Karnataka High Court
M/S Hindustan Steel Works Construction ... vs Union Of India Rep By on 2 November, 2017
Author: Vineet Kothari
Bench: Vineet Kothari
1/11
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 02nd DAY OF NOVEMBER 2017
BEFORE
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
C.M.P. No.102/2015
BETWEEN:
M/S. HINDUSTAN STEEL WORKS
CONSTRUCTION LTD.,
15TH FLOOR, NSC BOSE BUILDING
12, MAHATMA GANDHI ROAD
BANGALORE-560 001
NOW AT: No.1294, 13TH MAIN ROAD
JUDICIAL LAYOUT, GKVK POST
YELAHANKA, BENGALURU-65
REP. SRI. K.C. MAHESHWARAPPA
PROJECT ENGINEER.
...PETITIONER
(BY SRI. PRASADRAO V, SENIOR ADV., FOR
SRI. SAMPATH BAPAT, ADV.,)
AND:
UNION OF INDIA REP. BY 1 TO 3
1. THE CHIEF ADMINISTRATIVE OFFICER (C)
SOUTH WESTERN RAILWAY
18, MILLER'S ROAD, BANGALORE-46.
2. THE CHIEF ENGINEER (CONST.)
SOUTH WESTERN RAILWAY
CLUB ROAD, KESHWAPUR, HUBLI-31.
3. THE GENERAL MANAGER
SOUTH WESTERN RAILWAY
CLUB ROAD, KESHWAUR, HUBLI-31.
Date of Order 02-11-2017 C.M.P.No.102/2015
M/s. Hindustan Steel Works Construction Ltd. Vs.
Union of India & Ors.
2/11
4. SRI. A. SELVARAJ
FA & CAO/G
SOUTHERN RAILWAY
PARK TOWN, CHENNAI-600003
PRESIDING ARBITRATOR.
5. SRI. P.K. KSHATRIYA
CE/CN/BNC
No.18, MILLERS ROAD
BANGALORE-46
CO-ARBITRATOR.
6. SRI. V.K. MAURYA
CE/CN/NORTH/BNC
No.18, MILLERS ROAD
BANGALORE-46
CO-ARBITRATOR.
...RESPONDENTS
(BY SRI. ABHINAY Y.T. ADV., FOR
SRI. N.S. SANJAY GOWDA, ADV., FOR R1 TO R3)
THIS C.M.P. IS FILED UNDER SECTION 11(6)&(8) READ
WITH 15(2) OF THE ARBITRATION AND CONCILIATION ACT,
1996, PRAYING TO APPOINT A SOLE ARBITRATOR TO RESOLVE
THE DISPUTES AND ALL OUTSTANDING ISSUES BETWEEN THE
PARTIES IN ACCORDANCE WITH THE PROVISIONS OF TH
AGREEMENT BEARING No.CAO/CN/BNC/72321/A/24/IV/N/06
DATED:04/04/2006 IN THE INTEREST OF JUSTICE IN THE
INTEREST OF JUSTICE.
THIS C.M.P. COMING ON FOR ADMISSION THIS DAY, THE
COURT MADE THE FOLLOWING:-
Date of Order 02-11-2017 C.M.P.No.102/2015
M/s. Hindustan Steel Works Construction Ltd. Vs.
Union of India & Ors.
3/11
ORDER
Mr. Prasadrao V. Senior Adv. for Mr. Sampath Bapat, Adv. for Petitioner Mr. Abhinay Y.T. Adv. for Mr. N.S. Sanjay Gowda, Adv. for R1 to R3
1. This petition has been filed by M/s.Hindustan Steel Works Construction Ltd., the contractor against the Respondents-South Western Railway, the Awarder of contract under Sections 11(6) and 8 of the Arbitration and Conciliation Act, 1996 ('the Act' for short) seeking an appointment of the Arbitrator by this Court.
2. Mr.Prasadrao, learned Senior counsel for the petitioner has submitted before the Court that the Arbitral Tribunal constituted in terms of Clauses 63 and 64 of the Contract between the parties was reconstituted at the request of the Respondents-South Western Railway by the orders of the learned Single Judge of this Court on 24.07.2014 in the previously filed C.M.P.No.32/2011, which was decided earlier on 13.11.2013. While disposing of I.A.1/14 filed in that Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
4/11 C.M.P.No.32/2011 on 24.07.2014, the learned Single Judge of this Court also directed the said Arbitral Tribunal comprising of the in-service Officials of the Respondents-South Western Railway to conclude the arbitral proceedings within a period of six months from the date of receipt of a copy of that order. At the request of Respondents-South Western Railway, the name of one Mr.J.Vishwanathan was substituted in place of Mr.A.Selvaraj.
3. The relevant portion of the order passed on I.A.1/14 by the learned Single Judge (Hon'ble Mr.Justice Abdul Nazeer as his Lordship's then was) of this Court on 24.07.2014 is quoted below for ready reference:-
"3. I have heard the learned counsel for the parties.
4. A perusal of the order dated 13.11.2013 would clearly indicate that on consideration of facts and circumstances of the case, 3 arbitrators have been appointed for Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.5/11
adjudication of the dispute. The senior most among the arbitrators was made as Presiding Arbitrator. There is also a direction to complete the arbitration proceedings as expeditiously as possible.
