Uttarakhand High Court
ARBAP/20/2020 on 6 August, 2021
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
THE HON'BLE THE CHIEF JUSTICE SRI RAGHVENDRA SINGH CHAUHAN
ARBITRATION APPLICATION NO. 20 OF 2020
06TH AUGUST, 2021
BETWEEN:
Harjinder Pal Singh .....Applicant.
And
Cantonment Board, Dehradun ....Respondent.
Counsel for the applicant : Mr. Mahanand Joshi and Mr.
Kanti Ram.
Counsel for the respondent : Mr. B.S. Adhikari.
The Court made the following:
JUDGMENT
The present Arbitration Application has been filed
under Section 11(6) the Arbitration and Conciliation Act, 1996
(''the Act' for short), for appointment of the sole Arbitrator.
2. According to the learned counsel for the applicant,
the applicant is the contractor who undertakes government
contracts for supplying material/goods in relation to contracts
entered with the Government and the Semi-Government
Organization.
3. The respondent, the Cantonment Board, had
invited tenders for "repair and maintenance of roads" in the
year 2016. Consequently, the applicant had submitted his
rates for the work on 15.11.2016. By order dated
30.03.2017, the said tender was accepted by the respondent.
Therefore, the work order contract was issued on 06.04.2017.
4. According to the work order contract, it was agreed
that the respondent shall make payments within the time
stipulated under the agreement. Moreover, the respondent
was under the duty to clear all the bills of the applicant within
18 days' after which the amounts had become due.
5. According to the applicant, despite the fact that the
work order was completed with utmost satisfaction, no
payments were received by the applicant in relation to the
four work orders, which are as under:-
S. No. Work Order Amount/Valu Amount of Bill Date of
e (in INR) (in INR) Bill
1. Repairs to door 34,319/- 34,319.43/- 25.06.2018
window glazing of
Cantt. Quarter
No.4 (2nd June,
2017)
2. Public Group 3,71,755/- 3,71,755.57/-
Latrine Double
Compartment in
Cantt. Area 6 nos.
(17th November,
2017)
3. Construction of 11,49,019/- 11,49,019/-
vacation room &
extension of
playground at
Cantt. Inter
College, Chakrata
(19th September,
2017)
4. Repairs to Ceiling 65,262/- 65,262.48/- 25.06.2018
Gate and Mile
Steel Grill of
Cantt. Qtr. No.18
(5th March, 2018)
Amount Payable 16,20,355/- 16,20,356.48/-
6. The applicant has also done work under the Work
Orders in relation to the Guest House, Chilmiri to the
satisfaction of the respondent. However, no payments were
received by the applicant in relation to the said work orders.
Therefore, according to the learned counsel for the applicant,
the respondent owes Rs.84,78,552/- along with the GST.
7. Since the respondent was not heeding to the
request of the applicant, on 17.06.2020 the applicant sent a
legal notice requesting the respondent to both clear the
outstanding bills and, since disputes had arisen between the
parties to appoint the sole Arbitrator, 'the Garrison Engineer'.
8. According to Clause 19 of the Agreement, the
parties had agreed that, in case disputes were to arise, 'the
Garrison Engineer' shall be appointed as the sole Arbitrator.
9. In the letter dated 17.06.2020, the applicant had
clearly stated that the Garrison Engineer shall be appointed
within a period of thirty days from the date of the letter.
10. According to the learned counsel for the applicant,
letter dated 17.06.2020 was replied by the respondent on
14.08.2020. However, in the letter dated 14.08.2020, the
respondent maintained a study silence with regard to the
appointment of the sole Arbitrator. In the letter dated
14.08.2020, the respondent merely directed the applicant to
submit further documents including photographs of the
construction work carried out by the applicant. There was no
whisper about the appointment of an Arbitrator.
11. Since, even after making a request for appointment
of an Arbitrator, and due to laxity on the part of the
respondent in appointing the Arbitrator, left with no other
option, the applicant filed the present Arbitration Application
under Section 11(6) of the Act.
12. The respondent has filed its counter-affidavit.
According to Mr. B.S. Adhikari, the learned counsel for the
respondent, on 15.10.2020, the respondent has appointed
'the Garrison Engineer' as the sole Arbitrator. The learned
counsel for the respondent submits that, although, it is true
that Section 12(5) of the Act, does contain a bar which
prevents the appointment of any person whose relationship is
with the parties or the counsel or the subject matter of the
dispute. However, the proviso to said sub-section clearly
provides that the parties may, subsequent to disputes having
arisen between them waive the applicability of the sub-
section by an express agreement in writing.
