IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 135 Fire Luxur Developers Pvt. Ltd. Capric Contracts Pvt. Ltd. & CORAM: Present:- NIDHI GUPTA, J. defendant under Article aside the order dated Judge, Junior Division, Gurugram in Civil Suit No.CS “Capric Contracts Pvt. Ltd. & Another Vs. Fire Luxur Developers Pvt. Ltd” whereby the application the Arbitration and Conciliation Act, 1996 2. petitioner that Judge only on the ground that a Settlement Agreement had been arrived at between the parties. It is submitted that however, IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Fire Luxur Developers Pvt. Ltd. Vs. Capric Contracts Pvt. Ltd. & Another HON’BLE MS. JUSTICE NIDHI GUPTA Mr. Shobit Phutela, Advocate Mr. Yashdeep Shah, Advocate for the petitioner. *** NIDHI GUPTA, J. Present Revision Petition has been filed by the defendant under Article 226/227 of the Constitution of India for setting aside the order dated 12.03.2025 (Annexure P5) passed by learned Civil Judge, Junior Division, Gurugram in Civil Suit No.CS “Capric Contracts Pvt. Ltd. & Another Vs. Fire Luxur Developers Pvt. Ltd” whereby the application filed by the petitioner the Arbitration and Conciliation Act, 1996, has been dismissed. It is repeatedly submitted by learned counsel for the petitioner that the impugned order has been passed by the learned Judge only on the ground that a Settlement Agreement had been arrived at between the parties. It is submitted that however, IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR-2495-2025(O&M) Date of decision: 28.04.2025 ...Petitioner(s) ...Respondent(s) HON’BLE MS. JUSTICE NIDHI GUPTA , Advocate Mr. Yashdeep Shah, Advocate Present Revision Petition has been filed by the 227 of the Constitution of India for setting 12.03.2025 (Annexure P5) passed by learned Civil Judge, Junior Division, Gurugram in Civil Suit No.CS-418-2025 titled as “Capric Contracts Pvt. Ltd. & Another Vs. Fire Luxur Developers Pvt. Ltd” by the petitioner under Sections 5 and 8 of , has been dismissed. submitted by learned counsel for the the impugned order has been passed by the learned Civil Judge only on the ground that a Settlement Agreement had been arrived at between the parties. It is submitted that however, the impugned order 6 Present Revision Petition has been filed by the 227 of the Constitution of India for setting 12.03.2025 (Annexure P5) passed by learned Civil tled as “Capric Contracts Pvt. Ltd. & Another Vs. Fire Luxur Developers Pvt. Ltd” under Sections 5 and 8 of submitted by learned counsel for the Civil Judge only on the ground that a Settlement Agreement had been arrived at the impugned order SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document could not have been passed as in the TDS payments made by the petitioner were not taken into account. Learned counsel relies upon judgments of Hon’ble Supreme Court in Gajapathi Raju & Others Vs. P.V.G. Raju (Died) No.5251 of 1993 decided on 28.03.2000 Petroleum Corporation No.5156 of 2003 decided on 23.07.2003 Agricultural Co Arbitration Petition No.15 of 2006 decided on 22.05.2007 2327; “S.B.P. and Co. Vs. Patel Engineering Ltd. and Ors.” “SBI General Insurance Co. Ltd. Vs. Krish Spinning” 2024 (6) AL “Union of India (UOI) and Others VS. Master Construction Co.” Appeal No.3541 judgment of Bombay High Court in Maharashtra & Others” Writ Petition No.6707 of 22.07.2024 2024(5) ABR 757 arbitration cannot be rejected merely or solely on the ground that a settlement or discharge voucher has been executed 3. 4. perused the case file in great detail. d not have been passed as in the said TDS payments made by the petitioner were not taken into account. Learned counsel relies upon judgments of Hon’ble Supreme Court in Gajapathi Raju & Others Vs. P.V.G. Raju (Died) No.5251 of 1993 decided on 28.03.2000 AIR 2000 SC 1886 Corporation Ltd. Vs. Pinkcity Midway Petroleums” Civil Appeal No.5156 of 2003 decided on 23.07.2003 Agricultural Co-op. Marketing Federation India Ltd. Vs. Gains Trading Ltd.” Arbitration Petition No.15 of 2006 decided on 22.05.2007 “S.B.P. and Co. Vs. Patel Engineering Ltd. and Ors.” “SBI General Insurance Co. Ltd. Vs. Krish Spinning” 2024 (6) AL “Union of India (UOI) and Others VS. Master Construction Co.” Appeal No.3541 of 2011 decided on 25.04.2011 judgment of Bombay