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TMI Blog2016 (1) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... o the plaintiff in this suit the relief of recovery of money which admittedly is due to the plaintiff and the chances of recovery whereof, even if a decree were to be passed in favour of the plaintiff, are remote and to compel the plaintiff to spend more monies in invoking the arbitration clause when there is really nothing for arbitration. Without thus intending this to be precedent, in the facts and circumstances of the present case, I reject said argument also of the defendant.' Similarly, in Maruti Udyog Ltd. vs. Mahalaxmi Motors Ltd. and Anr., [ 2001 (12) TMI 907 - DELHI HIGH COURT ], the learned Single Judge of this Court on an application under Section 8 of the Arbitration Act held that where a liability is admitted, there are no disputes or differences with regard to the admitted liability. In the absence of any dispute or differences, the application under Section 8 of the Arbitration Act cannot be allowed. In the light of the pronouncements of the Hon'ble Supreme Court and of this High Court, it is clear that when no disputes exist between the parties, namely, what is claimed by the plaintiff is admitted by the defendant or impliedly admitted by the defendant, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork stated in the purchase order and work order were duly completed and the Final Acceptance Certificate for both after completion of the performance guarantee test was issued by the defendant under cover of letter dated 23.10.2007. The defendant thereafter also discharged two bank guarantees for performance security vide letter dated 03.05.2008. All payments as per the purchase order have been received by the plaintiff except a sum of Rs. 2.41 crores. A part payment of Rs. 88.95 lacs was received by the plaintiff on 31.08.2009 leaving a balance of Rs. 1,52,00,000/-. It is urged that the present suit is for this balance amount of Rs. 1,52,00,000/- and the interest on the belated payment received of Rs. 88,95,098/-. 5. The plaintiff further contends that the defendant has admitted its liability to pay the plaintiff the said sum of Rs. 1.52 crores vide its letters dated 01.11.2011 and 09.01.2012. A reference is made to the various correspondences between the parties. Hence, the present suit. 6. The defendant has not filed its written statement. However, in the present application i.e. IA No. 17710/2014, the defendant has pointed out that under the terms of Clause 7.1 of the Special C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd including communications dated 01.11.2011 and 09.01.2012. He further submits that the only contention raised by the defendant in the present application is that there is non- compliance of Clause 7.1 of the Special Condition of the contract whereby the plaintiff was obliged to get a no dues certificate from the competent sales tax authority before payment of the final bill. He submits that the necessary NOC from the sales tax department has been placed on record which is a certificate issued by the Assistant Commissioner stating that the plaintiff company is not in Sales Tax Arrears as on date (the document being dated 30.03.2015). The said certificate also states that the accounts are yet to be verified for the years 2010-11 to 2013-14 (VAT) (Deemed Assessment). The seal of the concerned official is placed on this document. In the light of this, he submits that the limited contention of the plaintiff that the defendant had to release the balance amount on receipt of an NOC from the Sales Tax Department has also been made out. It is urged that the present application be dismissed as there is no disputes to be referred to arbitration and a decree as sought may be passed by this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced by the plaintiff. The defendant however has taken a highly technical stand, namely, that in view of the application filed under Section 8 of the Arbitration Act, this court has no option but to refer the parties to arbitration. 13. We may first look at Section 8 of the Arbitration Act and its interpretation. Section 8 reads as follows:- Section 8. Power to refer parties to arbitration where there is an arbitration agreement.- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. 14. The Arbitration and Conciliation (Amendment) Ordinance, 2015 makes some changes in the said Section 8. Those amendments however would not have a bearing on the present case. 15. In Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums (supra) the Supreme Court quoted with approval its earlier judgment in the case of P.Anand Gajapathi Raju Ors. vs. P.V.G. Raju (Dead) Ors., (2000) 2 SCR 684 as follows:- 15. This Court in the case of P. Anand Gajapathi Raju and Ors. v. P. V.G. Raju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR 2011 SC 2507 (MANU/SC/0533/2011) the Supreme Court elaborated the scope of Section 8 of the Act and held as follows:- 20. The nature and scope of issues arising for consideration in an application under Section 11 of the Act for appointment of arbitrators, are far narrower than those arising in an application under Section 8 of the Act, seeking reference of the parties to a suit to arbitration. While considering an application under Section 11 of the Act, the Chief Justice or his designate would not embark upon an examination of the issue of 'arbitrability' or appropriateness of adjudication by a private forum, once he finds that there was an arbitration agreement between or among the parties, and would leave the issue of arbitrability for the decision of the arbitral Tribunal. If the arbitrator wrongly holds that the dispute is arbitrable, the aggrieved party will have to challenge the award by filing an application under Section 34 of the Act, relying upon Sub-Section 2(b) (i) of that section. But where the issue of 'arbitrability' arises in the context of an application under Section 8 of the Act in a pending suit, all aspects of arbitrability have to be decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intending this to be precedent, in the facts and circumstances of the present case, I reject said argument also of the defendant..... 