DILBAG SINGH CONTRACTOR, SON OF SHRI TEK RAM Vs. NORTH WESTERN RAILWAY THROUGH ITS GENERAL MANAGER, NWR HEAD QUARTER, JAWAHAR CIRCLE, JAIPUR

JUDGEMENT

(1.) This application under section 11(6) of the Arbitration and Conciliation Act, 1996 has been filed by petitioner Dilbag Singh Contractor, praying for appointment of sole Arbitrator for resolving the disputes and differences between the petitioner and the respondents. Mr. Jatin Agarwal, learned counsel for petitioner submitted that the respondents floated a tender for execution of the work of replacement of existing old FOB, waiting room retiring room, waiting hall and concourse of Hissar Station building under ADEN/SSA. The petitioner participated in that tender process and on being found to be the lowest bidder, the respondents awarded him the said work for a total contract price of Rs. 3,19,34,000/- vide letter of acceptance dated 25.07.2012. The petitioner deposited the earnest money of Rs. 2,85,400/- with the respondents. The respondents retained that amount as initial security. The petitioner was directed to commence the work within seven days from the date of issuance of the letter of acceptance. The work was to be completed within twelve months from the date of letter of acceptance. The petitioner also submitted a bank guarantee amounting to Rs. 15,96,700/- in the name of the Senior DFM, NWR, Bikaner. The petitioner started the work and completed the same on 31.05.2014. It was thereafter that differences arose between the parties after the final bill was prepared and payment in that respect was made. The dispute was with regard to payment of price variation and payment of structural steel under Item No. 081030 and 081031 above six meters. During execution of the work, the petitioner submitted a total price variation bill of Rs. 16,76,259/- in accordance with the general and special conditions of contract, however, the respondents approved payment of Rs. 5,72,818/- only, which the petitioner has received. Rest of the amount is now being claimed by the petitioner. Tender was opened by the respondents on 07.02.2012 and negotiation was done on 30.04.2012. After the said work was awarded to the petitioner, he deposited with the respondents the requisite bank guarantees but despite that the drawings were not provided to the petitioner within due time, on account of which the work could not be started in time and the petitioner was saddled with the additional bank charges and those charges were also claimed by the petitioner.

(2.) Learned counsel submitted that despite repeated requests of the petitioners, the respondents have not taken any step to resolve the dispute. Reference in this connection is made to Condition 33(a) and (b) of the tender. Condition 33(a) provides that the provisions of Clauses 63 and 64 (as amended from time to time) of the General Conditions of Contract will be applicable only for "Settlement of claims of disputes-Indian Railway Arbitration Rules" between the parties for values less than or equal to 20% of the value of the contract and when the claims or disputes are of value more than 20% of the value of contract, provisions of Clauses 63 and 64 and other relevant clauses of the GCC will not be applicable and arbitration will not be a remedy for settlement of such disputes. Condition 33(b) provides that the contractor shall not be entitled to ask for reference to arbitration before the completion of the work assigned to him under this contract. The contractor shall seek reference to arbitration to settle the disputes only once within the ambit of Condition 33(a). Learned counsel for the petitioner also referred to Clause 64(1)(i) of the GCC, which stipulates the provision for resolution of dispute by way of arbitration. Learned counsel submits that when the petitioner did not get any response from the respondents, the petitioner served a notice dated 19.06.2015 on the respondents for appointment of the arbitrator for settlement of the differences and disputes, but that too was of no avail. Prayer is therefore made to appoint an independent arbitrator in view of Section 12(5) of the Act of 1996, ignoring insistence of the Railways to appoint a serving or retired Railway officer as an arbitrator.

(3.) Learned counsel submitted that the respondents vide letter dated 11.11.2016 amended the provisions of Clause 64.(3) of the GCC, according to which there is a penal of three gazetted officers not below the grade of Junior Administrator Officer, who can be appointed to decide the claim and name of retired Railway Officers can also be offered therein. It is submitted that the aforesaid amended clause is not applicable in the present case because that came into effect much later whereas the agreement of the petitioner was executed in the year 2007-08. It is argued that despite insistence of the respondent-Railways, in view of the bar contained in Section 12(5) of the Act of 1996, neither serving nor retired Railway officers can be appointed as arbitrators.