W.P. 3331/2007 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD WRIT PETITION NO. 3331/2007 M/s Rusi Khambatta Associates Chartered Architect, Engineer, Chartered Town Planners, having its registered office, B/19 creative Industrial Estate, 12, N.M. Joshi Marg, Mumbai represented through Mr. R.S. Khambatta. ...Petitioner (Defendant) Vs. Padmashri Dr. Vithalrao Vikhe Patil Foundation, Ahmednagar, having its registered office at Vadgaon Gupta (Vilad Ghat), Post M.I.D.C., Ahmednagar 414 111 represented by its Director (Medical) Dr. Nanasaheb Sarangdhar Mhaske. ...Respondent. (Plaintiff.) Mr. P.R. Katneshwarkar, for the petitioner. Mr. Vinay Anjanwatikar h/f Mr. V.D. Hon, for respondent. CORAM : A.V. NIRGUDE, J. DATED : 11th April, 2011. ORAL JUDGMENT: 1. This writ petition is filed under Articles 226 and 227 of the Constitution of India, challenging the order on Exh. 24 dated 16/02/2007 passed by the ld. District Judge – 1 Ahmednagar in “Copy Rights Suit No. 1/2005”. The application Ex. 24 was filed by the petitioner / defendant. It was their contention that the Court has no jurisdiction to try and dispose of the suit and the dispute should be referred to the arbitrator as per the arbitration agreement between the parties. The application came to be rejected. W.P. 3331/2007 2 The cause of action for the respondent’s suit can be narrated as under. The respondent is a society / Public Trust having registered address at Ahmednagar. The main object of the respondent / plaintiff is to carry on activities in imparting education in the field of Engineering, polytechnic, Pharmacy, etc.. The petitioner / defendant are a firm of Architects. In the year 2000, the respondent / plaintiff proposed to construct a new building of their proposed medical college in Ahmednagar District. They appointed the petitioner / defendant as the architects for provide master plan for the building and to supervise the work of construction. The estimated cost of the building was to the tune of Rs.24 crore. The parties to the suit entered into an agreement on 11/11/2003. Initially, the petitioner submitted a master plan of the building. This plan underwent various changes as per the suggestions made by the respondent / plaintiff. Accordingly, it was decided between the parties that building block No. 2 should be constructed on priority basis, and a contractor was appointed for construction of such building. The respondent / plaintiff alleged that the petitioner / defendant did not furnish work drawing to the contractor in time and the construction got delayed. It is their case that the petitioner / defendant deliberately avoided to furnish the drawing. The respondent / plaintiff further alleged that the petitioner failed to appoint senior engineer at the site though they had agreed to do so in the agreement. They alleged further that the petitioner appointed a Junior Engineer who had no experience of work. This amounted to negligence on the part of the petitioner and resulted into unbearable delay in the work. (On the date of filing suit, the work was still incomplete.) In view of the negligence and deliberate avoidance W.P. 3331/2007 3 to get the work completed, the respondent / plaintiff terminated the agreement on 30/06/2005, by issuing a termination notice. On receipt of this notice, the petitioner / defendant sent two letters dated 01/08/2005 and 02/08/2005. By the first letter, the petitioner asked the contractor not to carry on the work at the site and by the second letter, the petitioner / defendant threatened the respondent / plaintiff not to encroach their copy rights in respect of the plan, they had given for construction of the building. The respondent further contended that they had paid a sum of Rs.7,52,320/- to the petitioner / defendant. They felt that they had cause of action for filing this copy right suit because of the above mentioned two letters. Main prayers made in the plaint are these: b) It may please be declared that the plaintiff is assignee and owner of the copy right for the conceptual and architectural designs and drawings for Ahmednagar Medical College and Hospital. c) The defendant, his servants, agents or anybody claiming through defendant be restrained from creating any obstruction and hurdle in any term on the actual construction site and Ahmednagar Medical College and Hospital. 2 The petitioner / defendant filed two written statements and denied the allegations made in respect of delay etc.. They also contended that as per the agreement dated 11/11/2003 they were to get remunerations @ 3.4% of the total cost of the project. They admitted that they had received Rs.7 lac. They also admitted that they supplied certain plans for construction of the building and they even admitted the sending of the letters dated 1st and 2nd August, 2005. They however asserted that unilateral termination of the agreement was illegal. They asserted further that differences and W.P. 3331/2007 4 disputes arose between the parties in respect of the contractual work and so such dispute should be referred to the arbitrator. They asserted that the agreement dated 11/11/2003 specifically provided that in the event of dispute, the parties should get the dispute resolved through the medium of arbitrators. It is common ground that the