Gujarat High Court
Anil Enterprise Through Sole ... vs Garrison Engineer (I) on 29 September, 2022
Author: Aravind Kumar
Bench: Aravind Kumar
C/IAAP/21/2019 ORDER DATED: 29/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 21 of 2019
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ANIL ENTERPRISE THROUGH SOLE PROPRIETOR VALIMAMAD
DODEPOTRA S/O HUSEN DODEPOTRA
Versus
GARRISON ENGINEER (I)
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Appearance:
MS SHEEJA G NAYAR(5458) for the Petitioner(s) No. 1
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
ARAVIND KUMAR
Date : 29/09/2022
ORAL ORDER
1. This petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short) for appointment of a sole arbitrator as proposed in paragraph 14 of the petition.
2. I have heard the arguments of Ms. Sheeja Nayar, learned counsel appearing for petitioner and Mr. Nikunt Raval, learned counsel appearing for respondents.
3. Petitioner is the sole proprietor of the firm M/s. Anil Page 1 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022 C/IAAP/21/2019 ORDER DATED: 29/09/2022 Enterprises and pursuant to three tenders floated by respondent no. 2, petitioner submitted its bids which came to be accepted on 30.06.2015. Petitioner claims to have completed the work and delivered the furniture as was required to be done under the work order issued during March, 2016 and as such, made a request for issuance of completion certificate and also sought for payment of balance amount of Rs. 66,43,950/-. On account of there being no reply, petitioner filed Special Civil Application No. 13944 of 2018, 13945 of 2018 and 13946 of 2018 seeking thereunder quashing of the communication dated 25.05.2017 issued by the respondent whereunder contract had been cancelled and demanded the outstanding amount with interest. Special Civil Applications were opposed to by the respondents on the ground of maintainablity contending inter alia that said contract contained "arbitration clause" and as such petitioner, if aggrieved by any decision and/or any action of the respondent connected with the contract and / or dispute arising thereunder is to be resolved through arbitration proceedings as per the terms and conditions of the contract. Page 2 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022
C/IAAP/21/2019 ORDER DATED: 29/09/2022 Said plea came to be accepted and at that point of time, learned counsel appearing for petitioner did not press the petition and sought leave of the Court to withdraw the same with a view to avail the remedy of taking recourse to arbitration proceedings in accordance with the terms of the contract. Hence, reserving said right, petitions came to be disposed of 29.11.2018 by this Court. It is thereafter petitioner got issued a legal notice dated 24.12.2018. In the meanwhile, respondent no. 1 forwarded a communication to the petitioner stating thereunder that contract has been cancelled and petitioner is required to pay a total amount of Rs. 21,04,337/- by way of compensation contending that the petitioner failed to complete the work entrusted to it. However, no reply was forwarded to by the respondent no. 2 and 3. The notice seeking appointment of arbitrator is said to have been replied by the respondent no. 1 by office letter No. 8011/CC/23/E8 dated 31.12.2018. However, neither of the parties have placed on record the said communication. The reply affidavit dated 31.12.2018 filed by the respondent would indicate that petitioner has been informed that said Page 3 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022 C/IAAP/21/2019 ORDER DATED: 29/09/2022 reply has been returned undelivered and same was forwarded through E-mail address provided on the letterhead of the Advocate to the petitioner. The copy of the e-mail is annexed to the affidavit as Annexure - R-6. Petitioner has been informed by the first respondent by communication dated 08.03.2019 (Annexure R-7) about the communications addressed to the Advocate having been returned unserved. In the interregnum, there has been reorganization of the Department and a new Chief Engineer Office with the jurisdiction of Porbankar, Okha and Vadinar stations is said to have come into existence under the name and style of Chief Engineer and the Chief Engineer (CG) Goa, having the jurisdiction has invoked the arbitration clause by forwarding a notice for appointment of an arbitrator to the Appointing Authority i.e. Engineer-in-Chief, Army Headquarter, New Delhi vide communication dated 80014/66/E8 dated 24.01.2019. Despite the appointing authority having called upon the petitioner to furnish the undertaking as required under section 12(5) of the Act, petitioner has refused to submit or in other words, has not submitted the same. Page 4 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022
C/IAAP/21/2019 ORDER DATED: 29/09/2022 Hence, contending without following the due procedure, sought for dismissal of the petition. It is an undisputed fact there being arbitration clause between the parties and it reads :
"(B) To supply to the extent to which my/our tender may herein be accepted upon terms and conditions contained or referred to in the said documents and at the price or prices quoted by me/us in Sch 'A' hereto, such of the stores and materials listed therein as may be required and demanded of me/us during the period of completion commencing as shown in first work order of contract and in respect whereof my/our tender may herein accepted. I/ We further agree that any condition of sale of contract or general reservations, which may be printed or written on any correspondence, delivery notes, invoices, etc. submitted by me/us in connection with this contract shall not be applicable hereto, and to refer all disputes, as required by condition 37 to the sole arbitration of an serving officer having degree in Engineering or equivalent or having pass final / direct final examination sub division II of institution of surveyors (India) recognized by the govt. of India to be appointed by the Engineer in Chief or in his absence, the officer officiating as Engineer-in-Chief or Director General of works if specifically delegated in writing by Engineer-in-Chief, Army Headquarter, New Delhi whose decision shall be final, conclusive and binding."
4. It is in furtherance of this agreement, the arbitration clause was invoked by the petitioner calling upon the respondent to appoint the arbitrator. However, respondent is insisting for an arbitrator to be appointed by the Chief Engineer and as such has called upon the petitioner to Page 5 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022 C/IAAP/21/2019 ORDER DATED: 29/09/2022 furnish the agreement as required under sub-section (5) of section 12 of the Act. In the background of petitioner not having executed such agreement, and the fact that independence and impartiality of the arbitration proceedings, being the hallmark, respondent cannot be heard to contend that arbitrator working in its department is required to be appointed as an arbitrator. When respondent is not disputing there being an arbitrable dispute, but on the other hand in the Special Civil Application which was filed by the petitioner for quashing the termination notice issued, raised a plea of dispute being arbitrable, it cannot be gainsaid by the respondent at this length of time to stave off the arbitration proceedings.
5. In that view of the matter, this Court is of the considered view that arbitrator as sought for requires to be appointed having regard to the fact that claim made by the petitioner is 66 lakhs and there is a claim on the part of respondent against the petitioner to the tune of Rs. 21 lakhs, it would be apt and appropriate to appoint an arbitrator. Page 6 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022
C/IAAP/21/2019 ORDER DATED: 29/09/2022
6. Hence following :
ORDER
(i) Petition is allowed.
(ii) Shri Mr. Dilipkumar Dhirajlal Thakkar,
Retired District Judge, Presently residing at : E/ 2, 902, Samarpan Tower, Off. C.G.Road, Navrangpura, Ahmedabad, permanent address : 15, Sheelalekh Duplex, B/H. Railway Station, Opp. Mamta Hotel, Alkapuri, Vadodara
- 390007, is hereby appointed as sole Arbitrator to resolve the dispute between the parties in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. Both parties would also be governed by said Rules.
(iii) Registry is directed to communicate this order to the sole arbitrator forthwith by Page 7 of 8 Downloaded on : Sun Dec 25 02:56:17 IST 2022 C/IAAP/21/2019 ORDER DATED: 29/09/2022 speed post.
(iv) No order as to costs.
(ARAVIND KUMAR,CJ)
AMAR SINGH
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