BHAGWATI CONSTRUCTION Vs. WESTERN RAILWAY

JUDGEMENT

(1.) Heard learned advocate Mr. Sukhwani appearing for the petitioner and learned advocate Ms. Archana Amin appearing for the respondents. Perused the records.

(2.) Petitioner is seeking appointment of a sole arbitrator contending inter alia that it is a registered partnership firm and having got itself registered as a Government approved Contractor, is carrying on the business. Pursuant to tender called for by the respondents, petitioner was awarded the contract for rebuilding of covering shed over Platform No. 1 & Platform surfacing, construction of foot over bridge with ramps and other miscellaneous work in connection with utility shifting for the proposed DFC parallel alignment on Pansar - Palanpur sec. and an agreement dtd. 12/6/2018 came to be entered into between the parties in this regard. As agreed under the agreement, the rate was fixed at Rs.7,67,04,303.87. This was proceeded by the acceptance of tender and submission of performance guarantee as well as irrevocable bank guarantee amounting to Rs.38,35,215.00 submitted by the petitioner in favour of the Western Railway. The agreement stipulated the time for completion of work as 12 months. Petitioner has alleged that for completion of work, respondents were required to provide drawings and it was belatedly furnished and the work for platform was awarded only on 30/7/2018 and on account of there being live water line and electric cable line, it was not possible to speed up the work. Petitioner is said to have appraised the Deputy Chief Engineer of the bottlenecks faced in execution of the work by communication dtd. 1/10/2018 and as such sought for extension, which is said to have been granted upto 31/3/2019. Petitioner is said to have sought for dismantling old shed, as it was not possible to do new work on the ground that it would endanger human life and as such requested the respondent for dismantling old shed and sought for providing drawing for covering shed and finalizing the drawing for foot over bridge. Petitioner is said to have received 48 hours notice from the office of Deputy Chief Engineer dtd. 2/1/2019 in terms of Clause 62 of the Standard General Conditions of contract, which is said to have been duly replied by the petitioner and assured that the work would be completed on or before 31/3/2019 and requested the respondent to withdraw 48 hours notice issued. Thereafter the respondent is said to have issued 7 days notice on 1/2/2019 resulted in petitioner informing the respondent by communication dtd. 12/2/2019 that petitioner was not provided with entire scope of work and only 30% was provided. Subsequently, Deputy Chief Engineer by communication dtd. 15/2/2019 is said to have rescinded the contract on the ground that termination of the contract is in terms of Clause 62. Contending said termination is wrongful and illegal and it was valid till 31/3/2019, as also the fact that time was not the essence of the contract, notice came to be issued to respondent by the petitioner on 26/2/2019 seeking payment of 1,15,05,645/- with interest @ 18% p.a. from the date of termination of the contract and also sought for release of FDRs within a period of 30 days and informing the respondent that failure to comply with the demands made thereunder, petitioner would be constrained to file a petition seeking for referring the disputes for being adjudicated through arbitration. On account of said demand having not been complied nor notice being replied, present petition has been filed.

(3.) On service of notice, respondents have appeared and filed their reply contending inter alia that Union of India is not a party and Western Railway is owned by the Union of India and the above petition is essentially against the Union of India and as such, proceedings should have been against the Union of India as contemplated under sec. 79 of Code of Civil Procedure and as such it is contended present petition is not maintainable. Denying the averments made in the petition and contending that remedy of the petitioner is to file a suit for recovery of the alleged amount due, if any, and petitioner could not take recourse to Clause 38 which provides for settlement of disputes, the respondent has sought for dismissal of petition. It is also contended that respondent has sent a form to be filled up by the petitioner either for waiving or not of the provisions of Sec. 12(5) and sec. 31A(5) of the Act and same has not been received and as such respondent has prayed for dismissal of the petition. It is the contention of Mr. Sukhwani, learned counsel appearing for the petitioner that arbitration clause in the agreement clearly envisages that disputes between the parties is to be settled under the Arbitration and Conciliation Act , 1996 and the embargo placed under sub-sec. (5) of Sec. 12 , and it cannot be resolved by an arbitrator who is either interested presently or in past or having any remote interest in the dispute and as such the claim of the respondent - Railways that it is entitled to appoint an official as indicated in the agreement or a retired official who has since been disassociated with the Railways for the past three years being permissible under entry no. 31 of Fifth Schedule is erroneous. He would submit that contention of Railways that they are empowered to appoint its retired official is without any basis and as such he has sought for allowing the petition by appointing an independent and sole arbitrator for adjudicating the disputes.