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2010 DIGILAW 248 (JHR)

Amrendra Kumar v. State of Jharkhand

2010-02-17

GYAN SUDHA MISRA

body2010
Order This application has been filed under Section 11(6) of the Arbitration &. Conciliation Act, 1996 for appointment of an Arbitrator in order to adjudicate the dispute between the petitioner and the respondent-State in regard to the claim of payment which the petitioner has raised due to execution of the work of civil construction for which a work order was issued to the petitioner by the Minor Irrigation Department, Dumka. 2. It appears that the petitioner in response to an advertisement published by the Executive Engineer, Minor Irrigation Division, Dumka, submited his tender papers for construction of Neem Bani No.1 Scheme (Earthen Dam) within Raneshwar Block, Dumka District for a sum of Rs. 5,68,289/-. The petitioner succeeded in securing the contract for execution of this work for which he also deposited the earnest money and thereafter an agreement for this purpose had also been executed between the parties. One of the Clause in the Agreement vide Clause 23 stipulated that in the event of existence of a dispute between the parties in relation to the execution of the work, an Arbitrator would be appointed by the respondents, who would be the Superintending Engineer of the Circle and the award passed by the said Arbitrator shall be final. 3. The petitioner duly executed the work in pursuance to the contract and also received the entire payment but he claimed further amount and contended that he had not been paid towards full and final claim, which eventually resulted into the emergence of a dispute between the petitioner and the respondents 4. Admittedly, the aforementioned dispute between the parties in regard to the claim of payment will have to be computed on the basis of the measurement of the work executed by the petitioner-Contractor. The petitioner having raised a claim that he has failed to receive the full and final payment for the work which he claims to have executed and alleging that final payment was not made to him, he filed an application before the respondent no. 4 for appointment of an Arbitrator, in view of the Clause in the Agreement to that effect. 5. 4 for appointment of an Arbitrator, in view of the Clause in the Agreement to that effect. 5. The petitioner has come up with a case that in spite of his application, which he had filed within the stipulated time, he failed to receive any response from the respondent-authority and this compelled him to file an application before this Court for appointment of an Arbitrator and for this purpose he has placed reliance on Section 11 (6) of the Act, 1996. Placing reliance on this provision, it was submitted that as the respondents failed to appoint an Arbitrator for adjudication of the dispute, this Court should now exercise its jurisdiction under Section 11 (6) of the Act. 1996 and appoint an Arbitrator as per its discretion for adjudication of the dispute. 6. The question however cropped up as to whether a new Arbitrator should be appointed in place of the Superintending Engineer of the Circle who is the named Arbitrator in the Agreement or another Arbitrator be appointed at the discretion of the Court in terms of Section 11 (6) of the Act of 1996. 7. The counsel for the respondent also could not contradict the position that there is a dispute between the parties in regard to the claim of payment raised by the petitioner and as there is a Clause for appointment of an Arbitrator, who was not appointed in spite of the application of the petitioner, the obvious conclusion is that an Arbitrator has to be appointed to adjudicate the dispute Which has emerged. 8. This Court, therefore, ascertained the quantum of claim raised by the petitioner and it was submitted by the counsel for the petitioner that the petitioner has raised a claim of Rs. 2.00 lacs for the work he has executed and the question of• interest also arises. He however also submitted that the determination of the claim ultimately would rest on the measurem1mt that has to be undertaken by the respondent-Department of Minor Irrigation and it is the measurement which would be the determining factor to decide the claim of the petitioner. In that view of the matter, it was considered just and appropriate by this Court that the Arbitrator, who is named in the Agreement, can also be appointed as the Arbitrator to decide the dispute. 9. In that view of the matter, it was considered just and appropriate by this Court that the Arbitrator, who is named in the Agreement, can also be appointed as the Arbitrator to decide the dispute. 9. At this juncture, a question arose as to whether this Court is bound to appoint another Arbitrator in place of the named Arbitrator in the Agreement, in view of the fact that he had not been appointed by the respondent-Department within the time stipulated in the Agreement and whether it would be appropriate for the Court to appoint the same Arbitrator who has been named in the Agreement. The answer to this question emerges from the fact that when the discretion as per Section 11(6) lies with the Court to appoint an Arbitrator and if the party entitled to appoint an Arbitrator has failed to do so, then whether the statutory discretion of the Court can be read and interpreted so as to infer that a new Arbitrator necessarily has to be appointed in place of the named Arbitrator in the Agreement or the Arbitrator in the Agreement can also be chosen by the Court. 10. In my considered view, if the Court in a particular situation considers it appropriate to appoint the Arbitrator who is named in the Agreement instead of replacing him by a new Arbitrator, the contesting party cannot be held entitled to contend that a new Arbitrator shall have to be appointed in place of the Arbitrator named in the Agreement, even though there is no reason to appoint a new Arbitrator at the discretion of the Court in place of the Arbitrator named in the Agreement. The reason for doing so is not far to seek as ultimately the discretion lies within the domain of the Court to appoint an Arbitrator under Section 11(6) of the Act of 1996 and discretion can be in favour of a new Arbitrator in place of the Arbitrator named in the agreement or a new one, depending upon the existing facts and circumstances and the judgment of the circumstance obviously will lay upon• the Court to appoint someone whose credibility and impartiality is above board. If in a given situation, either of the parties to the Agreement comes up with a case that the Arbitrator having not been appointed in terms of the agreement, would justify appointment of a new Arbitrator for certain reason in a given case, the Court appointing Arbitrator under Section 11 (6) of the Act of 1996, obviously will not be precluded from appointing a new Arbitrator but in the alternative if the circumstances justify that the Arbitrator named in the agreement is also fit to be appointed, then in my view, he cannot be denied to be appointed only on the plea that under Section 11(6), the discretion of the Court should not fall upon the Arbitrator named in the agreement and a new Arbitrator is bound to be appointed. 11. Fortunately, in this matter, counsel appearing for the petitioner has fairly submitted that as the determination of the dispute rests only upon the measurement to be undertaken by the Department, it may be appropriate to appoint the Superintending Engineer of the Circle, who is named in the agreement itself for determination of the dispute, specially when the petitioner has not alleged any mala fide against the named Arbitrator and the nature of dispute is also of a nature which will require measurement of the construction for which the Superintending Engineer would be suitable. 12. I, therefore, deem it appropriate that the Superintending Engineer, Minor Irrigation Circle, Dumka be appointed an Arbitrator for adjudication of the dispute between the petitioner and the respondent-Department of Minor Irrigation in regard to the work order incorporated in the Agreement No. 37F2 of 1985-86. It is expected of the Arbitrator to decide the dispute expeditiously, but not later than a period of four months from the date of receipt of the order. 13. The application, accordingly, is allowed and disposed of.