Sh. Mukesh Kumar vs The Commissioner, Municipal ...
2007 Latest Caselaw 2049 Del

JUDGMENT

Anil Kumar, J.

1. This is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

2. The petitioner has contended that he is a MCD contractor and pursuant to a short notice inviting tender dated 4.12.2002 for work of improvement of Titar Pur Drain between N and P Block, Raghubir Nagar, under West Zone, Delhi he had applied and filed a tender which was accepted and he has carried out the work specified in the tender including an extra work of sixty five meters on an oral request of the respondents.

3. According to the petitioner there is an arbitration agreement between the parties and pursuant to the work executed by the petitioner disputes have arisen. The petitioner has given a notice dated 27th January, 2006 seeking payment of a total amount of Rs. 7,33,124/- due to the petitioner along with interest from the respondents and in the alternative appointment of an arbitrator in terms of the arbitration agreement, however, no arbitrator was appointed by the respondent.

4. The petition is contested by the respondents contending that some of the claims are outside the purview of Clause 25 of the agreement and that proper procedure as stipulated under Clause 25 of the agreement has not been adopted. The petitioner denying assignment of any verbal work orders to the petitioner stated that the payment for the actual work done by the petitioner has already been made. Clause 25, Arbitration Agreement between the parties is as under:

Clause 25 Settlement of Disputes and Arbitration Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials as used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract designs, drawings, specifications, estimates instructions orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination completion or abandonment thereof shall be dealt with as mentioned hereinafter:

1. If the contract considers any work demanded of him to be outside the requirement of the contract, or disputes any drawings, record or decision given in writing by the Engineer in charge on any matter in connection with or arising out of the contract of carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instructions or decision. Thereupon, the Superintending engineer shall give his written instructions or decision within a period of one month from the receipt of contractor's letter.

If the Superintending engineer fails to give his instructions or decision in writing within the aforesaid period or if the contract are is dissatisfied with the instructions or decision of the Superintending engineer, the contract may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the chief engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The chief engineer shall give his decision within 30 days of the receipt of contractor's appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Commissioner MCD for appointment of arbitrator failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator.

2). Except where the decision has become final, binding and conclusive in terms of sub Para (i) above disputes or differences shall be referred for adjudication through arbitration a sole arbitrator appointed by the Commissioner MCD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever another sole arbitrator shall be appointed in the manner aforesaid. Such personal shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.

5. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the chief engineer of the appeal. It is also a term of this contract that no person other than a person appointed by such Commissioner MCD as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all.

6. It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer in charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and MCD be shall be discharged and released of all liabilities under the contract in respect of these claims.

7. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modification or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceedings under this clause.

8. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000 the arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the day he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitration shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the Arbitrator) shall be in the discretion of the arbitrator who made direct to any by whom and in what manner, such cost or any part thereof shall be paid and fix or settle the amount of cost to be so paid.

9. The respondents have alleged that the dispute raised by the petitioner is outside the ambit of Clause 25 of the agreement which is the arbitration agreement. The respondents, therefore, admits that the agreement between the parties have an arbitration agreement in terms of Clause 25 which is reproduced hereinabove. Despite the letter dated 27.1.2006 of the petitioner demanding payment due no amount has been paid by the respondents nor has an arbitrator been appointed.

From the aforesaid, it is evident that the disputes have arisen between the parties and that there is a binding arbitration agreement. The petitioner invoked the Arbitration Agreement on 27.1.2006. The respondent failed to appoint an arbitrator within four weeks of notice being given by the petitioner for appointment of an arbitrator. Even after filing of the petition the arbitrator has not been appointed. The learned Counsel for the respondent is unable to give any reason for not appointing an arbitrator on demand being raised by the petitioner. The failure of the respondent to appoint an arbitrator despite petitioner's specific demand by letter dated 27.1.2006 has resulted in respondent losing its right to appoint an arbitrator. The learned Counsel for the respondents is unable to explain as to how the disputes raised by the petitioner are beyond the scope of the Arbitration Agreement between the parties.

10. A learned Single Judge in Haryana Telecom Ltd. v. Union of India and Anr. 112 (2004) DLT 339 : 2004 (3) RAJ 147, had held that if the respondent fails to appoint an Arbitrator within the stipulated time of 30 days of the notice, and even after filing of the petition under Section 11 of the Act, it is for the Court to appoint an Arbitrator. Learned Counsel for the petitioner relied on this judgment and states that position is similar in the present case, since in the present case also notice was issued to the respondent and even after receipt of notice, no Arbitrator has been appointed by the respondent. It is contented that even after filing of the present petition till date, Arbitrator to resolve the disputes between the parties has not been appointed by the respondent. The learned Counsel for the respondents is also unable to show as to how the disputes between the parties are beyond the scope of the Arbitration Agreement and can not be decided by the Arbitrator.

11. Consequently, I appoint Mr. S.M. Chopra Advocate, (Retired Additional District Judge), 181, Deshbandhu Apartment, Kalkaji, New Delhi-110019 (Mob : 9213230349, Res. : 26484158) as an arbitrator. The learned Counsel for the petitioner states that the total claim of the petitioner is of about Rs. 7,33,124/- with interest. Considering these facts the fees of the arbitrator shall be Rs. 60,000/- payable by the petitioner. The parties shall appear before the arbitrator on 26.11.2007 at 4.30 PM. A copy of this order be sent to the learned arbitrator forthwith. The parties are also directed to give a copy of this order to the arbitrator. Copies of this order be given to the counsel for the parties dusty.