High Court in “EBIX Cash Pvt. Ltd Vs. State of Maharashtra & Others” Writ Petition No.6707 of 2024(5) ABR 757, wherein it has been held that a claim for arbitration cannot be rejected merely or solely on the ground that a settlement or discharge voucher has been executed No other argument is mad I have heard learned counsel for the d the case file in great detail. said Settlement Agreement, various TDS payments made by the petitioner were not taken into account. Learned counsel relies upon judgments of Hon’ble Supreme Court in “P. Anand Gajapathi Raju & Others Vs. P.V.G. Raju (Died) & Others” Civil Appeal AIR 2000 SC 1886; “Hindustan Ltd. Vs. Pinkcity Midway Petroleums” Civil Appeal AIR 2003 SC 2881; “National g Federation India Ltd. Vs. Gains Trading Ltd.” Arbitration Petition No.15 of 2006 decided on 22.05.2007 AIR 2007 SC “S.B.P. and Co. Vs. Patel Engineering Ltd. and Ors.” AIR 2006 SC 450; “SBI General Insurance Co. Ltd. Vs. Krish Spinning” 2024 (6) ALD 69; “Union of India (UOI) and Others VS. Master Construction Co.” Civil of 2011 decided on 25.04.2011 2011 (102) AIC 142; and “EBIX Cash Pvt. Ltd Vs. State of Maharashtra & Others” Writ Petition No.6707 of 2024 decided on wherein it has been held that a claim for arbitration cannot be rejected merely or solely on the ground that a settlement or discharge voucher has been executed between the parties. No other argument is made on behalf of the petitioner. learned counsel for the petitioner and 6 Settlement Agreement, various TDS payments made by the petitioner were not taken into account. Learned “P. Anand & Others” Civil Appeal ; “Hindustan Ltd. Vs. Pinkcity Midway Petroleums” Civil Appeal AIR 2003 SC 2881; “National g Federation India Ltd. Vs. Gains Trading Ltd.” AIR 2007 SC AIR 2006 SC 450; ; Civil and “EBIX Cash Pvt. Ltd Vs. State of 2024 decided on wherein it has been held that a claim for arbitration cannot be rejected merely or solely on the ground that a and SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document 5. respondents Contracts under which Work Orders were issued by the petitioner to the respondents for construction works in a project called project was for construction of residential units. an Arbitration Agreement was incorporated between the parties. against the petitioner, entered into between the parties t the Work Contracts. payment, a Civil Suit filed by the plaintiffs/respondents permanent and mandatory injunction related to Settlement Agreement dated 13.03.2023. The plaintiffs had claimed that they had provided construction services to the petitioner under various Work Orders which were not paid in full. Rs.1,20,47,346/ which was payable to the Government directly against the production of challans or to be reimbursed to the plaintiffs after receiving proof of deposit; and plaintiffs by the defendant in Phase-II of “The Empyrean” Project in Karnataka. Brief facts of the case are that respondents were engaged in a contractual relationship by way of Work Contracts under which Work Orders were issued by the petitioner to the respondents for construction works in a project called project was for construction of residential units. an Arbitration Agreement was incorporated between the parties. Subsequently, as certain payments were outstanding against the petitioner, a Settlement Agreement dated 13.03.2023 was entered into between the parties to settle their respective accounts under the Work Contracts. Apparently, as the petitioner still failed to make the Civil Suit No.418 of 2025 dated 29.01.2025 (Annexure P1) was filed by the plaintiffs/respondents herein, permanent and mandatory injunction related to Settlement Agreement dated 13.03.2023. The plaintiffs had claimed that they had provided construction services to the petitioner under various Work Orders which were not paid in full. As per the Settlement Rs.1,20,47,346/- was due of which Rs.21,40,342/ payable to the Government directly against the production of challans or to be reimbursed to the plaintiffs after receiving proof of and balance amount of Rs.99,07,004/ plaintiffs by the defendant as consideration for the transfer of unit No.417 II of “The Empyrean” Project in Karnataka. Brief facts of the case are that the petitioner and the ctual relationship by way of Work Contracts under which Work Orders