Ashok Khanna v. M/S B.E. BILLIOMORIA & COMPANY LTD

1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.

2. It is submitted by the petitioner that he, Ashok Khanna, is the Proprietor of M/s Anshu Fire Protection having its office at 71, SCF-II, Sector 16 A, opposite Government College, Faridabad. The respondent had awarded work order to carry out the various items of fire fighting works at Indoor Stadium for badminton and squash Courts at Siri Fort Sports Complex, which was constructed for Commonwealth games, 2010, vide letter dated 20th October, 2008. 2014:DHC:4056

3. The work order was accepted by the petitioner and subsequently an agreement dated 27th January, 2009 was executed between the parties. The petitioner carried out the work and raised the bills of Rs.57,69,305 which is outstanding.

4. Several E-Mails dated 28th October, 2010 and 3rd January, 2011 and 28th October, 2013 and 13th November, 2013 were exchanged between the parties but payment was not released. The petitioner had requested the respondent to set up a meeting with the Chairman in terms of Clause 15 of the agreement which the respondent failed to do. The petitioner filed an arbitration petition in this court bearing No. 515/2013 which was dismissed as withdrawn on 26th November, 2013 requiring the petitioner to take the requisite steps in terms of Clause 15 of the agreement. A notice dated 26th November, 2013 was sent by the petitioner through his counsel invoking the arbitration and informing the respondent about the appointment of Sh. S.K. Mahajan, retired Justice of Delhi High Court as an arbitrator to adjudicate the disputes giving the respondent seven days time to raise objection to the appointment of Arbitrator but the response of the respondent was not positive, hence the petition.

5. The main objection of the respondent is that there was no agreement of any nature between the respondent and the petitioner. It is submitted that the respondent had entered into an agreement with the company called M/s Anshu Fire Protection, a company incorporated under the Companies Act, 1956 vide Agreement dated 27th January, 2009.

6. It is contended that the petitioner is a stranger to the said agreement and has no locus standi to file the present petition.

7. Learned counsel for the petitioner has argued that there is no dispute to the fact that the respondent had entered into an agreement with M/s Anshu Fire Protection, a company registered under the Companies Act, but actually it was a proprietorship firm of the name of M/s Anshu Fire Protection of which he is the Proprietor and hence he has the locus standi. It is also argued that in several E-Mails, the respondent has not disputed this fact. It is also submitted that in reply to their notice dated 26th November, 2013 which was sent by the Advocate of the petitioner, this issue was not raised by the respondent.

8. It is argued on behalf of the respondent that these various E-mails were exchanged were between Anshul Khanna of M/s Anshu Fire Protection, the Company and the respondent. It is submitted that reply to the notice of the petitioner dated 26th November, 2013 does not amount to creating a contract with the petitioner.

9. I have given careful consideration to the rival contentions of the parties.

10. Section 11 of the Arbitration and Conciliation Act, 1996 confers jurisdiction to Courts to appoint an Arbitrator. In the case of Deutsche Post Bank Home Finance Limited v. Taduri Sridhar and Another (2011) 11 SCC 375, the Supreme Court has discussed the meaning of the expression “the party” which appears under Section 11(6) and the expression “the agreement” under Section 7 and Section 2(b) of the Act and has held as under:-

11. From the above discussion, it is therefore, apparent that the law requires that only a person who is a party to an agreement can invoke the jurisdiction of this court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator. A stranger to the arbitration agreement cannot approach the court under Section 11(6) of the Arbitration and Conciliation Act, 1996. The petitioner in this case has filed on record, the agreement dated 27st January, 2009 while invoking the arbitration clause and seeking the intervention of this court under Section 11 (6) of the Act for appointment of an Arbitrator. The para 1 of the said agreement reads as under:- “AGREEMENT This Agreement is executed on this 27th day of January 2009 between B.E. Billimoria & Company Limited a company incorporated under the companies Act, 1956 having its registered office at Shiv Sagar Estate, ‘A’Block, 2nd floor, Dr. Annie Besant Road, Worli, Mumbai-400 018 (hereinafter referred to as BEBL which expression(s) shall unless repugnant to the context, mean and include its successors-in-interest, executors and assigns) of the first part and Anshu Fire Protection, a company incorporated under the Companies Act, 1956 having its Head Office at 71 SCF-II, Sector 16-A, Behind Hotel Magpie, Faridabad-121007, Haryana(hereinafter referred to as AFP which expression(s) shall unless repugnant to the context, mean and include its successors-ininterest, executors and assign(s) of the second part.”

12. This agreement further shows that the Signatories to this agreement is Mr. Anshul Khanna for M/s Anshu Fire Protection. The petitioner is not a Signatory to this agreement. He has only signed this agreement as a witness to the execution of this document. Moreover, the agreement itself shows that the agreement was between Anshu Fire Protection, a company incorporated under the Companies Act, 1956 and not for M/s Anshu Fire Protection, a Proprietorship concern. This observation that the agreement was between M/s Anshu Fire Protection, a company incorporated under The Companies Act is further strengthened from the fact that a notice dated 18th November, 2013 under Section 433 (e) and 434 of The Companies Act, 1956 for winding up the company had been issued by M/s Anshu Fire Protection.