VARUN ASSOCIATES Vs. ARMY WELFARE HOUSING ORGANISATION

JUDGEMENT

(1.) The Army Welfare Housing Organisation is a society registered with the Registrar of Societies, Delhi under the Societies Registration Act 21 of 1860 with its head office located at South Hutments, Kashmir House, Rajaji Marg, New Delhi. The object of the society is chiefly to promote and provide dwelling units to the servicing, retired army personnel and their widows all over India on â No profit No Loss Basisâ . In normal course of its business the Society invited tenders for the execution of the work under the name and style of External Electricals Works for Army Welfare Housing Organisation at Sector 68, Mohali on 24th January, 2003. The Petitioner M/s Varun Associates, a partner firm having its registered office at A-37 (basement) Nirman Vihar, Delhi submitted its tender for that work which was accepted by the Society. The acceptance of the tender was communicated by the Society to the Contractor. The date of commencement of the work was 12th March, 2003 and completion thereto was 11th July, 2003. The parties have entered into the contract.

(2.) According to the Respondent Society, before this Court in the present Petition, the Contractor Petitioner herein had not completed the work within time despite the grant of extension of time for completion of work on 9th October, 2003 and then up to 29th February, 2004. Even the work was stopped on 25th February, 2004 and according to the Branch Manager there were large number of defects and certain items of work were yet to be executed by the Petitioner at the site. Finally the work was got completed and defects were removed through another agency and on 3rd November, 2004 notices/summons, without any petition, were received by the Society from the High Court. The paper book was not furnished to the Society. The Society was not aware of the contents of the Petition and on 10th November, 2004 the Society engaged its Counsel, inspected the Court record and came to know that Petitioner was praying for appointment of independent Arbitrator and that allegedly a letter dated 29th April, 2004 was written to the Society. Despite the fact that no such letter was received, the Society vide its letter dated 18th November, 2004 appointed Shri Satish Chander, Joint D.G. (Contracts), Directorate of Contract Management, Engineer in Chief Branch, Army Headquarters, Kashmir House, New Delhi as the sole Arbitrator to adjudicate the claims raised by the Petitioner Contractor in terms of the Arbitration Clause. It is also submitted on behalf of the Society that the said Society vide its letter dated 22nd November, 2004 has entered upon reference and has notified the parties to file their respective claims and or their counter claims. As such they pray for dismissal of the Petition.

(3.) On the other hand, according to the Petitioner Contractor the dispute has arisen between the parties when the Contractor had raised claims against the Society which were liable to be referred to arbitration, in terms of Clause 133, 134 and 135 of the Contract between the parties, to the Arbitrator. Vide its letter dated 29th April, 2004 the Contractor claims to have written to the Society at its correct address, that the dispute and differences referred to in the list annexed to the said letter should be referred to the Arbitrator. This letter at Pg. 64 of the documents was sent by courier and was received by the Respondent immediately thereafter. As such the respondent Society ought to have appointed the Arbitrator on or before 29th August, 2004. They having failed to do so, the Petitioner is entitled to pray before the Court for appointment of Arbitrator in accordance with the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act).