Research › Search › Judgment

Rajasthan High Court · body

2016 DIGILAW 1477 (RAJ)

Singhal Construction Company Registered Partnership firm B Narain Gate, Bharatpur through its partner Shri Gopal Chand Singhal son of Late Shri Goverdhan Singhal v. Rajasthan State Agriculture Marketing Board through Administrator, Pant Krishi Bhawan, Janpath, Jaipur

2016-10-07

MOHAMMAD RAFIQ

body2016
ORDER : 1. This application under Sections 10 and 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') has been filed by the applicant Singhal Construction Company, which is a partnership firm, through its partner Gopal Chand Singhal, with the prayer that an independent arbitral tribunal may be appointed for resolution of its disputes with the respondents. 2. Factual matrix of the case as averred in the application is that the applicant is a partnership firm registered as 'A' class contractor with the Public Works Department. The respondents invited tender for construction of 5 Links Roads under MDFF Packages. Offer of the applicant being found lowest, the respondents accepted the same and awarded contract for aforesaid construction to the applicant vide order dated 17.10.1998. Estimated cost of the work was Rs. 69,92,335.00 and stipulated time for completion of work was 15 months from 11.10.1998. Thus, date of commencement and completion of work were fixed respectively as 11.10.1998 and 10.01.2000. The applicant deposited a sum of Rs. 3,49,000/- as performance guarantee/bank guarantee in favour of the respondents. In order to execute the work an Agreement 10/98-99 was executed and signed between the parties. 3. Learned counsel for the applicant submitted that the respondents did not provide lay out plan in time, changed the specifications time and again and also failed to provide clear site to the applicant for construction. The respondent-department failed to acquire the land, give compensation to the land holders reluctantly, who knocked the door of the courts of law and stay order were granted in their favour. The respondents also failed to settle the agitation and protest of the villagers in constructing the roads because their crops were standing on the site and the site was still in their possession and cultivation. For all these reasons, the work could not be completed. After lapse of stipulated date of completion of the work, the respondents department without consent of the applicant extended interim time period up to 30.06.2000. It is argued that the respondents were fully responsible for non-execution of the work in time, even then without affording an opportunity of hearing and notice to show cause, the respondents unilaterally imposed deducted liquidated damages @ 0.03% of Rs. 1,84,342/- on the applicant. Yet, despite request of the applicant to finalize the work at that particular stage, the respondents failed to finalize the bill. 1,84,342/- on the applicant. Yet, despite request of the applicant to finalize the work at that particular stage, the respondents failed to finalize the bill. There was delay in execution of the work, which was beyond control of the applicant and the applicant was not liable for such delay. 4. It is argued that in the circumstances so narrated, the applicant exercised arbitration clause 23 of the agreement signed between the parties and requested the respondents to refer the dispute to Empowered Standing Committee. When no action was taken, the applicant moved application for appointment of arbitrator before this Court. However, during pendency of the application, the respondents referred the dispute to the Empowered Standing Committee. The applicant filed objections with regard to constitution of the Standing Empowered Committee. Even then, the Standing Committee passed the award. The applicant challenged the award by filing objections under Section 34 of the Act of 1996 before the District and Sessions Judge, Alwar which vide judgment dated 16.05.2009 set aside the award. Learned counsel for the applicant, therefore, submitted that independent arbitrator may now be appointed so as to resolve the disputes between the parties. It is argued that Division Bench judgment of this Court in State of Rajasthan & Others Vs. SPML INFRA Ltd. & Another, 2015 (4) WLC (Raj.) 375 and Single Bench Judgment of this Court in M/s. Mohammed Arif Contractor Vs. State of Rajasthan & Another, 2015 (4) WLC (Raj.) 32 holding that Clause 23 in the format of agreement in Public Works Department of State Government is not a arbitration clause, have not been correctly decided. It is contended that Division Bench of this Court in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr.(supra) has not noticed binding decision of another Division Bench in M/s. Suri Constructions Vs. State of Rajasthan & Others, 2005 (4) WLC(Raj.) 563, which held Clause 23 of the agreement as arbitration clause. Subsequent judgment delivered by Single Bench of this Court in M/s. Mohammed Arif Contractor (supra) was based on Division Bench judgment in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr. (supra). Therefore, both the judgments are liable to be ignored, as per incurium, as the previous judgment by Benches of equal and higher strength would still be binding. 