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2017 DIGILAW 552 (RAJ)

Amar Chand Chandak v. Union of India

2017-02-15

GOVERDHAN BARDHAR

body2017
ORDER : Sangeet Lodha, J. 1. This arbitration application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short "the Act") has been filed by the applicant for appointment of Arbitrator on account of the respondent failing to appoint Arbitrator in terms of the arbitration clause in the contract. 2. The respondent North Western Railway issued an NIT No. 118/2004-05 inviting tenders for repairing of GI Pipeline in Staff Quarter and Service Building at Deshnok, Palana, Nokha, Nagaur, Khajuwala and Merta City Station under ADEN/MTD. The applicant submitted the tender for award of work and deposited Rs. 12,000/- as earnest money on 31.8.04. According to the applicant, the tender submitted was valid upto 90 days from the date of opening of the tender and since the respondent did not issue any work order even after expiry of the period of 90 days, the applicant by way of registered letter requested for refund of earnest money vide letter dated 1.12.04. Since the respondent failed to refund the earnest money, the applicant vide communication dated 6.12.04, 17.1.05 and 2.2.05 requested the respondent to refund the earnest money alongwith interest @ 18%. However, vide communication dated 1.2.05, the applicant was informed that earnest money stands forfeited. In these circumstances, the applicant after service of notice upon the respondents, filed a civil suit before the court of Additional Civil Judge (J.D.) No. 2, Jodhpur Metropolitan City for recovery of Rs. 13,440/- alongwith the interest pendente lite. On the basis of the pleadings of the parties, the trial court framed the issues as under: ^^1- vk;k oknh 13]440@& :i;s rkjh[k nkok nk;jh ls rkolwyh rd 18 izfr'kr lkykuk dh nj ls e; C;kt izkIr djus dh vf/kdkjh gS\ ----oknh 2- vk;k oknh }kjk th-lh-lh- ds izko/kku la[;k 63 o 64 ds rgr vkchZVªs'ku dh ekax ugha dj lh/kk okn is'k fd;k gS tks esUVuscy ugha gS\ -----------izfroknh 3- vk;k oknh }kjk fu;ekuqlkj dk;Z 'kq: ugha djus ij th-lh-lh- ds Dykst 62 ds rgr oknh dh Risk & Cost ij oknh dk Bsdk fujLr dj fy;k x;k gS o oknh dh /kjksgj jkf'k tCr dj vU; dks Bsdk fn;k x;k gS\ -----izfroknh 4- vuqrks"k\^^ 3. After due consideration of the evidence on record, the trial court decided all the issues in favour of the defendant Railway and against the applicant and accordingly, the suit preferred by the applicant was dismissed vide judgment and decree dated 15.1.10. Aggrieved thereby, an appeal preferred by the applicant was dismissed by the court of Additional District Judge No. 3, Jodhpur Metropolitan City vide judgment and decree dated 18.7.14. A revision petition preferred by the applicant assailing the appellate judgment and decree stood dismissed by this court vide order dated 22.7.15. Thereafter, the applicant vide notice dated 14.9.15, while invoking clause 64 of General Conditions of Contract, 1999, requested the General Manager, North Western Railway to appoint the Sole Arbitrator for adjudication of the claim, which was not responded to by the respondents. Hence, this application. 4. A reply to the application has been filed on behalf of the Railway taking the stand that the suit preferred by the applicant for recovery of the amount of earnest money having been dismissed by the Civil Court of competent jurisdiction and appeal and revision preferred having been dismissed by the Appellate/Revisional Court, the same has attained finality and therefore, no arbitrable dispute exists in respect whereof the applicant can be permitted to invoke the arbitration clause contained in General Conditions of Contract, 1999. That apart, it is contended that the claim of the applicant is barred by limitation and therefore, by virtue of provisions of Section 43 of the Act, the dispute sought to be raised cannot be referred to arbitration. 5. Learned counsel appearing for the applicant contended that while deciding the issue No. 2, the Civil Court has categorically held that on account of availability of remedy of reference of dispute to the arbitration, the suit preferred by the applicant is not maintainable, which stands affirmed by the Appellate Court and therefore, the determination of other issues by the trial court cannot operate as res judicata so as to debar the applicant from invoking the arbitration clause in the contract. Learned counsel submitted that while deciding the revision petition, it is categorically observed by the court that option of going to arbitration is still available to the applicant and therefore, the objection sought to be taken by the respondents is devoid of any merit. Learned counsel submitted that while deciding the revision petition, it is categorically observed by the court that option of going to arbitration is still available to the applicant and therefore, the objection sought to be taken by the respondents is devoid of any merit. In support of the contentions, learned counsel has relied upon decisions of the Hon'ble Supreme Court in the matters of "Ashok Layland Ltd. v. State of Tamil Nadu & Anr.", AIR 2004 SC 2836 , "Arasmeta Captive Power Company Private Limited and Anr. v. Lafarge India Private Limited", (2013) 15 SCC 414 and "Rajesh Verma v. Ashwani Kumar Khanna", AIR 2016 SC 1910 . 