were issued by the petitioner to the respondents for construction works in a project called “The Empyrean”. The project was for construction of residential units. In every such Work Order, an Arbitration Agreement was incorporated for resolution of disputes as certain payments were outstanding a Settlement Agreement dated 13.03.2023 was o settle their respective accounts under the petitioner still failed to make the dated 29.01.2025 (Annexure P1) was herein, for specific performance, permanent and mandatory injunction related to Settlement Agreement dated 13.03.2023. The plaintiffs had claimed that they had provided construction services to the petitioner under various Work Orders which As per the Settlement Agreement dated 13.03.2023, was due of which Rs.21,40,342/- was to be paid as GST, payable to the Government directly against the production of challans or to be reimbursed to the plaintiffs after receiving proof of Rs.99,07,004/- would be paid to the as consideration for the transfer of unit No.417 II of “The Empyrean” Project in Karnataka. 6 the petitioner and the ctual relationship by way of Work Contracts under which Work Orders were issued by the petitioner to the The Work Order, for resolution of disputes as certain payments were outstanding a Settlement Agreement dated 13.03.2023 was o settle their respective accounts under the petitioner still failed to make the dated 29.01.2025 (Annexure P1) was , permanent and mandatory injunction related to Settlement Agreement dated 13.03.2023. The plaintiffs had claimed that they had provided construction services to the petitioner under various Work Orders which Agreement dated 13.03.2023, , payable to the Government directly against the production of challans or to be reimbursed to the plaintiffs after receiving proof of would be paid to the as consideration for the transfer of unit No.417 SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document 6. ‘Nil’ (Annexu Arbitration and Conciliation Act to the Arbitration in view of the Arbitration Clause contained in the Work Contracts executed between the parties. 12.03.2025 (Annexure P5), the said application of the petitioners has been dismissed. 7. that during the inspection of the purported Settlement 13.3.2023 by discrepancies were found. accounted for in the Settlement Agreement. It has been submitted that the same was reported to the respondents via email. However, no given by the plaintiff to rectify the purported Settlement in view of the aforesaid discrepancies. 8. made on behalf of the petitioner. emails purported to have been sent by the petitioner to the respondent, have been attached argument of the petitioner is liable to be rejected as Settlement Agreement dated 13.03.2023 (attached with the plaint [Annexure P1] During the pendency of this suit, an application ‘Nil’ (Annexure P3) was filed by the petitioner under Sections 5 and 8 Arbitration and Conciliation Act with the prayer that the matter be referred to the Arbitration in view of the Arbitration Clause contained in the Work Contracts executed between the parties. (Annexure P5), the said application of the petitioners has been The sole argument raised on behalf of the petitioner is that during the inspection of the purported Settlement by Accounts and Audit Team of the petitioner Company, few discrepancies were found. Few payments and TDS entries were not accounted for in the Settlement Agreement. It has been submitted that the reported to the respondents via email. However, no given by the plaintiff to rectify the purported Settlement in view of the aforesaid discrepancies. However, I find no merit in the above made on behalf of the petitioner. First and foremost, none of the aforesaid purported to have been sent by the petitioner to the respondent, have been attached with the present petition argument of the petitioner is liable to be rejected as Settlement Agreement dated 13.03.2023 (attached with the plaint [Annexure P1] at page 68-69 of the paper book), it is seen that it has been pendency of this suit, an application dated re P3) was filed by the petitioner under Sections 5 and 8 of the with the prayer that the matter be referred to the Arbitration in view of the Arbitration Clause contained in the Work Contracts executed between the parties. Vide impugned order