PRESTRESSED UDYOG Vs. UNION OF INDIA AND ORS.

JUDGEMENT

(1.) HEARD Mr. S.J. Sarma, the learned counsel for the petitioner. The respondent Railways are represented by Mr. U.K. Nair, the standing counsel of the N.F. Railway.

(2.) NOMINATION of arbitrator by the Court is prayed through this petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Arbitration Act"), in connection with the dispute arising out of the contract of manufacture and supply of Mono -Block Prestressed Concrete Sleeper for Broad Gauge line, against the Tender No. CS -166 of 2013. The work order for the 50,000 units @ Rs. 1,589/ - totaling Rs. 7,94,50,000/ - was issued on 17.10.2013 (Annexure -1) by the Railway authorities to petitioner. However, due to alleged default of the contractor, the contract was cancelled by the Railways on 01.05.2014 (Annexure -4). Following the cancellation order, the contractor invoked clause 2900 of the Indian Railway Standard Conditions of Contract and demanded appointment of arbitrator through their notice dated 30.05.2014 (Annexure -8). But since no response was received from the Railways, the contractor seeks nomination of arbitrator by the Court, under Section 11(6) of the Arbitration Act.

(3.) IN this case, since the application under Section 11(6) for appointment of arbitrator was filed on 04.11.2014, Mr. S.J. Sarma, the learned counsel submits that nomination of the arbitrator by the Railways under the agreed procedure after the petitioner had moved Court, is not legally permissible. In support of his contention, the counsel relies on Deep Trading Company Vs. Indian Oil Corporation & ors. reported in : (2013) 4 SCC 35. Against the argument of forfeiture of rights to nominate the arbitrator raised by the petitioner, the Railways contend that the competent authority had decided on the arbitrator on 06.10.2014 itself, well before the High Court was moved on 04.11.2014. But since the chosen person had dealt with the contract in question, a replacement arbitrator was nominated subsequently under sub -clause (b) of clause 2900 of the Conditions of Contract. Accordingly it is argued that the ratio of Deep Trading Company (supra) cannot be applied in the facts of the present case to hold that the Railways have forfeited their right to nominate the arbitrator under the agreed procedure.