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PUNJAB & HARYANA HIGH COURT

M/s Simplex Infrastructure Limited and another

 Vs.

 M/s J.P.Singla Engineers and Contractor

CR 6634/2019

Coram HON’BLE MS. JUSTICE NIDHI GUPTA

FACTS:

The current revision petition has been submitted to contest the decision dated 5.9.2019 (Attachment P-5) issued by the Civil Judge (Junior Division) in Chandigarh. This decision pertains to the rejection of the applicants’ petition under Section 8 of the Arbitration and Conciliation Act, 1996 (referred to as ‘the 1996 Act’). The respondent, a sole proprietorship firm engaged in construction, was contracted by the petitioners for road construction via an Agreement/work order from 14.4.2014. The respondent completed the project according to specifications and submitted bills for the period up to 22.8.2016. A final bill for minor patch work on 13.5.2017 was also sent. However, payment was not received despite reminders, leading the respondent to file Civil Suit No. 2207 of 2018 seeking to recover Rs. 27,16,659/- as principal and Rs. 3,79,748/- as 15% per annum interest from 13.5.2017. The petitioners, as defendants, argued the civil suit was improper due to Clause 12 of the Agreement/work order, which mandated arbitration for disputes. They submitted an application under Section 8 of the 1996 Act to this effect, which was rejected by the Civil Judge (Junior Division) on 5.9.2019. The petitioners have lodged the current revision petition to challenge this ruling.

COURT ANALYSIS AND DECISION:

The arbitration clause applies when a dispute falls within the scope of an Arbitration Agreement. In this case, the dispute doesn’t pertain to the execution, completion of work, or the contract itself. Instead, it concerns uncompensated dues. It’s not a dispute “under,” “in connection with,” or “regarding” the contract. Consequently, arbitration isn’t suitable, and the respondent, who is entitled to their dues, has appropriately filed a recovery suit. The respondent attempted to settle amicably, but the petitioners didn’t respond. Given these circumstances, the order dated 5.9.2019, which dismissed the revision petition, is deemed correct and the revision petition is rejected.

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Written by- Srijan Garg

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