P.C.Thomas And Comapny vs The Additional Director General ...
2021 Latest Caselaw 15900 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                             PRESENT
        THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
   MONDAY, THE 2ND DAY OF AUGUST 2021 / 11TH SRAVANA, 1943
                        AR NO. 87 OF 2020
APPLICANT:

             M/s.P.C.THOMAS & CO.,
             PUTHUSSERY HOUSE,
             MAMANGALAM, PALARIVATTOM,
             KOCHI - 682 025
             REPRESENTED BY ITS PARTNER
             PAUL THOMAS

             BY ADVS.


             SRI.K.L.VARGHESE (SR.)
             SMT.SANTHA VARGHESE
             SRI.RAHUL VARGHESE
             SRI.RANJITH VARGHESE




RESPONDENTS:

    1        THE ADDITIONAL DIRECTOR GENERAL (WORKS)
             CPWD, KENDRIYA SADHAN, KORAMANGALA,
             BENGALURU-560 034

    2        THE CHIEF ENGINEER SZ -III
             CPWD, KENDRIYA SADHAN, KORAMANGALA
             BENGALURU -560 034

    3        THE SUPERINTENDING ENGINEER
             CPWD, TRIVANDRUM CENTRAL CIRCLE,
             CGO'S COMPLEX, POONKULAM, VELLAYANI P.O.,
             TRIVANDRUM-695 022

    4        THE EXECUTIVE ENGINEER
             CPWD, TRICHUR CENTRAL DIVISION,
             MUNDASSERY MEMORIAL BUILDING,
             CHEMBUKKAVU, TRICHUR - 682 020
 AR NO. 87 OF 2020
                                   2

             BY ADV SHRI.P.VIJAYAKUMAR, ASG OF INDIA




      THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION
ON   02.08.2021,    THE   COURT   ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 AR NO. 87 OF 2020
                                      3

                                  ORDER

The applicant in this Arbitration Request, which is stated to be a

Partnership Firm, alleges that certain disputes have arisen between them

and the respondents with respect to and touching upon the terms of

Annexure A2 contract; and that consequently, they have notified of the

same through Annexures A7 and A8 notices.

2. The applicant predicates that, as per Annexure A2

agreement, all disputes between the parties relating to it have to be

resolved in the manner provided in Clause 25 thereof, which, after a

sequence of actions to be satisfied by the parties, stipulates its resolution

through a sole Arbitrator. The petitioner then concedes that as per

Clause 25(ii) of Annexure A2 agreement, a sole Arbitrator will have to

be nominated by the Chief Engineer, CPWD and that if there is no such

Chief Engineer, then the Additional Director General of a concerned

region of the CPWD. They, however, contend that this provision in the

contract cannot be now enforced on account of the judgment of the

Honourable Supreme Court in TRF Limited v. Energo Engineering

Projects Limited [(2017) 8 SCC 377] and thus pray that this Court

appoint a sole Arbitrator under the sanction of Section 11(5) of the AR NO. 87 OF 2020

Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the

Act' for short).

3. I have heard Sri.Rahul Varghese, learned counsel appearing

for the petitioner and Sri.P.Vijayakumar, learned Assistant Solicitor

General of India appearing for the respondents.

4. I must upfront record that, when this matter was considered

earlier on the 23rd of July, 2021 the Assistant Solicitor General made

expansive arguments on the scope of Clause 25 of Annexure A2

agreement and argued that the dispute resolution mechanism stipulated

therein has not been fully satisfied by the petitioner. He, however,

submitted that a sole Arbitrator had been appointed by the Additional

Director General of CPWD and thus prayed that if this Court is inclined

to allow this Arbitration Request, then the said person may be nominated

as the Arbitrator, because he is part of the panel of Arbitrators

maintained by this Court.

5. However, a vehement contra contention was impelled by

Sri.Rahul Varghese, learned counsel for the applicant, on that day

asserting that, going by TRF Limited (supra), an Arbitrator appointed by

one of the parties to the agreement cannot continue or be allowed to AR NO. 87 OF 2020

continue.

6. I, therefore, indited the following order on that day:

"I have heard this matter more or less in full detail.

2. It is indubitable from the rival submissions, that the sole issue before this Court is whether the Arbitrator now nominated by the respondent can be allowed to continue, or if a sole Arbitrator requires to be appointed by this Court under Section 11(5) or Section 11(6) of the Arbitration and Conciliation Act, 1996.

3. The Scheme of the dispute resolution between the parties as per their Agreement would show that there are four layers to be followed, one of which involves the Chief Engineer. However, the Agreement then says that an Arbitrator shall be appointed by the Chief Engineer or by the Additional Director General of the concerned region of the CPWD.

4. Prima facie, going by the judgment of the Hon'ble Supreme Court in TRF Limited v. Energo Engineering Projects Limited [(2017) 8 SCC 377], a legitimate suspicion arises as to whether an Arbitrator appointed by the Chief Engineer or by the Additional Director General can now be seen to be competent.

5. I, therefore, suggested to the parties that, if they are agreeable, this Court can appoint even a retired High Court Judge as the sole Arbitrator.

6. The learned counsel for the petitioner immediately agreed; while the learned Assistant Solicitor General of India sought a few days time to confer with his AR NO. 87 OF 2020

clients.

