K NARAYANA RAJU CONTRACTORE Vs. UNION OF INDIA

JUDGEMENT

(1.) Applicant seeks appointment of an independent arbitratorunderSection 11, subsections (5) and (6) of the Arbitration and Conciliation Act, 1996.

(2.) Pursuant to the tender notice, dated 19-7-1999, issued by the respondent for construction of pile foundations, R.C.C. columns and superstructure between Chirala and Stuartpuram railway station, Vijayawada, Gudur section, the petitioner submitted his negotiated offer on 11-1-2000 and respondents accepted the same on 19-1 -2000. As perthe terms of the agreement, the work should be completed within 12 months from the date of acceptance letter i.e., on or before 18-1-2001. Initially value of the work was Rs. 1,54,62,330/- The parties entered into an agreement bearing N0.2/CAO/C/SC/2000 on 7-2-2000. The petitioner deposited an amount of Rs.53,358/- towards EMD out of three crores to be deposited and requested the respondents to recoverthe balance amounts from his running bills and accordingly they recovered an amount of Rs.2,46,642/-. The quantities mentioned in the tender schedule are only approximate and thev are liable to be varied up to 25% beyond the agreement at the time of actual execution of the work. Due to improper planning of the respondents, they could not hand over the site and could not obtain permission from the R & B Department of Government of A.P., on account of which the work could not be progressed as planned. Contrary to the terms of the agreement, the respondents directed the petitioner to test drive the pile foundations and further directed to stop the work until a decision was taken. While the work was in progress, the site engineer asked the petitioner to stop the work until further instructions. On account of the stoppage of the work, the petitioner incurred an amount of Rs.50,000/- per day for the establishment besides that he had to incur idling charges, therefore, the petitioner requested the respondents to extend the currency of contract upto 31-3-2002 on the condition that the respondents shall hand over the site after duly obtaining permission from R & B Department and arrange payment as demanded in his letter dated 23-10-2001. The respondents extended currency of the agreement up to 31 -3-2002, but no subsidiary agreement was entered into. Therefore, the agreement came to an end with the efflux of time on 30-6-2001. The applicant, therefore, raised certain disputes on 5-12-2001 and made claims on 5-4-2002. Eventually he requested the respondents to referthe matter to arbitration. The respondents issued a seven days notice on 6-2-2002 followed by forty eight hours notice on 18-2-2002 and thereafter terminated the contract. The competent authority in response to the request of the petitioner dated 5-4-2002 sent a panel of arbitrators on 26-11 -2002 to enable the petitioner to choose his nominee. As one of the officers in the panel was not available in India, the petitioner requested third respondent to furnish him a fresh panel of arbitrators on 23-12-2002. When the respondent furnished the fresh panel, the petitioner conveyed his nominee and accordingly the competent authority constituted arbitral tribunal on 24-4-2003.

(3.) The tribunal asked the parties to file the respective claim statements along with necessary documents by 13-10-2003. The petitionerthus submitted his claim statements and the respondents too. The petitioner thereafter filed his rejoinder on 11-12-2003. However, as the tribunal did not proceed with the settlement, despite the request of the petitioner to proceed with the matter on 29-6-2004, the petitioner once again requested the tribunal to proceed with the matter on 11-8-2004. When the petitioner made discrete enquiries for the delay he came to know that one of the arbitrators was not interested to proceed with the matter, since huge amounts were due to him. Since the tribunal constituted was not proceeding with the adjudicating process, the petitioner requested the first respondent to reconstitute the tribunal with a fresh panel of arbitrators, in terms of clause 64 (iii) C. However, the respondents failed to constitute a new tribunal. Hence, the petition.