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2018 DIGILAW 2389 (MAD)

Creators Architects, 1106 KLJ Tower, Netaji Subhash Palace, New Delhi v. Registrar, Pondicherry University

2018-08-03

PUSHPA SATHYANARAYANA

body2018
ORDER : This Original Petition is filed seeking for confirmation of the appointment of Mr. P. Ravindranathan as the Sole Arbitrator to arbitrate over the disputes regarding settlement of claims between the petitioner and the respondent arising out of the agreement dated 28.05.2008. 2. Pending the original petition, the petitioner filed O.A.No.414 of 2018 seeking injunction restraining the respondent from appointing any other arbitrator. 3. The petitioner firm is one of the architect firms providing services like Architect services, interior service and interior decorative services. The respondent University issued notice inviting interest for empanelment of architect and interior decorator for the purpose of Building Projects and expanding the infrastructural facilities of new academic buildings, hostels, quarters, offices, etc.,. Pursuant to the said advertisement in the newspapers published on 04.06.2007, the petitioner submitted a bid, which was accepted by the respondent vide letter No.PU/EE/EW/Meeting/2007-08/899, dated 19.12.2007. An agreement was also entered into on 28.05.2008. The petitioner also commenced the work immediately as per the terms of the agreement. During the course of the execution of the work as per the agreement, there were additional works of providing lifts, furniture, etc. in the above said buildings. The completion period was also extended and the petitioner had completed the work in all aspects under Package I on 30.08.2011 to the full satisfaction of the respondent and with regard to Package III, the same were duly completed in the month of June, 2015. The petitioner stated as per the terms and conditions of the agreement, the payment is stipulated for work done by the petitioner to be made in stages at 3% of the total completion cost. However, the same was not paid, despite receiving the complete drawings and plan. The respondent also had entrusted and assigned certain other works, impressed by the quality of work done by the petitioner. 4. It is stated that as the legitimate dues of the petitioner was not forthcoming, a notice was sent on 10.10.2016 requesting the respondent to release the payment at the earliest. As there was no response, a legal notice was also issued on 10.04.2017 demanding the payment. As there was no response, the petitioner invoked Clause 4 of the Agreement, which provides for settlement of disputes through arbitration, by sending a notice dated 19.05.2017 under Section 21 of the Arbitration and Conciliation Act, 1996 (in short “A & C Act.”). As there was no response, a legal notice was also issued on 10.04.2017 demanding the payment. As there was no response, the petitioner invoked Clause 4 of the Agreement, which provides for settlement of disputes through arbitration, by sending a notice dated 19.05.2017 under Section 21 of the Arbitration and Conciliation Act, 1996 (in short “A & C Act.”). On receipt of the same, on 30.05.2017 there was a reply from the respondent rejecting the claims of the petitioner. On 06.07.2017, the respondent intimated the petitioner to give their consent for appointment of one Mr.P.Ravindranathan, as the Sole Arbitrator to resolve the disputes. The petitioner also conveyed their consent to the respondent for the named Arbitrator. 5. On 19.08.2017, the petitioner submitted a list of claims to be placed before the Arbitrator. On 08.09.2017, the Registrar of the respondent University sent a letter appointing the said Mr.P. Ravindranathan, as the sole Arbitrator. The petitioner vide letter dated 07.10.2017 reminded the respondent that as per Clause 4 of the Agreement, the Arbitrator should be appointed by the Vice Chancellor of the respondent University and stated that the present Arbitrator was appointed only by the Registrar of the University, which is not in accordance with the procedure contemplated in the agreement. The petitioner also requested the respondent to get appointment of the Arbitrator done by the Vice Chancellor of the respondent University as per Clause 4 of the Agreement. 6. The Arbitrator so appointed also sent a letter dated 17.10.2017 directing the parties to make their claims. The petitioner filed their claim on 15.12.2017 before the Arbitral Tribunal. Both the parties have paid an amount of Rs.1,00,000/- each to the Arbitrator. Further, the respondent on 13.02.2018 requested extension of time to file their defence statement citing administrative reasons. Thereafter, the respondent took several adjournments for filing their claim. 