I, therefore, adjourn this matter to be called on 28.07.2020."

7. Today, when this matter was called, the learned Assistant

Solicitor General reiterated that the Arbitrator appointed by the

Additional Director General of CPWD be allowed to continue because

he is on the panel of the Arbitrators maintained by this Court.

8. However, I am of the view that this submission cannot be

accepted by this Court on account of the affirmative declarations in TRF

Limited (supra), since it is conceded before me that the present

Arbitrator has been nominated by the Additional Director General of

CPWD, who is a party to Annexure A2 contract. This is more so

because, the Additional Director General, being the senior most officer

of the CPWD, certainly falls within the rigour of the persons enumerated

in Schedule 7 of the Act and therefore, would become incapacitated from

acting as an Arbitrator and consequently, of nominating one.

9. I am, therefore, of the firm opinion that it will be justified for

this Court to appoint a different Arbitrator to adjudicate and resolve the

dispute between the parties; and perhaps discerning my mind as afore, AR NO. 87 OF 2020

the learned Assistant Solicitor General suggested that either an Advocate

of this Court or a Retired District Judge be so considered.

10. Resultantly, I order this Arbitration Request in the following

manner:

(a) I nominate Sri.K.P.Balasubramanyan, Gokulam, II Avenue,

P C Road, Kaloor, Kochi-17 as the sole Arbitrator to adjudicate and

resolve the disputes and differences between the parties to this case

arising from and in connection with Annexure A2 agreement.

(b) The Registry is directed to communicate a copy of this

order to the learned Arbitrator, within a period of two weeks from today

and to obtain a Statement of Disclosure from him under Section 11(8)

read with Section 12(1) of the Arbitration and Conciliation Act, 1996.

(c) Once the Disclosure Statement is obtained from the learned

Arbitrator, the Registry shall release the certified copy of this order, with

a copy of the said statement appended to it, retaining the original of the

same on the files of this case.

(d) The fees of the Arbitrator shall be governed by the Fourth

schedule to the Arbitration and Conciliation Act, 1996.

(e) The parties to this case are ad idem that they will share the AR NO. 87 OF 2020

arbitration costs and fees equally and it is so recorded.

(f) In order to enable the Arbitrator to commence the

proceedings without delay, I direct the parties to mark appearance before

him at 11 a.m. on 07.09.2021.

Sd/-

DEVAN RAMACHANDRAN JUDGE SCS AR NO. 87 OF 2020

APPENDIX OF AR 87/2020

PETITIONER ANNEXURE

ANNEXURE A1 TRUE COPY OF THE LETTER OF ACCEPTANCE DATED 4.10.2014

ANNEXURE A2 TRUE COPY OF CLAUSE 25 OF CLAUSES OF CONTRACT UNDER THE GENERAL CONDITIONS OF CONTRACT

ANNEXURE A3 TRUE COPY OF THE APPEAL MEMORANDUM DATED 25.6.2019 EXCLUDING ANNEXURES

ANNEXURE A4 TRUE COPY OF THE DECISION OF THE DISPUTE REDRESSAL COMMITTEE DATED 7.4.2020

ANNEXURE A5 TRUE COPY OF THE LETTER DATED 2.5.2020 ISSUED BY THE RESPONDENTS

ANNEXURE A6 TRUE COPY OF THE LETTER DATED 4.5.2020 ISSUED BY THE APPLICANT TO THE RESPONDENTS

ANNEXURE A7 TRUE COPY OF THE NOTICE FOR APPOINTMENT OF ARBITRATOR DATED 14.8.2020 ISSUED BY THE APPLICANT

ANNEXURE A8 TRUE COPY OF THE REMINDER LETTER DATED 6.10.2020 ISSUED BY THE APPLICANT

ANNEXURE A9 TRUE COPY OF THE LETTER DATED 14.10.2020 ISSUED BY THE RESPONDENTS

ANNEXURE A10 TRUE COPY OF THE LETTER DATED 23.10.2020 ISSUED BY THE APPLICANT REITERATING THE PREVAILING LAW FOR APPOINTMENT OF ARBITRATOR

ADDL.ANNEXURE A11 TRUE COPY OF E-MAIL DT.07.12.2020 ISSUED BY THE APPLICANT TO SRI.N.HARIHARAN AR NO. 87 OF 2020

ADDL.ANNEXURE A12 TRUE COPY OF E-MAIL DT.06.12.2020 ISSUED BY THE COUNSEL FOR THE APPLICANT TO THE 1ST RESPONDENT AND COUNSEL FOR THE RESPONDENT

ADDL.ANNEXURE A13 TRUE COPY OF LETTER DT.29.12.2020 ISSUED BY SRI.N.HARIHARAN TO THE APPLICANT

ADDL.ANNEXURE A14 TRUE COPY OF E-MAIL DT.05.01.2021 ISSUED BY THE APPLICANT TO SRI.N.HARIHARAN ALONG WITH LETTER DT.05.01.2021 AND COPIES OF JUDGMENTS OF THIS HON'BLE COURT IN A.R.39 OF 2019 AND COMMON ORDER IN A.R.43&45 OF 2019 BETWEEN THE SAME PARTIES.

ADDL.ANNEXURE A15 TRUE COPY OF THE LETTER DT.14.01.2021 ISSUED BY SRI.N.HARIHARAN TO THE APPLICANT.