TaxTMI 
TaxTMI 
2022 (4) TMI 1565
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....ut of three tenders floated for; i. Construction of forty two (42) Type-B Group-I Flats (Stilt + Seven storied) (6 flats of seven storey in one tower) at Housing Board Colony, Jind Road at Rohtak (comprising Civil Work, Internal Public Health Work, Internal work and Elevator Services), the bid amount was Rs. 10,71,53,712/-, subject matter of CWP No. 21840 of 2020. ii. Construction of 64 Nos. Type-C Group-II Flats (Stilt + Eight storied) at Housing Board Colony, Jind Road at Rohtak (comprising Civil Work, internal Public Health Work, Internal Electrical work and Elevator Services), the bid amount being Rs.18,03,97,943/-, subject matter of CWP No. 21857 of 2020 and iii. Construction of 96 Nos. Type-C Group-VII Flats (Stilt + Eight Storied) at Housing Board Colony, Jind Road at Rohtak (comprising Civil Work, internal Public Health Work, Internal Electrical Work and Elevator Services), the bid amount being Rs.27,64,74,851/-, subject matter of CWP No. 21858 of 2020. Petitioner being eligible applied for the same and the tender was allotted. It is stated that the respondents restricted the amount of work in all the three cases. Acceptance letter was/were issued on behalf of the Ho....
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....tioner before the Arbitrator. It is stated that the respondents however raised an objection vide communication dated 14.03.2020 and sought a direction to the petitioner to deposit the required security for adjudication of claims as per the Arbitration Clause. In reply thereto the petitioner firm, took a stand that in view of the judgement of the Hon'ble Supreme Court in M/s ICOMM Tele Limited Vs. Punjab State Water Supply and Sewerage Board and another, 2019(5) R.C.R (Civil) 242, there is no requirement for pre-deposit as claimed by the respondents. Learned Arbitrator vide impugned order dated 09.11.2020, however directed the petitioner/s to deposit the amount in question in all the three matters in terms of Clause 33 (c) of the Contract, holding the said clause to be valid in view of the judgement of the Hon'ble Supreme Court in S.K. Jain Vs. State of Haryana, 2009(2) R.C.R (Civil) 202. Aggrieved therefrom, present writ petitions have been filed. Learned senior counsel for the petitioner vehemently argued that the contract in question is in-fact a contract of adhesion where the petitioner has no bargaining power. Clause 33 (7) of the Agreement requiring a pre-deposit, is claim....
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.... DASM Construction Co. Pvt. Ltd., decided on 27.01.2020, to substantiate his arguments. It is thus prayed that these petitions be allowed. Per contra, learned counsel for the respondents argues that there is no ground whatsoever for interference in the well reasoned and logical order dated 09.11.2020, Annexure P-4, passed by the learned Arbitrator. It is submitted that the present writ petitions are squarely covered by the judgement of the Hon'ble Supreme Court in S.K Jain's case (supra) which has been rendered by a three Judges Bench of the Hon'ble Supreme Court and has been succinctly discussed by the Hon'ble Supreme Court in M/s ICOMM Tele Limited's case (supra). Clause of pre-deposit involved in S.K. Jain's case (Supra), is identical to the one in the present case. Therefore, present writ petitions, it is prayed be dismissed with costs. I have heard learned counsel for the parties and have gone through the files with their assistance. The factual aspect of the contracts being executed between the parties and a dispute arising therefrom between the parties is a matter of record. It is further not in dispute that the petitioner invoked the arbitration clause and sought resolut....
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.... earlier judgment in S.K Jain's case (supra) and observed as under:- "12. In S.K. Jain v. State of Haryana, (2009) 4 SCC 357, this Court dealt with an arbitration clause in an agreement which read as follows:- "11. Sub-clause (7) of Clause 25-A of the agreement reads as follows: "25-A. (7) It is also a term of this contract agreement that where the party invoking arbitration is the contractor, no reference for arbitration shall be maintainable unless the contractor furnishes to the satisfaction of the Executive Engineer in charge of the work, a security deposit of a sum determined according to details given below and the sum so deposited shall, on the termination of the arbitration proceedings be adjusted against the costs, if any, awarded by the arbitrator against the claimant party and the balance remaining after such adjustment in the absence of any such costs being awarded, the whole of the sum will be refunded to him within one month from the date of the award- Amount of claim Rate of security deposit 1.For claims below Rs.10,000 @% of amount claimed 2.For claims of Rs.10,000/- and above and below Rs.1,00,000/- and 5% of amount claimed 3.For claims of Rs.1,0....
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....pra). It is obvious that a clear cut distinction has been made in respect to the type of pre-deposit clause. Discussion of the judgement of S.K. Jain's case (supra) makes it crystal clear that such like clauses, which provide for adjustment and refund to the party making the deposit after the passing of the award are materially different from the clause which was under challenge in M/s ICOMM Tele Limited's case (supra). In case of M/s ICOMM Tele Limited's case (Supra), the objectionable clause 25 (viii) was struck down finding the same to be arbitrary. Relevant part of the said judgement in this respect is reproduced as under:- "23. The important principle established by this case is that unless it is first found that the litigation that has been embarked upon is frivolous, exemplary costs or punitive damages do not follow. Clearly, therefore, a "deposit-at-call" of 10% of the amount claimed, which can amount to large sums of money, is obviously without any direct nexus to the filing of frivolous claims, as it applies to all claims (frivolous or otherwise) made at the very threshold. A 10% deposit has to be made before any determination that a claim made by the party invoking arb....
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....te resolution system and in-fact renders the entire arbitral process ineffective, however, keeping in view the specific discussion by the Hon'ble Supreme Court in its decision in M/s ICOMM Tele Limited's case (supra) of S.K. Jain's case (supra), I do not find any merit in the argument raised by learned counsel for the petitioner. The same is accordingly rejected as it is clear that this Court is bound by the judgement of the Hon'ble Supreme Court in S.K.Jain's case (supra), which has not been overruled till date. It is relevant to note at this stage that a Coordinate Bench has upheld a similar pre-deposit clause in the decision dated 03.11.2020 passed in ARB no. 127 of 2019 and in CWP No. 13539 of 2021, titled as M/s The Assan Co-op L&C Society, Bahadurgarh, District Jhajjar Vs. Haryana Vidyut Prasaran Nigam Limited (HVPNL). Argument raised by learned counsel for the petitioner/s that once the Arbitrator was appointed by the Chief Administrator himself without the pre-deposit being made, there is no question of insistence upon the same, is an argument which is devoid of any merit, hence rejected. This is so for the reason that it is clearly mentioned in impugned order dated 09.11....