Jharkhand High Court
M/S Daya Shankar Rai vs Central Coalfields Ltd. And Anr on 9 February, 2022
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Application No.09of 2020
M/s Daya Shankar Rai ... ... Petitioner
Versus
Central Coalfields Ltd. and Anr. ......Respondents
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CORAM:HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
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For the Petitioner :Mr. Indrajit Sinha, Advocate
For the Respondents : Mr.Amit Kumar Das, Advocate
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07/Dated09th February, 2022
The matter has been taken upthrough video
conferencing.
2. The instant application has been filed under
Section 11 (6) (C) of the Arbitration & Conciliation Act,
1996 (hereinafter referred to as "the Act, 1996") whereby
and whereunder the prayer for appointment of arbitrator
has been made in view of condition stipulated under
Clause 9 of the Agreement dated 20.11.1991.
3. The brief facts of the case, as per the
pleadings made in the application, which is required to be
enumerated for proper adjudication of lis, reads as under:
The applicant, having been found to be successful
bidder for road construction/repair work of strengthening
and widening of Khelari to Kalyanpur Road, entered into
an agreement on 20.11.1991 with respondents-CCL for
total value of Rs. 1,80,45,673.84. It is alleged that though
the completion period of work in question was ten
months, but, due to default on the part of respondents
there was delay in the work completion and it was
completed by 10.02.1995. It has further been stated that
during course of execution of work the applicant was to do
additional work beyond the scope of agreement namely;
(i)supply and stacking of coarse sand, (ii).labour for
mixing of gravel sand, (iii).excavation of the composed
draw (iv)carriage of metals (v)providing 7.5 cm thick
bitumen concrete after mixing with extra quantify for
bitumen at the rate of 9.51 kg per meter square instead of
agreement specification of 2.794 kg per meter square.
According to applicant, the entire work was
completed as per the agreement but the payment for
providing 7.5 cm thick bitumen concrete after mixing with
extra quantify for bitumen at the rate of 9.51 kg per meter
square instead of agreement specification of 2.794 kg per
meter square was not made by the respondents instead of
repeated request made by the applicant during course of
execution of the work.
Since the claim of the applicant was not decided by
the respondents-authorities, the applicant was compelled
to invoke the arbitration clause, whereupon a sole
arbitrator was appointed by this Court in Arbitration
Application No. 46 of 2004. The learned Arbitrator
adjudicated the claim and passed an Award dated
26.12.2008 whereby claim of the applicant was rejected.
However, a lump sum amount of Rs. 10,00,000/- (ten
lakh) was awarded in favour of applicant under Section 74
of the Indian Contract Act, 1872.
The respondent, being aggrieved with the aforesaid
Award filed a petition, being Misc. Arbitration Case No. 06
of 2009 under Section 34 of the Act, 1996,which was
dismissed vide order dated 09.03.2011 by learned Sub-
Judge VI, Ranchi. The applicant also filed a petition, being
Misc. Arbitration Case No. 14 of 2009 under Section 34(2)
of the Act, 1996, for modification of Award dated
26.12.2008, which was dismissed vide order dated
09.03.2011.
The respondent challenged order dated 09.03.2011
passed in Misc. Arbitration Case No. 6 of 2009 before this
Court in Arbitration Appeal No. 4 of 2011 and the
applicant challenged order dated 09.03.2011 passed in
Misc. Arbitration Case No. 14 of 2009 before this Court in
Arbitration Appeal No. 06 of 2011.
This Court, after hearing the parties and materials
available on record, set aside the Award passed by learned
Arbitrator vide order dated 25.07.2019 on the ground of
point of impartiality of the Arbitrator and granted liberty
to the parties to take steps in accordance with law for the
purposes of resolution of their dispute, thereby the instant
application has been filed by the applicant-petitioner
under Section 11 (6) (c) of the Act, 1996 for appointment
of sole Arbitrator.
