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2019 DIGILAW 413 (JHR)

Agros Impex India Private Limited v. State of Jharkhand

2019-02-08

ANUBHA RAWAT CHOUDHARY

body2019
ORDER : 1. Heard Mr. Pandey Neeraj Rai, counsel appearing on behalf of the petitioners. 2. Pursuant to the order dated 03.01.2019, the required declaration in terms of Section 12 of Arbitration & Conciliation Act, 1996 as amended has been received. Accordingly, this Court appoints Hon’ble Mr. Justice D.K. Sinha (Retd.), Former Judge of Jharkhand High Court as an Arbitrator in this matter. 3. For better appreciation, order dated 03.01.2019 is quoted hereinbelow : Heard learned counsel for the petitioners and the respondent. 2. Petitioners seek appointment of an independent Arbitrator to adjudicate the dispute between the parties in terms of Clause 4.17 of the Agreement dated 30.04.2012 for supply and affixation of High Security Registration Plates for motor vehicles in Jharkhand State. Agreement is at Annexure – 1. Clause 4.17 containing the arbitration Clause, is as under: 4.17 Arbitration 4.17.1 The Government of Jharkhand and the Contractor shall make every effort to resolve amicably by direct informal negotiations, any disagreement or disputes, arising between them in connection with the Contract. 4.17.2 If after 30 days from the commencement of such direct informal negotiations, the Government of Jharkhand and the Contractor have been unable to resolve amicably a Contract dispute, either party may require that the dispute be referred for resolution to the formal mechanism specified in Clause 4.17.3. 4.17.3 Any dispute which is not resolved amicably shall be finally settled by binding Arbitration under the Arbitration and Conciliation Act, 1996. The arbitration shall be by a panel of three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators appointed by the parties. The party requiring arbitration shall appoint an arbitrator in writing, inform the other party about such appointment and call upon the other party to appoint its arbitrator. If within 15 days of such intimation the other party fails to appoint its arbitrator, the party seeking appointment of arbitrator may take further steps in accordance with Arbitration and Conciliation Act, 1996. The decision or award resulting from arbitration shall be final and binding upon the parties and shall be enforceable in accordance with the provisions of the Arbitration and Conciliation Act, 1996. 4.17.4 The Arbitration and Conciliation Act, 1996, the rules there under and any statutory modification or re-enactments thereof, shall apply to the arbitration proceedings. 4.17.5 The place of arbitration shall be Ranchi. 4.17.4 The Arbitration and Conciliation Act, 1996, the rules there under and any statutory modification or re-enactments thereof, shall apply to the arbitration proceedings. 4.17.5 The place of arbitration shall be Ranchi. 4.17.6 The Government of Jharkhand may terminate this contract, by giving a written notice of termination of minimum 30 days, to the Contractor, if the Contractor fails to comply with any decision reached consequent upon arbitration proceedings pursuant to Clause 4.17.3.” 3. Petitioner had earlier approached this Court for quashing of the order of termination of the agreement dated 13.08.2012 and also order of debarment dated 04.09.2012 in writ jurisdiction through WPC No. 4901/2012. This court vide judgment dated 31.03.2016 quashed the order of debarment as being in violation of principle of natural justice, but was of the considered view that challenges to the termination of the contract cannot be entertained in exercise of writ jurisdiction of this court. Petitioner was however left with liberty to work out its remedy in accordance with law in an appropriate proceeding in a proper forum where such questions of fact can be agitated (Annexure-2). In Letters Patent Appeal No. 207/2016, learned Division Bench by order dated 30.04.2018 (Annexure-3) did not find any reason to interfere in the judgment of the learned Single Judge. It also observed at para-4 that the appellant has a remedy by way of arbitration clause incorporated in the Contract. As and when arbitration proceedings are invoked, the same will be decided in accordance with law and on the basis of evidences on record and without being influenced by the order passed by the learned Single Judge. Petitioner thereafter served a legal notice on 26.05.2018 upon the Respondents invoking the arbitration clause for reference of the dispute (Annexure-4 series). Postal receipt of dispatch and service of notice, as per tracking report, are enclosed as Annexure-5 series which is not disputed by the Respondent in their counter affidavit as well. Counsel for the petitioner has therefore sought appointment of an independent Arbitrator in terms of Section 11 (4) (a) of Arbitration and Conciliation Act, 1996. 