SANDEEP CHAUHAN Vs. STATE OF H.P.

JUDGEMENT

(1.) The present petition under Section 9 of the Arbitration; and Conciliation Act, 1996 (referred to as the Act) has been filed by Sandeep Chauhan petitioner against the respondents, namely, the State of Himachal Pradesh through the Secretary (PWD) as respondent No.1 and the Executive Engineer, National Highway Division, HPPWD, Solan as respondent No.2.

(2.) In the petition under Section 9 of the Act, it has been alleged by the petitioner that the parties had entered into an agreement relating to the execution of the work of improvement of riding quality to Shimla Kangra road NH 88 in Km. 25/0 to 60/00 vide agreement No. 52 of 2001 -2002. It was alleged that as per the terms of the said agreement the petitioner was required to execute and complete the work costing a sum of Rs.1,71,03,707/ - within a period of four months from the date when it was awarded i.e. 6.11.2001 and it was subject to various reciprocal obligation on the part of the respondents, like supply of material designs, drawings etc. as also regular payments. It was alleged that the said agreement between the parties also contained an arbitration clause embodied in clause 25 of the said agreements, requiring all disputes or difference arising out of the agreement to be referred to the sole arbitration of a person to be appointed by the Engineer -in -Chief/Chief Engineer. HPPWD. It was alleged that inspite of the efforts made by the petitioner, the work could not be completed within the stipulated period or even during the extended period on account of various factors including the failure on the part of the respondents to make payments to the petitioner in time. It was alleged that even though the petitioner was prevented from executing and completing the work within the stipulated period, the respondents vide order -dated 24.4.2003 illegally determined the contract and imposed compensation amounting to Rs.17,10,371/ - on the petitioner for alleged delay in execution of the work under clause 2 of the contract. It was further alleged that the contract was illegally rescinded by respondent No.2 vide letter dated 28.5.2004. It was alleged that the said action of the respondents in rescinding the contract has been challenged by the petitioner by filing of a civil suit in the court of District Judge, Solan and the said suit was still pending. It was alleged that in addition to the dispute raised by the petitioner in the civil suit, the petitioner had other claims in respect of which he intends to invoke the arbitration agreement between the parties. It was further alleged that on 7.6.2005 respondent No.2 had issued an office order setting out details of the amounts claimed by the respondents from the petitioner and asking all the Executive Engineers in HPPWD to recover a sum of Rs.18,77,424/ - from the amounts payable to the petitioner. It was alleged that legality of the said office order dated 7.6.2005 issued by respondents No.2 would also be one of the disputes, which would be sought to be referred to the sole arbitration, as per the arbitration agreement between the parties.

(3.) It was further alleged in the petition that prima facie the operation of the aforesaid office order was liable to be stayed during the pendency - of the arbitration proceedings. It was alleged that since the legality of the action taken by the respondents in rescinding the contract is already under challenge in the competent court, the respondents should not to have issued said office order for recovering the aforesaid amount from the petitioner. It was alleged that in case the operation of the said office order is net stayed the petitioner would suffer irreparable loss and injury etc. It was alleged that within the next few days the petitioner intends to invoke the arbitration agreement between the parties and to seek reference of the disputes between the parties to arbitration. It was accordingly prayed that the respondents be restrained from giving effect to the order dated 7.6.2005 issued by respondents No 2 and from recovering the amount of Rs.18,77,424/ - being claimed by them, till such time as the disputes between the parties are finally adjudicated upon by the arbitral tribunal which may be constituted in terms of the arbitration agreement between the parties.