SHIV SHANKAR DHAKAL Vs. MUKTI NATH ADHIKARI

JUDGEMENT

(1.) THIS appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act') arises out of a judgment dated 24-09-2011 passed by the learned District Judge, Special Division-II, East Sikkim at Gangtok in Suit (Arbitration) No. 01/2010, Mukti Nath Adhikari v. Shiv Shankar Dhakal. Brief resume of the facts relevant for the purpose of the present appeal is noticed hereinafter.

(2.) THE appellant herein submitted tender for allotment of work of construction of "Truckable Road from Lingee to Payong Government Junior High School, South Sikkim" being an enlisted contractor with the Sikkim Public Works Department (for short, 'SPWD'). Even before the work could be allotted to him, he entered into an Agreement on 26-12-2002 to sub-let the work for one kilometer of stretch of road construction to the respondent herein in the event the work is allotted to him. This agreement also contains an arbitration clause, being clause No. 10, making a provision for settlement of disputes through arbitration. The work in question was allotted to the appellant vide Work Order dated 15-02-2003. It is the case of the appellant that out of two kilometer stretch of road, one kilometer was allocated to the respondent for execution in terms of agreement dated 26-12-2002. However, he did not execute the entire work. The appellant further claims to have paid an amount of Rs. 3 lakhs to the respondent out of the payment received by him from SPWD on completion of the work, being proportionate amount for the work executed by the respondent. He has further stated that Rs. 1 lakh was also paid to one Abimanyu Thapa who was a partner of the respondent for which a separate receipt was executed by him. The respondent claiming breach of the agreement dated 26-12-2002 executed between him and the appellant, filed an application for appointment of an Arbitrator under Section 11 of the Act. The then Hon'ble Chief Justice appointed two Arbitrators, namely Shri D. G. Shandarpa and Shri G. R. Sharma in CMA (Arbitration) No. 04 of 2004. One of the appointed Arbitrators, Shri D. G. Shandarpa died, however, the Award signed by only one out of two Arbitrators was filed before the learned District Judge, East & North, who set aside the Award in Title Suit (Arbitration) No. 01/2005 vide order dated 31-03- 2006. Another CMA (Arbitration) No. 71/ 2006 was filed by respondent before this Court. This Court appointed Shri Lal Bahadur Chettri, retired Chief Engineer of PWD and Shri D. P. Deokota, retired Addl. Chief Engineer of PWD as Arbitrators with the consent of the learned counsel for the parties vide order dated 25-05-2007. The Arbitrators were directed to complete the process within a period of four months from the date of reference. It was further observed that in the event of any difference of opinion between the two Arbitrators in the matter of giving their decision, the parties were allowed liberty to appoint a third Arbitrator. Pursuant to the aforesaid order the Arbitral Tribunal entered upon reference and made their Award dated 30-09-2007 awarding the claims of the respondent to the extent of Rs.7,75,155.00 with interest @ 10% from the date of Award till full recovery.

(3.) AGGRIEVED of the Award, the appellant herein filed his objections under Section 34 of the Act. These objections were heard by the learned District Judge, Special Division- II, East Sikkim and rejected vide the impugned judgment dated 24-09-2011. While rejecting the application/objections under Section 34 of the Act, the Court ordered to make the Award Rule of the Court. It is against this judgment the present appeal has been preferred.