UNION OF INDIA vs M/S BPT INFRA PROJECTS PVT. LTD

2024-05-06 Information

$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 06.05.2024

+ FAO (COMM) 110/2022
UNION OF INDIA ….. Appellant
Through: Mr Om Prakash with Ms Simran Gill, Mr Nitish Pande and Ms Swati, Advs.

versus

M/S BPT INFRA PROJECTS PVT. LTD. ….. Respondent
Through: Mr S K Jain, Mr Akshu Jain and Ms
Stuti Jain, Advs.

CORAM:
HON’BLE MR. JUSTICE RAJIV SHAKDHER
HON’BLE MR. JUSTICE AMIT BANSAL

[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J.: (ORAL)
1. This appeal is directed against the judgment and order dated 28.03.2022 passed by the learned District Judge, Commercial Court-05, Central District, Tis Hazari Courts, Delhi.
2. Via the impugned judgment, the learned District Judge has dismissed the application preferred by the appellant, i.e., Union of India [hereafter referred to as, UOI] under Order VI Rule 17 of the Code of Civil Procedure, 1908 [in short, CPC].
3. The record discloses that the UOI had preferred a petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereafter referred to as 1996 Act], to assail the award dated 04.01.2019.
3.1 Concededly, the said petition was instituted before the learned Additional District Judge [in short, ADJ] under the powers conferred on ADJs to adjudicate commercial disputes under the provisions of Commercial Courts Act, 2015 [hereafter referred to as 2015 Act]. The designated commercial court was, as per the impugned judgment, created on 06.01.2020 whereupon, the petition preferred by the UOI was transferred to it on 28.02.2020.
3.2 The record further discloses that at the hearing held before the learned District Judge on 23.11.2020, preliminary objections, which were technical in nature, were raised on behalf of the respondent, albeit across the bar. The following extract of the order dated 23.11.2020 bears this out:
Record shows that my ld. Predecessor vide order dated 29-8-2019 granted opportunity to the respondent to file reply of the petition on next date of hearing but it was not filed at all. Certain preliminarily technical objections were raised during arguments by the respondent, which I deem it proper to decide first before proceeding case on merits

4. The objections raised, broadly, fell under the following heads:
(i) Locus standi of the representative of UOI to file the petition under section 34 of the 1996 Act.
(ii) Failure to pay the learned arbitrators fee.
(iii) Non-filing of certified copy of the impugned award.
(iv) Absence of authority with respect to the counsel who prepared the petition prior to the execution of the vakalatnama.
(iv) (a) Evidently, the petition under Section 34 of the 1996 Act was prepared on 29.03.2019 whereas, the vakaltnama was executed by the UOI in favour of its counsel, one, Mr V K Rai, Advocate on 01.04.2019.
(v) Absence of proper verification and failure to file the statement of truth.
5. The learned District Judge dealt with all the objections, which, as noted above, were taken across the bar. The learned District Judge, after hearing submissions of the parties, overruled all the objections taken across the bar, save and except, the objection concerning the statement of truth and proper verification of affidavits which, apparently, did not detail out the parentage, age, and residential address, office address, absence of signature on every page, etcetera. This is evident from the following observations made by the learned District Judge in the order dated 23.11.2020:
In view of the above discussions, I am of the view that technical objections raised by the respondent are having no substance and are hereby rejected. Petitioner is given time till next date to file statement of truth and proper verification affidavits with details of parentage, age, residential address besides office address, sign the every page of the petition as well as pay sum of Rs.3,05,681/- to the respondent within 15 days. Now the petition shall be heard on merits and on limitation point only and not on other points, which are already dealt with

