GANGOTRI ENTERPRISES LIMITED Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) HEARD learned Counsel for the parties in respect of application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of Arbitrator.

(2.) IT is stated by learned Counsel for the applicant that applicant is a Limited Company incorporated under Indian Companies Act, 1956 and is carrying on the business of contract or ship. The applicant was awarded contract by the Executive Engineer, Irrigation Division, Pali (Raj.) for the "construction of Bandi Nehra Irrigation Project Tehsil and District Pali" vide work -order No. Acctts/Bandi/Nehra/97 -98/11091 -101 dt. 10.02.1998. The said work was to be started from 01.12.1997 and was to be completed by 30.11.1999 (24 months period including rainy season). The contract was for an amount of Rs. 3,05,20,647/ - and an Agreement No. 131/1997 -98 (Annex. A/1) was also executed in this respect between the parties having arbitration clause that in case of any sort of dispute, the dispute was liable to be referred to "Standing Committee". It was alleged in the application that the respondents created hurdles and did not fulfill the obligation on their part, as a result of which, the work could not be completed within the contract period. Not only that, the running bills of applicant were not paid as per the terms and conditions of the agreement (Annex.A/1). It is also stated that the contract period was extended from 30.11.1999 to 31.05.2000 and during the extension period, the respondent -Department abruptly stopped the work on 23.12.1999 and an order for re -starting the work was issued on 24.06.2006, hence, it is stated that the agreement is still alive. Despite completion of work amounting to Rs. 84,28,340/ -, payment of the applicant was not released, as such, a dispute arose between the parties. The applicant claimed payment on various heads, the details whereof is as under:

(3.) LEARNED Counsel for the respondent -Department opposed the application stating that the contractor has not acted in accordance with the mandate of Rajasthan Public Works Account Rules, 1990 for getting the matter referred to Arbitrator. RPWA 90 prescribes detailed procedure for getting the matter referred and until and unless the those requirements are fulfilled/complied with, it cannot be said that proper application for getting the matter referred to the Arbitration Committee was ever moved by the contractor. No cause of action can be said to have accrued in favour of the applicant to maintain the arbitration application. The application of the contractor for getting the matter referred is lacking in material particular in many aspects, as such, for the want of requisite details, it was not possible for the Department to take action thereon. The procedure prescribed for submitting the application for settlement of dispute by the "Sanding Committee" too has not been followed by the contractor through the same has been embodied in the Rules. The contractor ought to have complied with the same and in absence of the same requirement, Clause 11(6) of the Arbitration and Conciliation Act, 1996 cannot be said to be fulfilled by the contractor. Thus, the contractor is not entitled to maintain this arbitration application and the same deserves to be dismissed. It was further stated that right from beginning the contractor was negligent in performing his job and at no point of time he was sincere towards the performance of the work. The contractor has levelled false and bald allegations that the respondent -Department created unnecessary hurdles and did not fulfil their obligation, as a result of which, the contract work could not be completed within the stipulated time but it was stated that the contractor himself was responsible for the delay and in not performing the work in time and has thus caused heavy loss to the Department. No case for appointment of sole arbitrator is made out. The arbitration application is not maintainable either at facts or at law and the same deserves to be dismissed.