JAGDISH PRASAD AGARWAL Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THE applicant-herein is a partnership firm to which a contract was awarded vide order dated 26. 6. 99 for Rs. 16,32,673/- for repairing Bikaner-Alwar-Behror-Narnol Road which falls on State Highway No. 14. THE applicant-firm succeeded in completing this work and thereafter raised a bill for the amount which is payable to the applicant by the respondent-State. THE applicant however, raised a dispute that the total payment towards the final bills have not been paid to the applicant and he raised a claim that the entire payment for the work has not been made to the applicant. THE contract was awarded to the applicant in regard to which an agreement had also been executed between the parties wherein a clause had been incorporated that in case a dispute arises between the contracting parties, the same shall be referred to the arbitrator for adjudication and settlement and the procedure for referring such dispute has also been laid down therein under Clause 23 which reads as follows: Clause-23 "if any question, difference or objection whatsoever shall, arise in any way in connection with or arising out of this instrument or the meaning of operation of any part thereof or the rights, duties or liabilities of either party, then save in so far as the decision of any such matter as hereinbefore provided for and been so decided, every such matter constituting a total claim of Rs. 50,000/- or above, whether its decision has been otherwise provided for and whether it has been finally decided accordingly, or whether the contract should be terminated or has been rightly terminated and as regards the rights or obligations of the parties as the result of such termination shall be referred for decision to the empowered Standing Committee which would consist of the following: (i) Administrative Secretary Concerned (ii) Finance Secretary or his nominee not below the rank of Deputy Secretary, (iii) Law Secretary or his nominee not below the rank of Joint L. R. (iv) Chief Engineer-cum-Additional Secretary of the concerned Department; (v) Chief Engineer concerned (Member Secretary) THE Engineer-in-Charge on receipt of application along prescribed fee (the fee would be two percent of the amount in dispute not exceeding Rs. one lakh) from the contractor shall refer the disputes to the committee within a period of one month from the date of receipt of application. "

(2.) SINCE the applicant-firm felt aggrieved of the action of the respondent-State which according to the petitioner had not paid the entire amount towards the work order which was granted to him, he filed an application in view of Clause 23 quoted hereinbefore alongwith the fee of 2% before the competent authorities of the respondent-State requesting them to refer the dispute to the Standing Committee alongwith the pay order of Rs. 13,205/- so that the matter could be adjudicated by the Standing Committee in terms of Clause 23. This application was submitted by application dated 3. 6. 2002. According to the petitioner's case the respondent did not act upon this application although he has waited for more than a period of one month and therefore, he was compelled to file this application for referring the dispute to the arbitrator by the Court in view of Section 11 of the Arbitration & Conciliation Act, 1996 (for short "act of 1996" ). In support of this application, the counsel for the applicant urged that the respondent-State having failed to act upon clause 23 of the agreement by not referring the dispute to the Standing Committee although the applicant had acted upon clause 23 by submitting an application with the request to refer the dispute to the Standing Committee and alongwith that, it also submitted the prescribed 2% fee which came to Rs. 13,205/-, yet the respondent-State failed to honour the agreement by not executing their part by referring the dispute to the Standing Committee and hence the Court should appoint an arbitrator as per the choice of the petitioner or of its own choice as the respondent-State's right has been forfeited since they have failed to act upon Clause 23 of the agreement by not referring the matter to the Standing Committee.