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    Application for Stay LPA 5.03.24

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    Application for Stay LPA 5.03.24

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    Application for Stay LPA 5.03.24

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    tinahog614

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    BEFORE THE HON’BLE HIGH COURT OF DELHI AT NEW DELHI

    CIVIL APPELLATE JURISDICTION

    LETTER PATENT APPEAL NO. ___________ OF 2023

    IN RE:

    M/S. HINDUSTAN CONSTRUCTION COMPANY LTD. ….. PETITIONER

    VERSUS

    MR. NAVIN KUMAR & ANR. .... RESPONDENTS

    APPLICATION ON BEHALF OF THE APPELLANT UNDER SECTION


    151 CPC, 1908 SEEKING AD INTERIM EX-PARTE STAY OF THE
    IMUGNED ORDER DTD 15.12.2023 AND STAY OF THE
    PROCEEDINGS IN THE MATTER DIAC/3814-D/03-22 PENDING
    BEFORE THE LD. SOLE ARBITRATOR.

    MOST RESPECTFULLY SHOWETH:


    1. That the Petitioners have filed the accompanying Appeal against the
    Order dt. 15.12.2023 passed in WP(C) No. 10657 the Hon’ble Writ Court
    has directed the Ld. Arbitrator to decide the issue of work contract after
    leading the evidence.
    2. That the facts and grounds are stated in detailed in the Appeal, which are
    not being repeated herein for the sake of brevity and the same may kindly
    be read as part of this application.

    3. That, it is submitted that inter-alia following errors have crept in the


    Impugned Order:
    a. The Hon’ble Writ Court has failed to appreciate that the provisions
    of the MSMED Act is not attracted in present case as the contract
    between the parties is a Works contract;

    b. The finding of the Ld. Arbitrator that the Appellant herein had not
    raised the objection regarding jurisdiction in the Statement of
    Defense and was raised only in the Reply to the Rejoinder, is
    perverse inasmuch as a bare perusal of Paragraph 7 of the
    Statement of Defense would show that the Appellant had very
    categorically raised the said objection;

    c. The Hon’ble Writ Court failed to appreciate that the Respondent


    had filed a false affidavit before the Hon’ble Writ Court that the
    services provided were towards execution of Civil Work, finishing
    work, S.S. Work, boundary wall development work, etc., whereas
    the Work Order, including Schedule B and C, would clearly show
    that it is a composite contract, which includes supply of goods
    (namely granite slab & stones, cement, water, etc.) and subsequent
    work and labour (namely its installation, rubbing, curing,
    moulding, polishing etc.)

    d. That, the Hon’ble Writ Court failed to appreciate that the Work
    Order and Schedule B and C are unimpeachable documents and are
    in fact documents on which the entire claim of the Claimant is
    based. Further, the said documents are sufficient to show the nature
    of the contract and as such there was no necessity for leading
    evidence in order to establish the nature of contract;

    e. That, where the Arbitral Tribunal, patently and inherently lacks


    jurisdiction to enter into reference, continuation of such
    proceedings would not only defeat the ends of justice but would
    also be abuse of process of law.

    4. That on plain reading of contents of the work order issued by the


    Appellant and schedule B & C submitted by the Respondent, it is crystal
    clear that the nature of contract between the parties is a work contracts
    which involve both supply of goods and rendering of services as well.

    5. That it is submitted that the Appellant had categorically stated in the


    Statement of defense filed before the Ld. Arbitrator and contended that
    the arbitration initiated, was beyond the scope of MSMED Act as the
    contract in conflict is a works contract and according to the well-
    established rules by way of precedents, the provisions of the MSMED act
    shall be inapplicable on a works contract.

    6. That the Respondent No. 1/Claimant contented that the work carried out
    by the claimant is contract of service and filed a false affidavit before the
    Hon’ble Writ Court that the services provided were towards execution of
    Civil Work, finishing work, S.S. Work, boundary wall development
    work, etc. That the claimant did not file Schedule B & C (as mentioned in
    the invoice) along with the affidavit with the sole reason to mislead the
    Hon’ble Writ Court.

    7. That the claimant neither filed the work order issued by the Respondent
    nor did it file the Schedule B & C along with invoices annexed with the
    Statement of Claim, as the claimant was very much aware that the work
    done by the claimant do not fall under the purview of the MSMED Act.

    8. That the said writ was filed against the order dated 22.05.2023 passed in
    arbitration proceedings by Ld. Sole Arbitrator, whereby the objection
    raised by the Appellant challenging the jurisdiction of the Ld. Sole
    Arbitrator by virtue of section 16(2) of Arbitration and Conciliation Act,
    1996 was dismissed without considering the question of law which was
    raised by the Appellant within the due time frame.

