M/S Ajay Kumar Sood vs State Of H.P. And Others
2021 Latest Caselaw 3196 HP

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             HIGH COURT OF HIMACHAL PRADESH, SHIMLA

                                                C.W.P. No. 1517 of 2021

                                                Date of decision: 22.07.2021




                                                                                 .

      M/s Ajay Kumar Sood                                                ...Petitioner

                                      Versus





      State of H.P. and others                    ...Respondents
    ____________________________________________________
    Coram:
    The Hon'ble Mr. Justice Ravi Malimath, Acting Chief Justice





    The Hon'ble Ms. Justice Jyotsna Rewal Dua, Judge

    Whether approved for reporting1 :

    For the Petitioner(s):            Mr. Suneet Goel, Advocate.

    For the Respondents:              Mr. Mr. Ashok Sharma, Advocate
                                      General, with Mr. Ranjan Sharma,
                                      Additional Advocate General and Ms.
                                      Ritta Goswami, Additional Advocate



                                      General, for the State.

                         Through Video Conference




    ____________________________________________________
    Jyotsna Rewal Dua,J.

Respondents have rejected the request of the

petitioner for invoking arbitration clause of the general conditions

of the contract executed between them. Aggrieved, petitioner has

preferred the present petition.

Whether Reporters of local newspaper are permitted to see the judgment ?

2. Petitioner is enlisted as 'Class-A' contractor for

'building and road works' with the H.P. Public Works Department

(HP PWD). The petitioner was awarded work of road safety in

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Km. 00/00 to 46/00 on NH-72B (New NH-707) Section Rajban-

Shillai-Meenus-Hatkoti Road in State of H.P. (C/o Wire Crates,

Co W-Metal crash barrier, C/o RCC V Shape draining, C/o

Parapets alongwith delineators, Re-construction of RCC railing on

existing bridge on both sides). According to the petitioner, the

work was completed on 31.10.2019. On 13.05.2020, the

petitioner raised a claim of Rs. 40,41,446/- (Forty Lacs forty one

thousand four hundred and forty six) towards interest component

and Rs. 1,01,70,687/- (One crore one lac seventy thousand six

hundred and eighty seven) towards GST. The petitioner's claim

was refuted by the respondents on 15.05.2020. Clauses 24 and

25 of the conditions of the agreement executed between the

parties provide for Dispute Resolution Mechanism, and read as

under :-

"24 Disputes.

24.1. If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or that the decision was wrongly taken, the decision shall be referred to the Dispute Review Expert within 14 days of the notification of the Engineer's decision.

25. Procedure for Disputes 25.1. The Dispute Review Expert (Board) shall give a decision in writing within 28 days of receipt of a notification of a dispute.

25.2. The Dispute Review Expert (Board) shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Dispute Review Expert. Either party may give notice to the other to refer a

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decision of the Dispute Review Expert to an Arbitrator within 28 days of the

Dispute review Expert's written decision. If neither party refers the dispute to arbitration within the next 28 days, the Dispute Review Expert's decision will be final and binding."

3. In terms of above clauses, the petitioner referred the

dispute to the Dispute Review Expert i.e. Superintending

Engineer Arbitration Circle, HP PWD Solan. The award was

passed by the said Dispute Review Expert on 31.08.2020.

According to the petitioner, the award was announced without

any notice to the parties, in their absence.

4. As per the petitioner, it received the copy of the

award through registered post on 14.09.2020. The award was not

acceptable to it, therefore, it sent a letter to the respondents on

12.10.2020, invoking clause 25.2 of the agreement, requesting for

appointment of an Arbitrator, besides mentioning therein that the

petitioner received the copy of the award through registered post

only on 14.09.2020. The respondents rejected petitioner's request

on 29.10.2020 on the ground that the award was announced on

31.08.2020 and the time period of 28 days stipulated in Clause

25.2 of the agreement expired on 28.09.2020, therefore,

petitioner's request for appointment of an Arbitrator made after 44

days of passing of the award is not acceptable to the department.

5. We have heard learned counsel for the parties and

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gone through the documents on record.

Admittedly, award was passed by the Dispute

Review Expert on 31.08.2020 without issuing any notice to the

parties and in their absence. During hearing of the case, learned

Additional Advocate General produced a postal receipt to buttress

her submissions that a copy of the award was sent to the

petitioner through registered post on 04.09.2020. This position

has also

been stated by the petitioner in Annexure P-8 i.e.

communication dated 12.10.2020, wherein a request for

appointment of an Arbitrator was made. The petitioner has

mentioned therein that the registered letter carrying the award

received by it bears the date of dispatch as 04.09.2020, but it

received the same only on 14.09.2020. No proof of date of

delivery of the registered letter dispatched on 04.09.2020 has

been produced by the respondents. The delivery of an award is

not a matter of mere formality. It is a matter of substance. We can

also take judicial notice of spread of COVID-19 pandemic at the

time. In the facts and the circumstances, the date of delivery

mentioned by the petitioner in the communication dated

12.10.2020 has to be accepted as the date when the award was

received by it. Thus, the time for petitioner to request for

appointment of an Arbitrator in terms of clause 25.2 of the

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agreement will start running from 14.09.2020 i.e. the date when

petitioner received the award. Counting from that day onwards,

the request of the petitioner for appointment of an Arbitrator, in

terms of Clause 25.2 of the conditions of agreement, was within

the prescribed time.

Accordingly, we allow this writ petition and quash the

decision of the respondents dated 29.10.2020 (Annexure P-9).

The respondents are directed to take further action upon the

request of the petitioner dated 12.10.2020 (Annexure P-8), within

a period of two weeks from today, in accordance with law. The

petition stands disposed off in the aforesaid terms. Pending

applications, if any, also stand disposed off.

                                               ( Ravi Malimath )





                                              Acting Chief Justice



    22nd July, 2021 (K)                      ( Jyotsna Rewal Dua )
                                                     Judge