TANTIA CONSTRUCTIONS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) In this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') the petitioner company has prayed for appointment of a sole Arbitrator to resolve the disputes arisen between themselves and the respondent, Eastern Railway relating to the Contract No.CE/C/VI/71 of 2012-2013 dated March 6, 2013 (hereinafter referred to as ' the said contract').

(2.) It is the case of the petitioner company that in terms of the said contract they had to carry out the work involving earthwork in filling, cutting, blanketing, construction of minor bridges, platform walls/flooring, drains, station buildings, gate lodges, roads, etc. and other ancillary works in Bandel (including yard) and Talandu (including yard up to Km. 51.00) in connection with the construction of the third line between Bandel and Bainchi. The terms and conditions under which the petitioner had to carry out the said work were those mentioned in the said contract, as well as the General and Special Conditions of Contract framed by the respondent Railway (hereinafter referred to as 'the GCC'). Clause 63 read with clause 64(1) of the GCC contemplated that all disputes arising between the parties to said contract would be first referred by the contractor to the railway and if the latter fails to decide the matter referred to by the former within 120 days, such matters may be referred to arbitration by the contractor within 180 days of his presenting his final claim on the disputed matters. Since the total value of the work allotted to the petitioner by the respondent railway was more than Rs.10 lac as per clause 64(3)(a)(ii) of the GCC all disputes and differences arisen between the parties to the said contract would be decided by an Arbitral Tribunal. In this regard, clauses 64(3)(a)(ii) and 64(3)(a)(iii) of the GCC are extracted below:

(3.) According to the petitioner, with the introduction of sub-section (5) of section 12 as well as the Seventh Schedule to the Act of 1996 with effect from October 23, 2015 the General Manager of the respondent railway became ineligible to be involved in the process of constitution of the Arbitral Tribunal and, as such, an independent person is to be appointed as the sole Arbitrator to adjudicate the disputes arisen between the parties to the said contract. Therefore, by a letter dated July 29, 2017 addressed to the General Manager of the respondent railway the petitioner invoked the arbitration clause and sought such disputes and differences being adjudicated through an advocate suggested by them as the sole Arbitrator. By a letter dated December 20, 2017, the General Manager 0f the railway forwarded a panel of four persons, who have retired from the service of the railway, to enable the petitioner to suggest at least two names out of the panel as their nominees and appoint one out of them as their nominee Arbitrator. The petitioner by their letter dated January 2, 2018 informed the General Manager of the respondent railway that in view of the provisions contained in section 12(5) read with the Seventh Schedule to the Act of 1996, the persons named in the letter dated December 20, 2017 are ineligible to be appointed as the Arbitrator and requested the General Manager to take steps in the matter in accordance with law. The said letter, however, evoked no response from the respondent railway. Thus, the petitioner company filed the present application seeking the relief mentioned above.