Akola Pravasi Va Malvahtuk Sahakari Sanstah Maryadit v. Municipal Corporation of City of Amravati
2013-07-05
ANOOP V.MOHTA
body2013
DigiLaw.ai
JUDGMENT 1. The application is heard finally with the consent of the learned counsel for the parties. 2. The applicant has invoked Section 11 of the Arbitration and Conciliation Act, 1996 and prayed for appointment of an arbitrator in view of the Arbitration Clause, which is as under: 21. ARBITRATION:- In case of any dispute, the same shall be referred to the committee appointed by the commissioner consisting of 5 persons which will comprise of commissioner or his representative, Divisional Controller, MSRTC, Amravati, agent's representative, RTO and Incharge Engineer (Automobile) and the decision of the committee shall be final and binding on the Agent. If the Agent is dissatisfied with such decision, the Agent within a period of 30 days from the receipt of the decision, shall indicate his intention to refer the dispute to the arbitration, failing which the said decision shall be conclusive and the same shall not be questioned. Within 30 days of the receipt of notice from the Agent of his intention to refer the dispute to Arbitration, the Municipal Commissioner shall send the Agent a list of three (3) Officers of the rank of not less than Deputy Secretary to the Government of Maharashtra and who have not been connected with the work under the contract. The Agent shall within 15 days of the receipt of such list, select one of them, who shall then be appointed as the Sole Arbitrator by the Corporation. The Arbitration proceedings shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification thereunder. That only because the matter is referred to arbitration will not entitle the Agent to continue the agreement without making payment of the installments due and payable to the Bank in the Loan account and payment of Royalty to the Corporation and without fulfilling all other terms and conditions and clauses of this agreement and the Corporation shall be entitled to terminate the contract under the provisions and terms and conditions contained in this agreement. The Agent shall not be entitled to claim any interim relief from the Court on the ground that the matter has been referred to arbitration. The Agent shall not be entitled to claim any kind of interest on any of his claim/s as per the Interest Act or any other provisions.
The Agent shall not be entitled to claim any interim relief from the Court on the ground that the matter has been referred to arbitration. The Agent shall not be entitled to claim any kind of interest on any of his claim/s as per the Interest Act or any other provisions. That all the award/s shall be in writing and in case of the award being for Rs.1,00,000/-or more, then such award shall state the reasons for the amount so awarded. 3. This Court, by an order dated 28.06.2013 observed as under: 1. The learned Counsel appearing for the contesting respondent states that in pursuance of the Clause 21 of the Agreement, appointment of Five Members Committee is under process and therefore, the petition is premature. 2. The representation of the applicant, if considered favourably by the Committee itself, the present petition can be disposed of as there is no question of granting any other prayer in the petition under Section 11 of the Arbitration and Conciliation Act and specifically stay or interim arrangement so asked. The designated Court has no jurisdiction under Section 11 to pass such order. 3. Stand over to 05.07.2013 for final disposal." 4. The learned counsel appearing for the applicant, on instructions, fairly stated that the applicant is not pressing prayer clauses (d) to (g). 5. Liberty is granted to the applicant to initiate appropriate proceedings in accordance with law so far as prayer clauses (d) to (g) are concerned. 6. Considering the arbitration clause as referred above, it is clear that the applicant is also under obligation to provide the name of his representative so as to constitute the five member committee in terms of the first part of Clause 21. The statement is made by the advocates for both the parties that the applicant has nominated his representative however that is under confirmation. This itself means both the parties have completed the formalities which are required for the constitution of five members committee. The dispute, therefore, even if so raised is pending since 2011 and now the same is required to be adjudicated by the committee as early as possible to avoid further delay.
This itself means both the parties have completed the formalities which are required for the constitution of five members committee. The dispute, therefore, even if so raised is pending since 2011 and now the same is required to be adjudicated by the committee as early as possible to avoid further delay. It is held in (2013) 4 Supreme Court Cases 35) Deep Trading Company Versus Indian Oil Corporation & others that if the non-applicant fails to appoint the arbitrator though asked for, therefore, the arbitrator need to be appointed in view of the application (reliance is on Paragraph 19), which is as under: "19. If we apply the legal position exposited by this Court in Datar Switchgears to the admitted facts, it will be seen that the Corporation has forfeited its right to appoint the arbitrator. It is so for the reason that on 9-8-2004, the dealer called upon the Corporation to appoint the arbitrator in accordance with the terms of Clause 29 of the agreement but that was not done till the dealer had made application under Section 11 (6) to the Chief Justice of the Allahabad High Court for appointment of the arbitrator. The appointment was made by the Corporation only during the pendency of the proceedings under Section 11(6). Such appointment by the Corporation after forfeiture of its right is of no consequence and has not disentitled the dealer to seek appointment of the arbitrator by the Chief Justice under Section 11(6). We answer the above questions accordingly." 7. In the case before the Supreme Court, there was admittedly an arbitration clause. The other party failed to appoint the arbitrator within prescribed time and, therefore, the observations followed. In the present case, though there is an arbitration clause, that needs to be considered only after the five member committee takes a decision. The aggrieved party, thereafter, within thirty days is entitled to invoke the second part of Clause 21 and pray for appointment of the sole arbitrator. The applicant in the present case, in view of above undisputed position on record, has not crossed the first hurdle which in the present facts and circumstances and in view of specific agreement/ arbitration clause, just cannot be overlooked. The applicant needs to follow the binding arbitration clause in question including the procedure so agreed.
The applicant in the present case, in view of above undisputed position on record, has not crossed the first hurdle which in the present facts and circumstances and in view of specific agreement/ arbitration clause, just cannot be overlooked. The applicant needs to follow the binding arbitration clause in question including the procedure so agreed. The applicant needs to wait for the decision of the five member committee for appointment of the sole arbitrator. There is no bar that the arbitral Tribunal cannot be constituted as there is in-house mechanism available to resolve the dispute. But, in the present case, there is delay on the part of the applicant, as he failed to appoint his representative for the committee. 8. It is made clear that the sole arbitrator would be appointed by consent of both the parties. Therefore, taking overall view of the matter, by keeping all points open, no case is made out by the applicant to appoint the arbitrator at this stage of the proceedings. So far as prayer clauses (b) and (c) are concerned, as the statement is made by the advocates appearing for the parties that they have already constituted five member committee, there is no question of grant of direction as prayed for. The statement would itself suffice the purpose. 9. It is made clear that considering the fact that the applicant has raised a dispute and it is pending since August-2011, it is desirable to adjudicate the claim within six months subject to the confirmation of the constitution of the five member committee. The applicant to co-operate accordingly. 10. The request made by the learned counsel for the applicant to impose costs upon the non-applicants in view of delaying the matter and not taking steps is rejected in view of the observations so referred above. There is no case made out for costs. 11. The application is rejected with liberty. No costs.