7. While so, the Registrar of the respondent University vide the letter dated 10.04.2018 addressed to the Arbitrator intimated that the Arbitrator has been removed, since his appointment was not in accordance with Clause 4 of the Agreement. The respondent further sated that the Arbitrator was appointed by the Vice Chancellor (in-charge) and therefore, the appointment was not done by the competent authority as specified in Clause 4 of the Agreement. The same was responded by the petitioner on 13.04.2018, vehemently opposing the unilateral removal of the Arbitrator without any legal basis. The respondent further sated that the Arbitrator was appointed by the Vice Chancellor (in-charge) and therefore, the appointment was not done by the competent authority as specified in Clause 4 of the Agreement. The same was responded by the petitioner on 13.04.2018, vehemently opposing the unilateral removal of the Arbitrator without any legal basis. It was stated that the respondent, after consulting the appointment of the named Arbitrator and also after participating in the proceedings, cannot be permitted to unilaterally remove the Arbitrator. The said unilateral removal of the Arbitrator by the respondent is against law. The act of the respondent by not appointing the substituted Arbitrator even after the removal of the sole Arbitrator goes to show that the respondent is not interested in proceedings with the arbitration. Therefore, the petitioner was contrained to file the above original petition to confirm the appointment of Mr.P.Ravindranathan, as the Sole Arbitrator to arbitrate over the disputes regarding settlement of claims between the petitioner and the respondent. 8. The respondent University filed an elaborate counter affidavit, disputing the claims of the petitioner, and submitted that the original petition is not maintainable. It is stated by the respondent that at that time, the petitioner raised the disputes, there was only an Acting Vice Chancellor Dr.Anisa Basheer Khan, who had straight away appointed the Sole Arbitrator on 11.10.2017 without following the procedure contemplated under clause 4 of the Agreement. Therefore, it is stated that the appointment made by the Vice Chancellor (in-charge) was clearly in violation of the Agreement and also against the Act and Statutes of the respondent University. It is stated that Dr.Anisa Basheer Khan was not a regular Vice Chancellor, who is competent to appoint an Arbitrator, but only an acting Vice Chancellor and lacked the power to make any such appointment. The acting Vice Chancellor can only discharge the work of routine nature till the regular Vice Chancellor takes over the charge. 9. It is stated that a Search Committee for appointment of regular Vice Chancellor for the respondent University was constituted in January 2017. It is also stated that the regular Vice Chancellor has now been appointed. The acting Vice Chancellor can only discharge the work of routine nature till the regular Vice Chancellor takes over the charge. 9. It is stated that a Search Committee for appointment of regular Vice Chancellor for the respondent University was constituted in January 2017. It is also stated that the regular Vice Chancellor has now been appointed. The said regular Vice Chancellor, after assuming office on 29.11.2017, having come to know about the appointment of the Sole Arbitrator Mr.P.Ravindranathan and the Vice Chancellor (in-charge) did not have the power to appoint the Arbitrator, recalled the appointment of the Arbitrator through the Registrar on 10.04.2018. Since the appointment of the Arbitrator is recalled, the respondent University did not file any claim before the Arbitrator appointed earlier. It is also stated that as the regular Vice Chancellor had recalled the appointment of the sole Arbitrator appointed, the respondent sought dismissal of the above Original Petition. 10. After hearing the learned counsels for sometime, it was agreed that a new Arbitrator can be appointed by this Court. However, learned counsel for the petitioner contended that he had already paid the present Arbitrator, a sum of Rs.1,00,000/- and also had spent a substantial amount before the Arbitral Tribunal for appearing several hearings, especially due to the attitude of the respondent. Therefore, learned counsel for the petitioner insisted that a new Arbitrator can be appointed only if the fee and expenses incurred by them before the present sole Arbitrator is refunded by the respondent. 11. Learned Senior counsel for the respondent University, while consenting to refund the fees paid by the petitioner to the Arbitrator, disputed the amount claimed as expenses. 12. In such circumstances, upon consent, this Court appoints Hon'ble Mr.Justice K.Venkataraman, a retired Judge of this Court, residing at L-Block, No.125, East Anna Nagar, Chennai-600 102 (Mobile No.9444390961), as the Sole Arbitrator to enter upon reference and adjudicate the disputes inter se the parties. The learned Arbitrator may, after issuing notice to the parties and upon hearing them, pass an award as expeditiously as possible, preferably within a period of six months from the date of receipt of the order. The learned Arbitrator is at liberty to fix his remuneration and other incidental expenses. The proceedings may be conducted under the aegis of the Madras High Court Arbitration Centre and in accordance with the Madras High Court Arbitration Rules. 13. The learned Arbitrator is at liberty to fix his remuneration and other incidental expenses. The proceedings may be conducted under the aegis of the Madras High Court Arbitration Centre and in accordance with the Madras High Court Arbitration Rules. 13. As the fees paid to the Arbitrator is admitted by both the parties, the respondent University is directed to refund fees of Rs.1,00,000/- paid by the petitioner to the Arbitrator appointed earlier within two weeks from the date of receipt of a copy of this order. 14. In respect of the remaining expenses, which are not quantified, it is open to the petitioner to make a claim before the respondent and it is for the respondent to consider the same. 15. The Original Petition is, accordingly, disposed of leaving the parties to bear their own costs. Consequently, pending application stands closed.