4. Mr. Indrajit Sinha, learned counsel for the
applicant-petitioner has submitted that in view of
judgment rendered by Hon'ble Apex Court in McDermott
International Inc. Vs. Burn Standard Co. Ltd & Ors
[(2006) 11 SCC 181 and in Project Director, National
Highways No. 45 E and 220 National Highways
Authority of India vs. M. Hameem&Anr. [(2021) 9 SCC
1],law is settled that application filed under Section
11(6)(C) of the Act, 1996 after setting aside award earlier
passed by the sole arbitrator is maintainable.
5. Mr. Amit Kumar Das, learned counsel for the
respondents-CCL has not disputed the aforesaid legal
position.
6. This Court, having heard learned counsel for the
parties and after going through the materials available on
record,has found that the instant application has been
filed under Section 11(6)(C) of the Act, 1996for
appointment of sole arbitrator in terms of Clause as
contained in agreement. Counter affidavit has been filed
on behalf of respondents disputing the prayer made in the
application by taking stand about non-maintainability of
the instant application.
This Court has also gone through the issue
referred/rendered by Hon'ble Apex Court in McDermott
International Inc. Vs. Burn Standard Co. Ltd & Ors
(supra) wherein at paragraph 52, it has been held that
after quashing of award it will be open for the parties to
begin the arbitration again, if is desired.
The relevant passage of said judgment is being
quoted and referred hereunder as:
"52. The 1996 Act makes provision for the supervisory role
of courts, for the review of the arbitral award only to ensure
fairness. Intervention of the court is envisaged in few
circumstances only, like, in case of fraud or bias by the
arbitrators, violation of natural justice, etc. The court cannot
correct errors of the arbitrators. It can only quash the award
leaving the parties free to begin the arbitration again if it is
desired. So, the scheme of the provision aims at keeping the
supervisory role of the court at minimum level and this can
be justified as parties to the agreement make a conscious
decision to exclude the court's jurisdiction by opting for
arbitration as they prefer the expediency and finality offered
by it."
Similar view has been reiterated by Hon'ble Apex
Court in the judgment rendered in Project Director,
National Highways No. 45 E and 220 National
Highways Authority of India (supra) wherein at
paragraph 25 it has been laid down that the application
under Section 11 (6)(C) is maintainable for appointment of
sole arbitrator once award is being quashed by the
competent Court of law.
7. Though the respondents have taken the plea
of non-maintainability of instant application in the
counter affidvit but Mr. Das, learned counsel for the
respondents-CCL Management has fairly submitted that
after the judgment having been pronounced by the
Hon'ble Supreme Court, as above, laying down the
rulethat the application under Section 11 (6)(C) is
maintainable for appointment of sole arbitrator once
award is being quashed by the competent Court of law,
the issue is now no more res integra.
8. This Court, considering the submissions advanced
by learned counsel for the parties and ratio laid down by
Hon'ble Apex Court in the judgments rendered in
McDermott International Inc. Vs. Burn Standard Co.
Ltd & Ors (supra) and Project Director, National
Highways No. 45 E and 220 National Highways
Authority of India (supra), is of the considered view that
the instant application is maintainable.
9. Since this Court arrives at a conclusion about
maintainability of the instant application and applicant
has invoked the jurisdiction under Section 11(6)(c) of the
Act, 1996 praying for appointment of arbitrator under
Clause 9 of the agreement dated 20.11.1991, this Court is
of the considered view that sole arbitrator is required to be
appointed by invoking jurisdiction conferred under
Section 11(6)(c) of the Act, 1996.
10. In view thereof, learned counsel for the parties are
directed to furnish the list/name of Former Judges of this
Court for his/her appointment as sole arbitrator, so as to
scrutinize their names from the list provided by the
Registrar General of this Court before passing order of
appointment of sole arbitrator, subject to his consent and
declaration.
Needless to say that the said appointment will be
subject to Section 12 (5) of the Act, 1996.
11. Post this matter on 17th February, 2022.
(Sujit Narayan Prasad, J.)
Alankar/-