5. Vs. SPML INFRA Ltd. & Anr. (supra). Therefore, both the judgments are liable to be ignored, as per incurium, as the previous judgment by Benches of equal and higher strength would still be binding. 5. Learned counsel for the respondents opposed the application and argued that Clause 23 of the agreement has rightly been held to be not an arbitration clause by Division Bench of this Court in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr. (supra) and judgment delivered by Single Bench of this Court in M/s. Mohammed Arif Contractor(supra). Present application, therefore, deserves to be dismissed. 6. I have given my anxious consideration to rival submissions and perused the material on record. 7. Although the question whether or not Clause 23 of the agreement in the present case is arbitration clause has been set at rest by Division Bench of this Court in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr.(supra) and Co-ordinate Bench of this Court in M/s. Mohammed Arif Contractor(supra), but the learned counsel for the applicant has sought to re-agitate this issue citing another Division Bench judgment of this Court in M/s. Suri Constructions(supra) and arguing that since earlier Division Bench judgment in M/s. Suri Constructions(supra) was ignored by the subsequent Division Bench and since the judgment of the Single Bench of this Court in M/s. Mohammed Arif Contractor(supra) was based on the judgment of the Division Bench of this Court in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr.(supra), therefore, later two judgments are liable to be ignored as per incurium and earlier Division Bench Judgment in M/s. Suri Constructions(supra) would still have a binding force. In this view of the matter, it is deemed appropriate to consider the question in the light of rival submissions made whether or not Clause 23 of the agreement in the present case is indeed an arbitration clause. 8. In this view of the matter, it is deemed appropriate to consider the question in the light of rival submissions made whether or not Clause 23 of the agreement in the present case is indeed an arbitration clause. 8. In order to better appreciate arguments of the parties, it is deemed appropriate to reproduce Clause 23 of the agreement in extenso, which reads as under: “Clause 23-if any question, difference or objection whatsoever shall, arise in any way in connection with or arising out or this instrument of then meaning of operation of any part thereof or the rights, duties or liabilities of either party, then save in so far as the decision of any such matter as herein before provided for and been so otherwise, every such matter constituting a total claim of Rs. 50,000/- or above, whether its decision has been otherwise provided for and whether it has been finally decided accordingly or whether the contract should be terminated or has been rightly terminated and as regards the rights of obligations of the parties as the result of such terminations shall be referred to for decision to the empowered standing committee which would consist of the following: (1) Addl. Chief Engineer, R.S.A.M.B.(convenor) (2) Nominee of Director, Agri. Marketing not below the rank of Addl. Director (3) Chief Accounts Officer, R.S.A.M.B. (4) S.E. concerned The Engineer-in-charge on receipt of application along with prescribed fee which shall be two percent of the amount in dispute, from the contractor shall refer the dispute to the committee within a period of one month from the date of receipt of application.” 9. Whether or not Clause 23 of the agreement is an arbitration clause, would require thorough survey of the decided case laws touching upon the core of the issue. 10. The Supreme Court in Vishnu (Dead) by LRs. VS. State of Maharashtra & Others, (2014) 1 SCC 516 while considering Clause 30 of B-1 Agreements between the parties, which empowered Superintending Engineer to immediately resolve any controversy relating to specifications, designs, drawings, quality of workmanship or material used, etc. 10. The Supreme Court in Vishnu (Dead) by LRs. VS. State of Maharashtra & Others, (2014) 1 SCC 516 while considering Clause 30 of B-1 Agreements between the parties, which empowered Superintending Engineer to immediately resolve any controversy relating to specifications, designs, drawings, quality of workmanship or material used, etc. and providing that his decision shall be binding on contractor, held that such clause was not an arbitration clause as power conferred upon Superintending Engineer is in the nature of departmental dispute resolution mechanism meant for expeditious sorting out of problems that arise during execution of work and nothing can be inferred from Clause 30 that parties had conferred role of arbitrator upon Superintending Engineer. Power conferred upon the Superintending Engineer to take decision on matters enumerated in Clause 30 did not involve adjudication of any dispute or lis between Government and the contractor. 