Sh. R.N. Gupta vs Uoi
2008 Latest Caselaw 1818 Del

             IN THE HIGH COURT OF DELHI AT NEW DELHI

                             ARB.P. 251/2007

                                         Date of decision : 15.10.2008.

IN THE MATTER OF :

      SH. R.N. GUPTA                    ..... Petitioner
                         Through : Mr. A.K. Trivedi with
                                   Mr. D.C. Saxena, Advs.

                    versus

      UNION OF INDIA                    ..... Respondent

Through : Mr. Sanjay Katyal, Adv.

CORAM * HON'BLE MS.JUSTICE HIMA KOHLI

1. Whether Reporters of Local papers may be allowed to see the Judgment? No

2. To be referred to the Reporter or not? No

3. Whether the judgment should be reported in the Digest? No

HIMA KOHLI, J. ( O R A L )

1. The present petition is filed by the petitioner under Section

11 (6) of the Arbitration & Conciliation Act, 1996 praying inter alia for

appointment of an arbitrator to adjudicate upon the disputes and

differences between the parties.

2. Briefly stated, the facts of the case are that the petitioner is

in the work of construction and entered into an agreement with the

respondent for execution of Construction of Office Building for NATP at

CTP Complex, Pusa, New Delhi-110012 on a tendered amount of

Rs.1,63,85,453/-. As per the agreement, the date of commencement

of the work was 26.4.2003 and the date of completion was 25.10.2003.

As per the counsel for the petitioner, the petitioner started and

completed the work on 8.3.2004, to the satisfaction of the respondent.

Thereafter, the petitioner submitted a statement of claim to the

respondent, vide letter dated 26.8.2005, claiming a sum of

Rs.8,66,550/-. It is stated that despite the aforesaid demand, the

respondent did not release the payment to the petitioner and as a

result, the petitioner issued a legal notice dated 27.1.2007 to the

respondent invoking Clause 25 of the agreement which provides for

appointment of an adjudicator to decide the disputes between the

parties within a period of 28 days of the receipt of a notification of a

dispute.

3. It is stated by the counsel for the petitioner that despite his

invoking the aforesaid clause and appointment of Mr. P. Krishnan,

Former DGW, CPWD, as an adjudicator, no further action was taken for

adjudication, thus compelling the petitioner to issue yet another legal

notice dated 11.5.2007, invoking the arbitration clause governing the

parties being Clause No.25. As the respondent failed to respond to the

aforesaid legal notice, counsel for the petitioner submits that the

petitioner was compelled to file the present petition.

4. The present petition was filed on 12.7.2007 and notice was

issued thereon on 13.7.2007. Appearance was entered on behalf of

the respondent on 29.9.2008. A reply has been filed to the petition. It

is not disputed in the reply that the respondent failed to act after

receiving the notice dated 11.5.2007 from the petitioner and that the

respondent did not appoint an arbitrator to adjudicate the disputes

that have arisen between the parties. Instead, the stand of the

respondent is that the respondent has already paid the entire amount

due and payable to the petitioner and no dispute subsists.

5. Considering the fact that the respondent has failed to

appoint an arbitrator in terms of Clause 25.3(f) of the agreement

governing the parties, this Court has no option but to allow the present

petition and appoint an arbitrator to adjudicate the disputes between

the parties.

6. In the case of Datar Switchgears Ltd. Versus Tata Finance

Ltd. & Anr., reported in (2000) 8 SCC 151, the Supreme Court has

held that if the vacancy of an arbitrator is not filled till the party

approaches the Court and files a petition for appointment of an

arbitrator by the designated authority of the Chief Justice of that Court

under Section 11(6) of the Arbitration and Conciliation Act, the right to

supply the vacancy by the opposite party stands extinguished. The

ratio of the aforesaid case was approved by the Supreme Court in Punj

Lloyed Ltd. Versus Petronet MHB Ltd., reported in (2006) 2SCC 682

and it was again followed by a Division Bench of this Court in the case

of Delkon (India) Pvt. Ltd. Versus G.M. Bharat Heavy Electricals Ltd.,

reported in 120 (2005) DLT 542 (DB).

7. In view of the aforesaid judgments, the respondent has lost

its right to appoint an Arbitrator, it having failed to do so within 30

days from the date of receipt of the notice from the petitioner for

appointment of an Arbitrator or even prior to the date of institution of

the present petition.

8. In these circumstances, the present petition is allowed.

Justice Manju Goel (Retd.) is appointed as the sole Arbitrator to

adjudicate all the disputes arising between the parties. The parties

shall share the fee equally, which shall be fixed by the Arbitrator.

9. The parties shall appear before the Arbitrator on 12 th

November, 2008 at 4.30 P.M. The Registry is directed to forward a

copy of the order to the Arbitrator forthwith. The parties are also

directed to intimate the Arbitrator about the order.

10. The petition is disposed of.

HIMA KOHLI,J OCTOBER 15, 2008 sk/KA