Madhya Pradesh High Court
M/S Security Solutions And Manpower ... vs All India Institute Of Medical Sciences ... on 16 December, 2024
Author: Vishal Dhagat
Bench: Vishal Dhagat
NEUTRAL CITATION NO. 2025:MPHC-JBP:799
1 AC-32-2022
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL DHAGAT
ON THE 16th OF DECEMBER, 2024
ARBITRATION CASE No. 32 of 2022
M/S SECURITY SOLUTIONS AND MANPOWER SERVICES
Versus
ALL INDIA INSTITUTE OF MEDICAL SCIENCES BHOPAL
Appearance:
Shri Rahul Gupta - Advocate for applicant.
Ms. Kanak Gaharwar - Advocate for respondent.
ORDER
Applicant has filed this application under Section 11(6) of Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.
2 . Counsel appearing for applicant submitted that applicant is a proprietor firm and provides man power for various services at All India Institute of Medical Sciences (AIIMS) Bhopal-non-applicant. Non-applicant is a leading health care hospital in State of Madhya Pradesh. Agreement was entered between applicant and non-applicant on 30.05.2015 for providing man power and various services. Contract was for a period of one year, which was further extended for a period of two years. Applicant continued the contract work on mutual agreement and provided services till 10.08.2018. He made a request for issuing performance certificate and payment of his pending bills. Performance certificate was not issued and there was dispute between parties, therefore, contract was suspended. Respondents imposed penalty of 10% of annual contract value on applicant and also encashment of Signature Not Verified Signed by: NEETI TIWARI Signing time: 16-01-2025 11:59:06 NEUTRAL CITATION NO. 2025:MPHC-JBP:799 2 AC-32-2022 bank guarantee. It is submitted that no opportunity of hearing was given before passing of said adverse order. Petitioner gave a legal notice to non- applicant. Non-applicant was requested to appoint sole arbitrator and refer the dispute for arbitration. Non-applicant failed to appoint arbitrator. In this circumstances, prayer is made for appointment of arbitrator.
3. Counsel appearing for non-applicant raised objection of jurisdiction and submitted that client has right to decide the dispute. It is submitted that applicant has suddenly terminated the agreement by sending email. Action of the applicant has raised serious problems of administration of AIIMS and disbursement of wages to contract employees. No prior notice was given before termination of contract. Non-applicant has a right to revoke the contract and impose penalty. Same has been done in accordance with agreement and in case of dispute, client has a right to decide the dispute between them, therefore, application may be dismissed.
4. Heard learned counsel for parties.
5 . As per terms and conditions of agreement, Director All India Institute of Medical Sciences Bhopal has a right to decide the dispute. Clause 25 & 26 of terms and conditions of contract are reproduced as under:
25. In case of any dispute between the Agency and AIIMS, Bhopal, the Director, AIIMS, Bhopal shall have the right to decide.
However all matters of jurisdiction shall be at the local courts located at Bhopal.
26. In case of any dispute or differences arising under the terms of this Agreement the same shall be settled by reference to arbitration by a Sole Arbitrator to be appointed by Director AIIMS, Bhopal. The provisions of Arbitration and Conciliation Act 1996 shall be applicable.
Signature Not Verified Signed by: NEETI TIWARI Signing time: 16-01-2025 11:59:06NEUTRAL CITATION NO. 2025:MPHC-JBP:799 3 AC-32-2022 Since there is arbitration agreement between parties and sole arbitrator is to be appointed in case of dispute between the parties. After amendment of Arbitration and Conciliation Act, 1996, any person who is interested in affairs of non-applicant, who is covered by Section 12(5) of Arbitration and Conciliation Act, 1996 and falls under any of the categories specified in the Schedule-7 may not be appointed as Arbitrator.
Section 12(5) of Arbitration and Conciliation Act, 1996 is quoted herein under :
Section 12(5) in The Arbitration And Conciliation Act, 1996 (5)[Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-
matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.] Director of AIIMS will be covered under Schedule-7 & no waiver has been obtained from applicant to appoint Director of AIIMS as sole arbitrator.
6. In view of aforesaid circumstances, petition is allowed and following order is passed :-
(i) Shri Anil Thakre, Retd. District & Sessions Judge, R/o 36, Rachna Nagar, Govindpura, Bhopal (M.P.)-462023, Mobile No.9425025431, Email-
[email protected], [email protected] is appointed as sole independent Arbitrator to resolve the dispute between the parties, subject to the declarations being made under Section 12 of the 1996 Act (as amended) with respect to the independence and impartiality of the Arbitrator and the Signature Not Verified Signed by: NEETI TIWARI Signing time: 16-01-2025 11:59:06 NEUTRAL CITATION NO. 2025:MPHC-JBP:799 4 AC-32-2022 ability to devote sufficient time to complete the arbitration within the period specified by Section 29-A of the 1996 Act.
(ii) Said arbitration will take place at Bhopal.
(iii) The Arbitrator is, however, at liberty to conduct the proceedings at a convenient venue as per the convenience of the Arbitrator and the parties, if so required. The Arbitrator will be paid fees in accordance with the Fourth Schedule of the 1996 Act. Both parties will share the costs of the arbitration equally.
(iv) Parties are directed to deposit necessary charges and fees as per M.P. Arbitration Center (Domestic and International) Rule, 2019.
(v) Other provisions of Section 15 (3)(4) of the Arbitration and Conciliation Act, 1996 will apply to Substitute Arbitrator.
9. With aforesaid directions, Arbitration Case is allowed and disposed off.
(VISHAL DHAGAT) JUDGE nd Signature Not Verified Signed by: NEETI TIWARI Signing time: 16-01-2025 11:59:06