M/S. Khare And Tarkunde ... vs Municipal Council, Malkapur, ...
2016 Latest Caselaw 1708 Bom

                                                                          mca44.16


                                            1




                                                                            
                                                    
              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        NAGPUR BENCH : NAGPUR
                  Misc. Civil Application [Arb.] No. 44 of 2016




                                                   
     M/s. Khare & Tarkunde
     Infrastructure Pvt. Ltd.
     through its Director Shri
     Makarand S. Bhagwat, having




                                        
     its Registered Office at 1st and
     2nd floor, Shivaji Complex,
                             
     235, West High Court Road,
     Dharampeth, Nagpur.                               .....           Applicant.
                            
                                        Versus

     Municipal Council, Malkapur,
     through its Chief Officer,
      

     Opp : Telephone Exchange,
     Nandura Road,
   



     Distt. Buldana.                                 .....    Non-Applicant.


                                     *****
     Shri A.V. Khare, Adv., for the Applicant.





     Shri N.R. Saboo, Adv., for the Non-applicant.

                                         *****





                                     CORAM :        Z. A. HAQ, J.

                                     Date       :   21st April, 2016

     ORAL JUDGMENT:

01. Heard Shri A. V. Khare, learned Adv., for the applicant and

mca44.16

Shri N.R. Saboo, learned Adv., for the Non-applicant.

02. Rule. Rule is made returnable forthwith.

03. The applicant has filed this application under Section 11 of

the Arbitration & Conciliation Act, 1996, praying that an Arbitrator be

appointed to resolve the dispute between the parties.

04. According to the applicant, he has undertaken the

construction of a Shopping Complex and Departmental Stores for the

Non-applicant as per the Work Order dated 12th July, 2007. The

applicant claims that the amount of Rs. 1,57,71,410/- receivable by the

applicant is not paid by the Non-applicant. The applicant claims further

amount of Rs.3,60,15,228-00. The applicant issued notice dated 26th

October, 2015 through his Advocate, calling upon the Non-applicant to

pay the amount of Rs.5,17,86,638-00. This notice was not replied by

the Non-applicant and, therefore, the applicant sent the

communication dated 10th November, 2015 proposing that the matter

be referred for arbitration to Shri Dilip N. Potdukhe, Retired Chief

Engineer, Public Works Department. The dormancy on the part of the

Non-applicant continued and there was no response from the Non-

applicant and, therefore, the applicant approached this Court by this

mca44.16

application.

05. The application is opposed on the ground that the dispute is

not covered by Clause 24 of the Special Conditions of the Contract and

the claim made by the applicant cannot be referred to arbitration

under Clause 25.3 of the Special Conditions of Contract. Shri N.R.

Saboo, learned Adv., for the Non-applicant, has submitted that under

the Special Conditions of Contract, arbitration can be only in matters

arising out of a decision of the Engineer; but the claim of the applicant

is for unpaid bills for the works alleged to have been done by him and,

therefore, the claim made by the applicant is not arbitrable as per the

Special Conditions of Contract. It is further submitted that the

applicant has made claim for four items, out of which two items are

covered by the bid document and two claims are not covered by the

bid document and, therefore, the applicant cannot resort to Clause

25.3 of the Special Conditions of Contract to seek arbitration of the

dispute. In support of the submission, reliance is placed on the

Judgment given in the case of Wellington Associates Ltd., Vs. Kirit

Mehta reported in (2000) 4 SCC 272.

06. After hearing learned Advocates for the respective parties, I

find that the claim made by the applicant is not a stale claim. The

mca44.16

parties are not ad idem on the point that the dispute is required to be

referred for arbitration as per the Special Conditions of Contract. The

existence of contract between the applicant and the non-applicant is

not disputed. Shri A.V. Khare, learned Adv., for the applicant, has

rightly relied on the Judgment given in the case of SBP & Co. Vs.

Patel Engineering Ltd. & another reported in (2005) 8 SCC 618,

and has submitted that the dispute between the parties is arbitrable or

not as per the Special Conditions of Contract will have to be decided by

the Arbitrator. Hence, in my view, arbitrator is required to be

appointed.

07. The applicant had proposed the name of Shri D.N. Potdukhe,

Retired Chief Engineer, Public Works Department, to be the Arbitrator.

The Non-applicant has filed reply before this Court opposing the claim

of the applicant for referring the matter to arbitration, but has not

stated that Shri D.N. Potdukhe cannot be appointed as the Arbitrator.

08. The learned Adv., for the applicant has referred to Clause

25.3 (a) of the Special Conditions of Contract, and has submitted that

the dispute has to be considered by Arbitral Tribunal of three

Arbitrators, one to be appointed by the applicant, one to be appointed

by the Non-applicant and the third Arbitrator shall be

mca44.16

Consultant/Engineer as Presiding Arbitrator. It is submitted that if at all

this Court is of the opinion that the dispute between the parties is

required to be resolved by arbitration, the Arbitral Tribunal of three

Arbitrators has to be appointed as per Clause 25.3 (a) of the Special

Conditions of Contract.

In my view, this submission cannot be accepted, as the Non-

applicant has not acted as per the Special Conditions of Contract, and

has not taken any action to refer the dispute to arbitration within thirty

days of receipt of the notice sent by the applicant requesting for

referring the dispute for arbitration. Non-applicant lost right to appoint

the Arbitrator and, therefore, this Court has to exercise jurisdiction

under Section 11 (4) of the Arbitration & Conciliation Act, 1996.

09. In the facts of the case, the following order is passed:-

[a] Shri D.N. Potdukhe, Retired Chief Engineer, Public Works Department, resident of 207, 208, Govind Apartments, 4, Shankar Nagar, Nagpur-440 010,

[Mob. No. 9822473674; Land Line No. 0712-

2549551] is appointed as Arbitratot to examine and resolve the dispute between the applicant and the Non-applicant.

mca44.16

[b] The Arbitrator may deal with the objection raised by the Non-applicant that the dispute raised by the applicant is not arbitrable and/or part of the claim

made by the applicant cannot be considered in arbitration proceedings.

[c] The Applicant and the Non-applicant shall deposit

Rs.50,000-00 [rupees fifty thousand only] each with

the Registry of this Court within four weeks towards the security of fees of the Arbitrator.

[d] The applicant and the Non-applicant shall pay the fees to the Arbitrator directly as would be determined by him.

[e] The applicant shall deposit Rs.10,000-00 [rupees ten

thousand only] with the Registry of this Court within four weeks towards the Processing Charges.

10. Rule is made absolute in the above terms. In the

circumstances, parties to bear their own costs.

Judge

-0-0-0-0-

|hedau|

mca44.16