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2006 DIGILAW 420 (DEL)

EN VEE KAY CONSTRUCTION CO v. DELHI DEVELOPMENT AUTHORITY

2006-03-03

ANIL KUMAR

body2006
ANIL KUMAR, J. ( 1 ) THIS is a petition under Section 13, 14 and 15 of the Arbitration and conciliation Act, 1996 by the petitioner for termination/quashing of mandate of superintendent Engineer (Arbn.) II as Arbitrator. ( 2 ) THE case of the petitioner is that Executive Engineer, Northern division No. VIII, Delhi Development Authority, Pitampura, Near T. V. Tower, New delhi invited the tenders for the work of construction of 320 MIG Dus at jahangirpuri including water supply and sanitary installation ? SH; Construction of 176 MIG Dus at Jahangirpuri, New Delhi. The petitioner was one of the tenderer and the work was awarded to petitioner firm by letter no. F. 54 (1051)/ee/nd-VIII/96/237 dated 7th February, 1997. In respect of the work awarded to the petitioner, disputes arose and the arbitration agreement between the parties was invoked and Shri H. B. Jha, Director (Nizarat), development Authority, Vikas Sadan, INA, New Delhi was appointed as Sole arbitrator by the Engineer-Member, DDA. ( 3 ) THE arbitrator appointed by the respondent, Engineer-Member, however resigned after about 9 hearings as he was promoted as Chief Engineer (electrical) and no arbitrator was appointed for a long time entailing filing of a petition under Section 11 of the Arbitration and Conciliation Act for filling the vacancy where respondent No. 1 made a categorical submission by contending that Shri J. D. Pahuja, S. E (Arbn.) ? II, DDA has been appointed as an arbitrator. ( 4 ) THE petitioner contended that letter of appointment of Shri J. D. Pahuja was not given to the petitioner in Court and on getting the letter he found that the appointment of Superintendent Engineer (Arbn.)- II as arbitrator is erroneous and the learned arbitrator has no authority to proceed with the matter as the appointment made by the persona designate that of S. E (Arbn.) ? II as arbitrator is null and void and therefore, the petitioner claimed, declaration that the appointment of S. E (Arbn.) ? II is null and void and quash his appointment and appoint in his place another person as an independent arbitrator. ( 5 ) THE petitioner contended that when the petitioner had moved under section 11 of the Arbitration and Conciliation Act, 1996 it was requested to make the appointment of an independent person as an arbitrator. II is null and void and quash his appointment and appoint in his place another person as an independent arbitrator. ( 5 ) THE petitioner contended that when the petitioner had moved under section 11 of the Arbitration and Conciliation Act, 1996 it was requested to make the appointment of an independent person as an arbitrator. The respondent, however, instead of appointing an independent personal, created the post of superintending Engineer (Arbitration) ? II to act as an arbitrator to proceed with the matter which was a clear violation of the terms of the agreement in the appointment of the arbitrator. In the circumstances, the petitioner claimed that the appointment of S. E (Arbn.)-II as arbitrator is null and void and in the circumstances appointment of another person as an independent arbitrator is sought by the petitioner. ( 6 ) IN support of his contention, the petitioner relied on an order an dated 8th February, 2000 in M/s. Strength and Sports Builder (P) Ltd. Vs. DDA and others, OMP No. 152/1998; 2001 (59) DRJ 412 , K. C. Goel Vs. DDA and M/s express Engineering and Construction Co. Vs. DDA and another, OMP No. 376/2002. ( 7 ) THE petition is contested by the respondents who filed a reply contending that the appointment of Shri J. D. Pahuja whose designation happens to be S. E (Arbn.) ? II is by name and not by designation. The respondents categorically asserted that the plea of the petitioner that appointment is of s. E (Arbn)-II and not of J. D. Pahauja was denied and was stated to be contrary to order dated 15th December, 2004 The respondents have also opposed the petition on the ground that the petition has been filed belatedly after about one year after participating in the arbitration proceedings before the learned arbitrator. The respondents have also objected to the petition on the ground that no objection was taken regarding the jurisdiction of the arbitrator before the learned arbitrator in accordance with section 16 of the Arbitration and conciliation Act,1996 and in any case the plea regarding jurisdiction of the arbitrator could not be taken later after the submission of a statement of defense. It was also averred that the present plea was not raised before