IN THE COURT OF GURGAON, HARYANA

OMP (COMM.) NO.

M/S CLASSIC INFRA SOLUTIONS PVT. LTD.

PETITIONER/OBJECTOR

VERSUS

M/S RG COLONISERS PVT. LTD.

RESPONDENT

REPLY ON BEHALF OF RESPONDENT

MAY IT PLEASE YOUR LORDSHIPS.

The humble Respondent, above named, most respectfully submit as

under: -

PRELIMINARY OBJECTIONS

1. That the Respondent is a company incorporated under the

Companies Act, 1956 under the name of M/s RG Colonisers Pvt. Ltd.,

engaged in the business of construction and development of

buildings.

2. That the Respondent is represented by_____________________, who is

duly authorized to file this Reply, Affidavit etc. on behalf of the

Respondent.

3. That the provision adjunct to the exercise of ‘making of an application’

under Section 34 is the newly introduced Section 34(5) which reads

as under –
“An application under this section shall be filed by a party only after

issuing a prior notice to the other party and such application shall be

accompanied by an affidavit by the applicant endorsing compliance

with the said requirement.”

Upon a bare perusal of the above provision it is clear that service of a

prior notice of an application under Section 34 is crucial to the

‘making of an application’. Also, in a case law MACHINE TOOL (INDIA)

LIMITED VS. SPLENDOR BUILDWELL PVT. LTD. AND ORS. O.M.P.

(COMM) 199/2018, the apex court held that:

“The service of a prior notice on the other party is a mandatory

requirement before filing of an application under Section 34 of the Act.

Not only is such notice to be given but also the application itself has to

be accompanied by an affidavit of the applicant endorsing the

compliance of said requirement. This requirement of the service of prior

notice therefore, cannot be said to be a mere formality or directory in

nature. The wording used in Section 34(5) of the Act clearly shows that

the intent of the legislature was that no application under Section 34 of

the Act can be filed until and unless the same has been served on the

other party. The use of the words 'only after' clearly demonstrates the

mandatory nature of this requirement of issuance of prior notice to the

other party. Any doubt in this regard is completely obliterated by

second part of the sub-section which provides that the application

'shall' be accompanied by an affidavit by the applicant endorsing

compliance with the said requirement.

Thus, the use of the words ‘shall’ and ‘only’ rendered the provision to

be mandatory. But in the instant case the Petitioner neither served

the notice nor attached the affidavit, thereby, violating the same.

Therefore, due to non-compliance of the mandatory provision by the

 Petitioner, the petition deserves to be dismissed by this hon’ble court

only on this ground prima facie.

4. That the award by the arbitrator can be set aside only on one or more

of the seven grounds set forth in Section 34(2).

Section 34 - Application for setting aside arbitral award. —

(2) An arbitral award may be set aside by the Court only if—
(a) the party making the application furnishes proof that—
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the
law for the time being in force; or
(iii) the party making the application was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission to
arbitration:
Provided that, if the decisions on matters submitted to arbitration can
be separated from those not so submitted, only that part of the
arbitral award which contains decisions on matters not submitted to
arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties, unless such
agreement was in conflict with a provision of this Part from which the
parties cannot derogate, or, failing such agreement, was not in
accordance with this Part; or
(b) the Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.

But, in the instant case so far as the objection on the behalf of

petitioner is concerned, the petitioner has made infructuous and

untenable objections simply to harass and humiliate the respondent.

Also, none of the grounds as mentioned in this section is violated,

and hence the objection raised is vexatious prima facie.

The arbitrator has decided the matter in terms of the contract and

has acted within its authority and according to the principles of fair

play. And so long as the arbitrator has acted in a reasonable and just

manner, the award is ordinarily final and conclusive.

Reference can be made to a case law SHREE DURGA CONST. CO. V.

DELHI DEVELOPMENYYT AUTHORITY, 1998(1) ARB LR 509 (DEL):

“Where the arbitrator assigns cogent grounds and sufficient reasons

and no error of law or misconduct is cited, the award will not call for

interference by the court in exercise of powers vested in it.”

In the instant case the arbitrator has discussed every aspect,

including the case law with adequately elaborate and convincing

reasons in the award. The learned arbitrator has correctly relied on

the decision of GAMMON INDIA LTD. V. TRENCHLESS

ENGINEERING SERVICES (P) LTD. 2014 (3) MH. LJ. The facts of this

case are correlated to the instant case, as the arbitral tribunal

rejected the counter claim filed by the petitioner on the ground that

he has not deposited the fees. It was held that, neither the arbitral

tribunal nor this Court can compel a party to deposit the contribution

of fees and expenses of both parties. The arbitral tribunal was thus

justified in terminating the arbitral proceedings in respect of counter

claim in view of the petitioner and respondent refusing to deposit any

amount of fees and expenses for hearing counter claim of the

petitioner. The petition was dismissed and the award was upheld.

In the instant case also, respondent has been recalcitrant in

depositing his share of the reasonable costs determined by the

Arbitrator towards the adjudication of the counter claim. The

 Arbitrator has acted fairly. Though the counter claim of the Petitioner

was excluded, the Petitioner participated in the adjudication of the

claim and was allowed to cross-examine the Respondent's witness, as

stated in the award. Therefore, in the light of above view, the petition

deserves to be dismissed by this Hon’ble court on this ground prima

facie.

5. The Arbitral Tribunal has been entrusted with the power to take steps

in aid of the execution and enforcement by its orders. As according to

Section 38(2), on non-payment of fees, the arbitral tribunal has power

to suspend or terminate the counter claim.

