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2004 DIGILAW 65 (JK)

Rakesh Constructions Through Sh. C. L. Koul v. University Of Jammu Through Its Registrar

2004-03-19

S.K.GUPTA

body2004
This is a petition under section 11 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 (hereinafter for short referred to as "the Act, 1997") preferred by the petitioner seeking appointment of an Arbitrator on the ground of the failure of the respondents to appoint an Arbitrator within the period of notice, as given by the petitioner. 2. The case of the petitioner, in brief, is that in response to NIT dated 13-12-2002 for the construction of: (i) Lecture Halls with bath rooms in the Department of Computer Science; (ii) Analytical lab and two rooms on first floor of USIC building; and (iii) two class rooms in Law Department, the petitioner also submitted the tender. The tender of the petitioner was accepted and allotment letter No.UWD/2003-04/06-14 dated 4-4-2003 was issued by the respondents for the aforesaid construction. The allotment letter contained a relevant clause that in the event of any dispute arising out of the contract, the same was to be adjudicated upon by the Vice-Chancellor, a nominated Arbitrator. Further case of the petitioner is that the respondents were required to supply the drawings and other specifications before starting the construction. When the drawings and other information for execution of working were not provided by the respondents, preliminary work was started by the petitioner. The cement and the steel provided by the respondents were sub-standard and the petitioner declined to accept the same and requested for its purchase from the open market. The same was refused. Therefore, the non-supply of the drawings and the material for the execution of the work allotted, resulted in inevitable delay in the execution of the work and occasioned a great loss to the petitioner. The petitioner served a notice dated 25th June, 2003 requesting the respondents for appointment of an Arbitrator for settlement of the dispute between the parties having raised out of the contract containing Arbitration Clause. That despite receipt of the notice/letter, neither the Arbitrator was appointed nor any information was received in this behalf from the respondents. Since the respondents failed to appoint the Arbitrator within a period of thirty days of the receipt of the request/demand for the appointment of Arbitrator to settle the dispute between the parties, it compelled the petitioner to approach the Court for the appointment of an indepen- dent Arbitrator in invoking the powers under section 11 of the Act, 1997. 3. Since the respondents failed to appoint the Arbitrator within a period of thirty days of the receipt of the request/demand for the appointment of Arbitrator to settle the dispute between the parties, it compelled the petitioner to approach the Court for the appointment of an indepen- dent Arbitrator in invoking the powers under section 11 of the Act, 1997. 3. The respondents in their reply did not dispute the receipt of the demand/request by the petitioner for appointment of an Arbitrator, as the dispute between the parties had arisen in respect of the arbitration contained in the Arbitration Clause. It is admitted by the respondents that notice dated 25th June, 2003 was received on 30th June, 2003. Further stand of the respondents is that the petitioner, in fact, wanted the basic condition of NIT as regards the cement and steel to be modified, but the same was rejected. It is also denied that the cement and steel in the store of the University were sub-standard, as contended by the petitioner. The Arbitrator, according to the respondents, was appointed vide their letter dated 16-08-2003. It is further contended that delay in executing the work of construction allotted to the petitioner, at site, has resulted in a great loss to the University. As the matter in dispute has been referred to the Arbitrator - Vice-Chancellor, an independent Arbitrator, at this stage, cannot be appointed contrary to the terms of the NIT. 4. Heard the arguments advanced by the learned counsel appearing for the respective parties, in extenso. I have also perused the record, meticulously, besides relevant provisions of law touching the matter in controversy. 5. The spinal question that falls for consideration is that whether the respondents could appoint an Arbitrator after the Court has been seized of the request for the appointment of an Arbitrator, made through the petition under section 11 of the Act. Mr. R. Koul, learned counsel appearing for the petitioner, submitted that section 11 of the Act deals with the appointment of the Arbitrators. It provides that the parties are free to agree on a procedure for appointing of an Arbitrator or Arbitrators. Mr. R. Koul, learned counsel appearing for the petitioner, submitted that section 11 of the Act deals with the appointment of the Arbitrators. It provides that the parties are free to agree on a procedure for appointing of an Arbitrator or Arbitrators. Sub-sections (3), (4) (5) & (6) of section 11 of the Act prescribe the events when a party may request the Chief Justice or his designate to nominate an Arbitrator and the nomination shall be made by the Chief justice or any person designated by him. Mr. R. Koul, learned counsel appearing for the petitioner, vehemently urged that in case, before an Arbitrator is appointed, if a party files an application under section 11 of the Act seeking appointment of an Arbitrator, then the right of other party to appoint Arbitrator ceases. Whereas Mr. D.S. Thakur, learned counsel appearing for the respondents, on the other hand, submitted that though the appointment of the Arbitrator was made, but it was not within 30 days period. The appointment was made of an Arbitrator, according to Mr. Thakur, was valid, as it cannot be said that the right was forfeited after expiry of 30 days from the date of demand/request. His further submission is that there is no automatic forfeiture of the right to appoint an Arbitrator upon expiry of 30 days. 6. On a plenary reading of the provisions of section 11 of the Act, it is clearly envisaged that if one party demands the opposite party to appoint an Arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under section 11, that would be sufficient. In other words, in cases arising under section 11(6), but where the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files the application under section 11 seeking appointment of the Arbitrator. 7. In the present case, it is not in dispute that the demand for appointment of an Arbitrator was made by the petitioner on 25-06-2003, which stood received by the respondents on 30-06-2003. 7. In the present case, it is not in dispute that the demand for appointment of an Arbitrator was made by the petitioner on 25-06-2003, which stood received by the respondents on 30-06-2003. When the Arbitrator was not appointed and dispute arising between the parties referred to him for settlement within a period of thirty days of the demand, the petitioner preferred an application to make appointment and reference of dispute to the Arbitrator on 8-8-2003. The respondents, however, referred the matter to the nominated Arbitrator, Vice-Chancellor of University, vide their letter dated 16-08-2003. This clearly shows that the respondents had forfeited their right to nominate and appoint an Arbitrator after it had failed to comply with the demand made and the petitioner having already filed the petition on 08-08-2003. 8. After taking conspectus of the aforesaid facts and circumstances, it is held that the appointment of the Arbitrator by the respondents is without authority of law. Therefore, in exercise of powers conferred under section 11 of the Jammu & Kashmir Arbitration and Conciliation Act, 1997, I hereby nominate and appoint Mr. Vinod Sharma, Superintending Engineer, JDA, R/O H.No.42, Sector 1-A, Trikuta Nagar, Jammu, as the sole Arbitrator to adjudicate upon the issues, claims and counter-claims of the parties. The fee of the Arbitrator is fixed at Rs. 3,000 per hearing, subject to ceiling of Rs. 30,000. It may, however, be clarified that fee per hearing so fixed would mean effective hearing. The fee shall be shared equally by both the parties, subject to outcome of the award. 9. Petition stands allowed in terms indicated above.