13. According to Mr. B.S. Adhikari, the learned counsel
for the respondent, since the request to appoint 'the Garrison
Engineer' as the sole Arbitrator was made by the applicant by
letter dated 17.06.2020, the applicant has waived the bar
contained in Section 12(5) of the Act. Therefore, the applicant
is not entitled to pray to this Court for appointment of the
sole Arbitrator. Hence, according to the learned counsel for
the respondent, only 'the Garrison Engineer' can be appointed
as the sole Arbitrator.
14. On the other hand, Mr. Mahanand Joshi, the
learned counsel for the applicant, submits that, in the letter
dated 17.06.2020, the period for appointment 'the Garrison
Engineer' as the sole Arbitration was clearly stated 'within
thirty days'. Therefore, if there is any waiver of the bar
contained in Section 12(5) of the Act, the waiver extends only
for a period of thirty days and not beyond. Secondly, despite
the option of the waiver made by the applicant for a period of
thirty days, the respondent did not accept the request, in
fact, made mentioned hereinabove. Even in its reply dated
14.08.2020, there was not a single word about the
appointment of an Arbitrator. Thus, there silence is a clear
indication that it has rejected the request of the applicant for
appointing 'the Garrison Engineer' as the sole Arbitrator.
Thirdly, since the respondent maintained a study silence and
did not appoint the Arbitrator, as requested within a period of
thirty days, the applicant had no option but to approach this
Court under Section 11(6) of the Act for appointment of the
sole Arbitrator. Therefore, according to the learned counsel
for the applicant, once this Court is seized of the matter
under Section 11(6) of the Act, it is only this Court which has
the power to appoint the sole Arbitrator. Hence, according to
the learned counsel for the applicant, the contentions raised
by Mr. B.S. Adhikari, the learned counsel for the respondent
is highly misplaced.
15. Heard the learned counsel for the parties and
perused the record.
16. Section 12(5) of the Act is as under:-
"12(5). Notwithstanding any prior agreement
to the contrary, any person whose relationship,
with the parties or counsel or the subject-matter of
the dispute, falls under any of the categories
specified in the Seventh Schedule shall be ineligible
to be appointed as an arbitrator:
Provided that parties may, subsequent to
disputes having arisen between them, waive the
applicability of this sub-section by an express
agreement in writing".
17. A bare perusal of the proviso clear reveals that it
creates a bar with regard to the appointment of an Arbitrator
who is in relationship with the parties or with the counsel or
with the subject matter of the dispute. However, the proviso
contained an exception. The exception is that, after disputes
have arisen between the parties, both the parties agreed by
'an express agreement in writing', only then can the bar
contained in Section 12(5) of the Act be said to be the waiver
by the parties.
18. Admittedly, in the letter dated 17.06.2020, the
applicant had requested for appointing 'the Garrison Engineer'
as the sole Arbitrator. However, the request had to be acted
upon within a period of thirty days. Undoubtedly, the
respondent did not act on the said request within a period of
thirty days. Moreover, in the present case, there has been no
'express agreement in writing', with regard to the waiver of
the bar contained in Section 12(5) of the Act. Therefore, the
learned counsel for the respondent is not justified in claiming
that, by letter dated 17.06.2020, the applicant had waived
the bar imposed by Section 12(5) of the Act. Moreover,
admittedly, the applicant had filed the present applicant on
24.09.2020 before this Court. Even after the filing of the
present application, the respondent sat quietly over the
request of the applicant for appointing 'the Garrison Engineer'
as the sole Arbitrator till 15.10.2020. Therefore, the learned
counsel for the respondent is not justified in claiming that the
respondent is legally justified in appointing 'the Garrison
Engineer' as the sole Arbitrator in accordance with the arbitral
clause. Hence, the contention raised by the learned counsel
for the respondent is clearly unacceptable.
19. Admittedly, the disputes continue to exist between
the parties. Obviously, the dispute needs to be resolved
through the arbitral proceedings. Therefore, this Court
appoints Mr. B.C. Kandpal, Retd. Judge, High Court of
Uttarakhand, R/o 117 Rajeshwar Nagar, Phase-I,
Sahastradhara Road, Dehradun, as the sole Arbitrator after
his disclosure in writing is obtained in terms of Section 11(8)
of the Act; and only after receipt thereof, shall his
appointment, as an arbitrator, come into force.
20. On giving consent to arbitrate the disputes between
the parties, Mr. B.C. Kandpal, Retd. Judge, High Court of
Uttarakhand, R/o 117 Rajeshwar Nagar, Phase-I,
Sahastradhara Road, Dehradun, shall enter reference, and
shall pass an award in accordance with law. The learned
arbitrator shall fix his fees in consultation with both the
parties.
21. The arbitration application is disposed of
accordingly.
(RAGHVENDRA SINGH CHAUHAN, C.J.)
Dated: 06th August, 2021
NISHANT
