PUNJAB NATIONAL BANK Vs. AJANTA CONSTRUCTION COMPANY

JUDGEMENT

(1.) THIS is a petition under Section 33 of the Arbitration Act and also under Section 8, 11 and 12 of the Arbitration Act, 1940 seeking an order that there is no arbitral dispute which can be referred to arbitration in view of the accord and specific confirmation by respondents no. 1 and 2, further praying for revocation of the authority of respondent no. 3 as sole arbitrator. Facts as stated in the petition are that the Punjab National Bank (herein referred to as petitioner) awarded a contract to respondent no. 1 on 3.11.87. Respondent no. 2 being the partner of respondent no. 1 was responsible for execution of entire work Staff Training Centre of the petitioner Underhill road. The total value of the work awarded was Rs. 45 lakhs out of which the respondent executed work of Rs. 22.55 lakhs and suspended the work in November 1999 and did not restart despite reminder dated 18.3.1989. It is further stated in the petition that the respondents no. 1 and 2 did not execute the balance work despite various letters written to them and, therefore, the remaining work was withdrawn and the only controversy remained between the parties about the balance payment to be made to respondent no. 1.

(2.) MUCH after the withdrawal of work, the respondent no. 1 raised its final bill dated 9.2.93, the same was verified by the petitioner and the amount payable to the respondents no. 1 and 2 came to be Rs. 149166.82. Accordingly, the sum for this amount was handed over to respondent no. 2 on 20.10.94 who acknowledged the receipt of the said sum towards full and final payment of their final bill dated 9.2.93 and further certified that respondents no. 1 and 2 had no other claim in respect of the said work.

(3.) THE petitioner replied to respondent No. 1 refuting the additional claim of the petitioner, same being devoid of any substance. Despite that, respondent No. 1 invoked the Arbitration and appointed respondent No. 3 as their nominee Arbitrator. Since the petitioner did not appoint his nominee Arbitrator, as such respondent No. 3 became the sole Arbitrator and commenced arbitration proceedings and issued notices to the petitioner. Therefore this petition.