6. On the other hand, counsel appearing for the respondents reiterating the stand taken in reply to the application, submitted that after due consideration of the evidence on record, the trial court arrived at a categorical finding that after accepting the tender, the applicant herein was duly informed within the validity period but still the applicant failed to start the work in terms of the contract whereupon the work was got completed at the risk and cost of the applicant through another contractor Hussain and Company and the earnest money was duly forfeited. Learned counsel submitted that the finding arrived at by the trial court having been upheld by the Appellate Court and declined to be interfered with by the High Court exercising revisional jurisdiction, the question of reopening of the dispute by way of arbitration, does not arise and therefore, in absence of existence of any arbitrable dispute, the application preferred for appointment of Sole Arbitrator deserves to be rejected. 7. I have considered the rival submissions and perused the material on record. 8. Indisputably, the dispute sought to be referred by the applicant to arbitration invoking jurisdiction under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short "the Act") already stands adjudicated by the Civil Court of competent jurisdiction on merits. The decree passed by the trial court dismissing the suit stands affirmed by the Appellate Court and declined to be interfered with by the revisional court and the same has attained finality. The decree passed by the trial court dismissing the suit stands affirmed by the Appellate Court and declined to be interfered with by the revisional court and the same has attained finality. After due consideration of the evidence led by the parties while deciding the issue No. 1 & 3 framed as aforesaid, the trial court has arrived at categorical finding that the tender submitted by the applicant was accepted by the respondent Railway vide letter dated 24.11.04, however, the applicant did not commence the work and complete the same within a period of three months as per condition of the contract and therefore, vide letter dated 31.3.05, the contract was terminated and while inviting fresh tenders, a fresh contract was awarded at the risk and cost of the applicant and accordingly, the forfeiture of the earnest money was found to be justified. 9. It is true that jurisdiction of this court under Section 11 is limited and confined to examine as to whether dispute has arisen in relation to the agreement but then, the dispute which already stands adjudicated by the court of competent jurisdiction and the decree passed has attained finality, cannot be said to be an existing dispute which could be referred for arbitration under Section 11 (6) of the Act. It is pertinent to note that the revisional court has categorically declined to interfere with the findings recorded by the trial court, affirmed by the Appellate Court. Merely because, while considering the contention of the applicant that since contract did not come into being and the applicant herein did not have option of going to arbitration, the passing observation made by the court regarding the liberty being still available to the applicant, in no manner entitles the applicant to claim reference of the dispute as a matter of right. 10. 10. It is pertinent to note that as per provisions of Section 8 of the Act, an action brought before the court which is subject matter of an arbitration agreement, is required to be referred to the arbitration if party to the arbitration agreement or any person claiming through or under him so applies not later than submitting of his first statement on the substance of the dispute but, in the instant case, no such application was ever made by the parties to the arbitration agreement for reference of the dispute to the arbitration rather, the suit was contested and decided on the various issues framed as aforesaid. In this view of the matter, in the considered opinion of this court, the dispute sought to be referred by the applicant having been decided by the Civil Court of competent jurisdiction and the decree passed having attained finality, the self same dispute cannot be said to be an existing dispute which could be referred to arbitration in terms of arbitration clause in the contract. 11. For the aforementioned reasons, the application preferred by the applicant under Section 11 (6) of the Act is dismissed.