5. Though this order was passed on 13.11.2013 nothing has moved further. It is the case of the respondent that Sri J.Vishwanathan, who is presently working as FA & CAO in Hubli in place of Sri.A.Selvaraj. Therefore he prays for substitution of Sri.J.Vishwanathan in place of Sri A.Selvaraj, since it would be convenient for the Railway Administration to convene the Arbitral Tribunal by coordinating with the officers who are within the administrative control of the South Western Railway.
6. As noticed above, this Court after detailed consideration of the facts and circumstances has appointed three arbitrators keeping in mind sub section 8(b) of Section 11 of Arbitration and Conciliation Act, 1996. I do not find any merit in the contention of the respondents. IA-1/14 is rejected.
7. The matter is pending since 2007. Despite the observations of this Court for early Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.6/11
disposal of the case, it has not disposed of so far. Therefore, I direct the Arbitral Tribunal to dispose of the matter within a period of six months from the date of receipt of copy of this order".
4. The learned Senior counsel further submitted that thereafter also, the said Tribunal has not proceeded further to conclude the arbitration proceedings and the order passed by the said Arbitral Tribunal, last on 25.09.2014 vide Annexure-L produced before this Court, the Tribunal adjourned the case to 17.10.2014, as the petitioner-contractor M/s.Hindustan Steel Works Construction Ltd., made some more claims before the said Tribunal, which were not cleared and referred by the General Manager of South Western Railway, as envisaged in the relevant Clauses 63 and 64 and that is where the matter stood at that point of time.
He further submitted before the Court that being dissatisfied with the General Manager of South Western Railways not referring the certain additional claims of Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
7/11 the petitioner for arbitration, the petitioner even preferred a Writ Petition before this Court namely W.P.No.50904/2014 as stated in Paragraph-19 of the present C.M.P.No.102/2015 and which Writ Petition is still pending in this Court.
He, therefore, submitted that a fresh Arbitrator deserves to be appointed in the present case and hence, the present petition has been filed in this Court on 04.06.2015.
5. Per contra, Mr.Y.T.Abhinay, learned counsel for the Respondents-South Western Railway has submitted before the Court that in view of the constant filing of the additional claims before the Arbitral Tribunal earlier constituted in the matter, in terms of the Arbitration Clauses 63 and 64 of the Contract, the Arbitral Tribunal was constrained to direct the petitioner-contractor to seek reference of such additional claims by the General Manager (Sales), South Western Railway and since the Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
8/11 petitioner failed to get such reference made through the General Manager of South Western Railway, the Tribunal could not naturally proceed further in the matter. He also submitted that the aforesaid Writ Petition No.50904/2014 was filed by the petitioner- contractor as aforesaid and in view of the pendency of that writ petition also, the Tribunal could not proceed further in the matter, awaiting the decision of this Court in the said writ petition.
6. At this stage, the learned Senior counsel for the petitioner, upon instructions, has submitted that there was no interim order in the aforesaid writ petition, passed by this Court and his client would withdraw the said Writ Petition No.50904/2014 itself from this Court.
7. Having heard the learned counsels for the parties, this Court is of the opinion that the present petition under Section 11(6) of the Act has no merit and deserves to be dismissed.
Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
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8. Sub-Section(6) of Section 11 of the Arbitration and Conciliation Act, envisages intervention and appointment by this Court of the Arbitrator, only if the parties to the Contract either failed to act as required under the procedure agreed between them for the appointment of the Arbitrator or the Arbitrator or the Institution fails to perform the function entrusted to him under that agreed procedure. Therefore, it is only on the failure of the parties, Arbitrator or Arbitral Tribunal or the Institution, that such a petition under Section 11(6) of the Act can be preferred and not where the Arbitral Tribunal is already seized of the arbitration proceedings under the agreed procedure.
9. In the present case, the facts stated above reveals that such Arbitral Tribunal is already constituted and even reconstituted with one Member substituted under the orders of this Court at the request of one of the parties namely, the South Western Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
10/11 Railway, and while that Tribunal was seized of the matter and was in seisin of the Arbitral disputes between the parties, the present petitioner-contractor has chosen to file this petition under Section 11(6) of the Act seeking appointment of a fresh Arbitrator.
10. There is no material on record to arrive at the conclusion that the Arbitral Tribunal already appointed as per the procedure agreed between the parties under Clauses 63 and 64 has failed to perform its functions or has ceased to function.
11. Despite the time limit of six months given by this Court in the order dated 24.07.2014 quoted above, it appears that the proceedings before the Tribunal could not proceed more so by the acts of the petitioner- contractor himself rather than the fault of the Respondent-South Western Railway or the Arbitral Tribunal in any manner. Filing of the W.P.No.50904/2014, which is pending for the last three Date of Order 02-11-2017 C.M.P.No.102/2015 M/s. Hindustan Steel Works Construction Ltd. Vs. Union of India & Ors.
11/11 years was one such valid reason for the Tribunal not to proceed further in the matter and equally valid reason seems to be the non-reference or clearance by the General Manager of the South Western Railway of the additional claims raised by the petitioner-contractor. The petitioner-contractor therefore cannot blame the Arbitral Tribunal to have not concluded the arbitration proceedings within the time frame given by this Court, much less it can be allowed to substitute the Tribunal with a new appointment of Arbitrator by seeking recourse to Section 11 of the Act at this stage.
12. The petition is therefore devoid of any merit and the same is liable to be dismissed and accordingly, it is dismissed. No costs.
Sd/-
JUDGE Srl.