Bhupinder Pal Mahajan vs State Of H.P. & Another

M.S. Ramachandra Rao, CJ

This application is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act”) for appointment of an Arbitrator.

The applicant contends that respondent no.2 has awarded work of “Construction of Pungh-Kapahi via Patsal road Km.0/0 to 9/300 (SH: C/O F/C 5/7 mtr. wide Km.6/300 to 9/330, R/Wall, CD works with walls 6.00mtr. RCC Slab Culvert parapets C/O Pucca V-Shape Drain and AP/L MT) Under NABARD RIDF-XIX (Agreement No.75 of 2014-2015)" through a letter of award dt. 28th May, 2014 with the stipulated time for executing the contract being twelve months. The value of the work awarded was Rs.1,40,99,836/-. According to the applicant there was delay in execution of the work which was not attributable to the applicant. Also the tax regime changed from 01.07.2017 after the enactment of Goods and Services Tax Act, 2017, which according to the applicant hampered the inflow of finances. According to the applicant he made a request on 19.05.2021 for release of the final bill, GST and the royalty, but to no avail. Applicant contends that the work had been prolonged from 11.06.2015 to 30.04.2018, but the final bill had not been prepared till date. The details of the claims alleged to be pending with the respondents are set out in para-4.

Legal notice was got issued by the applicant being Annexure P-3 dt. 9th December, 2021 invoking the arbitration clause, being Clause 25 of the agreement between the parties seeking appointment of Arbitrator under the provisions of the Act. According to the applicant thereafter he was summoned for discussions to explore the possibility of amicable settlement and some claims were settled, but the claim in respect of GST was however not settled and the 2nd respondent rejected the claim of the applicant qua GST on 14.06.2023.

Therefore, the applicant seeks appointment of Arbitrator to decide the entitlement of the applicant to receive the amount claimed towards GST.

Notice in this application had been given to the respondents and they have filed a reply opposing the entitlement of the applicant for GST on merits, but no pleading has been taken in reply filed by the respondents as to why an Arbitrator cannot be appointed. Admittedly, there is an Arbitration Clause 25 in the agreement between the parties providing for arbitration in the event of a dispute arising between them. The existence of dispute is clear from the pleadings of both the parties and admittedly the applicant had issued Annexure P-3 notice dt. 9th December, 2021 for appointment of arbitrator.

Having regard to the fact that in the reply filed by the respondents there is no objection raised as to the appointment of Arbitrator, this application is allowed and Mr. L.N. Sharma, District & Sessions Judge (retired), R/o Laxmi Niwas, near Girls Senior Secondary School, The Mall Solan, H.P. is therefore appointed as Arbitrator to adjudicate the dispute between the parties, after his disclosure in writing is obtained in terms of Section 11(8) of the Act and only after receipt thereof, shall his appointment, as an Arbitrator, come into force.

On his giving consent to arbitrate the dispute between the parties as an Arbitrator, Mr. L.N. Sharma, District & Sessions Judge (retired), R/o Laxmi Niwas, near Girls Senior Secondary School, The Mall Solan, H.P., shall enter into reference, and shall pass an award in accordance with law.

Copy of this order be forwarded to the learned counsel for the parties as also to the learned Arbitrator. The learned Arbitrator so appointed shall be entitled to fee as per stipulation contained in 4th Schedule appended to the Act.

The application is disposed of accordingly.