dated (Annexure P5), the said application of the petitioners has been The sole argument raised on behalf of the petitioner is that during the inspection of the purported Settlement Agreement dated Accounts and Audit Team of the petitioner Company, few Few payments and TDS entries were not accounted for in the Settlement Agreement. It has been submitted that the reported to the respondents via email. However, no response was given by the plaintiff to rectify the purported Settlement in view of the However, I find no merit in the above-said submissions First and foremost, none of the aforesaid purported to have been sent by the petitioner to the respondent, with the present petition. In any event, the said argument of the petitioner is liable to be rejected as upon a perusal of the Settlement Agreement dated 13.03.2023 (attached with the plaint 69 of the paper book), it is seen that it has been 6 dated of the with the prayer that the matter be referred to the Arbitration in view of the Arbitration Clause contained in the Work Vide impugned order dated (Annexure P5), the said application of the petitioners has been The sole argument raised on behalf of the petitioner is Agreement dated Accounts and Audit Team of the petitioner Company, few Few payments and TDS entries were not accounted for in the Settlement Agreement. It has been submitted that the response was given by the plaintiff to rectify the purported Settlement in view of the said submissions First and foremost, none of the aforesaid purported to have been sent by the petitioner to the respondent, said a perusal of the Settlement Agreement dated 13.03.2023 (attached with the plaint 69 of the paper book), it is seen that it has been SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document clearly stated therein that accounts they have ar Rs.1,20,47,346/ the government directly against the production of challans or to be reimbursed to Capric after receiving firm proof of deposit of t government authorities. Balance amount of Rs.99,07,004/ of 21,40,342/ 9. that the said Settlement Agreement was entered into by the petitioner “after duly verifying the accounts”. for the petitioner that after 13.03.2023, as per the defendant’s request, an undertaking/No Due Certificate dated 11.04.2023 was also issued by the plaintiffs underscoring that after Agreement dated 13.03.2023, the plaintiff shall have no claim left on t in question. Needless to say, vice by learned counsel for the petitioner that it was an error on part of the petitioner in not pointing out the alleged discrep 10. was contained in the original Work Contracts executed between the parties. Admittedly, in the present Settlement Agreement dated 13.03.2023, is no clause for the mat clearly stated therein that “The Parties agree that they have arrived at full and final amount payable to Capric as Rs.1,20,47,346/-, out of which GST of Rs.21,40,342/ the government directly against the production of challans or to be reimbursed to Capric after receiving firm proof of deposit of t government authorities. Balance amount of Rs.99,07,004/ of 21,40,342/-) would be payable to Capric as under The ld. Counsel for the petitioner is unable to dispute that the said Settlement Agreement was entered into by the petitioner “after duly verifying the accounts”. It is also not denied by learned counsel for the petitioner that after entering into the Sett 13.03.2023, as per the defendant’s request, an undertaking/No Due Certificate dated 11.04.2023 was also issued by the plaintiffs underscoring that after Agreement dated 13.03.2023, the plaintiff shall have no claim left on the defendant with respect to the said Work Contracts Needless to say, vice versa would also apply. by learned counsel for the petitioner that it was an error on part of the petitioner in not pointing out the alleged discrep Moreover, it is not denied that the Arbitration Clause was contained in the original Work Contracts executed between the parties. Admittedly, in the present Settlement Agreement dated 13.03.2023, is no clause for the matter to be referred to Arbitration in case of any “The Parties agree that after duly verifying the rived at full and final amount payable to Capric as , out of which GST of Rs.21,40,342/- would be payable to the government directly against