4. In the counter affidavit, Respondent have contested the claim on the ground that the order of termination was passed after giving opportunity to the petitioner to respond. Contentions on merits have been denied as being false and incorrect. 4. In the counter affidavit, Respondent have contested the claim on the ground that the order of termination was passed after giving opportunity to the petitioner to respond. Contentions on merits have been denied as being false and incorrect. According to the Respondent there was no dispute with the petitioner to be settled through arbitration as arbitration agreement has been terminated by a reasoned order (Annexure-B). Learned counsel for the Respondent submits that any reference of the dispute to arbitration would be an idle exercise as the petitioner has failed to execute the work under the agreement without any reasonable doubt and despite inordinate delay. 5. Considered the submissions of the learned counsel for the parties in the light of the relevant material facts borne from the fact, as noted above. There is an arbitration clause 4.17 in the agreement between the parties which contemplates reference of a dispute to Arbitration in case parties fail to resolve it amicably. Arbitration and Conciliation Act, 1996 with such statutory modification or enactment would apply to the arbitration proceedings. Place of arbitration shall be Ranchi. Respondent have terminated the agreement by invoking clause 25 of the Agreement. The writ court has refrained from exercising jurisdiction in the matter on the ground that questions of fact based on evidence were required to be adjudicated and that the agreement provided an alternative remedy as well. Letters Patent Court also allowed liberty to the petitioner to invoke arbitration clause for adjudication of the dispute. Petitioner is aggrieved by termination of the contract and has alleged breach of reciprocal promise on the part of the Respondent as well. Despite service of legal notice on 26.05.2018 through Speed Post, Respondent have failed to appoint an Arbitrator within the time stipulated. As such, ingredients to invoke the jurisdiction of this court under Section 11 of Arbitration and Conciliation Act, 1996 is satisfied. I, therefore, propose to appoint Hon’ble Mr. Justice D.K. Sinha (Retd.), Former Judge of this Court presently resident at D/4001/ Green Residency, Nalanda Colony, Budha Vihar, Tetar Toli, Bariyatu, Ranchi-834001 having mobile no. 9431115209 as Arbitrator is required to submit a declaration in terms of Section 12 of Arbitration and Conciliation Act, 1996, as amended. Registry to communicate the entire order to the proposed Arbitrator. Declaration, if any, submitted by the proposed Arbitrator, be placed on record by the next date. 6. 9431115209 as Arbitrator is required to submit a declaration in terms of Section 12 of Arbitration and Conciliation Act, 1996, as amended. Registry to communicate the entire order to the proposed Arbitrator. Declaration, if any, submitted by the proposed Arbitrator, be placed on record by the next date. 6. Matter be placed on 31.01.2019 as an unfixed case. 4. Since the proposed Arbitrator has furnished declaration in terms of Section 12 of the Arbitration and Conciliation Act, 1996, I hereby appoint Hon’ble Mr. Justice D.K. Sinha (Retd.), Former Judge of this Court presently residing at D/4001/Green Residency, Nalanda Colony, Budha Vihar, Tetar Toli, Bariyatu, Ranchi – 834001 having mobile no.9431115209 as independent Arbitrator to adjudicate the dispute between the parties. Learned Arbitrator would be free to lay down his fees and other expenses towards conduct of the arbitration proceedings, however keeping into account the ceiling prescribed under Schedule IV of the Act of 1996 as amended. Learned Arbitrator would endeavor to conclude the proceedings expeditiously, also taking into regard the mandate of the Legislature under Section 29-A of the Act of 1996. 5. Let photocopy of the entire pleadings along with copy of the instant order be sent to the learned Arbitrator by the Registry. 6. Accordingly, this Arbitration Application stands disposed of.