Arbitration Application No. 77 of 2009. Case: Sri V.G. Constructions Vs Maytas Infra Ltd.. High Court of Andhra Pradesh (India)
| Case Number | Arbitration Application No. 77 of 2009 |
| Counsel | For Appellant: A.K. Mahesh, Adv. and For Respondents: C.R. Sridharan, Adv. |
| Judges | N.V. Ramana, J. |
| Issue | Arbitration and Conciliation Act, 1996 - Section 11 |
| Judgement Date | February 26, 2010 |
| Court | High Court of Andhra Pradesh (India) |
Order:
N.V. Ramana, J., (At Hyderabad)
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By this application, filed under Section 11 of the Arbitration and Conciliation Act, 1996, the applicant prays this Court to appoint a sole Arbitrator and refer the dispute/difference that has arisen between them and the respondent, namely M/s. Maytas Infra Ltd., out of the contract entered into by and between them, to the Arbitrator for adjudication.
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The applicant is a construction company. The respondent, a public limited company is also into construction and development business. The applicant states that the respondent retained them as sub-contractor vide sub-contract agreement dated 28.08.2008 in respect of civil works relating to construction of Warehouses Compex at Malkapur on Hyderabad - Vijayawada, which work was awarded to the respondent by M/s. Maytas Hill County Developers Pvt. Ltd, vide work order dated 18.03.2008.
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The applicant states that as per the sub-contract agreement, they are required to complete the entire work within seven months from the date of its execution. Pursuant to the sub-contract agreement, the applicant states that they mobilized machinery, men and power for the work and commenced the work as per schedule, however, there were laches on the part of the respondent in even reimbursing money for the works certified. The applicant states that out of total work executed to the tune of Rs. 2,67,07,694/-, the respondent released an amount of Rs. 85,00,000/-, and thereafter, by letter dated 28.01.2009, permitted them to take away TMT bars from the project site towards piecemeal payment.
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While the matters stood thus, the applicant states that the respondent served termination notice on 14.02.2009 with a request for amicable closure on or before 16.02.2009. In response thereto, the applicant claims to have submitted final bill on 17.02.2009 for Rs. 2,82,89,986/-. Thereafter, the respondent had sent an undated letter, to which the applicant addressed clarification letter dated 19.03.2009.
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The applicant states that the respondent called them for a meeting on 06.04.2009. In the said meeting, as against their final claim for Rs. 2,82,89,986/-, the respondent informed the applicant in no uncertain terms that there offer was on the basis of "Take it or leave it", as otherwise, he will not receive even Rs. 9.00 lakhs by way scrap steel also. Thereafter, the applicant states that he addressed letter dated 17.04.2009 raising dispute, and issued notice dated 24.07.2009 to the respondent appoint a sole Arbitrator instead of CEO. However, as the applicant did not appoint Arbitrator, he filed the present application under Section 11 of the Arbitration and Conciliation Act, 1996 praying to appoint an Arbitrator.
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The learned Counsel for the applicant submits that the so called Full and Final Settlement, alleged to have been arrived at by the applicant and the respondent under the Memorandum of the Meeting dated 06.04.2009, was not at all arrived at by consensus ad Idem of the parties. He submits that the applicant and respondent do not stand on equal footing, and as the respondent is backed with greater leverage of bargaining power, the applicant had no alternative, but to succumb to the pressures of the respondent and sign the Full and Final Settlement; for had he refused to do so, the respondent would have denied even the admitted amount of Rs. 9.00 lakhs.
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He submits that as the applicant was compelled to sign the Memorandum of the Meeting, immediately upon signing the Memorandum of the Meeting and after taking delivery of the scrap steel, issued notice dated 13.04.2009 disputing the so called Full and Final Settlement arrived at under the Memorandum of Meeting dated 06.04.2009. He submits that the acts of the applicant in taking delivery of steel scrap in lieu of payment of Rs. 9.00 lakhs and addressing letter dated 27.04.2009 withdrawing the letter dated 13.04.2009, are based on the principle necessissatis non-habef lagem (necessity knows no law), and as such, the said acts of the applicant, cannot come in his way in seeking recourse to settlement of disputes through arbitration as per the arbitration clause in the sub contract agreement...
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