HBHL VKS Vs. UNION OF INDIA

JUDGEMENT

(1.) This order will dispose of the above three cases as common question of law falls for consideration in all these cases based on somewhat similar facts. For the purposes of convenience, it will be sufficient to make the reference only to the facts giving rise to the filing of Arb.P.217/2005 (HBHL-VKS (J.V.) v. The General Manager and another).

(2.) The petitioner which is a registered partnership concern through its registered partner Sh. B.K.Bassi has filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying for a direction to the respondents to file the original arbitration agreement in court and for appointment of an independent sole arbitrator for adjudication of the disputes/claims detailed in para 7(xxiii) of the petition. The petitioner is carrying on the business of Engineers and Contractors. The respondents invited the tender for the work under the name and style Construction of single line Br. No.9 at Km 7.512 over sewer outlet near sector-47 consisting of super structure of pre-stressed concrete box girder center to center bearing 4x31.5m and sub structure with RCC abutment and piers on well foundations and other allied works on Chandigarh Morinda Ph-I, Section of Chandigarh-Ludhiana new B.G. Rail Link. The petitioner submitted its tender which was opened on 13.3.2001. The respondents vide their letter dated 7.6.2001 informed the petitioner that the tender of the petitioner for the work in question had been accepted and the parties entered into an agreement dated 24.4.2002. Clause 64 of the agreement contemplates resolution of disputes by reference to arbitration. According to the petitioner, the work was required to be completed within a period of 18 months from the date of issue of the award with an approximate cost of Rs. 2,50,49,729.07/-. The petitioner geared up the entire resources and mobilized them to the site of the work. It is also stated by the petitioner that after GAD was made available to it, it started excavation for placement of cutting edge on A1 and also taken layout etc. for starting the work. It was noticed that the drawings given by the respondents were not the same as in the case of Bridge No. 8 and other bridges and the work done by the petitioner was wasted. The respondents vide their letter dated 22.1.2002 pointed out that the drawings for casting of well curb, well steining etc. have already been provided to the petitioner and as such they should start the work. This resulted in delay and certain recoveries towards security were made by the respondents contrary to the guidelines and policy framed by the Railway Board. The petitioner requested for release of the excess amount of security recovered. The petitioner requested the respondents to provide for the detailed drawings and to do the needful but instead of acceding to the genuine request, a notice dated 25/26.7.2002 was issued The notice was more intended to cover up own faults of the respondents. Despite the fact that the hindrances were caused by the respondents, they did not agree to the request of the petitioner fully but extended the time upto 30.7.2003 vide their letter dated 20.12.2002 without levy of penalty but without PVC also. Certain other disputes also arose between the parties with regard to rate of cement and steel and payments in that behalf. The petitioner vide its letter dated 18.5.2004 refuted the allegations made by the respondents and raised its claims to the extent of Rs. 90 lacs which have been detailed in paragraph 7(xxiii) of the petition. The petitioner served a notice upon the respondents dated 5.7.2005 by which it invoked the arbitration clause feeling that its request to the respondents would be no consequence. In the letter/notice dated 5.1.2005/5.7.2005, the petitioner had detailed all the disputes, its claims and had specifically called upon the respondents that it is invoking clause No. 64 of the general conditions of agreement, the arbitration clause and in the event no steps are taken within 30 days, it would take action in accordance with law. The notice dated 5.7.2005 was served upon the respondents by speed post. Despite service and grant of opportunity, no reply was filed in this case and Arb.P. 219/2005. However in the other connected case i.e. Arb.P. 213/2005, reply was filed .

(3.) Learned counsel appearing for the respondents, during the course of hearing of the cases, had handed over a letter to the counsel appearing for the petitioners requiring them to give their choice of arbitrator out of the panel of arbitrators stated in that letter. There is hardly any controversy or dispute to the facts stated in the petition. The parties have argued the case primarily on the question of law. According to the petitioners, in view of judgment of the Supreme Court in the case of Datar Switchgears Ltd. v. Tata Finance Ltd. and another (2000) 8 SCC 151, the respondents have lost the right to appoint an arbitrator in terms of Clause 64 of the contract as despite service, they failed to act within a period of 30 days or even prior to the filing of the petition.