COURT NO.1
HIGH COURT OF SIKKIM : GANGTOK
Record of Proceedings
Arb.P. No. 02/2022
M/S MAHABIR PRASAD AGARWAL PETITIONER (S)
VERSUS
UNION OF INDIA & ORS. RESPONDENT (S)
For Petitioner : Ms. Pritima Sunam and Ms. Pema Dechen Bhutia,
Advocates.
For Respondents : Ms. Sangita Pradhan, Dy. Solicitor General of
India with Ms. Natasha Pradhan, Advocate.
Date: 17/03/2023
CORAM :
HON'BLE MR. JUSTICE BISWANATH SOMADDER, CHIEF JUSTICE
...
JUDGMENT
This is an application filed under section 11 of the Arbitration and
Conciliation Act, 1996 (as amended till date), for appointment of an Arbitrator. It
has been filed by a partnership firm by the name of M/s Mahabir Prasad
Agarwal. This partnership firm has its office situated at Namchi in the district of
Namchi, Sikkim. From the pleadings it appears that the petitioner entered into a
contractual agreement with the Executive Engineer of the Central Public Works
Department, Gangtok Central Division, Government of India (hereinafter
referred to as E.E., CPWD, GCD) for the purpose of construction of Regional
Museum of Natural History at Marchak, Gangtok, Sikkim, following acceptance of
tender on 28th July, 2016. The total work was estimated to the tune of Rupees
twenty-five crores six lakhs seventy thousand three hundred eighty-three and
paise forty-seven only. In the said letter of acceptance dated 28th July, 2016, it
has also been stated that the petitioner's letter dated 10th June, 2016, shall form
part of the agreement.
In paragraph 6 of the petition, it has been stated that the petitioner had
completed nearly 95% of the work till date of filing of the petition. From
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paragraph 11 of the counter affidavit filed on behalf of the respondents by the
E.E., CPWD, GCD, it appears from a plain reading thereof that the specific
assertion made by the petitioner in paragraph 6 of the petition of having
completed nearly 95% of the total work till date, has not been specifically
denied.
Be that as it may, it appears that the petitioner sent several letters to the
E.E., CPWD, GCD, requesting for issuance of completion certificate and closure
of the contract. From paragraph 14 of the counter affidavit, it appears that there
have been several correspondences from the end of the concerned respondent
authority also, requesting the petitioner to complete the pending work but
according to the respondent, the petitioner had repeatedly neglected to
complete the work.
In this factual backdrop, it appears that the petitioner invoked the
arbitration clause, initially by writing to the E.E., CPWD, GCD, on 23rd
November, 2021, and subsequently, on 27th November, 2021, to the Chief
Engineer, Central Public Works Department, Matigara, Siliguri, being the
authority to appoint an Arbitrator in terms of clause 25 of the General Clauses of
Contract governing the parties.
A bare perusal of clause 25, however, reveals inter alia that in terms of
the contract, each party invoking arbitration must exhaust the prescribed
alternative mechanism of settlement of claims/disputes prior to invoking
arbitration. This alternative mechanism which has been clearly specified in
clause 25 is named as the Dispute Redressal Committee (DRC). Clause 25
further reveals that even before the DRC is constituted, it is the duty of the
concerned Engineer to give his instructions or decision in writing within a period
of one month from receipt of the contractor's letter. In so far as the instant
matter is concerned, all the concerned respondent authorities have remained
silent and have not taken any step for redressal of the grievances sought to be
raised by the petitioner.
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COURT NO.1 HIGH COURT OF SIKKIM : GANGTOK Record of Proceedings
In such circumstances, this Court is of the view that the Chief Engineer of
Central Public Works Department, Matigara, Siliguri, may be directed to consider
the petitioner's letters which have been referred to in the instant arbitration
petition and take a decision supported with cogent reasons, within a period of 30
days from date. In the event, the petitioner is dissatisfied with such decision, it
will be at liberty to appeal against the same before the Dispute Redressal
Committee (DRC), within a period of 36 days therefrom in terms of clause 25 of
the contract. Such appeal shall be disposed of by the Dispute Redressal
Committee (DRC), within a period of 90 days from the date of receipt of the
petitioner's appeal, also in terms of the said clause 25. In the event, the
petitioner is dissatisfied with the decision to be rendered by the Dispute
Redressal Committee (DRC), it will be at liberty to take further steps in the
matter in terms of clause 25 of the contract, which governs both the parties.
The arbitration application stands disposed of accordingly.
(Biswanath Somadder) Chief Justice pm/ami
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