the learned arbitrator at any point of time earlier and in the circumstances, the objection now raised is an after thought. It was also averred that the present plea was not raised before the learned arbitrator at any point of time earlier and in the circumstances, the objection now raised is an after thought. ( 8 ) I have heard the learned counsel for the parties and perused the petition and reply filed by the respondents and the documents filed by the parties. The appointment was made by letter dated 15th December, 2004 The relevant portion of the letter dated 15th December, 2004 bearing No. F2 (677)FO (NZ)/dda/632 is reproduced for the sake of reference:"sub: In the matter of Arbitration Between sh. En Vee Kay Construction Co. V/s. Delhi Development Authority name of work: C/o 320 MIG Dus at Jahangirpuri i/c water supply and sanitary installation sh: C/o 176 MIG Dus at Jahangipuri, Delhi agmt. No. : 8/ee/nd-8/dda/96-97 whereas Shri H. B. JHA Director (Nizarat) was appointed as Sole Arbitrator vide letter No. F2 (677)FO (NZ)/dda/616 DT. 16-9-02 in the above matter whereas sh. H. B. JHA the aforesaid arbitrator has resigned due to promotion as Chief engineer (Electrical) vide letter No. HBJ/ce/ei. /arbn. /2004/975 Dt. 13. 8. 04. I, prabhas Singh, Engineer Member, Delhi Development Authority in exercise of the powers conferred upon me under Clause-25 of the agreement hereby appoint Shri j. D. Pahuja S. E. (Arbitrator) OO as Sole Arbitrator to determine the disputes referred to the aforesaid Arbitrator vide aforesaid letter no. F2 (677)FO (NZ)/dda/616 Dt. 16-9-02 in accordance with the said clause 25 of the aforesaid agreement. Shri J. D. Pahuja S. E. (Arbitrator) II may start the proceedings from the stage at which the aforesaid left off. The Arbitrator shall give the reasons for the award. The reference is without prejudice to the defense that may be raised by the respondents regarding the tenability of the claims on all necessary and available grounds including those of limitation. (Prabhash Singh) engineer Member, DDA sh. J. D. Pahuja s. E. (Arbitrator) II DDA copy to: - 1. M/s. EN Vee Kay Constn. Co. B-364, Lok Vihar Delhi ? 110034 (RAD) 2. Ex. Engineer. ND-8, DDA engineer Member, DDA" ( 9 ) ARBITRATION agreement, clause 25 reveals that the reference has to be to a person. (Prabhash Singh) engineer Member, DDA sh. J. D. Pahuja s. E. (Arbitrator) II DDA copy to: - 1. M/s. EN Vee Kay Constn. Co. B-364, Lok Vihar Delhi ? 110034 (RAD) 2. Ex. Engineer. ND-8, DDA engineer Member, DDA" ( 9 ) ARBITRATION agreement, clause 25 reveals that the reference has to be to a person. Clause 25 of the agreement is as under:"clause 25 Except where otherwise provided in the contractor all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality workmanship or materials used on the works or as to any other question claim, right matter or thing whatsoever, in any way arising out of or relating to the contract designs, drawings, specifications, estimates, instruction, 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 of abandonment thereof shall be referred to the sole arbitration of the person appointed by the Engineer Member, Delhi Development Authority at the time of dispute will be no objection to any such appointment that the Arbitrator so appointed is a Delhi Development Authority employee that he had to deal with the matters to which the contract relates and that in the curse of his duties as delhi Development Authority employees he had expressed view on all or any of the matters in dispute of difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Engineer Member, Delhi Development Authority as aforesaid at the time of such transfer, vacation of office or liability 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 it is also a term of this contract that no person other than a person appointed by such Engineer Member, delhi Development Authority as aforesaid should act as arbitrator and, if for any reason that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. In all cases where the amount of the claim in dispute is Rs. 75,000/- (Rupees Seventy Five thousand only) and above the arbitrator will give reason for the award. Subject as aforesaid the provisions of the Arbitration Act, 1940 of any statutory modification or re-enhancement thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under this clause. It is term of the contract that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute. It is also a term of the contract that if the contractor (s) does/do not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the Engineer-in-Charge that the bill is ready for payment the claim (s) of the contractor (s) will