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2017 DIGILAW 1066 (JK)

Swastik Telecom v. Bharat Sanchar Nigam Ltd.

2017-12-15

M.K.HANJURA

body2017
JUDGMENT : M.K. Hanjura, J. 1. In this petition, the petitioner seeks the revocation of the appointment of respondent No. 4 (Chief General Manager) as the Sole Arbitrator and the appointment of an Independent one to settle the dispute through Arbitration. The facts as these surface from the study of the file under consideration are that the respondent No. 1 invited tenders for the "Annual Maintenance Contract" (AMC) of Infrastructure Equipments at GSM BTS Locations in Jammu SSA vide Tender No. JP/GSM/BTS/tender-I, dated 18.11.2010. After the acceptance of the tender of the petitioner, a contract agreement dated 18.12.2010 came to be executed between the petitioner and the respondent No. 1. The said contract agreement contained an arbitration clause for the settlement of the dispute between the parties. As per the contract agreement, the respondent No. 4, "Chief General Manager, Telecom, Bharat Sanchar Nigam Ltd. Kerala Circle", was nominated as an Arbitrator for the settlement of all the disputes inter-se the parties through arbitration. 2. The case of the petitioner is that the respondents failed to release the payments due to be paid to him despite repeated demands. Therefore, the petitioner vide letter dated 17.09.2016 requested the respondent No. 4 being designated as an arbitrator, to enter upon the reference and settle the dispute as it arose between them. This letter was followed by letters dated 14.10.2016 and 25.11.2016, but to the dismay of the petitioner the respondent No. 4 did not take any steps required to be taken under the contract agreement for the settlement of the dispute, which constrained him to approach this Court for seeking the revocation of the appointment of the said arbitrator and for the appointment of an independent arbitrator. 3. In their objections, the respondents have resisted and controverted the petition of the petitioner on the grounds, inter alia, that it was due to an inadvertence that "CGMT, BSNL, Kerala Circle" was mentioned in Clause 10, running under the head "Dispute and Arbitration", of the contract agreement, which ought to have been "CGMT, BSNL, J & K Circle" for the reason that "CGMT, BSNL, Kerala Circle" has nothing to do with the case of the petitioner. It is submitted that the case falls under the jurisdiction of CGMT, BSNL, J & K Circle, North Block, Bahu Plaza, Jammu and he is the competent authority to appoint an arbitrator in the matter. It is submitted that the case falls under the jurisdiction of CGMT, BSNL, J & K Circle, North Block, Bahu Plaza, Jammu and he is the competent authority to appoint an arbitrator in the matter. There is no cause for the petitioner to pray for the appointment of an independent arbitrator as any question, dispute or difference arising between the parties is under the agreement required to be referred to the CGMT, BSNL, J & K Circle, who has the power to act as an Arbitrator either himself or refer the same for settlement to some other person appointed by him. 4. Hoard and considered. 5. Section 14 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, provides that the mandate of an Arbitrator shall terminate if he becomes do jure or de facto, unable to perform his functions or for reasons fails to act without undue delays. The Chief General Manager, Telecom, Bharat Sanchar Nigam Ltd. Kerala Circle, was obliged to enter upon the reference for the resolution of the dispute that arose between the petitioner and the respondents. The said arbitrator has become defunct in view of the pleadings of the respondents wherein it is stated that it was 'CGMT, BSNL, J & K Circle', who had to enter into the reference and exercise the functions of the Arbitrator but inadvertently 'CGMT, BSNL, Kerala Circle', has been mentioned under the terms of the agreement. The agreement entered into between the parties cannot be altered or tinkered with and the scheme under the agreement has to be followed in the matter of the resolution of the dispute between the parties. Since 'CGMT, BSNL, Kerala Circle' has not taken any steps to resolve the dispute between the parties as, according to the respondents, he was not the right person to do so, therefore, the mandate of the arbitration clause shall terminate. 6. The arbitration proceedings shall be deemed to have commenced on the date when the request for reference has been made by the petitioner. On considering the effect of the agreement it can well be said that the dispute cannot be decided by the nominated arbitrator, although the petitioner concern has requested for arbitration by the medium of a letter in the year 2016, followed by reminders, which has not been disputed by the other side. On considering the effect of the agreement it can well be said that the dispute cannot be decided by the nominated arbitrator, although the petitioner concern has requested for arbitration by the medium of a letter in the year 2016, followed by reminders, which has not been disputed by the other side. Paragraph 13 of the law laid down in the case of State of West Bengal v. Amritlal Chatterjee, reported in AIR 2003 SC 4564 assumes significance here in the context of the decision of the instant petition and it is reproduced below verbatim: "The Court having regard to the duty imposed upon the arbitrator held that the arbitrators enter on the reference as soon as they have accepted their appointment and have communicated to each other about the reference. If the Arbitrator fails in his duty to enter on the reference or make a public award during the period stipulated under Rule 3 of the First Schedule indisputably, a cause of action will arise for his removal or appointment of a new arbitrator in terms of Sections 11 and 12 of the 1940 Act. The words "commencement of the arbitration proceedings" have not been defined in the 1940 Act. They have to be given their ordinary meaning having regard to the provisions contained in Chapter II thereof." 7. Paragraph 13 of the aforesaid judgment applies in all the fours to the facts and circumstances of the case. Since the arbitrator has failed to perform his duty to enter into the dispute, a cause of action arises to the petitioner to seek the revocation of the appointment of the arbitrator and the nomination of a new one. Viewed in the context of the preceding analysis, the arbitrator, named in the agreement, is removed and Mr. R.S. Jain, retired District and Sessions Judge, is appointed as an arbitrator in the matter on a remuneration of Rs. 60,000/- to be paid to him by the parties to the instant petition in equal shares. The arbitrator is directed to give the award within a period of four months from the date of the service of this order upon him. The parties shall co-operate before the arbitrator and shall not seek unnecessary adjournments. The petition is disposed of accordingly, along with connected MP.