to the letters of the Petitioners as above-
mentioned they made RTI applications (Pages 268-281) with the MCD to know the
status of the payment and also asked for the copies the agreement and MB. On the
RTI applications and constant following with the higher officials of the MCD,
Petitioner's file started moving for the first time and in internal note of 23/07/2008
the officials admitted that no bill has been prepared for the work done (Page 263)
and on the basis of said note, the MCD on 30/07/2008 (Page 282) wrote to the
Appellantsand for the first time admitted that certain un-verified bills were pending
and the same was not paid as no legal heirs approached MCD for the payment. It is
pertinent to mention that this is the first letter ever written by MCD to the
Appellantsand also that this admission came when the application u/s 11(6) was
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pending before the Hon'ble High Court. It is stated that the amount so admitted by
the MCD was refuted by the Petitioners vi de their letter dated 24/07 /2009 (Page
322).

7. It is pertinent to mention at this stage that Petitioners were never aware till
30/07/2008 if any record entries were even made in the Measurement Book. It was
again through the process of RTI application only MCD provided the copy of the
MB to the Appellants vide letter dated 24/06/2009 (Pages 110-138).

8. As stated above inspite of the fact that the Ld. Arbitrator had adjudicated all of the
Petitioner's claims, the Ld. Arbitrator passed a NIL Award as the Ld. Arbitrator
found the Petitioner's Claims to be barred by Law of Limitation. Thus coming to the
issue of the limitation as decided by the Ld. Sole Arbitrator, it was urged before the
Ld. Sole Arbitrator that as per the agreement, MCD has to inform the Contractor
about the preparation of the final bill and after such intimation only the contractor
could invoke the arbitration clause giving the full details of the claim (Pg. 152). It is
pertinent to mention that the relationship between the parties was governed by an
agreement and the certain relevant part of the arbitration clause is reproduced below:

It is also a term of contract that if the contractor does not make any demand for
appointment of arbitrator in respect of any claims in writing as aforesaid within 120
days of receiving the intimation from the Engineer-in-Charge that the final bill is
ready tor payment, the claim of the contractor shall be deemed to have been waived
and absolutely barred and the MCD shall be discharged and released of all
liabilities under the contract in respect of these claims ... ........ ". (Pages 152). It is
pertinent to mention that its an admitted position that MCD never informed the
contractor about the preparation of the bill and that no such intimation was made to
the contractor about the preparation of the final bill in the present case (Kindly refer
to cross of Respondent's witness@ Pg. 266-267). In this regard the Appellants are
relying on following judgments.
(i) Pandit Construction Company Vs. Delhi Development Authority & Anr.;
(2007) (98) DRJ 96 (para 5-7, 10@ Pg. 3 - 5 of the compilation.
(ii) Mysore Minerals Ltd., rep., by its Managing Director, Bangalore Vs. Tam-
Tam Pedda Guruva Reddy, ILR 2014 KAR 1152 (para 16-20, @ Pg. 25-38
of the compilation.
(iii) Union of India, Secunderabad Vs. P. Kameswar Rao Contractor, Hyderabad,
1995 (2) A.P.L.J. 473 (HC) (para 5-8 @Pg. 53-57 of the compilation).

(iv) Avinash Sharma Versus Municipal Corporation of Delhi 2007 (97) DRJ 132
(para 6 & 12 @Pg. 61-62 & 64 of the compilation).
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9. It is further stated that after considering the Judgment of the Hon'ble Supreme Court
in Inder Singh REkhi V/s DOA AIR 1988 SC 1007, Hon'ble Delhi High Court in
Sham Sunder Versus Municipal Corporation of Delhi & Ors. 2006 (91) DRJ 200,
(para 11 & 13 @ Pg. 75-76 of the compilation) cause of action would only arise
when the legal notice under Clause 25 of the Agreement is sent.

