Gauhati High Court
N.J. Devani Builders (P.) Ltd. vs Union Of India (Uoi) And Anr. on 3 April, 2002
Equivalent citations: (2003)3GLR36
Author: N.S. Singh
Bench: N.S. Singh
JUDGMENT N.S. Singh, J.
1. Heard Mr. S.R. Sen, learned senior counsel assisted by Mrs. PDB Baruah, learned counsel for the petitioner and Mr. P. Dey, learned Addl. CGSC for the Union of India /respondents in these three appeals.
2. These three cases involve common question of facts and laws and are inter-related and, that being the position, these cases are taken up together for hearing today and considering the nature of these cases, it appears to me that these cases can be disposed of at this stage and, accordingly, the cases are disposed of with the following short common judgment and order.
3. In all the cases, the petitioners sought for appointment of an independent Arbitrator directing him to resolve the disputes raised by the petitioner relating to the work of provision of SM Barrack certain OTM Accn. single JCO's Otrs and JCO's Mess for certain units at Teliamura near Agartala (Tripura) CA No. CESZ/TELIA/09 of 2000-2001 in FAO No. 1(T)18(SH) 2001 ; likewise in FAO No. 1(T) 19(SH) 2001, the same and similar prayer has been made by the petitioner concerned for appoint of sole Arbitrator to resolve the related disputes raised by the petitioner in connection with CA No. CESZ/MHB/20 of 1987-88 : Provision of Hanger including Annexes with Allied Services at Mohunbari and in the last case being FAO No. 1(T) 20(SH) 2001, the petitioner made a prayer for appointing a sole Arbitrator directing him to resolve the disputes raised by the petitioner relating to the contract work namely, provision of OTM ACCN for 22 AIR of FHT at DINJAN under CA No. CESZ/DIN 28 of 1994-95 by contending inter alia, that certain disputes and differences arose between the parties in connection with the execution of the related works for which the petitioners served due notice upon the authority concerned/respondents herein to refer the dispute/matter for arbitration under the related Clause 70 of IAFW 2249 of the General Terms and Conditions of the related contract but the authority did not refer the matter for arbitration, in other words, the authority did not appoint an arbitrator in terms of the said contract clause and being dissatisfied with the action of the respondents concerned, these petitioners filed this petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act of 1996). I have perused the related clause of the Contract Agreement which reads thus :-
"All disputes between the parties to the contract (other than those for which the decision of the C.W.E. or any other person is by the contract expressed to be final and binding) shall, after written notice by either party to the contract to the other of them, be referred to the sole arbitration of a serving officer having a degree in Engineering or Equivalent or having passed final/direct final Examination of sub-division II of Institution of Surveyors (India) recognised by the Government of India to be appointed by the authority mentioned in the tender documents.
Unless both parties agree in writing such references shall not take place until after the completion or alleged completion of the Works or termination or determination of the contract under Condition Nos. 55, 56 and 57 hereof :
Provided that in the event of abandonment of the works of cancellation of the Contract under Condition Nos. 52, 53 and 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other contractor or contractors of Agency or Agencies :
Provided always that commencement or continuance, of any arbitration proceedings hereunder and otherwise shall not in any manner militate against the Government's right of recovery from the Contractor as provided in condition 57 here of.
If the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place.
The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence.
The Arbitrator may proceed with the arbitration ex parte if either party, in spite of a notice from the Arbitrator, fails to take part in the proceedings.
The Arbitrator may, from time to time with the consent of the parties, enlarge the time for making or publishing the award.
The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, alongwith sums awarded, separate by on each individual item of dispute.
The Arbitrator shall give his reasons for the award in each and every case irrespective of the value of the claims or counter claims.
The venue of arbitration shall be such place of places as may fixed by the Arbitrator in his sole discretion.
The award if the Arbitrator shall be final and binding on both parties to the contract."
4. Supporting the case of the petitioners, Mr. S.R. Sen, learned senior counsel contended, that no prejudice shall be caused to the respondents when the court appoint a sole Arbitrator in terms of the provisions of Section 11 of the Act of 1996 and to secure the ends of justice, a retired Chief Engineer of the respondents/department may be appointed as sole Arbitrator to resolve the disputes raised by the petitioners relating to the works mentioned above.
5. Replying to the argument advanced by Mr. S.R. Sen, Mr. P. Dey, learned Addl. CGSC for the respondents submitted that, in terms of the amended provisions of Clause 70, the words,' 'Engineer Officer' appearing in the said Clause 70 is to be read as Serving officer having degree in Engineering or equivalent or having passed final/direct final Examination of Sub-Division II of Institution of Surveyor (India) recognised by the Government of India, and that being the position, a Serving Officer having such degree and qualification should be appointed as Arbitrator if at all the Court is to appoint in the present cases.
