SAI ADVERTISERS Vs. JAMMU MUNICIPAL CORPN.

JUDGEMENT

(1.) The petition, at the request of learned Counsel for the parties is taken up for final disposal.

(2.) The Petitioner, through medium of instant writ petition, calls in question Arbitration Clause (clause 14) in Licence Deed dated 25 April 2008 executed by and between the Petitioner and Respondent No. 1 on 25 April 2008, in so far as it relates to appointment of Respondent No. 2 as sole arbitrator on the ground of being violative of Section 12(3)(a) J & K Arbitration and Conciliation Act 1997 (hereinafter referred to as Act). The Petitioner also throws challenge to order dated 20 November 2010 passed by Respondent No. 2 in the arbitration proceedings tilted SAI Advertisers v. Jammu Municipal Corporation. The Petitioner further prays for a writ of prohibition prohibiting Respondent No. 2 from proceeding with the arbitration proceedings and an order directing appointment of an independent arbitrator in accordance with Sections 7, 8 and 11 for resolution of the dispute claimed to have arisen out of the aforementioned contract.

(3.) The background facts are as under: The Petitioner, a partnership firm engaged in advertising business, responded to a tender notice dated 25 February 2008 floated by Respondent No. 1 inviting offers for advertising rights in and within extended areas of Jammu Municipal Corporation. The Petitioner succeeded in his bid and was given advertising rights within the area notified in the aforementioned NIT in consideration of payment of annual fee of Rs. 91,11,111/- to be deposited within the stipulated time. The Petitioner claims to have deposited the agreed amount of Rs. 91,11,111/- with the Respondent Corporation on 16 April 2008 whereafter a formal Licence Deed was executed by the Respondent Corporation in favour of the Petitioner on 25 April 2008. The Petitioner's case is that the Petitioner was not in a position to exercise exclusive advertising rights within the notified area till 14 October 2008 because of a writ petition touching the matter, filed by M/S Selvel Media Services Private Limited and also because of failure of the Respondent Corporation to remove existing advertising material hoisted and displayed unauthorisedly within the notified area. It is pleaded that the Respondent corporation, in terms of the Licence Deed, was under a contractual obligation to remove such material so as to enable the Petitioner to exercise exclusive advertising rights within the aforesaid notified area. It is pleaded that the Petitioner was also deprived of right otherwise available under the Licence Deed in question to exercise and enjoy the advertising rights in Trikuta Nagar area on the plea that Respondent corporation was yet to receive a ''No Objection Certificate'' (NOC) from Jammu Development Authority. The Respondent Corporation, it is pleaded, despite inability of the Petitioner to enjoy the exclusive rights of advertising within the notified area because of litigation and thereafter failure to take steps to make possible exercise of such rights, laid a demand of full licence fee amount for the year 2010-11, in violation of the terms and conditions of the Licence Deed. The events set out in detail in the petition, according to the Petitioner, have resulted in a dispute between the parties arising out of the contract (Licence Deed in question) and the Respondent Corporation in terms of Clause 14 of the Licence Deed has referred the dispute to Respondent No. 2 for resolution/settlement.