Section 38(2) of Arbitration and Conciliation Act, 1996:

“The deposit referred to in sub-section (1) shall be payable in equal

shares by the parties: Provided that where one party fails to pay his

share of the deposit, the other party may pay that share: Provided

further that where the other party also does not pay the aforesaid share

in respect of the claim or the counter-claim, the arbitral tribunal may

suspend or terminate the arbitral proceedings in respect of such claim

or counter-claim, as the case may be.”

Also, in a case law REHMAT ALI BEG V. MINOCHER M. DEBOO,

2012 SCC BOM 914, The Appellant was not permitted to pursue his

counter claim on the ground that he failed to deposit costs as directed

by the Arbitrator for adjudicating upon the counter claim.

Therefore, in the present case as well due to non-payment of fees by

the Petitioner, the arbitrator was empowered to adjudicate upon the

matter and with regard to the counter claim of the defaulting party,

the same was terminated by the arbitrator. In the above view, the

petition deserves to be dismissed by this Hon’ble court.

6. That so far as the counter claim as set up on behalf of the petitioner

is concerned, the respondent has unlawfully and arbitrarily made the

claims therein simply to harass and humiliate the claimant. Even

assuming without admitting that if any claim is maintainable against

the claimant, the same cannot go beyond the terms as stipulated in

the contract which is 0.5% to a maximum of 5% of the contract value

as stated in clause 68.5 of the contract. Thus, the petitioner has filed

its counter-claim out of their whims and fancies which is beyond the

terms as stipulated in the agreement. The Petitioner has

hypothetically claimed Rs.2,48,53,440/- towards

compensation/penalty to the flat buyers which is completely sham

and frivolous as such there is no such terms in the General

Conditions of Contract which speaks about such claims. The

Petitioner merely provided the details of payment made to the vendors

and others towards the payment of R.A. bills 15th, 16th and 17th and

no such documents/bills/vouchers have been provided to

corroborate their averments towards the alleged payments. Also, the

Petitioner is has ex-facie denied the execution of the Addendum to

contract which was signed on 25.01.2015, but the claimant was

persistently working on the site after the signing of addendum as

evident from 15th ,16th and 17th R.A. bills raised by the claimant which

were approved and certified by the respondent only after signing the

addendum to the contract. Therefore, the claimant is entitled to the

claims and hence the award by the arbitrator must be upheld.

7. That the petition is not maintainable against the Respondent as it has

been filed merely to harass and gain undue advantage. It is submitted

that the petitioner has been filled with ulterior motive and mala-fide

intention to cause prejudice.

 8. That the Petitioner has concealed and suppressed material and

relevant facts of the case and hence, it is an abuse of the process of

law. The Petitioner is guilty of suppression and false suggestion as

will be evident from the contentions of the case below. That the

Petition being frivolous and vexatious is liable to be dismissed as it

does not fall under any of the grounds of Section 34 of the

Arbitration and Conciliation Act,1996.

PARA WISE REPLY

1. That the contents of Para 1 of the petition are not disputed. However,

the petitioner is not entitled to invoke the jurisdiction of this hon’ble

court as, none of the grounds mentioned in Section 34(2) have been

violated and hence, the objections cannot be raised under the same.

2. That the contents of Para 2 are factual and need no reply.

3. That the contents of Para 3 are factual and need no reply.

4. That contents of Para 4 are not admitted in its entirety and hence

denied.

4.1 That the contents of Para 4.1 are factual and not disputed.

4.2 That the contents of Para 4.2 are factual and not disputed.

4.3 That the contents of Para 4.3 are not disputed.

4.4 That the contents of Para 4.4 are vehemently denied. The

assigned work was started after the receipt of letter of intent

dated 08.08.2013 issued by the Petitioner but the work could

not be completed by the claimant on account of pendency of

payment of due bills, non-payment of interest on delayed

payment and arbitrary encashment of bank guarantee by the

 Petitioner and arbitrary termination of the contract. Therefore,

in turn the loss was suffered by the Respondent.

4.5 That the contents of Para 4.5 are correct. The arbitration was

invoked due to non-payment of invoices by the Petitioner.

4.6 That the contents of Para 4.6 are factual and need no reply.

4.7 That the contents of Para 4.7 are factual and need no reply.

5. That the contents of Para 5 are factual and need no reply.

6. That the contents of Para 6 are denied in toto. The recourse to a

court against an arbitral award is available only on the grounds

stated in the section 34(2) and no more. And it is pertinent to

mention that, none of grounds have been violated. Also, the award

is made in compliance with the due process of law and under the

power enumerated in Section 38(2) of the Act. That objections made

by the party to set aside the award is the mistake made by the party

and nothing more than an irregularity on its part. In a case law

ASSOCIATE BUILDERS V DELHI DEVELOPMENT AUTHORITY,

2015 AIR 363 SC, the Supreme Court also clarified the scope of

interpretation of most basic notions of morality and justice.

Accordingly, an award could be set aside under the ground of justice

when the "award" would be such that it would shock the conscience

of the Court. Further, an award against morality was considered to

be something that was against the mores of the day that would

shock the conscience of the Court.

Therefore, in the instant case the award is made with due

accordance of law and hence, does not shock the conscience of the

court. In the above view, the petition deserves to be dismissed by

this Hon’ble court and inter-alia the award deserves to be upheld.

6.1.1 That the contents of the Para 6.1.1 are denied vehemently.

There is no conclusive proof that the Petitioner has made

the payment of the bulls

6.1.2