6. Mr. S.R. Sen, learned senior counsel replying to the argument advanced by Mr. P Dey, learned counsel for the respondents, contended that in a case between Union of India, Petitioner v. Goel Trading Company Respondents, this Court by a related judgment dated 5.6.1998 passed in Civil Revision No. 25(SH) 97 appointed a retired Brigadier who is an experienced person and a senior public servant as the sole Arbitrator to resolve the disputes raised by the parties concerned which was challenged by the Union of India and others before the Apex Court, but the Apex Court affirmed the judgment dated 5.6.1998 passed by this Court rejecting the Special Leave Petition filed by the Union of India and others in that regard. This fact cannot be controverted or disputed by Mr. P. Dey at the hearing of these cases. I have perused the related judgment dated 5.6.1998. According to me, the provisions of Section 11 of the Act of 1996 and related Scheme pertaining to the appointment of Arbitrators issued by the Chief Justice of this Court namely, Scheme of 1996 are relevant in the instant case. I have perused the related Scheme of 1996 and the provisions of Section 11 of the Act of 1996 and apart from that, I hereby recall a Full Bench decision of the Apex Court rendered in, Konkan Railway Corporation Ltd. and Another, Appellants v. Rani Construction (P.) Ltd. reported in 2002 AIR SCW 426 wherein, the Apex Court held thus :-
"There is nothing in Section 11 that requires the party other than the party making the request to be noticed. It does not contemplate a response from that other party. It does not contemplate a decision by the Chief Justice or his designate on any controversy that the other party may raise, even in regard to its failure to appoint an arbitrator within the period of thirty days. That the Chief Justice or his designate has to make the nomination of an arbitrator only if the period of thirty days is over does not lead to the conclusion that the decision to nominate is adjudicatory. In its request to the Chief Justice to make the appointment the party would aver that this period of thirty days has passed and, ordinarily, correspondence between parties would be annexed to bear this out. This is all that the Chief Justice or his designate has to see. That the Chief Justice or his designate has to take into account qualifications required of the arbitrator by the agreement, between the parties (which ordinarily, would also be annexed to request) and other considerations likely to secure the nomination of an independent and impartial arbitrator also cannot lead to the conclusion that the Chief Justice or his designate is required to perform an adjudicatory function. That the word 'decision' is used in the matter of the request by a party to nominate an arbitrator does not of itself mean that an adjudicatory decision is contemplated.
As we see it, the only function of the Chief Justice or his designate under Section 11 is to full the gap left by a party to the arbitration agreement or by the two arbitrators appointed by the parties and nominate an arbitrator. This is to enable the arbitral tribunal to be expeditiously constituted and the arbitration proceedings to commence. The functions has been left to the Chief Justice or his designate advisedly, with a view to ensure that the nomination of the arbitrator is made by a person occupying high judicial office or his designate, who would take due care to see that a competent independent and impartial arbitrator is nominated."
7. Considering the nature of these three cases and also keeping in view of the decision of the Apex Court rendered in Konkan Railway (supra), I am of the view that Section 11 of the Act of 1996 empowers the Chief Justice or his designate to fill the gap left by a party to the arbitration agreement and to ensure that the nomination of the Arbitrator is made by a person occupying high judicial office or his designate, who shall take due care to see that a competent, independent and impartial arbitrator is nominated. Therefore, it would be just and proper to nominate an independent and impartial arbitrator so as to enable the arbitrator to resolve the disputes raised by the party concerned in terms of the related clause of the agreement. During the course of the proceedings of these cases, Mr. P Dey produced a copy of the office letter dated 18.2.2002 marked as 'X' for identification thus furnishing three retired Chief Engineers whose particulars and identity are given below :
"(a) Maj. Gen. C. T. Chad, AVSM (Retd.), 120 Defence Officer Colony, Chennai-600 032
(b) Maj Gen. Y. W. Joshi (Retd.), Shripod Bunglow, Erendwang, Pune-411004
(c) Brig. Keshab Chandra (Retd.), 1219 Sector 18D, Chandigarh, Punjab."
8. After proper application of my mind, I am of the view that these retired Chief Engineers may be appointed as sole Arbitrators to resolve the disputes in the cases mentioned above and no prejudice shall be caused to either of the party as the parties have every right to plead their cases before the sole Arbitrator as required under the Act of 1996 and it is made clear that the amended provisions pertaining to the appointment of Serving Officer as sole Arbitrator as highlighted by Mr. P Dey cannot override the decision of the Apex Court and this Court as discussed above. Hence, to meet the ends of justice, I do hereby appoint (i) Maj. Gen CT Chari (Retd.) as the sole Arbitrator to resolve the dispute in connection with the work of provision of SM Barrack certain OTM Accn. Single JCO's Qtrs and JCO's Mess for certain units at Teliamura near Agartala (Tripura) CA No. CESZ/ TELIA/09 of 2000-2001, (ii) Maj. Gen YW Joshi (Retd.) as the sole Arbitrator to resolve the differences and disputes in connection with the work namely, provisions of manger including Annexes with Allied Servies at Mohunbari CA No. CBSZ/MHB/20 of 1987-88 (iii) Keshav Chandra (Retd.) as the sole Arbitrator to resolve the dispute in connection with the work namely, provision of OTM Accn for 22 AIR of FHT at Dinjan under CA No. CESZ/DIN/28 of 1994-95. It is further made clear, that the Arbitrators shall be entitled the required fees claimed by the Arbitrators concerned which shall be paid by the parties at the ratio 50:50 each together with the cost. It is also made clear, that these Arbitrators so appointed by this Court shall resolve the disputes are early as possible.
9. Registry is directed to communicate a copy of this judgment and order to the Arbitrators so appointed by this Court and to the learned counsel for the parties concerned. The authority concerned shall issue necessary orders appointing those retired Chief Engineers mentioned above as Arbitrators in connection with the cases mentioned above. This shall be done within a period of one week from the date of receipt of this judgment and order.
10. For the reasons, observations and directions made above, these appeals are finally disposed of but, no order as to costs.