COMPETENT CONSTRUCTION COMPANY Vs. STATE OF HIMACHAL PRADESH

JUDGEMENT

(1.) PETITIONER was awarded the work of construction of Himachal Bhawan, Sikandra Road, New Delhi, by respondent No. 1 on 22.8.1978. Agreement including arbitration clause was executed in relation thereto. The work was to be completed within 24 months i.e., on or before 5.9.1980. The work could not be completed for one reason or the other. Petitioner allege non -completion of the work due to hindrance and hurdles created by respondent No. 1. Any how, the time was extended upto 14.2.1982 for the completion thereof. Within the extended period, the building work was completed and it was handed over to respondent No. 4.

(2.) AFTER submission of the final bill in relation to the above said work done by the petitioner, some disputes arose. It is alleged that though part payments in respect of the bills have been made after unilaterally deducting/ withholding/disallowing huge amount, the balance amount is not being paid. Thus the respondents having failed to make the payment to the petitioner, the latter had been compelled to invoke clause 25 of the agreement seeking a reference of the dispute to an Arbitrator. Clause 25 envisage that if any dispute or claim arises out of the contract such dispute shall be referred to the Chief Engineer for arbitration by a person appointed by him. Petitioner allege that the dispute and claim arose between the parties inter alia, regarding the interpretation of clauses 10C, 43, 12, 5 and other clauses of he agreement. So he requested the Chief Engineer vide his letter dated 26.2.1984 to appoint an arbitrator having legal background and good knowledge of law for the reasons that the dispute involved substantial and complicated questions of law. Petitioner allege that no such efforts has been made till date. According to him, the second respondent (Engineer -in -Chief) mechanically and unilaterally appointed Shri S. C. Kohli and thereafter P. C. Bisht, both Superintending Engineers, one after the other, but each one of them expressed his inability to proceed with the arbitration and conclude the case. Shri P. C. Bisht unilaterally appointed as an Arbitrator is alleged to have entered upon the reference w.e.f. 2.4.1985 but later declined to do so. Resultantly, the petitioner filed the instant petition under Sections 5, 8, 9, 12 and 41 of the Arbitration Act in the High Court of Delhi in exercise of its Civil Original Jurisdiction in August 1985. The said petition was registered as Civil Suit No. 1534 -A of 1985. Later vide order passed on July 6, 1988, finding that the court had no jurisdiction, the petition was returned for it presentation before the court of Id. District Judge, Shimla. It appears that the papers pertaining thereto were either not returned or record to the case was not sent to the learned District Judge, Shimla, so the petitioner filed another petition seeking a direction to its Registry to send the record of the original suit referred to above to appropriate authority as is envisaged under Order 7 Rule 10 of the Code of Civil Procedure. A single Bench of High Court of Delhi vide its order dated December 17, 1991 ordered the sending of the record to the appropriate authority, i.e., the learned District Judge, Shimla and also directed the parties to appear in that court on 15.2.1992.

(3.) RESPONDENTS have adopted the reply already filed in the High Court of Delhi. The prayer seeking the appointment of an Arbitrator having legal knowledge in relation to the peculiar facts and circumstances of this case has been vehemently contested. According to the respondents, petition is neither bona fide nor in accordance with the statutory provisions of the Arbitration Act, Respondents contend that on the dispute raised by the petitioner, arbitrators have been appointed by the competent authority in accordance with clause 25 of the agreement. According to the respondents the Arbitrator earlier appointed was a Senior Superintending Engineer having vast experience of technical and all other related matters in addition to having handled a number of arbitration matters, had already been appointed. Secondly, the dispute also falls under Clause 12 -A pertaining to the analysis of rates are required to be derived and decide by an Engineer. Similarly, the claims falling under Clause -10C are required to be worked out and decided for the said purpose and particularly the adjudication of the claim, it is contended that the prayer for appointment of a legal expert is not tenable.