R K PAHWA Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition is filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator as according to the petitioner disputes have arisen between the parties. The contract awarded to the petitioner by the respondents was terminated by the respondents vide Order dated 14-9-99. Thereafter, on 4-11-99 the petitioner made request for appointment of an Arbitrator. By letter dated 13-11-99 in reply to the aforesaid letter of the petitioner dated 4-11-99 the respondents stated that as per condition 70 of IAFW-2249 reference to arbitration could not take place until alternative arrangement had been finalised by the Government to get the works completed by or through any other contractor or contractors or agency or agencies. It was also stated that action was in hand to get the left over work completed, at petitioner's risk and cost, through other agency or agencies and request of the petitioner for appointment of Arbitrator would be considered only after making alternative arrangement to get the work completed. As the respondents did not appoint the Arbitrator due to aforesaid reason, the present petition was filed on 4-5-2000 for appointment of Arbitrator by the Court. Notice of this petition was directed to be served upon the respondents returnable on 2-8-2000. It was received by the respondents on 7-6-2000. The respondent i.e. persona designata appointed Brig.R.R.Singh as sole Arbitrator by order dated 25-7-2000.

(2.) However, the petitioner does not accept this appointment and the submission of the petitioner is that the respondents have forfeited their right to appoint the Arbitrator, when the Arbitrator was not appointed after the request made by the petitioner for appointment of the Arbitrator and in any case till the date of filing of the present petition. In support of this submission the petitioner has relied upon the judgment of the Supreme Court in the case of Datar Switchgears Ltd. Vs. Tata Finance Ltd. and another 2000(3)Arb.L.R. 447 (SC).

(3.) On the other hand, learned counsel for the respondents argued that as per Clause 70 of the terms and conditions of the Contract entered into between the parties, there was no occasion to appoint the Arbitrator earlier and, therefore, on the facts of this case judgment in the case of Datar Switchgears Ltd. (Supra) shall not be applicable. Elaborating the submission, learned counsel for the respondents argued that the petitioner had filed OMP.No.365/99 in this Court which was petition under Section 9 of the Arbitration and Conciliation Act, 1996 and in that case this Court had passed interim order dated 22-12-99 restraining the respondents from carrying out any addition or alteration in the work done by the petitioner. By order dated 7-1-2000 this interim order was extended with the clarification that the said interim order will not stand in the way of respondents in taking necessary steps for entrusting the remaining work to another party. Thus it was only after the respondents were allowed to entrust the remaining work to another party that the contractor accepted the same on 12-6-2000 although he had been awarded work earlier. It was further submitted that even this order entitled the respondents to only entrust the work to another party. Complete embargo was lifted only by order dated 29-8-2000 in the aforesaid OMP. Therefore, it was not a case of inaction on the part of the respondents, after receiving the request of the petitioner for appointment of the Arbitrator. Due to the aforesaid OMP and the orders passed therein, respondents were precluded from awarding the remaining work to the third party and getting the same completed at the risk and cost of the petitioner.