be demand to have been waived and absolutely barred and the Delhi Development Authority shall be discharged and released of liabilities under the contract in respect of these claims. " ( 10 ) REFERRING to clause 25 of the Arbitration Clause it is apparent that the Contract provides that the Engineer Member shall appoint a ?person? to adjudicate upon the dispute of the parties. The designation of an office does not come within the definition of ?person?. ?person? is an individual human being and by no stretch of imagination, the ?office? or ?designation? though manned by persons comes within the definition of a person. A designation is not a person and therefore, the Engineer Member could not appoint a post or designation and therefore he could not appoint S. E (Arbn) ? II as an arbitrator. In M/s. Strength and Sports Builders (P) Ltd (supra) decided on 8th February, 2000 it was held that it was wrong for the Engineer Member to appoint an arbitrator by designation, as the Arbitrator ought to have been appointed by name and, therefore, the appointment by way of designation was held to be null and void and the Arbitrator was removed on this ground. This Court in K. C. Goyal (Supra) in paragraph 2 had held as under:-"clause 25 of the Arbitration Clause of the Contract provides that the engineer Member shall appoint a ?person? to adjudicate upon the dispute of the parties. This Court in K. C. Goyal (Supra) in paragraph 2 had held as under:-"clause 25 of the Arbitration Clause of the Contract provides that the engineer Member shall appoint a ?person? to adjudicate upon the dispute of the parties. Instead of appointing a person by name, the Engineer Member appointed superintending Engineer as the Arbitrator. The designation of an office does not come within the definition of ?person?. ?person? is an individual human being and by no stretch of imagination, the ?office? or ?designation? though manned by persons comes within the definition of a person. Thus, the appointment of superintending Engineer by way of designation by the Engineer Member was not in accordance with the provisions of Clause 25 nor was it in accordance with the provision of Law. " ( 11 ) PERUSAL of the order dated 15th December, 2004 clearly reflects that appointment of Shri J. D. Pahuja is by name and not by designation. Had the appointment been by designation, the order would have indicated that superintending Engineer (Arbitration) ? II is appointed as an arbitrator without mentioning the name of the arbitrator or it could be that Superintending engineer (Arbitration) ? II is appointed as an arbitrator who is Shri Shri J. D. Pahuja. Rather the order is categorical that Shri J. D. Pahuja is appointed as an arbitrator who is S. E (Arbitration) ? II. In the circumstances, there can not be any doubt that the Engineer Member had appointed Shri J. D. Pahuja as an arbitrator who is S. E (Arbn.)- II and not the S. E (Arbn.)-II was appointed as an arbitrator as has been contended by the petitioner. ( 12 ) THE learned counsel for the petitioner has laid great emphasis on the orders passed by the Learned Arbitrator in the arbitration proceedings, copies of which have been filed, contending that Shri. J. D. Pahuja has referred himself as S. E. (Arbn.) ? II and therefore, the reference was to S. E. (Arbn.)-II. In my opinion, the contention of the petitioner is without any rational. Shri j. D. Pahuja is S. E. (Arbn.) ? II and therefore, his reference to himself as s. E. (Arbn.)-II does not convert reference to him into the reference to the s. E. (Arbn.)-II in the present facts and circumstances. In my opinion, the contention of the petitioner is without any rational. Shri j. D. Pahuja is S. E. (Arbn.) ? II and therefore, his reference to himself as s. E. (Arbn.)-II does not convert reference to him into the reference to the s. E. (Arbn.)-II in the present facts and circumstances. ( 13 ) THE petitioner has also failed to give any explanation as to why he participated in the proceedings for almost one year without any demur and objection and thereafter has filed the present petition raising objections regarding jurisdiction of the Arbitrator. ( 14 ) CONSEQUENTLY the inevitable inference is that Shri J. D. Pahuja who is s. E. (Arbn.)-II was appointed as an Arbitrator and not the S. E. (Arbn.)-II as has been wrongly contended by the petitioner. Therefore, appointment of shri. J. D. Pahuja by letter dated 15th December,2004 can not be declared to be null and void nor any other person can be appointed as an Arbitrator in his place in the present facts and circumstances. For these reasons the petition is dismissed and the parties are left to bear their own costs. .