VIDHYAWATI COUNSTRUCTION VO Vs. UNION OF INDIA

JUDGEMENT

(1.) This application has been filed by the applicant under section 11(3)(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Act of 1996') seeking appointment of an arbitrator for resolution of the dispute existing between the parties.

(2.) Brief facts of the case, necessary for deciding this application are as under: Applicant M/s Vidhyawati Construction Company, with its Head Office at Vidhya Kunj,Allahabad is a Partnership Firm, and this application is filed by one of the Partners, who is authorized to file it. The Firm is a registered firm with the competent authority in the State of Uttar Pradesh. Non-applicant No.2, General Manager, Central Railway is Head of the Department and certain tenders were floated for construction work on behalf of Union of India. Offer made by the applicant was accepted and a contract entered into on 6.6.01, for the purpose of making certain construction activities, as are detailed in the contract agreement. Clauses 63 and 64 of the contract agreement, which is the General Conditions of Contract, contemplates a provision for settlement of dispute and for making demand for arbitration. It is the case of the applicant that the said work, which was entrusted to the applicant, was completed successfully and to the full satisfaction of the non-applicants on 25.11.2002 and a certificate - Annexure 1 was issued by the Executive Engineer (Construction) Bhopal in this regard. It is stated that after the work was completed the applicant submitted a final bill vide Annexure 2, demanding a sum of Rs.89,16,602=81, after deducting amount already paid to the tune of Rs.2,18,91,502=71. It is stated that after about five months on 16.4.03, vide Annexure 3, certain information were sought for and correspondence took place vide Annexure 4, in this regard. It is stated that finally vide Annexure 5, on 6.6.03, applicant raised a claim to the tune of Rs.89,16,602. Thereafter, reminders were sent, but instead of adjudicating the claim as per Clause 63 of the General Terms and Conditions, vide Annexure 8, non-applicants informed the applicant that they should nominate an arbitrator from the panel indicated in Annexure 8, so that the dispute can be resolved by arbitration. Applicant again submitted the claim and on 9.7.04 proposed the name of one Hon'ble Shri Justice A.N. Dixit, Former Judge of the Allahabad High Court, to be appointed as Arbitrator, vide Annexure 9. When nothing was done, this application has been filed.

(3.) Shri V.R. Rao, learned Senior Advocate, taking me through the documents and material available on record, submitted that there being a dispute between the parties, when the claim was raised by the applicant, instead of adjudicating the claim in accordance to the terms contemplated under Clause 63 of the General Conditions, non-applicants vide Annexure 8 directly resorted to the procedure of arbitration, when no demand was made for arbitration by the applicant. Subsequently, when demand for arbitration was made vide Annexure 9, as no action was taken it is stated that non-applicants have forfeited their right to nominate the arbitral Tribunal in accordance to the agreement, instead now this Court should appoint an Independent arbitrator. Interalia contending that the claim is for more than 1 Crore and the arbitrator appointed or proposed by the non-applicants in Annexure 8 will not be an independent arbitrator, it is stated that a Former Judge of the High Court should be appointed as arbitrator. Inviting attention of this Court to an order passed in the case of the present applicant themselves, the Hon'ble Supreme Court in SLP(Civil) on 20.11.97, 19.11.2001,Shri V.R. Rao, learned Senior Advocate, argued that exercising jurisdiction in the matter,this Court should now appoint the arbitral Tribunal.