11. This judgment was later on followed in P. Dasaratharama Reddy Complex Vs. Government of Karnataka & Another, (2014) 2 SCC 201 . Therein, the appellant contractor filed an application under Sections 11(6) and (8) of the Act of 1996 for appointment of an arbitrator for adjudication of all the disputes pertaining to a contract. The Designated Judge dismissed the application observing that Clause 29 of the contract cannot be construed as an arbitration agreement or an arbitration clause for settlement of disputes. As per Clause 29(a), any dispute or difference, irrespective of its nomenclature in matter, relating to specifications, designs, drawings, quality or workmanship or material used or any question relating to claim, right in any way arising out of or relating to the contract designs, drawings etc. or failure on the contractor's part to execute the work, whether arising during the process of the work or after its completion, termination or abandonment, had to be first referred to the Chief Engineer or the Designated Officer of the Department. Clause 29(b) provided that the Chief Engineer's decision in respect of every dispute or difference so referred shall be final and binding upon the contractor. Clause 29(b) provided that the Chief Engineer's decision in respect of every dispute or difference so referred shall be final and binding upon the contractor. Clause 29(c) provided for the remedy in case decision of Chief Engineer was not acceptable to contractor then he may approach the law courts for settlement of dispute, after giving due written notice in this regard to the Chief Engineer within a period of ninety days from the date of receipt of the written notice of the decision of the Chief Engineer. Clause 29(d) provided that if the Chief Engineer has given written notice of his decision to the contractor and no written notice to approach the law court has been communicated to him by the contractor within a period of ninety days from receipt of such notice, the same decision shall be final and binding upon the contractor. Clause 29(e) provided that if the Chief Engineer fails to give notice of his decision within a period of ninety days from the receipt of the contractors request in writing for settlement of any dispute or difference as aforesaid, the contractor may within ninety days after the expiry of the first named period of ninety days approach the law courts, giving due notice to the Chief Engineer. 12. Thus, Clause 29 of the agreement in that case was quite similar to Clause 23 of the agreement in the present case, which has also been made subject to Clause 51 of the agreement. Clause 51 inter alia provides that in the event of any dispute arising between the parties in respect of any matters comprised in the agreement, the same shall be settled by a competent court having jurisdiction over the place where agreement is executed and by no other court. 13. The Supreme Court in J. Kodanda Rami Reddy Vs. State of Andhra Pradesh & Others, (2011) 1 SCC 197 was dealing with a case where order appointing arbitrator was not challenged by the Government, even though para 2 of GOM dated 24.10.1983 provided that all claims above Rs. 50,000/- shall be laid before the Court of competent jurisdiction. Total 14 claims were raised by the appellant worth of which was more than Rs. 50,000/-, even then the Government did not challenge the order passed by the civil court appointing arbitrator under Section 8(2) of the Arbitration Act, 1940. 50,000/- shall be laid before the Court of competent jurisdiction. Total 14 claims were raised by the appellant worth of which was more than Rs. 50,000/-, even then the Government did not challenge the order passed by the civil court appointing arbitrator under Section 8(2) of the Arbitration Act, 1940. The arbitrator rejected some of the claims and allowed some of them and filed award before the Civil Court. The Government filed objections for setting aside the award, which were rejected by the Civil Court, which made the award rule of the Court. The Government then filed appeal before the High Court. The appeal was allowed by the High Court holding that in view of the relevant clause in the GOM, arbitrator could not be appointed, therefore, while setting the award, appellant was permitted to convert his application under Section 8 of the Act into regular civil suit by carrying out necessary amendments. In those facts, the Supreme Court, relying on its earlier judgment in State of A.P. & Another Vs. Obulu Reddy, (1999) 9 SCC 568 held that aforesaid clause of the GOM cannot be held to be arbitration clause. 