Delhi High Court
K.C. Sharma vs Ndmc & Anr. on 12 August, 1999
Equivalent citations: 1999VAD(DELHI)543, 81(1999)DLT552, 1999(51)DRJ99
Author: Mukul Mudgal
Bench: Mukul Mudgal
ORDER
Mukul Mudgal, J.
1. This is an arbitration petition, on behalf of the petitioner, under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the 'Act') seeking the directions to the respondents to file the arbitration agreement and also an order of reference of the disputes detailed in Para 12 of the petition for arbitration.
2. The petitioner is a contractor who entered into contract on 26.2.1993 for providing Grit Wash on outer site of old building of Charak Hospital at Moti Bagh, New Delhi.
3. Clause 25 of the contract Agreement provided for the arbitration and reads as follows:
"Settlement of disputes by arbitration: Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter of thing whatsoever, in any way arising out of or relating to the contract, designs, specification, esti-
mates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the President NDMC at the time of dispute or if there be no President, the administrative head of the NDMC, at the time of such appointment. It will be no objection to any such appointment if the arbitrator so appointed is a Government servant of NDMC employee, that he has to deal with the matters to which the contractrelates and that in the course of his duties as Government servant or NDMC employee he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred, being transferred or vacating his office or being unable to act for any reason, the President or administrative head as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by the President or administrative head of NDMC, as aforesaid should act as arbitrator and for any reason, that is not possible, the matter is not to be referred to arbitration at all. In this case, parties have agreed that the arbitrator/arbitrators or umpire will give reasons for the award.
Subject as aforesaid, the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.
The arbitrator may, from time to time with the consent of the parties enlarge the time for making and publishing the award.
It is also a term of the contract that if the contractor does not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the NDMC that the bill is ready for payment, the claim of the contractor will be deemed to have been waived and absolutely barred and the NDMC shall be discharged and released of all liabilities under the contract in respect of these claims.
It is a term of the contract that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount(s) claimed in respect of each such dispute.
Notwithstanding anything contained in this agreement, the parties shall not be entitled to revoke reference of disputes to the arbitration after acceptance of the final payment until it is so recorded on the bill that the same was being received under protest.
The decision of Chief Engineer regarding the quantum of reduction as well as justification thereof in respect of rates for sub standard work which may be decided to be accepted will be final and would not be open to arbitration."
4. There were some disputes because of the non-fulfilment and non-perormance of the obligations on the part of the respondents and the petitioner's claim arose from the contract agreement and on such completion of work, various requests were made by the petitioner and respondents failed to make payments and settle the final bill.
5. Learned counsel for the plaintiff has submitted that the contract was wrongly terminated by the respondents vide their letter dated 1.3.1995. Thereafter by his letter dated 12.5.1995, the petitioner invoked the arbitration clause and requested the respondents to refer the claims/disputes detailed by him in the said letter for arbitration. This was followed by a reminder dated 7.7.1995, a document at Page 18 of the paper-book (PartIII), by which the petitioner gave notice that if the arbitrator is not appointed within 15 days then it will be presumed that the appointing authority has waived its right to appoint the arbitrator because of the arbitration clause which requires the appointing authority to appoint the arbitrator.
6. Learned counsel for the respondents has relied upon a judgment of this Court in Govt. of NCT, Delhi & Ors. Vs. M/s. Uttam Singh Duggal & Co. Ltd., A.L.R. 1997 (1) 227; to contend that even upon the refusal of the respondents to appoint an Arbitrator, the Court was not entitled to appoint an independent arbitrator straightway and even if there was inaction/delay on the part of the respondents in apponting the arbitrator upon the demand being made on 12.5.1995, the Court should still appoint an arbitrator as per the Arbitration Clause which permits the respondents to make an ap-
pointment of the Administrator.
7. The learned counsel for the petitioner has relied upon a judgment of this Court in Airtech Pvt. Ltd. Vs. New Delhi Municipal Committee & Ors., 1997(2) A.L.R. 162; to contend that when upon a request made to the designated authority an arbitrator is not appointed, the Court is entitled to appoint an arbitrator. The learned Single Judge in the said judgment has relied upon two judgments of the Hon'ble Supreme Court as per the following observations in Paragraph 3 :-
"Notice of this application was given to the respondent. Reply was filed to the applications. Subsequently, the petitioner amended the petition, but no reply was filed by the respondent despite opportunity. Learned Counsel appearing for the petitioner pointed out that as far back as 25th February, 1995, it called upon the Administrator NDMC for appointment of an Arbitrator, but the request was refused. In the circumstances, he submits that this court should appoint an independent Arbitrator. Learned Counsel relied upon the decision of the Supreme Court in Nandyal Cooperative Spinning Mills Ltd. Vs. Mohan Rao ; G. Ramachandran Reddy & Co. Vs. Chief Engineer, Madras Zone ; Military Engineering Service 1994(2) ALR 61. On the other hand learned counsel appearing for the respondent submitted that the petitioner while giving notice requiring the respondent to appoint an arbitrator did not enumerate its claims and therefore, he cannot ask this court to appoint an arbitrator instead of seeking a direction to the respondent to make the appointment of an arbitrator in terms of the agreement. In support of his submission he relied upon the decision of the Orissa High Court in Niranjan Swain Vs. State of Orissa ."
8. The Hon'ble Supreme Court in Nandyal Cooperative Spinning Mills Ltd.
Vs. Mohan Rao ; held as follows:
"It would thus be clear that if no Arbitrator had been appointed in terms of the contract within 15 days from the date of receipt of the notice, the administrative head of the appellant had abdicated himself of the power to appoint Arbitrator under the contract."
9. The Hon'ble Supreme Court in G. Ramachandran Reddy & Co. Vs. Chief Engineer, Madras Zone ; held as follows:
"Thus when the notice was given to the opposite contracting party to appoint an Arbitrator in terms of the contract and if no action has been taken, it must be deemed that he neglected to act upon the contract. When no agreement was reached, even in the court between the parties, the court gets jurisdiction and power to appoint an Arbitrator. Even if Section 8(a) per se does not apply, notice was an intimation to the opposite contracting party to act upon the terms of the contract and his/its non-availment entails the forfeiture of the power to appoint an Arbitrator in terms of the contract and gives right to the other party to invoke the Court's jurisdiction under Section 20. In the instant case, the respondent did not appoint an Arbitrator, after the notice was received."
10. In view of the fact that the Hon'ble Supreme Court has held that refusal to appoint an arbitrator abdicates the power of designated authority to appoint arbitrator. It is clear that Court thus is entitled to appoint an independent arbitrator. Accordingly, I appoint Mr. Justice Jaspal Singh, a retired Judge of this Court to act as the Sole rbitrator to adjudicate the disputes enumerated in paragraph 12 of this petition which is filed before this Court. The Arbitrator may enter upon reference within 4 weeks from today and may give his award within 4 months of entering reference.
11. In view of the above, the petition stands disposed of.