Madhya Pradesh High Court
M/S Capital Construction Co. vs Union Of India on 13 December, 2024
Author: Vishal Dhagat
Bench: Vishal Dhagat
NEUTRAL CITATION NO. 2024:MPHC-JBP:61989
1 AC-114-2022
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL DHAGAT
ON THE 13 th OF DECEMBER, 2024
ARBITRATION CASE No. 114 of 2022
M/S CAPITAL CONSTRUCTION CO.
Versus
UNION OF INDIA AND OTHERS
Appearance:
Ms. Alka Singh - Advocate for applicant.
Ms. Kanak Gaharwar - Advocate for respondent No.1.
ORDER
Applicant has filed this application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.
2. Applicant is service provider, engineers, builders and Government contractor. Non-applicant No.2 Military Engineer Services invited bid to provide new furniture. Applicant took part and was declared successful. Letter of acceptance was signed on 12/02/2014. Work order was issued to applicant on 24/02/2014 for sum of Rs.96,45,922.61. Applicant completed the work on 14/03/2018 and completion certificate was issued vide letter dated 29/03/2018. Applicant submitted final bills for clearance. Final bills submitted by applicant were not cleared despite repeated requests. There is arbitration clause No.37 of IAFW 1815Z between applicant and non-applicant. As per agreement serving officer having decree in engineering or equivalent or having passed final / direct final examination of sub-division II of Institution of Surveyor (India) recognized by Government of India is to be appointed as Arbitrator by Authority. On agreement of both the parties, reference shall take place. Applicant made request Signature Not Verified Signed by: ANURAG SONI Signing time: 07-01-2025 11:05:04 NEUTRAL CITATION NO. 2024:MPHC-JBP:61989 2 AC-114-2022 for appointment of Arbitrator by letter dated 30/07/2019. Reply to said letter was given stating that applicant has not invoked arbitration clause 37 of IAFW-1815Z and no letter has been received. Further non-applicant asked applicant to prove by documentary evidence for invoking arbitration between the parties. Applicant gave notice to invoke arbitration on 06/10/2019. Non-applicants sent consent from agreement seeking waiver under Section 12 (5) of Arbitration and Conciliation Act, 1996 and appointing service officer as an Arbitrator. Non-applicant had failed to appoint Arbitrator on request of applicant, therefore, application under Section 11(6) of Arbitration and Conciliation Act, 1996 is filed before High Court.
3. Learned counsel appearing for applicant submitted that there is no delay in filing application for appointment of Arbitrator. Apex Court in Suo Motu Writ Petition (C) No.3 of 2020 during COVID-19 period has relaxed limitation period from 15/03/2020 to 28/02/2022. Said period is to be excluded in computing the period of limitation prescribed under Section 23 (4) and 29A of Arbitration and Conciliation Act, 1996, Section 12A of Commercial Courts Act, 2015 and also under Section 138 of Negotiable Instruments Act, 1881. It is submitted that excluding such period there is no delay in filing of application for arbitration.
4. Learned counsel appearing for non-applicant submitted that appointment of Arbitrator was not denied. Applicant was not agreeing to sign waiver and appoint Arbitrator in accordance with arbitration agreement i.e. serving officer. In these circumstance since there is no denial on part of non-applicants in appointment of Arbitrator, therefore, application be dismissed. It is further submitted that application for appointment of Arbitrator is barred by Limitation Act. Application is filed beyond the period of three years.
5. Heard learned counsel for the parties.
6. On going through facts of the case, final bills were prepared by applicant Signature Not Verified Signed by: ANURAG SONI Signing time: 07-01-2025 11:05:04 NEUTRAL CITATION NO. 2024:MPHC-JBP:61989 3 AC-114-2022 and submitted for payment in April-2018. Running of time for calculating limitation period starts when final bills were submitted. Application for appointment of Arbitrator was filed before High Court on 19/12/2022 i.e. after 4 years 7 months and 18 days.
7. Apex Court in its order dated 10/01/2022 passed in Suo Motu Writ Petition (C) No.3 of 2020 held that period between 15/03/2020 to 28/02/2022 is to be excluded in counting of limitation period. If said period is excluded i.e. about one year 11 months, then application filed by applicant is within limitation period.
8. Sub-Section 5 of Section 12 of Arbitration and Conciliation Act provides as under :-
(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.
9. Serving officer of non-applicant will fall within Seventh Schedule prepared under Section 12(5) of Arbitration and Conciliation Act. Such a person cannot be appointed as Arbitrator unless and until parties have waived applicability of said clause by an express agreement in writing. Counsel appearing for non-applicant is unable to show any express agreement in writing regarding waiver of said condition.
10. In view of aforesaid circumstances, petition is allowed and following order is passed :-
(i) Shri Vinod Kumar Bhatia, Retired Engineer-in-Chief, R/o 12, Adarsh Nagar, Gwarighat Road, Jabalpur, Mobile No.94250-26025, Email-
[email protected], is appointed as sole independent Arbitrator to resolve Signature Not Verified Signed by: ANURAG SONI Signing time: 07-01-2025 11:05:04 NEUTRAL CITATION NO. 2024:MPHC-JBP:61989 4 AC-114-2022 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 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 Jabalpur.
(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.
11. With aforesaid directions, Arbitration Case is disposed off.
(VISHAL DHAGAT) JUDGE as Signature Not Verified Signed by: ANURAG SONI Signing time: 07-01-2025 11:05:04