10. It is further submitted that under section 28(3) of the Arbitration and Conciliation
Act, 1996, the Arbitral Tribunal is bound to decide the dispute between the Parties in
accordance with the terms of the contract and also take into account the usages of the
trade applicable to the transaction. It is submitted that the Ld. Arbitrator by not
following the requirement of Clause 25 of the Contract between the Parties have mis-
conducted himself. In this regard the Appellants reley on following judgments:

(i) Delhi Jal Board v. V. K. Dewan & Co 2011(1) Arb. LR 473 (para 55-56,
@Pg. 90 of the compilation)
(ii) M.S.T.C. Limited Vs Jain Traders & Ors. 2011 (125) DRJ 435 (para 19 @
Pg. 105-106 of the compilation)
(iii) All India Radio Versus Unibros & Anr. 2010 (115) DRJ 573 (para 6@ Pg.
116 of the compilation)

11. That it is submitted that the Ld. Arbitrator relying only on the judgment of the
Hon'ble Supreme Court in AIR 1988 SC 1007 Major (Retd.) Inder Singh Rekhi
V/s DDA (para 4 @ Pg. 69 of the Compilation), which judgment was considered
by all the above judgments which have been quoted above and applying the facts of
that case with the present case ruled that the claims of the Appellants were barred by
limitation. It is submitted that after considering the particular facts and circumstances
of the case Hon'ble Supreme Court in lnder Singh Rekhi (Supra) had held that:

"4 ... ............. There should be dispute and there can onlv be a dispute when a claim
is asserted bv one party and denied by the other on whatever grounds. Mere failure
or inaction to pay does not lead to the inference of the existence of dispute. Dispute
entails a positive element and assertion in denying. not merely inaction to accede to
a claim or a request. When in a particular case a dispute as arisen or not has to be
found out from the fact and circumstances of the case. " (Underline supplied)

Thus it submitted that the Hon'ble Supreme Court was aware that the facts of Major
(Retd.) Inder Singh Rekhi V/s ODA can not be pari materia with the facts of each
case and whether a dispute has arisen or not will have to be seen in the facts and
circumstances of each case.

12. It is submitted that in the facts of the present case the Ld. Arbitrator as well as the
Ld. Trial Court by ignoring the contractual provisions of the agreement between the
parties have mis-conducted and has wrongly applied the facts of the judgment of the
Hon'ble Supreme Court in AIR 1988 SC 1007 Major (Retd.) Inder Singh Rekhi V/s
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DOA in the present case and has wrongly ruled against the Appellants on the issue of
limitation. It is submitted that in light of the judgments cited above the letter dated
20/06/2003 cannot by any stretch of imagination be termed as a letter asserting the
claim by the Appellants and resultantly the start of the period of limitation I cause of
action. It is submitted that at best the cause of action first arose in favour of the
Petitioners on 11112/2007 when the Petitioners raised their detailed claim as per
Clause 25 of the agreement between the parties or on 24/07 /2009 when the
Petitioners refuted the admitted amounts given by the MCD vide their letter dated
30/07 /2008. Another point to be noted is that on one hand MCD in its letter dated
30/07 /2008 states that "after the demise of the concerned person the legal successor
of the person has not given any legal proof of succession to process the case further"
(Page 282) and then in the reply before the Ld. Arbitrator they state that no one
approached the department for the payment (Page 352) and on the other hand the Ld.
Arbitrator takes the letter dated 20/06/2003 as Petitioner's assertion of claim. This is
nothing but contradiction which vitiates Award itself. It is humbly submitted that the
facts of the present case is entirely different than the facts in lnder Singh Rekhi
(Supra) as explained above. It is further submitted that the Ld. Arbitrator as well as
the Ld. Trial Court also mis-conducted by not considering the specific contractual
provisions of the agreement between the parties because being creature of an
agreement between the Parties Ld. Arbitrator was duty bound to give effect the
contractual provisions of the agreement between the parties.

13. It is further submitted that dismissal of 7 claims of the Petitioners by the Ld.
Arbitrator is based on wrong premises that the copies work orders were handed to the
Appellants at the first instance. It is submitted that the Ld. Arbitrator failed to
appreciate that the MCD's witness clearly admitted that they do not have any record
to show that copies of the work orders were handed over to the Appellants (Page
266). It is the case of the Appellants that the copies of the Work Orders were never
provided at the time of the grant of the work and the work site was also provided
after about six months of grant of the work and there was shift of the work site also
because of which the Appellants incurred cost of escalation and also cost in shifting
the materials from one site to the other.

Through,

Rajeev Kumar I Alka Srivastava

Advocates
Enrolment No. D/118/1998R
330, Lawyer's Chamber
Delhi High Court, Delhi - 110 003
Place: New Delhi Ph No. 9810466870 I 9811950380
Date: 26 .04.2023 Email: [email protected]