TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1512
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....05.2002 was for unloading, handling, storage, assembly and erection at site, commissioning, etc. of the Urea handling system for Namrup-II and Namrup-III. The total contract price was Rs. 1,16,52,500/-. The two orders constituted one single turn-key contract for the Urea & Bulk and Bag handling system for Namrup-II and III Revamp Projects. The total value of the contract was Rs. 15,98,47,197/-. 4. It is contended in the plaint that the work 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 contend....
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....the agreement. He, however, submits that there is no dispute between the parties. The defendant has given the Final Acceptance Certificate indicating that the work done by the plaintiff for the purchase order and work order has been accepted. The two bank guarantees for performance security furnished by the defendant have been released to the plaintiff. There are unconditional admissions and acknowledgments of the dues of the plaintiff on record 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 (VA....
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.....2015. It is further urged that the so called document is not a No Objection Certificate as per the terms of the agreement between the parties. 12. I have heard learned counsel for the parties and gone through the record. The basic contention of the plaintiff is that there is no subsisting dispute between the parties in view of the admissions made by the defendant and also in view of the No Objection Certificate from the sales tax authorities now produced 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 Conciliati....
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....enders the original arbitration agreement or duly certified copy thereof. 23. Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as aforestated are satisfied, the court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court has to refer the parties to arbitration." 17. However, in Booz Allen and Hamilton Inc. vs. SBI Homes Finance Ltd. & Ors., AIR 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 p....
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....he claim of the plaintiff for recovery of arrears of his salary. There is thus really no dispute for adjudication by arbitration. I see no reason to deny to 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....." 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 a....
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....n this connection, clause 7.1 of the Special Conditions of Contract (Supply cum Erection) is quoted below: The price shall be inclusive of works and contract tax. Owner will deduct tax at sources as per prevailing rules and issue necessary certificates to this effect to the contractor. The contractor shall be entirely responsible for getting their accounts settled with sales tax authorities and shall submit no dues certificate from the competent sales tax authority before clearance of their final bill. 8. The defendant company 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 Ord....
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....atter was heard and the judgment was reserved, again no objections were made regarding the contents of the affidavit. Hence, I take the affidavit and certificate on record. 27. In my opinion, on the face of it the document now produced by the plaintiff filed along with the affidavit dated 28.05.2015 falls within the definition of No Due Certificate issued by the necessary Sales Tax Authorities and fulfils the condition of Clause 7.1 of the Special Condition of the Contract. Defendant has not shown anything to the contrary. In the light of this 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....
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....lso constitutes the reservoir of the power of a Court of record to throw out vexatious suits." 31. This court in the case of P.S. Jain Co. Ltd. vs. Atma Ram Properties (P) Ltd. & Anr. 205 (2013) DLT 302 while dealing with Order XV CPC held as follows:- "7. However the precedents are on questions of law and not of facts. It has thus been enquired from the counsel for the appellant/defendant no. 1 as to what is the plea in the written statement of the appellant/defendant no. 1 which is required to be put to trial. Attention of the counsel has been invited to Order XIV 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 ....