Veeyar Enginers And Contractors vs The General Manager
2022 Latest Caselaw 9894 Kant

                                                  -1-




                                                          CMP No. 100002 of 2022


                      IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

                              DATED THIS THE 29TH DAY OF JUNE, 2022

                                                BEFORE
                                 THE HON'BLE MR JUSTICE R.DEVDAS
                             CIVIL MISC PETITION NO. 100002 OF 2022 (-)
                      BETWEEN:

                      VEEYAR ENGINEERS AND CONTRACTORS
                      REPRESENTED BY ITS MANAGING PARTNER
                      S J ALPHONSE, FLAT NO 7, RIO LOK APARTMENTS
                      OLD NO. 37, NEW NO.4, CLUB ROAD, CHETPET,
                      CHENNAI-600 031

                                                                      ...PETITIONER
                      (BY SMT. T.POONKUZHALI, ADVOCATE)
                      AND:

                      1.   THE GENERAL MANAGER
                           SOUTH WESTERN RAILWAY OFFICE
                           GADAG-HUBLI-DHARWAD, HUBLI
                           KARNATAKA-580 020

                      2.   THE DIVISIONAL RAILWAY MANAGER (DRM)
                           MYSORE DIVISION, SOUTH WESTERN RAILWAY
         Digitally
                           IRWIN ROAD, MYSORE-570 021
         signed by
         VINAYAKA
         BV
VINAYAKA Location:
BV       Dharwad
                      3.   THE SR.DEN (CO-ORIGINATION) MYSORE DIVISION
         Date:
         2022.07.01
         11:46:02
                           OFFICE OF THE DRM WORKS, SOUTH WESTERN RAILWAY
         +0530
                           IRWIN ROAD, MYSORE-570 021

                      4.   THE SR.DEN (CENTRAL) MYSORE DIVISION
                           OFFICE OF THE DRM WORKS, SOUTH WESTERN RAILWAY
                           IRWIN ROAD, MYSORE 570 021

                                                                    ...RESPONDENTS

                      (BY SRI.AJAY U.PATIL, ADV. FOR RESPONDENTS)
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                                      CMP No. 100002 of 2022


      THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER
SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT
1996, PRAYING THAT, THEREFORE THE PETITIONER HUMBLY PRAYS
THE HONORABLE COURT TO APPOINT A SOLE ARBITRATOR TO
ADJUDICATE ALL THE OUTSTANDING CLAIMS AND DISPUTES
BETWEEN THE PARTIES, IN THE MATTER OF WORKS AGREEMENT
NO.1081/2017/ENG/041 DATED 24.08.2017 BETWEEN PETITIONER
AND RESPONDENTS.
    THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR
ORDERS THIS DAY. THE COURT MADE THE FOLLOWING.
                          ORDER

R.DEVDAS J., (ORAL):

The petitioner has filed this civil miscellaneous

petition under Section 11(6) of the Arbitration and

Conciliation Act, 1996 seeking appointment of a sole

arbitrator to adjudicate all the outstanding claims and

disputes between the parties, in the matter of works

agreement No.1081/2017/ENG/041 dated 24.08.2017

between the petitioner and respondents-South Western

Railways, through its Divisional Railway Manager, Mysore

Division.

2. Learned counsel for the respondents-South

Western Railways does not dispute the fact that the

agreement dated 24.08.2017 contains arbitral clause

making provision in terms of Clause 18 for settlement of

CMP No. 100002 of 2022

disputes under Arbitration and Conciliation Act, 1996

(hereinafter referred to as 'the Act' for short). The contract

agreement at Clauses 63 to 64(7) which contains a

separate head "Settlement of Disputes-Indian Railway

Arbitration Rules" would provide for settlement of disputes

through arbitration. Learned counsel would however

submit that in terms of Clause 63, all disputes and

differences of any kind whatsoever arising out of or in

connection with the contract, shall be referred by the

contractor to the General Manager and the General

Manager shall, within 120 days after receipt of the

contractor's representation, make and notify decisions on

all matters referred to by the contractor in writing.

Accordingly, the petitioner sought appointment of an

Arbitral Tribunal by writing to the General Manager on

03.03.2020. However, due to Covid-19 pandemic, the

General Manager could not pass the order and

communicate his decision within the stipulated period of

CMP No. 100002 of 2022

120 days. However, the General Manager has appointed

Arbitral Tribunal by communication dated 31.05.2022.

3. Learned counsel for the petitioner places

reliance on a judgment of the Hon'ble Supreme Court in

the case of Datar Switchgears Ltd. Vs. Tata Finance

Ltd. and Another reported in (2000) 8 SCC 151,

wherein it was held that insofar as Section 11(6) of the Act

is concerned, if one party demands the opposite party to

appoint an arbitrator and the opposite party does not

make an appointment within 30 days of the demand, the

right to appoint does not get automatically forfeited after

expiry of 30 days, if the opposite party makes an

appointment even after 30 days of the demand, but before

the first party has moved the court under Section 11.

However, if the opposite party has moved the court under

Section 11, then the right of the opposite party ceases.

Learned counsel would therefore submit that, when

admittedly the General Manager did not comply with the

said requirements and has sought to make appointment of

CMP No. 100002 of 2022

the Arbitral Tribunal subsequent to filing of this petition,

the said appointment cannot be sustained.

4. Although learned counsel for the respondents

seeks to contend that this court should take a lenient view

that the General Manager has appointed the Arbitral

Tribunal after the stipulated period, owing to the Covid-19

pandemic and the difficulties faced by the General

Manager, this court is of the considered opinion that such

a concession is not permitted in view of the decision of the

Hon'ble Supreme Court in the case cited by the learned

counsel for the petitioner.

5. However, since it is found that the works were

undertaken at Mysore and the concerned officers of the

respondents-Railways are also seated at Mysore, both the

parties would be benefited if the arbitration proceedings

are held at Bengaluru in the Arbitration Center of the High

Court. Hence, this court proceeds to pass the following:

ORDER

i) The Civil Miscellaneous Petition filed Under Section 11(6) of the Arbitration & Conciliation Act, 1996 is allowed;

CMP No. 100002 of 2022

ii) Sri.H.V. Ramachandra Rao, Retired District Judge is hereby appointed as the sole arbitrator to adjudicate all the outstanding clams and disputes between the parties in the matter of Works Agreement No.1081/2017/ENG/041 dated 24.08.2017 between the petitioner and respondents;

iii) The petitioner shall place a copy of this order at the hands of the Arbitrator and thereafter the Arbitrator shall proceed to resolve the dispute after issuing notice to both the parties;

iv) The fee payable to the arbitrator shall be in terms of the fee structure of the Bengaluru Arbitration and Conciliation Centre (Domestic & International), Bengaluru, as per the extant Rules;

v) Ordered accordingly.

In view of disposal of the petition, all pending I.A's do not survive for consideration and the same are dismissed.

SD JUDGE

MBS