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1999 DIGILAW 600 (DEL)

K. C. SHARMA v. NDMC

1999-08-12

MUKUL MUDGAL

body1999
Mukul Mudgal, J. (Oral) ( 1 ) THIS is an arbitration petition, on behalf of the petitioner, under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the act ) seeking the directions to the respondents to file the arbitration agreement and also an order of reference of the disputes detailed in Para 12 of the petition for arbitration. ( 2 ) THE petitioner is a contractor who entered into contract on 26. 2. 1993 for providing Grit Wash on outer site of old building of Charak Hospital at Moti Bagh, New Delhi. Clause 25 of the Contract Agreement provided for the arbitration and reads as follows: "settlement of disputes by arbitration: Except where otherwise provided in the contract all questions and disputes relating to the. meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter of thing whatsoever, in any way arising out of or relating to the contract, designs, specification, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the President NDMC at the time of dispute or if there be no President, the administrative head of the NDMC, at the time of such appointment. It will be no objection to any such appointment if the arbitrator so appointed is a Government servant or NDMC employee, that he has to deal with the matters to which the contract relates and that in the course of his duties as Government servant or NDMC employee he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred, being transferred or vacating his office or being unable to act for any reason, the President or administrative head as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by the President or administrative head of NDMC, as aforesaid should act as arbitrator and for any reason, that is not possible, the matter is not to be referred to arbitration at all. In this case, parties have agreed that the arbitrator/arbitrators or umpire will give reasons for the award. ( 3 ) SUBJECT as aforesaid, the provisions of the Arbitration Act, 1940 or any statutory modification, or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause. The arbitrator may, from time to time with the consent of the parties enlarge the time for making and publishing the award. It is also a term of the contract that if the contractor does not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the NDMC that the bill is ready for payment, the claim of the contractor will-be deemed to have been waived and absolutely barred and the NDMC shall be discharged and released of all liabilities under the contract in respect of these claims. ( 4 ) IT is a term of the contract that the party invoking arbitration shall specie the dispute or disputes to be referred to arbitration under this clause together with the amount (s) claimed in respect of each such dispute. ( 5 ) NOTWITHSTANDING anything contained in this agreement, the parties shall not be entitled to revoke reference of disputes to the arbitration after acceptance of the final payment until it is so recorded on the bill that the same was being received under protest. THE decision of Chief Engineer regarding the quantum of reduction as well as justification thereof in respect of rates for sub-standard work which may be decided to be accepted will be final and would not be open to arbitration. " ( 10 ) THE Hon ble Supreme Court in Nandyal Cooperative Spinning Mills Ltd. vs. Mohan Rao 1993 (2) SCC 654 ; held as follows: "it would thus be clear that if no Arbitrator had been appointed in terms of the contract within 15. " ( 10 ) THE Hon ble Supreme Court in Nandyal Cooperative Spinning Mills Ltd. vs. Mohan Rao 1993 (2) SCC 654 ; held as follows: "it would thus be clear that if no Arbitrator had been appointed in terms of the contract within 15. days from the date of receipt of the notice, the administrative head of the appellant had abdicated himself of the power to appoint Arbitrator under the contract. "the Hon ble Supreme Court in G. Ramachandran Reddy and Co. vs. Chief Engineer, Madras Zone 1994 (5) SCC 142 , held as follows: "thus when the notice was given to the opposite contracting party to appoint an Arbitrator in terms of the contract and if no action has been taken, it must be deemed that he neglected to act upon the contract. When no agreement was reached, even in the court between the parties, the court gets jurisdiction and power to appoint an Arbitrator. Even if Section 8 (a) per se does not apply, notice was an intimation to the opposite contracling party to act upon the terms of the contract and his/its non-availment entails the forfeiture of the power to appoint an Arbitrator in terms of the contract and gives right to the other parly to invoke the Court s jurisdiction under Section 20. In the instant case, the respondent did not appoint an Arbitrator, after the notice was received. " ( 11 ) IN view of the fact that the Hon ble Supreme Court has held that refusal to appoint an arbitrator abdicates the power of designaled authority to appoint arbitrator. It is clear that Court thus is entitled to appoint an independent arbitrator. Accordingly, I appoint Mr. Justice Jaspal Singh, a retired-Judge of this Court to act as the sole Arbitrator to adjudicate the disputes enumerated in paragraph 12 of this petition which is filed before this Court. The Arbitrator may enter upon reference within 4 weeks from today and may give his award within 4 months of entering reference. ( 12 ) IN view of the above, the petition stands disposed of.