H.A. Enterprises vs The State Of Rajasthan Through The ...
2022 Latest Caselaw 6310 Raj/2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

S.B. Arbitration Application No. 8/2022

H.A. Enterprises, Office At Devanda Ki Dhani, Nagal Kalan, Chomu, District Jaipur, Through Its Proprietor Gograj Devanda S/o Shri Arjun Lal Devendra R/o Devanda Ki Dhani, Nangal Kalan, Chomu, Jaipur (Raj.).

----Applicant Versus

1. The State Of Rajasthan Through The Chief Engineer, Public Works Department, Jaipur Rajasthan.

2. Additional Chief Engineer (PPP) Public Works Department, Government Of Rajasthan, JACOB Road, Jaipur.

3. Project Director, PPP, Public Works Department Sikar Rajasthan.

----Non-Applicants

For Applicant(s) : Mr. Girdhari Lal Gupta for Mr. Anshuman Saxena For Non-Applicant(s) : Mr. Rohit Choudhary, DY. G.C.

HON'BLE MR. JUSTICE PANKAJ BHANDARI

Order

22/09/2022

1. This Arbitration Application has been filed under Section 11

of the Arbitration & Conciliation Act, 1996 (for short the

'Arbitration Act') seeking appointment of a Sole Arbitrator for

resolving the disputes between the parties.

2. It is mentioned in the application that Clause 28 was the

Arbitration Clause in the Agreement. It is also mentioned in the

application that applicant was awarded the contract of collection of

Toll Plazas fee of State Highway. Due to COVID-19 and complete

lock-down, there were no vehicles passing through the Highway as

such certain letters were written to the non-applicants but in vain

and the dispute was not resolved. Finally, a notice was issued on

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18.08.2021, wherein, applicant suggested the name of Shri

Vinayak Kumar Joshi, Advocate Rajasthan High Court, Jaipur

Bench, Jaipur as an Arbitrator. The non-applicants vide their letter

dated 09.09.2021, rejected the prayer for appointment of an

Arbitrator, suggested by the applicant, on the ground that as per

Clause 28 of the Agreement, Secretary Incharge of the Authority

or his nominee shall be the Sole Arbitrator. It was also mentioned

that name of the Arbitrator shall be intimated to the applicant.

There is now complete ban on the employees of the State

Government, where the contract is with the State to act as an

Arbitrator and when an employee cannot act as an Arbitrator, he

cannot nominate Arbitrator on his behalf. In this regard counsel

for the applicant has also placed reliance on "Perkins Eastman

Architects DPC & Anr. vs. HSCC (India) Ltd. 2019 SCC

Online SC 1517."

3. Counsel appearing on behalf of the non-applicants contends

that as per the Arbitration Clause, the arbitrator has to be the

Secretary Incharge or his nominee.

4. I have considered the contentions.

5. Admittedly, there is an Arbitration Clause. Dispute has arisen

between the parties and a legal notice was issued by the

applicant, in reply to which, non-applicants have stated that they

would be appointing an Arbitrator in terms of the Clause just prior

to the filing of this application before this Court. The Secretary,

PWD, was appointed as an Arbitrator vide letter dated 28.09.2021.

Though that letter is not on record.

6. Considering the fact that there is specific bar under the Act

and in view of the judgment of "Perkins Eastman Architects

DPC & Anr. vs. HSCC (India) Ltd." (supra), the Secretary of the

(3 of 3) [ARBAP-8/2022]

Government cannot act as an Arbitrator nor he can nominate an

Arbitrator. Thus Clause 28 of the Agreement in its entirety cannot

be invoked for appointment of a Sole Arbitrator by the non-

applicants. Only remedy now available with the applicant is to

approach the Court under Section 11(6) of the Arbitration Act.

7. In view of the judgment of "Perkins Eastman Architects

DPC & Anr. vs. HSCC (India) Ltd." (supra), this Court deems it

proper to allow the present Arbitration Application and appoint Mr.

Justice Mohammad Rafiq (Retd. Chief Justice) as the Sole

Arbitrator to decide this Arbitration Application.

8. Accordingly, the Arbitration Application is allowed.

9. The appointment of the Sole Arbitrator is subject to the

declarations being made under Section 12 of the Arbitration &

Conciliation Act, 1996 with respect to independence and

impartiality, and the ability to devote sufficient time to complete

the arbitration within the prescribed period.

10. The Arbitrator shall be entitled to lay down fees as provided

under Manual of Procedure for Alternative Disputes Resolution,

2009 as amended from time to time.

11. The observations made herein above are only for the

purpose of deciding the present application and the same will not

disentitle the parties to raise all valid objections before the learned

Arbitrator and Arbitrator will be free to dispose the said objections

without being influenced by the observations made by this Court.

12. Registry is directed to intimate Mr. Justice Mohammad Rafiq

(Retd. Chief Justice) and obtain his formal consent.

(PANKAJ BHANDARI),J

AMIT KUMAR /12

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