respondent / plaintiff did not resort to the arbitration clause in the agreement. The petitioner further contended that the respondent / plaintiff owed them sum of Rs.79,11,821/- towards their fee for making drawing and licence. They further stated that they had sent their bill to the respondent / plaintiff. They asserted that to avoid this demand, the suit was filed. They however asserted that they hold the copy rights in respect of the original master plans on all the buildings which they had made and sent to the respondent / plaintiff. The clause in the agreement in the arbitration reads as under. “9.0 Arbitration : All differences and disputes arising between the client and the architect on any matter connected with the agreement or in regard to the interpretation of the content thereof shall be referred to arbitrators. 9.01 Two arbitrators will be nominated, one arbitrator is to be nominated by the Management and other arbitrator to be nominated by the architect with consultation of management. 9.02 The meetings of the arbitrators are held in the premises of the Ahmednagar Medical College. 9.03 The provisions of Arbitration and Conciliation Act 1996 are applicable or the decision of arbitration proceeding. 9.04 For the drawings and decisions the work should not be held up. The work shall be taken up stage wise and complete as per the instructions of client. 9.05 All legal proceedings pertaining to this agreement is subject to jurisdiction of Ahmednagar Courts or the High Court of Bombay bench of Aurangabad.” 3 The ld. Judge took a very simplistic view of the dispute and observed that the dispute in the suit is not covered by Clause-9 quoted above. He said that the averments in the plaint are in respect W.P. 3331/2007 5 ownership right of drawing etc.. This writ petition is filed against this finding of the ld. District Judge. 4 It is common ground that there was an agreement between the parties in which there existed a clause of arbitration. It is also common ground that the petitioner / defendant were appointed as architects for prestigious project worth Rs.24 Crore of the respondent / plaintiff. It is also common ground that the fees of the petitioner was fixed @ 3.4% of the total cost of the project. The first part of the project, it appears, was construction of building no.2. It seems, during this early phase, a dispute arose between the parties because the petitioner / defendant delayed furnishing of the working drawing to the contractor. Their occurred delay in completion of the construction work of building No.2. The respondent / plaintiff were anxious to get work of building No.2 completed in time because they were expecting approval from Medical Council for their proposed Medical College. Since the approval from the Medical Council, it seems, came in jeopardy due to alleged delay in work, on 30/06/2005 the respondent / plaintiff unilaterally terminated the agreement. This termination gave rise to the dispute between the parties. This termination has apparently no connection whatsoever to the Copyrights in respect of the original drawing etc. submitted by the petitioner / defendant to the respondent / plaintiff. After termination of the contract, it seems, the respondent / plaintiff carried on the work of construction which was based on the architectural drawing supplied by the petitioner / defendant. So, it seems, the petitioner / defendant sent letters saying that they should not carry on the work unless they pay the fees which was then payable to them etc.. It seems, the W.P. 3331/2007 6 contention of the petitioner then was that since they were not paid for the work they had done until then, they possessed the copy right to the drawing and asked the respondent / plaintiff not to use them for carrying on construction work. They were also aggrieved because of unilateral termination of the contract. It is thus clear that the dispute that arose between the parties directly related to the agreement and the work given to the petitioner as per the agreement. The question as to whether the petitioner / defendant held Copyright but their drawing was a consequential one. The main dispute was in respect of termination of the contract and in respect of the unpaid dues of the architect. This situation is squarely covered by the above mentioned arbitration clause. It is clear that by filing this misleading litigation the respondent was trying to distract the real issues between the parties. In a way the suit was filed with this malafide objective and should have been shown its right place immediately. The ld. District judge should have realised this. Appreciation of the facts leading to the dispute in this perspective was pertinent and necessary for him. But, the Ld. District judge took simplistic or perverse view of the case and it seems, hurriedly passed the impugned order. The order is patently illegal and deserves to be set aside. The rule is made absolute in terms of following order. ORDER a) The impugned order below Ex. 24 in Copy Right Suit No. 1/2005 passed on 16/02/2007 by District Judge-1, Ahmednagar is set aside. W.P. 3331/2007 7 b) The application Ex. 24 is allowed. c) The District Judge shall take further steps as per the provisions of arbitration clause. [A.V. NIRGUDE, J.] ts k/2011/April11/wp3331.07/ok