STATE OF MADHYA PRADESH Vs. VAYAM TECHNOLOGIES LTD

JUDGEMENT

(1.) In this writ petition under Article 227 of the Constitution of India the petitioner has assailed the validity of the order dated 20-11 -2013 by which mandate of the Arbitrator under Section 14(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been terminated.

(2.) Background facts leading to filing of the writ petition, briefly stated, are that a tender was invited on 17-1-2011 by the Director General of Police with a view to procure a software solution, namely, Integrated Data Management System. The respondent submitted its bid, which was accepted, and a purchase order dated 4-10-2011 was issued by the Assistant Inspector General of Police on behalf of the Inspector General of Police. Thereafter, an agreement dated 9-11-2011 was executed between the Governor of Madhya Pradesh and the respondent. The agreement was signed by the Director General of Police on behalf of the Governor of Madhya Pradesh and the respondent. Clause 21 of the Agreement provides that any dispute between the parties to the agreement shall be referred to the arbitration of Director General of Police, Madhya Pradesh whose decision thereon shall be final and binding on the parties. A show cause notice dated 1-3-2013 was issued by the Assistant Inspector General of Police on behalf of the Director General of Police to the respondent on the ground that the Software was not found up to date and the respondent was asked to show cause as to why the contract be not cancelled and the respondent-firm be not black listed. Thereafter, by an order dated 24-4-2013 the contract was rescinded by the Director General of Police and the respondent was black listed for one year.

(3.) The respondent vide communication dated 1-5-2013 requested the petitioner to initiate arbitration proceeding. The respondent filed its claim before the named Arbitrator on 7-5-2013 along with an application under section 17 of the Act. The petitioner filed its reply before the Arbitral Tribunal. The Arbitrator vide order dated 27-5-2013 rejected the application filed by the petitioner under section 17 of the Act. The respondent thereafter on 10-6-2013 filed an application under section 13(2) of the Act. The Arbitrator vide order dated 28-9-2013 rejected the aforesaid application on the ground that the respondent itself initiated arbitration proceeding wherein it accepted the Director General of Police as an Arbitrator. Thereafter, the respondent filed an application under section 14(2) of the Act before the trial Court which was allowed vide order dated 20-11-2013 and mandate of the arbitrator was terminated on the ground that a person cannot be a Judge in his own cause and there is real likelihood of bias. In the aforesaid factual background the petitioner has approached this Court.