the production of challans or to be reimbursed to Capric after receiving firm proof of deposit of the same to the government authorities. Balance amount of Rs.99,07,004/- (after deduction ) would be payable to Capric as under:...” (Emphasis is mine). The ld. Counsel for the petitioner is unable to dispute that the said Settlement Agreement was entered into by the petitioner It is also not denied by learned counsel entering into the Settlement Agreement dated 13.03.2023, as per the defendant’s request, an undertaking/No Due Certificate dated 11.04.2023 was also issued by the plaintiffs; thereby underscoring that after Agreement dated 13.03.2023, the plaintiff shall he defendant with respect to the said Work Contracts versa would also apply. It is also admitted by learned counsel for the petitioner that it was an error on part of the petitioner in not pointing out the alleged discrepancy in the Settlement. Moreover, it is not denied that the Arbitration Clause was contained in the original Work Contracts executed between the parties. Admittedly, in the present Settlement Agreement dated 13.03.2023, there ter to be referred to Arbitration in case of any 6 after duly verifying the rived at full and final amount payable to Capric as would be payable to the government directly against the production of challans or to be he same to the (after deduction The ld. Counsel for the petitioner is unable to dispute that the said Settlement Agreement was entered into by the petitioner It is also not denied by learned counsel lement Agreement dated 13.03.2023, as per the defendant’s request, an undertaking/No Due thereby underscoring that after Agreement dated 13.03.2023, the plaintiff shall he defendant with respect to the said Work Contracts It is also admitted by learned counsel for the petitioner that it was an error on part of the Moreover, it is not denied that the Arbitration Clause was contained in the original Work Contracts executed between the parties. there ter to be referred to Arbitration in case of any SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document dispute. The petitioner can derive no judgments as the same are distinguishable on facts and law. been correctly reasoned by the learned trial Court that: - 11. the impugned order. The 12. 28.04.2025 Sunena Whether speaking/reasoned: Whether reportable: The petitioner can derive no benefit from the relied upon as the same are distinguishable on facts and law. been correctly reasoned by the learned trial Court “9....the Full and Final Settlement Agreement dated 13.03.2023 constituted a novation of the earlier contractual obligations, thereby superseding the arbitration clause contained in the work orders. The present suit is purely of the Settlement Agreement, which is a distinct and independent cause of action, thereby excluding the applicability of arbitration as a mode of dispute resolution. Accordingly, I find no ground is made out to interfer the impugned order. The present petition is hereby Pending application(s) if any also stand(s) disposed of. Whether speaking/reasoned: Yes/No Whether reportable: Yes/No benefit from the relied upon as the same are distinguishable on facts and law. Thus, it has been correctly reasoned by the learned trial Court in the impugned order the Full and Final Settlement Agreement dated 13.03.2023 constituted a novation of the earlier contractual obligations, thereby superseding the arbitration clause contained in the work orders. The present suit is purely for specific performance of the Settlement Agreement, which is a distinct and independent cause of action, thereby excluding the applicability of arbitration as a mode of dispute resolution....” Accordingly, I find no ground is made out to interfere in hereby dismissed. Pending application(s) if any also stand(s) disposed of. (Nidhi Gupta) Judge 6 benefit from the relied upon has in the impugned order the Full and Final Settlement Agreement dated 13.03.2023 constituted a novation of the earlier contractual obligations, thereby superseding the arbitration clause contained in the for specific performance of the Settlement Agreement, which is a distinct and independent cause of action, thereby excluding the applicability SUNENA 2025.04.30 11:52 I attest to the accuracy and integrity of this document