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2006 DIGILAW 2389 (DEL)

SHIV CHAND KUMAR v. N. B. C. C. LTD.

2006-12-20

MANJU GOEL

body2006
MANJU GOEL, J. ( 1 ) THESE are five applications under Section 11 of the Arbitration and conciliation Act, 1996 for appointment of an Arbitrator. The applicants are the building contractors. The respondent, National Building Constructions corporation Limited, is engaged in construction business. The respondent awarded civil construction works of different kinds to the applicants at NBCC's project site at Jawahar Navodaya Vidyalaya, Samoh (Etawah), U. P. vide separate agreements. Clause 25 of each of the agreements require the Chairman-cum-Managing Director of the respondent or Director (NVS) to refer any dispute between the parties to arbitration. Dispute between the parties arose on account of the respondents failure to release the dues claimed by the applicants. The applicants issued notices requesting the Chairman-cum-Managing Director of the respondent to appoint an Arbitrator. The applicants in respect of five disputes have filed five different applications for appointment of an Arbitrator. The applicants pray for an appointment of an independent and impartial Arbitrator. The work contract, the value of the claim and the date of the agreement of the different claims are given as under: Number of Arbitration Application A. A. No . 206/2006 Name of Civil Work Date of Agreement Value of the claim 26. 10. 1998 Rs. 13,06,000/- A. A. No . 207/2006 08. 06. 1999 Rs . 4,06,141/- A. A. No . 208/2006 Construction of boundary wall at NBCC's Project site at Jawahar Navodaya Vidyalaya , Somoh (Etawah), U. P. Construction of septic tank and sewerline at Jawahar Navodaya Vidyalaya , Somoh (Etawah ), U. P. Construction of Type-I quarters at Jawahar Navodaya Vidyalaya , Somoh (Etawah), U. P. Construction of Type-III quarters at Jawahar Navodaya Vidyalaya , Somoh (Etawah), U. P. 24. 04. 1997 Rs. 13,52,000/- A. A. No . 209/2006 24. 04. 1997 Rs. 16,37,000/- A. A. No . 210/2006 Work of P/l of RCC NP-2 pipes at Jawahar Navodaya Vidyalaya , Somoh (Etawah), U. P. 04. 11. 1099 Rs . 7,28,500/- ( 2 ) THE respondent has opposed the applications. In reply to the application, the respondent admits award of the work to the applicants but says that no payment is due to the applicants. It is further contended that as per clause 25 of the agreement, no person can be appointed as the Arbitrator except the Chairman-cum-Managing Director of the respondent and that the respondent has appointed Shri anurudhan Jain, Arbitrator, on 8. 7. 2005. It is further contended that as per clause 25 of the agreement, no person can be appointed as the Arbitrator except the Chairman-cum-Managing Director of the respondent and that the respondent has appointed Shri anurudhan Jain, Arbitrator, on 8. 7. 2005. ( 3 ) THE applicants are opposing the appointment of Shri Anurudhan Jain. It is contended on behalf of the applicants by Mr. Rajeshwar Kumar Gupta that the respondent had the right to appoint the Arbitrator only till the application under Section 11 of the Arbitration and Conciliation Act was filed. According to him, once the respondent has failed to appoint an Arbitrator as per the terms of the agreement and the Designated Authority has been moved by an application under Section 11 of the Arbitration and Conciliation Act the respondent loses his right to appoint an Arbitrator. Reliance has been placed on the DB judgment of this court in the case of Union of India vs. RR Industries and Ors. , 120 (2005) DLT 572 (DB ). The judgment of the DB has relied upon a judgment of the supreme Court in the case of Datar Switchgears Ltd. vs. Tata Finance Ltd. and anr. , (2000) 8 SCC 151 . The relevant extract is reproduced as under:"so far as cases falling under Section 11 (6) are concerned such as the one before us, no time limit has been prescribed under the Act whereas a period of 30 days has been prescribed under Section 11 (4) and Section 11 (5) of the Act. In our view, therefore, so far as Section 11 (6) is concerned, 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 party first has moved the Court under Section 11, that would be sufficient. In other words in cases arising under Section 11 (6) if 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 application under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. Only then the right of the opposite party ceases. " ( 4 ) IN the present cases the respondent did not appoint an Arbitrator within the stipulated period by the agreement. Nor did the respondent appoint the arbitrator at any time before the present applications were filed. The applicant could do nothing other than knocking at the doors of the Designated Authority. Applying the principles laid down in the passage quoted above, I am of the opinion that the applicants are entitled to have an Arbitrator appointed by the designated Authority. Both parties suggested names of engineers who could be appointed as Arbitrator in this case. However, both parties expressed reservations in respect of the each others choice. ( 5 ) ACCORDINGLY, keeping in view the nature of dispute between the parties, it will be appropriate to appoint a senior engineer from an independent organization. I, therefore, appoint Mr. Niranjan Singh, Superintending Engineer, central Division, I. P. Estate, New Delhi " 110002 as the Arbitrator in these five cases. He will fix his own fees commensurate with the nature of the dispute and the value of the claim.