5.1 Besides this, the learned District Judge also directed the UOI to pay its share of the learned arbitrators fees, which was quantified at Rs.3,05,681/-. Since the entire fee of the learned arbitrator had been paid by the respondent, the direction issued was that the said sum should be paid by the UOI to the respondent.
5.2 Admittedly, Rs.3,05,681/- has been paid by the UOI to the respondent.
6. The UOI, instead of straightaway curing the defects in the petition preferred under Section 34 of the 1996 Act, moved an application, as indicated above, under Order VI Rule 17 of the CPC whereby, it sought to introduce additional grounds. 6.1 The said application, however, was accompanied by a fresh petition, along with the statement of truth, and bore, even according to the counsel for the respondent, proper verification. There is no dispute that each page of this petition bears the signature of the concerned person authorized to file the petition.
7. Mr S K Jain, learned counsel, who appears on behalf of the respondent, says that despite opportunities being given to the UOI to cure the defects in the petition preferred under section 34 of the 1996 Act, it took no steps, therefore the impugned order should be sustained.
7.1 Mr Jain has relied upon the judgment of a coordinate bench of this Court, dated 09.02.2024, rendered in FAO(COMM) 10/2023, titled, Delhi Development Authority vs. M/s Amardeep Builders, in support of his plea that the absence of statement of truth with the petition filed under Section 34 of the 1996 Act will render the action non est.
8. In our view, whether or not the action is non est need not detain us, given the fact that the UOI, in this case, has cured the defect(s), albeit by going about it in a roundabout manner.
9. Furthermore, Mr Jains submission that since the provisions of CPC are not applicable, the application preferred by the UOI, in any event, is not maintainable does not impress us.
9.1 The reason we reached this conclusion is simply this: although the provisions of CPC are not applicable, the analogous principles which emerge upon perusal of the provisions contained therein are applicable and therefore, the application could not have been dismissed only on that account.
10. On the other hand, Mr Om Prakash, learned counsel, who appears on behalf of the appellant/UOI, relied upon a judgment of another coordinate bench of this Court rendered in ONGC vs. Joint Venture of Sai Rama Engineering (Sree) & Megha Engineering & Infrastructure Limited (Meil), (2023) SCC OnLine Del 63 in support of his plea that absence of statement of truth will not render the action non est.
11. We have heard the learned counsel for the parties and perused the record.
12. According to us, there were, as indicated above, several objections taken on 23.11.2020 by the respondent, albeit orally. These objections, however, were dealt with by the learned District Judge. The only aspects which were flagged by the learned District Judge concerned the failure to file the statement of truth, and the defect in verification of the affidavit(s) that accompanied the petition filed under Section 34 of the 1996 Act.
12.1 However, as indicated above, the UOI, instead of curing the defects in the petition which was on record, perhaps ill-advisedly, moved an application under Order VI Rule 17 of the CPC, and along with the said application, filed a fresh petition which was free of the defects pointed out by the learned District Judge on 23.11.2020.
13. Therefore, the moot question that arises for consideration is: should the court in the given circumstance deny UOI the right to assail the award on merits by taking recourse to an action preferred under Section 34 of the 1996 Act?
14. Practically, this is the only stage, at which, a litigant, who suffers an award, gets an opportunity to contest the case on merits, albeit within the confines of Section 34 of the 1996 Act.
15. In this case, corrective measures were taken, perhaps, not in the manner they ought to have taken.
16. A careful reading of the judgment rendered in Delhi Development Authority vs. M/s Amardeep Builders case would show that the court took a dim view of the litigant not curing the defects, despite opportunities.
17. Insofar as the judgment in ONGC case is concerned, the court opined that failure to file the statement of truth would not render the filing non est. [See paragraph 31 of the judgment].
18. In the present case, as indicated above, the UOI did, in fact, took corrective measure, though not in a manner it was required to go ahead.
19. Thus, for the foregoing reasons, we are inclined to set aside the impugned judgment and order with the following caveat, having regard to the submission made by Mr Om Prakash that the additional ground (M) embedded in the petition filed under Section 34 of the 1996 Act with the application preferred under Order VI Rule 17 of the CPC concerning fee of the learned arbitrator is not pressed:
(i) The impugned judgment and order is set aside.
(ii) The Section 34 petition, filed along with the application under Order VI Rule 17 of the CPC, is taken on record, excluding ground (M).
(iii) The learned District Judge will now decide the Section 34 petition on merits and render a decision qua the same.
(iv) Counsel and their respective parties will appear before the concerned District Judge on 31.05.2024.
(v) Costs of these proceedings are quantified at Rs.25,000/-. The UOI will pay the costs within six (06) weeks of receipt of a copy of the judgment.
(vi) Since we are told that the UOI has deposited the awarded amount with the Court, the deposit made along with accrued interest will abide by the final decision in the petition filed under Section 34 of the 1996 Act.
20. The appeal is disposed of in the aforesaid terms.

RAJIV SHAKDHER, J

AMIT BANSAL, J
MAY 6, 2024/pmc

FAO (COMM) 110/2022 Page 7 of 7