    9. That the Appellant raised the objections in its statement of defense


    mentioned that “it is well settled law that the MSMED Act, 2006 cannot
    be invoked in case of work contract/ composite contract. The work
    contracts issued to the Claimant are excluded from the ambit of MSMED
    Act and there are various judicial pronouncements by several High courts
    regarding the same. That the claimant in its reply to the Statement of
    defense denied the contents of said para 7, however did not provide the
    reason for it. That the Ld. Arbitrator wrongly considered that the
    objection as to the work/composite contract was raised in the rejoinder
    and not in reply of the Respondent/Appellant. Also considered that the
    challenge to the jurisdiction of the Arbitral Tribunal has to be raised not
    later than submission of the statement of defence hence the challenge
    raised in the rejoinder shall not be considered at this stage.

    10. That the order dated 22.05.2023 was challenged before the supervisory
    jurisdiction before the Hon’ble Writ Court as the Ld. Sole Arbitrator
    while passing the order ignored the contentions raised by the Petitioner
    well in time in its Statement of Defense and not at the time of filing
    rejoinder, which in fact established that the Tribunal was acting out of
    jurisdiction and hence the order dated 22.05.2023 passed is illegal,
    perverse and erroneous. The said order is not only arbitrary but is
    completely illegal and erroneous.

    11. That the said Writ Petition was listed as W.P (C) 10657/2023 before the
    Hon’ble writ court which was disposed off by the Hon’ble Writ Court
    with direction to the Ld. Arbitrator to determine the issue of work
    contract after leading evidence by the parties.

    12.The said order passed by the Hon’ble writ court is erroneous as the said
    direction was passed solely on the basis of a false affidavit filed by the
    Claimant.

    13. That it is settled law that a work contract is a separate specie of contract
    distinct from a contract for rendering of services or supply of goods. It is
    submitted that in view of the scheme of MSME Act 2006, its provisions
    do not apply to a work contract. The Division Bench of this Hon’ble
    Court in Shree Gee Enterprises Vs Union of India reported as 2015 (224)
    DLT 445 clearly held that the purchase preference policy which was
    advocated by the Government is meant for giving preference to
    procurement of goods produced and services rendered of MSEs and that
    it would not be applicable to a work contract simpliciter.

    14.That it is settled law that where the Arbitral Tribunal, patently and
    inherently lacks jurisdiction to enter into reference, continuation of such
    proceedings would not only defeat the ends of justice but would also be
    abuse of process of law.

    15.That the prima facie case, balance of convenience is in favour of the


    petitioners and if the relief is not granted the Appellant shall suffer great
    loss and injury, which cannot be compensated by any means.
    PRAYER
    It is, therefore, most humbly prayed that that in view of the facts and
    circumstances mentioned hereinabove and in the interest of justice this
    Hon’ble court may kindly be pleased to:

    1. Allow the present application and pass an order granting ex-parte


    ad-interim stay of the Impugned Order dated 15.12.2023 dated
    15.12.2023 Writ Petition No. W.P. (C) 10657 of 2023 & CM
    APPL. No. 41325 of 2023 passed by the Hon’ble Writ Court.

    2. Pass ad-interim ex-parte order Staying of the order 22.05.2023


    passed by Mr. Anupam Shirvastava, Sole Arbitrator, and Delhi
    International Arbitration Center in the matter in the matter
    DIAC/3814-D/03-22 and further proceedings.

    3. Pass any other order and direction which in the view of hon’ble
    court deems fit and justified.

    Applicant

    Through

    Counsel

    Charu Sachdev & Gulshan Kr. Sachdev, Advocates


    Chamber No. 363, Lawyer’s Block
    Saket Court, New Delhi-110017.
    DATED: Phone: 9899635146, 9711173901
    PLACE: NEW DELHI. Email: [email protected],
    [email protected]
    BEFORE THE HON’BLE HIGH COURT OF DELHI AT NEW DELHI

    CIVIL APPELLATE JURISDICTION

    LETTER PATENT APPEAL NO. ___________ OF 2024

    IN RE:

    M/S. HINDUSTAN CONSTRUCTION COMPANY LTD. ….. PETITIONER

    VERSUS

    MR. NAVIN KUMAR & ANR. …….. RESPONDENTS

    AFFIDAVIT
    I, Nilesh M Mekel, aged about 48 years S/o Late Sh. Vasant D Mekel, Deputy
    General Manager Legal of Hindustan Construction Company Ltd, having
    registered office at: Hincon House, Lal Bahadur Shastri Marg Vikhroli West,
    Maharashtra-400083.do hereby solemnly and declare as under: -

    1) That I am the Authorized representative of the Appellant Company and I


    am well conversant with the facts and circumstances of the case on the
    basis of the record maintained by the Appellant company in its normal
    course and made available to me and hence, competent and authorized to
    swear this affidavit.

    2) That the accompanying Application has been drafted by our counsel under
    my instructions and the contents stated in the Application are true and
    correct to the best of my knowledge and belief. No material has been
    concealed and no part is false.
    3) That the annexures annexed to the Application are true and correct copies
    of the respective originals.

    DEPONENT

    VERIFICATION
    Verified at _____________on this __ day of March 2024 solemnly affirmed and
    verified that the contents of the above affidavit are true to the best of my
    knowledge and belief, that no part of it is false and nothing material has been
    concealed therefrom.

    DEPONENT

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