14. The Supreme Court in State of Orissa & Others Vs. Bhagyadhar Dash, (2011) 7 SCC 406 , was dealing with a case in which Chief Justice of High Court appointed arbitrator holding that sentence in proviso to Clause 10 of conditions of contract was an arbitration agreement since it provided that in the event of dispute between parties as to claim for increase in rates for certain items decision of Superintending Engineer (SE) is final. The Supreme Court held that clause empowering Engineer-in-Charge to execute non-tendered additional items of work and if contractor is not satisfied with the determination of rate for such work, rate to be finally determined by Superintending Engineer, was not an arbitration clause because it does not (i) refer to arbitration as mode of settlement of disputes, (ii) provide for reference of disputes between parties to arbitration, (iii) make decision of Superintending Engineer binding on either party, (iv) provide or refer to any procedure which would show that Superintending Engineer has to act judicially after considering submissions of both parties, (v) disclose any intention to make Superintending Engineer an arbitrator in respect of disputes that may arise between parties, and (vi) make decision of Superintending Engineer final on any dispute other than on a claim for increase in rates for non-tendered items. It was further held that such decision of Superintending Engineer is not a judicial determination, but mere decision of one party to the contract, which is open to challenge in a court of law. Such clause was, therefore, held to be not an arbitration clause. 15. In Jagdish Chander Vs. Ramesh Chander & Others, (2007) 5 SCC 719 , the Supreme Court held that it was not permissible for Chief Justice or his designate to appoint an arbitrator to adjudicate the dispute between the parties in the absence of an arbitration agreement or mutual consent. The principles as to in what situation arbitrator should be appointed culled out in that judgment are as follows: “(i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and an willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement. While there is no specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement. (ii) Even if the words 'arbitration' and 'arbitral tribunal (or arbitrator)' are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are : (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them. (iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to Arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes, contains words which specifically excludes any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agreement, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the Authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the Authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement. (iv) But mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. (iv) But mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.” 16. In International Amusement Limited Vs. India Trade Promotion Organization & Another, (2015) 12 SCC 677, the Supreme Court, following the judgment of P. Dasaratharama Reddy Complex(supra), held that essence of arbitration is adjudication of disputes by independent/neutral person/body. Clause 28 of the agreement in that case provided that in case of any dispute arising out of or in connection with this agreement, the disputes shall be referred to the sole arbitration of the Chairman, India Trade Promotion Organization or his nominee whose decision/award shall be final, conclusive and binding on the parties. Such Clause providing that in case of disputes, decision/award by officer or authority of one of the parties shall be final, conclusive and binding on the parties was held to be not an arbitration clause. The Supreme Court in Payal Chawla Singh Vs. Such Clause providing that in case of disputes, decision/award by officer or authority of one of the parties shall be final, conclusive and binding on the parties was held to be not an arbitration clause. The Supreme Court in Payal Chawla Singh Vs. Coca-Cola Company & Another, (2015) 13 SCC 699 held that presence of clause providing for exclusive jurisdiction of courts in a particular city in contract negates claim of existence of arbitration clause in contract. 17. In Karnataka Power Transmission Corporation Limited & Another Vs. Deepak Cables (India) Limited, (2014) 11 SCC 148 , Clause 48 of the agreement provided for disputes or differences arising out of performance of works to be referred to and settled by the Engineer within 30 days and his decision was to be final and binding on parties until completion of works. Construing said clause as arbitration clause, the Designate Judge of the High Court appointed sole arbitrator to adjudicate matters in disputes. The Supreme Court held that said clause, not having provided any procedure by which Engineer is required to act judicially by following principles of natural justice or to consider submissions of both parties, cannot be treated as arbitration clause. 18. Coming now to the argument that earlier Division Bench judgment in M/s. Suri Constructions(supra) having not been noticed in later Division Bench judgment in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr.