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2009 DIGILAW 1613 (PNJ)

Nirmal Singh v. G. M. Northern Railway

2009-09-11

JAGDISH SINGH KHEHAR

body2009
Judgment J.S.Khehar, J. 1. Consequent upon the desire expressed by the Respondents, and in consideration of the claim of the petitioner in furtherance thereof, a contract was executed between the parties at an agreed rate of Rs. 4,5.1,558/- For some reason, the Respondents desired to rescind the contract. Accordingly, a notice dated 26.5.2003 was issued depicting the intention of the Respondents of rescinding the contract. Thereafter a notice was also issued by the Respondents to the petitioner for forfeiture of the earnest amount. 2. For the same work, another tender was floated on 25.7.2003. The tender amount at this juncture was Rs. 5.05,020/-. After considering the tender claim of those who responded to the notice inviting tenders, it was found that the petitioner was the lowest tenderer. The petitioner tenders was accordingly accepted on 30.9.2003. An agreement was accordingly executed between the parties on 29.1.2004. 3. It is not a matter of dispute that litigation in the nature of a civil initiated by the petitioner against the Respondents in respect of the first tender notice valued at Rs. 4.51,558/-. However, the same is only relevant in so far as the present controversy is concerned, to the 1imited extent that a deduction of Rs. 54,262/- is being made by the Respondents from the petitioner as a consequence of certain acts of the petitioner relating to the earlier tender. For this a letter dated 12.10.2004 was issued to the petitioner. The significance of the aforesaid deduction is relevant for the present controversy because the aforesaid deduction was made from the petitioner, out of the amount that had become due to the petitioner from the sub-sequent tender (which was accepted on 30.9.2003, and had been formalized in the shape of contractual agreement dated 29.1.2004). 4. It is not a matter of dispute that the agreement dated 29.1.2004 incorporates an arbitration clause whereby a dispute arising between the parties out of the agreement executed between them, was referable to an arbitrator. When the amount of Rs. 54,262/- was sought to be deducted on 12.12.2004 from the amount which became due to the petitioner on the basis of the agreement dated 29.1.2004, the petitioner issued a legal notice dated 14.10.2004 protesting against the aforesaid action of the Respondents. Since no heed was paid to the legal notice dated 14.10.2004, the petitioner issued a further legal notice dated. 54,262/- was sought to be deducted on 12.12.2004 from the amount which became due to the petitioner on the basis of the agreement dated 29.1.2004, the petitioner issued a legal notice dated 14.10.2004 protesting against the aforesaid action of the Respondents. Since no heed was paid to the legal notice dated 14.10.2004, the petitioner issued a further legal notice dated. In the instant legal notice dated 23.12.2004, the petitioner also claimed appointment of an arbitrator. Since no arbitrator was appointed by the Respondents in furtherance of the aforesaid legal notice dated 23.12.2004, the petitioner has approached this Court by filing the present petition under section 11 of the Arbitration and Conciliation Act, 1996. 5. The prayer made by the petitioner for appointment of an arbitrator has been strongly contested at the hands of the respondents. The first contention advanced by the learned counsel for the respondents is, that the instant deduction which has been ordered to be made on 12.10.2004 valuing Rs. 54,262/- is subject matter of consideration of a contract other than the contract dated 29.1.2004, and as such, the arbitration clause incorporated in the contractual agreement dated 29.1.2004, cannot be the basis for appointment of an arbitrator, nor can the same be the basis for adjudication of the dispute, pertaining to the amount of Rs. 54,262/-. 6. I have considered the first contention advanced by the learned counsel for the petitioner, as has been noticed in the foregoing paragraph. Although, there is no doubt about the fact that the recovery of Rs. 54,262/- is not based on the contractual agreement executed on 29.1.2004. Yet, it cannot be denied that the aforesaid amount of Rs. 54,262/- is being deducted from the amount payable to the petitioner in furtherance of the contract dated 29.1.2004. If the two transaections had been kept apart, it would have been fair for the respondents to raise the contention as has been noticed in the foregoing paragraph. However, if the Respondents have chosen to effect recovery of the amount due under the first contract from the payment due to the petitioner, under the second contract (dated 29.1.2004), it does not lie in the mouth of the Respondents to raise the instant contention. In view of the above, we find no merit in the first contention advanced by the learned counsel for the Respondents. 7. In view of the above, we find no merit in the first contention advanced by the learned counsel for the Respondents. 7. The second contention advanced by the learned counsel for the Respondents is based on the fact that the petitioner has filed a civil suit, raising identically the same controversy (which the petitioner seeks to be adjudicated through arbitration). It is therefore, the submission of the learned counsel for the Respondents, that it is not open to the petitioner to claim the appointment of an arbitrator, or to seek the adjudication of the dispute connected to the recovery of Rs. 54262/- by way of arbitration. 8. It is not possible for me to accept the second contention advanced by the learned counsel for the Respondents. The civil suit pertains to the interse claims between the parties, based on the original i.e., the first contract. The instant arbitration proceedings are based on a deduction of Rs. 54,262/- out of the amount payable to the petitioner under the second contract (dated 29.1.2004). It is therefore, apparent that there is hardly any justification in so far as the second contention is concerned. 9. Since no arbitrator was appointed by the Respondents within the time stipulated under section 11(4) or the Arbitration and Conciliation Act, 1996, it is imperative for me to make such an appointment. I accordingly hereby appoint Shri G.S. Khurana, District and Sessions Judge. (Retd), House No. 271, Medical Enclave, Amritsar, as arbitrator. The arbitrator shall be free to determine his own fee as also other payments for the arbitration proceedings vested in him. He shall determine the aforesaid payment keeping in mind the total claim which, is subject matter of arbitration proceedings, namely, Rs. 54,262/-. The parties shall appear before the arbitrator on 20.10.2009. The Registry of this Court shall furnish a copy of this order to the Arbitrator. Disposed of in the aforesaid terms.