Sameer Construction Company v. Program Manager Project Implementation Unit Tourism Garhwal
2022-05-25
SHARAD KUMAR SHARMA
body2022
DigiLaw.ai
JUDGMENT : Sharad Kumar Sharma, J. The respondents, in pursuance to an invitation of bids for the purposes of the work called as “Renovation and Upgradation of damaged tourism assets in disaster affected district Chamoli. There were certain work packages, which were floated by the respondents, for the purposes of award of work contract in relation to the respective value of the contract and the period within which it was supposed to be completed. For example, in WPMS No. 608 of 2020, the contract, which was subject matter was an Agreement No. 10/PM/Contractor/PIU(T) dated 05.02.2016; in WPMS No. 609 of 2020, the contract, was by way of an Agreement No. 9/PM/Contractor/PIU(T) dated 05.02.2016; and in WPMS No. 610 of 2020, Agreement No. 17/PM/Contractor/PIU(T) dated 07.04.2016, which, according to the terms of the contract, in an event of arising out of any dispute in relation to the respective contracts, the Redressal Forum for deciding the dispute was provided under Clause 23 and 24 of the agreement, which are extracted hereunder:- 23. Appointment of the Adjudicator 23.1 The Adjudicator shall be appointed jointly by the Employer and the Contractor, at the time of the Employer's issuance of the Letter of Acceptance. If, in the Letter of Acceptance, the Employer does not agree on the appointment of the Adjudicator, the Employer will request the Appointing Authority designated in the PCC, to appoint the Adjudicator within 14 days of receipt of such request. 23.2 Should the Adjudicator resign or die, or should the Employer and the Contractor agree that the Adjudicator is not functioning in accordance with the provisions of the Contract, a new Adjudicator shall be jointly appointed by the Employer and the Contractor. In case of disagreement between the Employer and the Contractor, within 30 days, the Adjudicator shall be designated by the Appointing Authority at the request of either party, within 14 days of receipt o such request. 24. Procedure for Disputes 24.1 If the Contractor believes that a decision taken by the PIU-In Charge was either outside the authority given to the PIU-In Charge by the Contract or that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the PIU-In Charge's decision. 24.2 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute.
24.2 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. 24.3 The Adjudicator shall be paid by the hour at the rate specified in the PCC, together with reimbursable expenses of the types specified in the PCC, and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicator's decision shall be final and binding. 24.4 The arbitration shall be conducted in accordance with the arbitration procedures published by the institution named and in the place specified in the PCC.” 2. The agreed Forum for redressal of the grievances for adjudication of a dispute would fall under Clause 23 and clause 24 of the Contract, and it would be, by virtue of the decision to be taken by the Adjudicator within the period of 14 days from the date of receipt of request and in an event if the Adjudicator does not decide the matter within the aforesaid period of 14 days or in an event if the contractor being dissatisfied with the decision of the Adjudicator, he will have a recourse left open for him as provided under clause 24.3 to be read with clause 24.4, which provides for seeking an adjudication of a dispute by an Arbitrator. 3. The learned counsel for the petitioner submitted that despite his request when the Adjudicator was not appointed under clause 23, his case will not fall under Section 11 of the Arbitration and Conciliation Act, 1996 and rather writ would be the only remedy which would be available for him for getting a prior adjudication from the Adjudicator, before he is brought within an ambit of clause 24 of the dispute redressal forum as per the terms of the contract. 4. In order to answer the arguments about the tenability of the writ petition due to non compliance of Clause 23, in fact, the implications of Section 11 of the Arbitration and Conciliation Act, particularly, in the context of the procedure prescribed under sub Section (6) of Section 11 of the Act, which is extracted hereunder, becomes relevant for consideration before this Court.
“(6) Where, under an appointment procedure agreed upon by the parties,— (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.” 5. In fact, sub Clause (16) provides that invocation of Section 11 for appointment of an Arbitrator would be, subject to satisfying the conditions under sub Section (6) of Section 11, when the agreed recourse for appointment procedure prescribed under the Contract has been invoked by the contractor and no appointment has been made or the Forum for the redressal of the grievances, as agreed by the parties to the contract, has not been provided, and is not appointed by the competent authority to decide the dispute. 6. Admittedly, in this case according to the petitioners in relation to the respective contracts, the petitioner has already approached the respondent for the appointment of an Adjudicator under Clause 23. This appointment of an Adjudicator under clause 23, is for the purposes of first phase adjudication of a dispute, by an agreed platform, which was formed to be agreed within the ambit of a procedure for appointment of a Dispute Redressal Forum for redressal of the grievances, covered under the terms of the contract and in an eventuality, if the decision on the application of the petitioner is not taken within 14 days, as provided under clause 23.1 and 23.2 of the Contract, as extracted above, the appropriate recourse, which will be available to the petitioner would be, to approach the High Court under Section 11 of the Act, within 30 days of his application for appointment of an Adjudicator and when there is a failure on part of the employer or opposite party to appoint the same, the writ would not be the remedy for the petitioner under Article 226 of the Constitution of India for enforcing the appointment of an Adjudicator under Clause 23, which are governed as per the terms of the contract agreed between the parties. 7.
7. In that eventuality, non-compliance of clause 23 of the Contract, this Court is of the view, if the appointment of an Adjudicator for deciding the dispute referred to by the contractor is not appointed within 14 days, it will be falling to be within the procedure of appointment of adjudicator, as provided under sub Section (6) of Section 11 of the Act, and failure to appoint an Adjudicator to decide a dispute, in order to enable the petitioner to further approached the Arbitrator under Clause 24, would be subject to a conjoint interpretation of Clause 23, to be read with Clause 24.1. 8. In that eventuality, where an Adjudicator has not been appointed under Clause 23, in order to enable the petitioner to approach an Arbitrator under Clause 24 of the contract, executed between him and his employer the appropriate recourse available to the petitioner would be, to approach the High Court under Section 11 of the Act, for appointment of an Arbitrator for deciding the dispute, as appointment of an Adjudicator or reference of a dispute by an Adjudicator to the Arbitrator, will fall to be within a dispute redressal mechanism provided under the contract itself and it will fall to be under sub Section (6) of Section 11 of the Act. 9. In that eventuality, these writ petitions are dismissed with liberty left open to the petitioner to approach the Hon’ble Chief Justice or any other Hon’ble Judge, nominated by the Hon’ble Chief Justice to exercise his powers under Section 11 of the Act, for the purposes of appointment of an adjudicatory forum, as agreed between the parties under the terms of the contract. 10. In view of the aforesaid, the writ petitions are dismissed subject to the liberty of filing of an application under Section 11, to be read with sub Section (6) of the Arbitration and Conciliation Act, for appointment of an Adjudicator/Arbitrator, for redressal of the dispute as sought to be redressed by the petitioner on a reference made by him to the Adjudicator under Clause 23. 11. Subject to the aforesaid, the writ petitions stand dismissed.