(supra) would still hold field, it may be noted that the Division Bench in M/s. Suri Constructions(supra) based its decision on the judgment of the Supreme Court in State of Rajasthan & Others Vs. M/s. Nav Bharat Construction Co., (2005) 1 WLC(SC) Civil 586 and also took note of Clause 23, which was in existence in that case prior to 1996 and was different than Clause 23 with which this Court is presently concerned. Following observations made in para 12 of the judgment are relevant for this purpose: “12. A bare perusal of the aforesaid clause 23 in the present case as well as in the case before Hon'ble Supreme Court in State of Rajasthan and others Vs. M/s. Nav Bharat Construction Co. Following observations made in para 12 of the judgment are relevant for this purpose: “12. A bare perusal of the aforesaid clause 23 in the present case as well as in the case before Hon'ble Supreme Court in State of Rajasthan and others Vs. M/s. Nav Bharat Construction Co. (Supra) clearly reveal that in the present case Arbitration Clause 23 deals with any question, difference or objection, in any way in connection with or arising out of this instrument, or the meaning of operation of any part thereof with the further reference for decision and prerequisite condition for reference i.e. Notice and the requisite fee as well as the reference to the Committee within a period of one month from the date of receipt of the application whereas in case of Hon'ble Supreme Court in State of Rajasthan and others Vs. M/s. Nav Bharat Construction (Co.) (supra) the opening words are “except where otherwise specified in the contract” clearly reveal that the same is a residuary clause for filling the gap with regard to specifications, decisions, drawings and instructions and further there is no reference of any dispute arising between the parties in connection with or arising out of the instrument. Apart from the above, the case before Hon'ble Supreme Court was under the Act of 1940 which clearly reveal that the clause 23 which was in existence was prior to 1996, 23 of agreement of 2002 which came into force after Act of 1996. We are of the view that the clause 23 before the Hon'ble Supreme Court was not of arbitration whereas clause 23 of the present case is of arbitration.” 19. The Division Bench of this Court in M/s. Suri Constructions (supra) was considering Clause 23 which existed prior to 1996 that it was different than Clause 23 which has now been incorporated in format of contract agreement of Public Works Department of the State. Even then, the Division Bench, on the strength of M/s. Nav Bharat Constructions Co.(supra) proceeded to hold Clause 23 as arbitration clause primarily because it held that the respondent-State neither during the proceedings on the application for referring the matter to the arbitrator nor before the learned Single Judge had held that Clause 23 is not the arbitration clause. Clause 23 in the present case is different than Clause 23 which was considered in Nav Bharat Constructions Co.(supra). Clause 23 in the present case is different than Clause 23 which was considered in Nav Bharat Constructions Co.(supra). Thus, clearly Clause 23 that was required to be considered in M/s. Suri Constructions(supra). The respondents are very much disputing that Clause 23 can be construed as arbitration clause. 20. On the other hand, Division Bench in State of Rajasthan & Ors. Vs. SPML INFRA LTD. & Anr.(supra) has based its decision in arriving at conclusion that Clause 23 is not an arbitration clause by relying on the judgment of the Supreme Court in State of Orissa & Others Vs. Bhagyadhar Dash(supra) and held as under: “18. xxxxxxxxxxxxxxxxxxxxxxxx A writ court under Article 226 of the Constitution of India, cannot take away the jurisdiction vested under Section 110 of the Act of 1996 on the Chief Justice or the Judge designated by him. Such powers are to be exercised only by the Chief Justice or the Judge designated by him, and cannot be exercised indirectly or by reference in exercising jurisdiction under Article 226 of the Constitution of India. Ordinarily, the High Courts under Article 226 of the Constitution of India do not exercise powers, which are vested under the special Act on either the Chief Justice or any Judge nominated or designated under the Act. It is well settled that when something is required to be done under the statutory Act in a particular manner, it should be done in a same manner and not otherwise. Learned Single Judge could not have, even in the alternative, directed the matter to be decided by a retired Judge of the Court by nominating the Judge. The directions issued by learned Single Judge are clearly contrary to the scheme of the Act of 1996 for nominating an arbitrator, in case parties fail or neglect to appoint an arbitrator in accordance with the arbitration clause contained in the agreement.” 21. Aforesaid distinction has been noticed by Co-ordinate Bench of this Court in M/s. Mohammed Arif Contractor(supra) which noted that decision of later Division Bench of this Court in State of Rajasthan & Ors. Vs. SPML INFRA Ltd. & Anr.(supra) which is founded on principle of law laid down by the Supreme Court in Bhagyadhar Dash(supra) has to be preferred. The Co-ordinate Bench of this Court in para 17 of the judgment held as under: “17. Vs. SPML INFRA Ltd. & Anr.