M P HOUSING BOARD Vs. SOHANLAL CHOURASIA

JUDGEMENT

(1.) PETITIONER (M. P. Housing Board) issued a notice inviting tender for proposed construction of Commercial complex near Gurudwara, victoria Hospital Jabalpur. Tender of respondent No. 1 was accepted for civil work amounting to Rs. 21,10,352/ -. An agreement, as contained in Annexure P/1 was duly executed between the parties on 10-2-2005. Work order dated 13-5-2005 was duly issued in favour of the petitioner requiring him to complete the work within six months. There arose some dispute and consequently, the petitioner intimated the respondent to stop work vide its letter dated 17-8-2005. Respondent No. 1 issued a notice dated 12-9-2005 (Annexure P/2) under clause 29 of the agreement with a request to refer the matter to the Arbitration of additional Housing Commissioner. Again reminder-cum-notice dated 16-1-2006 (Annexure P/3) was issued by the respondent. Thereafter, another letter dated 1-4-2006 (Annexure P/4) was issued by the respondent that since the authority under the agreement had failed to act as an Arbitrator within the stipulated period, respondent proposed to appoint respondent No. 2 as a sole Arbitrator. Claim was submitted by respondent before the said Arbitrator who initiated the arbitral proceedings. Petitioner on receipt of notice from D. C. Jain, respondent no. 2 submitted preliminary objection regarding maintainability of the proceedings, in view of the provisions of Arbitration and Conciliation Act, 1996. This objection was turned down by the respondent No. 2 vide his order dated 9-10-2006 contained in Annexure P/9. Consequently, this petition has been preferred for the following reliefs :-

(2.) RESPONDENT No. 1 submitted his return and refuted the claim of the petitioner. Relying upon clause 29 of the agreement, it has been contended that the parties are bound by the said clause. A notice was duly issued by respondent no. 1 to the Deputy Housing Commissioner for taking up the matter in arbitration. On having received no response from the Deputy Housing commissioner, the respondent No. 1 proposed the name of respondent No. 2 as an Arbitrator for adjudication of the dispute. Respondent No. 2 has undertaken job/work of arbitration in a valid manner after duly issuing the notice of the proceedings to the petitioner. It is contended that instead of filing preliminary objection, the appointment of respondent No. 2 as a sole Arbitrator ought to have been challenged on issuing notice dated 1-4-2006. Issues have already been framed by respondent No. 2 and time was granted to the parties to file statement on affidavit. Thus, the petitioner would be deemed to have waived its rights to challenge the appointment of Arbitrator in view of the law laid down by the Apex court in M/s M. K. Shah Engineers and Contractors vs. State of M. P. , AIR 1999 sc 950.

(3.) SHRI Naman Nagrath, advocate and Shri D. C. Jain, advocate made their submissions at length which have been considered in the light of material on record and provisions of law governing the situation.