20. Similarly, in Maruti Udyog Ltd. vs. Mahalaxmi Motors Ltd. and Anr., (2002) DLT 290 (MANU/DE/1439/2001), the learned Single Judge of this Court on an application under Section 8 of the Arbitration Act held that where a liability is admitted, there are no disputes or differences with regard to the admitted liability. In the absence of any dispute or differences, the application under Section 8 of the Arbitration Act cannot be allowed. The court held as follows:- 3. It is settled law that the arbitration clause can be invoked only when there are differences and disputes with regard to certain payments or breach of obligations of the respective parties of the terms of the agreement. However wherever there is an admitted liability, the arbitration clause cannot be invoked. The very connotation admitted liability suggests that there are no disputes or differences with regard to the said admitted liability. 4. The extracts of the letter dated 5th April, 1997, the minutes of the meeting and the affidavit filed by Mr.M.C. Mehta in his capacity as Managin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any states that the aforesaid contractual obligation on the part of the plaintiff, introduced with the object and purpose of securing against any loss to the exchequer on account of non-payment by the contractor of its tax liability arising from and in connection with the performance of the contract, has admittedly not been complied with by the contractor, i.e. the plaintiff in the present suit. 9. Instead, in a bid to evade/wriggle out of the aforesaid contractual obligation and the consequences of its non- performance, the plaintiff has sought to place reliance on certain provisions of the purported amendment dated 10th September, 2002 to the Purchase Order, which itself did not receive approval to the Board of the Defendant Company, to suggest that the requirement to produce documentary evidence for payment of taxes and duties was completely done away with under the contract. Such a construction is contrary to the express terms of the contract, including in particular, the very provisions of the purported amendment order sought to be relied upon. 23. Hence, the sum and substance of the dispute that is raised by the defendant is non-compliance by the plaintiff of Clause 7.1 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate having been placed on record, no meaningful dispute survives between the parties. 28. Having come to the conclusion that there are no pending disputes between the parties, the question would arise as to what should be the fate of the present application under section 8 of the Arbitration Act. Should the matter be referred to arbitration as sought for by the defendant. Reference may be had to the observations of the Supreme Court in the case of T.Arivandandam vs. T.V. Satyapal and Anr., AIR 1977 SC 2421 (MANU/SC/0034/1977) where the Court held as follows:- 6. The trial Court in this case will remind itself of Section 35-A, C.P.C. and take deterrent action if it is satisfied that the litigation was inspired by vexatious motives and altogether groundless. In any view, that suit has no survival value and should be disposed of forthwith after giving an immediate hearing to the parties concerned. 29. Reference may also be had to the judgment of the Supreme Court in T.Arivandandam vs. T.V. Satyapal and Anr., AIR 1977 SC 2421 the Supreme Court on frivolous litigations should be held as follows:- 5. We have not the slightest hesitation in condemning the petitioner for the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Order XV of the Code of Civil Procedure, 1908. It is not as if the CPC requires all suits to be decided only after trial, unless admissions are made. Order XIV of the CPC requires the Civil Court, after the pleadings have been completed, to frame issues. Such issues are to be framed on material propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. Order XV of the CPC prescribes the course of action to be followed where the parties are found not at issue on any question of law or of fact and requires the Court to at once pronounce judgment. ... 21. This aspect is also no longer res integra. As far back in ITC Limited Vs. Debt Recovery Appellate Tribunal MANU/SC/0968/1998: (1998) 2 SCC 70 followed in Sanjay Sharma Vs. Madan Mohan Sharma MANU/DE/1999/2013 as well as in Guru Nanak Vidya Bhandar Trust Vs. UOI MANU/DE/8130/2006 relied upon by the counsel for respondent No. 1, it has been held that merely because issues have been framed does not disentitle the Court from at a subsequent stage, if finds that a relief can be granted on admissions or if finds that no material issue arises o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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