Calcutta High Court
Umesh Kumar Pandey vs Union Of India & Anr on 22 March, 2017
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
AP No.65 of 2017
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
UMESH KUMAR PANDEY
Versus
UNION OF INDIA & ANR.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 22nd March, 2017.
Appearance:
Mr.Rama Pada Biswas, Adv.
Mr. K. Ghosh, Adv.
Mr. Mahendra Prasad Gupta, Adv.
The Court : A preliminary objection is taken up on behalf of the respondent
authority with regard to the maintainability of the application on the ground that there is no enforceable arbitration agreement between the parties. The learned counsel has referred to the letter of acceptance and submitted that the petitioner has not furnished the performance guarantee and, in view thereof, no formal agreement could be executed and, accordingly, the arbitration clause contained in the tender document cannot be enforced in this proceeding.
The respondent has relied upon a communication dated 3rd February, 2015 which shows that the work was terminated on that date after forfeiting EMD and other dues payable against the contract, as the petitioner has failed to submit the requisite performance guarantee within sixty days from the date of issuance of the letter of acceptance.
The petitioner contends that since the contract value was reduced to Rs.16,83,593/- instead of the tender value of Rs.21,88,938/-, the amount of earnest money retained as security deposit would be Rs.33,272/- (2% of contract value) instead 2 of Rs.1,09,447/- as mentioned in the tender notice and the balance amount of security deposit ought to be recovered at the rate of 10% of the bill amount till the full security deposit , i.e., Rs.83,000/- (5% of contract value) is recovered. The petitioner says that after receipt of the letter of acceptance dated 14th August, 2014, the petitioner had engaged labours and staff to execute the job and when the work was in progress, the respondent has illiterally and/or illegally terminated the contract. There cannot be any doubt that the dispute has arisen in respect and in relation to the contract which contains an arbitration clause. The Arbitrator would be required to decide as to whether the contention of the petitioner in his representation dated 16th February, 2015 with regard to the quantum of performance guarantee required to be furnished by the petitioner was justified and in the event the answer is in the affirmative, there cannot be any doubt that the contract is illegally terminated.
However, this observation is, prima facie, as this Court, at this stage, is only concerned with the existence of an arbitration agreement. It appears that the parties cannot perhaps dispute the acceptance of the arbitration agreement and the fact that the dispute has arisen out of or in relation to the said arbitration agreement. The petitioner served a notice under Section 21 of the Arbitration and Conciliation Act, on 7th July, 2015 followed by a reminder dated 3rd March, 2016. The railway authorities have communicated its decision on 18th April, 2016 declining to refer the dispute to arbitration on the ground that the agreement could not be executed due to non- compliance of terms and conditions that is non-submission of performance guarantee within stipulated the period. By reason of the expiry of the statutory period of thirty days from the date of receipt of the notice, the legal right has accrued in favour of the petitioner and the appointing authority has forfeited its right to make any appointment. The arbitration clause has qualified the appointment in respect of the present dispute. The qualification of the arbitrator required to adjudicate the dispute is in Clause 64(3)
(c)(iii)(i) which reads:
3
"64.(3)(c)(iii)(i) Qualification of Arbitrator (s)
(a) Serving Gazetted Railway Officers of not below JA Grade level.
(b) Retired Railway Officers not below SA Grade level, three years after his date of retirement.
(c) Age of arbitrator at the time of appointment shall be below 70 years.
(ii) An arbitrator may be appointed notwithstanding the total number of arbitration cases in which he has been appointed in the past."
In my view, the Gazetted Railway Officer is not a qualification but a status. Under such circumstances, Justice Sukhdeb Singh Anand, Retired District and Sessions Judge, (Address: 4C Regent Tower 121/1 N.SC. Bose Rd, Kolkata-700040, Mob. No.9007986995), is appointed as Arbitrator. The commensurate remuneration of the Arbitrator may be fixed by the Arbitrator at the first sitting of the arbitration preferably on a consolidated basis. The parties are directed to bear the remuneration of the learned Arbitrator and the expenses of arbitration in equal measure. The Arbitrator is requested to conclude the reference within a period of six months of the statement of claim being lodged before him.
AP No. 65 of 2017is, accordingly, disposed of.
There shall be no order as to costs.
The petitioner is directed to communicate this order to the respondent within a week from date by speed post with acknowledgement due.
(SOUMEN SEN, J.) B.Pal