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2013 DIGILAW 696 (JK)

K. N. Singh v. Executive Engineer, PMGSY, Rajouri

2013-11-29

M.M.Kumar

body2013
1. The instant petition under Section 11 of the J&K Arbitration and Conciliation Act, 1997 seeks appointment of Arbitrator. 2. In pursuance of NIT, a contract for construction of road from Rajdhani to Pangrian Package No. JK-12-16, Phase-IV Length 10 Kms Block Manjakote of Rajouri District was awarded to the petitioner. The standard form agreement was executed between the parties on 17.09.2007 and the work was to be completed within a period of nine months. However, after execution of agreement some correspondence took place between the parties. The petitioner-contractor raised the issue by sending a communication on 11.02.2008. The petitioner-contractor apprised the respondents that the work was stopped by the locals due to land dispute on account of non-payment of compensation of acquisition of their land. The aforesaid letter was duly replied. There was further correspondence on that issue. Eventually a final notice was published by the respondents in the English daily (Daily Excelsior) dated 28.08.2009. 3. According to the allegations made in the notice the allotment of work was made on 17.09.2007 and the petitioner-contractor had failed to resume construction of work which had been stopped for more than 40 days. The petitioner-contractor was asked to attend personally or through authorized representative for taking final measurements vide letter dated 13.08.2009, but he failed to turn up. The final notice asked him to attend office of the Executive Engineer, PMGSY Division Rajouri on 03.09.2009 during office hours so as to take final measurement to put the unfinished work to fresh tenders at his risk and cost. Eventually, the contract was terminated by invoking Clause 52 of the Contract Agreement dated 27.07.2011. It has come on record that there is Arbitration Clause 25.4 in the agreement between the parties dated 17.09.2007 and same is set out below in extenso for facility of reference: "25.4 Where the initial contract price as mentioned in the acceptance letter is Rs. 5.00 Crores and below, dispute or difference in which an adjudicator has given a decision shall be referred to a sole arbitrator The sole arbitrator would be appointed by the agreement between the parties; failing such agreement within fifteen days of the reference to arbitration., by the appointing authority, namely the chairman of the executive committee of the India Equipments and machinery Congress. 25.5 Arbitration proceedings shall be held at Srinagar/Jammu India and the language of the arbitration proceedings and that of all documents and communication between the parties shall be in English. 25.6. Performance under the contract shall continue even after reference to the arbitration and payments due to the contractor by the employer shall not be withheld unless they are the subject matter of the arbitration proceedings." 4. The aforesaid narration of facts would show that there is existing dispute between the parties and also there is an arbitration clause in the agreement signed by them. Therefore, both the conditions for making reference to an arbitrator stand satisfied. 5. It is well settled that if the respondents failed to appoint an arbitrator in terms of the arbitration agreement within a period of 30 days then respondents would forfeit the right to appoint an Arbitrator. This period of 30 days is extended till before the time the application under Section 11(6) of the Act is filed. In that regard reliance may be placed on the judgments of Hon'ble the Supreme Court in the cases of Datar Switchgear Limited v. Tata Finance Ltd. and anr. (2000) 8 SCC 151 , Punj Lloyd Ltd. v. Petronet MHB Ltd. (2006) 2 SCC 638 , Danel (Proprietary) Ltd. v. Ministry of Defence (2012) 2 SCC 759 and Deep Trading Corp. v. Indian Oil Corporation (2013)4 SCC 35 . 6. In the present case, it is conceded that no arbitrator was appointed till the date of filing of the instant petition. Accordingly an independent arbitrator has to be appointed as has been held by Hon'ble the Supreme Court in the cases of Datar Switchgears Limited v. Tata Finance Ltd. and anr. (2000)8 SCC 151 and Deep Trading Co. v. Indian Oil Corporation (2013)4 SCC 35 . Accordingly, it is apparent from the record that the petitioner-contractor issued notice of appointment on 09.07.2010 (Annexure-"G"), which was followed on 22.01.2011 (Annexure-"H"). Despite the notices issued by the contractor through their counsel, respondent has not appointed any arbitrator. Eventually the instant petition was filed on 10.06.2011. In view thereof an independent arbitrator has to be appointed by the Court. 7. As a sequel to the above discussion, this petition succeeds, Mr. R. C. Kotwal (Retd.) Chief Engineer is appointed as Arbitrator. He shall enter upon the reference and decide the same in accordance with law. 8. Eventually the instant petition was filed on 10.06.2011. In view thereof an independent arbitrator has to be appointed by the Court. 7. As a sequel to the above discussion, this petition succeeds, Mr. R. C. Kotwal (Retd.) Chief Engineer is appointed as Arbitrator. He shall enter upon the reference and decide the same in accordance with law. 8. The Registrar (Judicial) shall send an intimation to the arbitrator as early as possible preferably within two weeks. 9. Petition disposed of.