R.K.AGRAWAL, J. - (1.) Challenge in this appeal is to the legality of the judgment and order dated 28.09.2012 rendered by a Division Bench of the High Court of Delhi at New Delhi in FAO (OS) No. 470 of 2012 whereby the High Court dismissed the appeal filed by the appellants herein.
(2.) Factual position in a nutshell is as follows:- a) An agreement to reconstruct a building situated at C-6/4, Vasant Vihar, New Delhi was executed between Hema Khattar-the appellant No. 1 herein, wife of Ashwani Khattar - the appellant No. 2 herein, carrying on business in construction under the name and style of M/s Dessignz and Shiv Khera-the respondent herein on 06.06.2009. b) Pursuant to the said agreement, the building site was handed over to the appellant No. 1 herein on 09.11.2010 and thereafter the execution of the work had started. In March 2011, as per Clause 16 of the Agreement dated 06.06.2009, a spot inspection was conducted by renowned structural engineers which pointed out several structural lacunae. On coming to know about the same, the respondent further arranged inspection by various specialized agencies which confirmed the same in their reports. c) Being aggrieved by the quality of construction, the respondent served a legal notice dated 19.09.2011 to the appellant No. 1 seeking damages. The respondent, vide Clause 33 of the said agreement, appointed a sole arbitrator claiming that the appellant No. 1 has not complied with the terms of the agreement whereby disputes, requiring adjudication, have arisen between the parties. In statement of claims, the respondent, besides other claims, also sought for a sum of Rs. 39.85 lakhs paid to the appellant No. 1 along with a sum of Rs. 35,000/- for the TDS deposited to her credit. d) The appellants filed a suit for declarations, permanent injunction and recovery before the High Court being CS(OS) No. 1532 of 2012 seeking a decree that the agreement dated 06.06.2009 entered into between the appellant No. 1 and the respondent was vitiated and had been terminated by mutual consent by both the parties and any proceeding initiated pursuant to the agreement is null, non-est and void and also for recovery of an amount of Rs. 45,50,000/-. e) It is also pertinent to mention here that it was alleged in the plaint that a formal meeting was held between the parties in which it was decided that appellant No.1 will no longer be the contractor and the agreement dated 06.06.2009 would stand terminated by mutual consent and the construction would be carried out by the sub-contractors to be appointed as per the advice of appellant No. 2 who would supervise the same without remuneration/profit. f) The respondent filed I.A. No. 12124 of 2012 in CS(OS) No. 1532 of 2012 under Section 8 of the Arbitration and Conciliation Act, 1996 (in short 'the Act') claiming that the subject-matter of dispute in the present suit is already pending adjudication before the Arbitral Tribunal, hence, the suit cannot be proceeded with which was denied by the appellants in their reply to the above said application. g) Vide order dated 17.09.2012, learned single Judge of the High Court, found that the suit is bad for misjoinder of parties as well as for causes of action and gave an option to the appellants therein to elect whether they want the suit to be treated as a suit for recovery of money by appellant No. 2 herein against the respondent or a suit for declarations and injunction by appellant No. 1. h) Being aggrieved by the order dated 17.09.2012, the appellants went in appeal and filed FAO (OS) being No. 470 of 2012 before the High Court. A division bench of the High Court, vide order dated 28.09.2012, dismissed the appeal. i) Aggrieved by the order dated 28.09.2012, the appellants have filed this appeal by way of special leave before this Court.
(3.) Heard Mr. Jayant Bhushan, learned senior counsel for the appellants and Mr. Sakal Bhushan, learned counsel for the respondent and perused the records. Point for consideration:- ;