(supra) which is founded on principle of law laid down by the Supreme Court in Bhagyadhar Dash(supra) has to be preferred. The Co-ordinate Bench of this Court in para 17 of the judgment held as under: “17. If the afore stated principles/guidelines are applied to the facts of the present case, it appears that the Standing Committee for settlement of disputes as mentioned in the said clause 23 consist of the members, who are the concerned Secretaries and the Engineers of the concerned department of the government, and therefore such committee could not be termed to be a private tribunal by any stretch of imagination. There is nothing in the said clause 23 to suggest that both the parties to the contract had any intention to be bound by the decision of the said Committee. On the contrary, Clause 51 of the said agreement states that in the event of any differences arising between the parties in respect of any matters comprised in the agreement, the same shall be settled by the competent Court having jurisdiction over the place, where the agreement is executed and by no other Court, after completion of proceedings under Clause 23 of the contract. From the bare perusal of the said clause 51, it clearly transpires that it was kept open for both the parties to approach the competent court having jurisdiction for settling the disputes, after the completion of proceedings under Clause 23 of the agreement in question. The non adjudicatory decision of the empowered committee under Clause 23, was made subject to the right of the parties to seek remedy as per Clause 51. Therefore such Clause 23 could not be termed as the arbitration Clause, as held by the Apex Court in case of P. Dasaratharama Reddy Complex (supra).” 22. In view of parameters of law laid down by the Supreme Court in umpteen of decisions, it would be clear that Clause 23 of the agreement cannot be held to be an arbitration clause as such clause provides for empowered standing committee consisting of Additional Chief Engineer, Secretaries of the concerned department, which cannot be described as a private tribunal of arbitrators. Aforesaid clause does not contain any stipulation that the empowered standing committee would be required to give opportunity to the parties to give their evidence and render its decision after hearing them. Aforesaid clause does not contain any stipulation that the empowered standing committee would be required to give opportunity to the parties to give their evidence and render its decision after hearing them. No procedure has been prescribed as to and in what manner said Committee shall conduct its proceedings. Binding nature of the decision of the standing empowered committee is expressly doubtful, as Clause 51 of the agreement provides that in the event of any dispute arising between the parties here to in respect of any of the matters comprised in this agreement, the same shall be settled by a competent court having jurisdiction over the place where agreement is executed and by no other court. Therefore, decision of the empowered standing committee cannot be termed as a judicial decision. Even from the perspective of Section 12(5) read with entry first and fifth of Schedule Fifth and Seventh of Arbitration and Conciliation (Amendment) Act, 2015(for short 'the Amendment Act of 2015'), it is found that since the empowered standing committee consists of Secretaries and Engineers of the concerned department, it cannot be considered as arbitral tribunal because the Parliament by the aforesaid amendments has emphasized for appointment of an independent and impartial arbitrator. 23. Section 12(1) of the Amendment Act of 2015 provides that when a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances, (a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality and (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months. Section 12(5) of the Act provides that notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule, shall be ineligible to be appointed as an arbitrator. Section 12(5) of the Act provides that notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule, shall be ineligible to be appointed as an arbitrator. Clauses 1 of both Schedule Fifth and Seventh are similarly worded which provide that if the arbitrator is an employee, consultant, advisor or has other past or present business relationship with a party, it would give rise to justifiable doubts as to his independence or impartiality. Clauses 5 of both Schedule Fifth and Seventh also provide that for a similar consequence, if any arbitrator happens to be manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration. Sub-section (5) of Section 12 of the Amendment Act of 2015 has been given overriding effect over any prior agreement to the contrary. Therefore, independence and impartiality of arbitrator as mandated by Amendment Act of 2015 has now been made paramount Consideration for appointment of arbitrator. 24. There is no merit in this application and the same is accordingly dismissed. 25. However, it would be open to the applicant to avail his remedy in accordance with Clause 51 of the agreement and while doing so, the applicant would be entitled to benefit of Section 14 of the Limitation Act for pursuing wrong remedy with due diligence and in good faith.