ERA INFRA ENGINEERING LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) CONTRACTOR M/s Era Infra Engineering Ltd. has filed this first appeal assailing order dated 16.5.2009 passed by learned Additional District Judge, Jalandhar thereby allowing petition under section 34 of the Arbitration and Conciliation Act, 1996 (in short, the Act) filed by respondent no. 1-Union of India and thereby setting aside award dated 7.4.2006, Annexure A2 passed by respondent no. 2-Arbitrator (Rajender Prasad).

(2.) RESPONDENT no. 1-Union of India awarded contract for construction of Army Public School to the appellant-contractor. Dispute arose between the parties. The dispute was referred to respondent no. 2- Arbitrator who was then Chief Engineer (Air Force), Jalandhar Zone, Jalandhar Cantt. , as per the clause contained in the agreement between the parties. The said Arbitrator has given award dated 7.4.2006, Annexure A/2. Union of India challenged the aforesaid award by filing petition under section 34 of the Act inter alia on the ground that during pendency of the arbitration proceedings, the Arbitrator had retired as Chief Engineer on 30.6.2004 and therefore, he ceased to be Arbitrator. Consequently, award dated 7.4.2006 passed subsequently by him is invalid and without authority. Appellant-contractor controverted the averments made by Union of India and defended the award to be legal and valid.

(3.) I have heard learned counsel for the parties and perused the case file. Counsel for the appellant contended that respondent no. 2 was validly appointed as Arbitrator and therefore, he did not cease to be Arbitrator merely on retirement. Reliance in support of this contention has been placed on judgment of Hon'ble Supreme Court in M/s Construction India vs. Secretary, Works Department, Government of Orissa and others, (1998) 2 Supreme Court Cases 89. It was also contended that judgment of Hon'ble Supreme Court in Union of India and others versus Prabhat Kumar and Bros. and another, 1995 Supp (4) Supreme Court Cases 525 relied by the trial court is not applicable to the facts of the instant case because in the said case, there was specific provision in the arbitration clause that if the Arbitrator resigned his appointment or vacated his office............, the authority appointing him may appoint a new Arbitrator to act in his place, but there is no such corresponding provision in the arbitration clause in the instant case.