D.C. Chandel vs State Of Himachal Pradesh And Others

Mohammad Rafiq, CJ

The petitioner is before this Court in this petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), seeking for appointment of an Arbitrator to resolve the dispute that has arisen between the parties.

It is the case of the petitioner, who is a Government Contractor, that there was an agreement (Annexure P-1), between the petitioner and the respondents and accordingly a contract was entered into between the parties in respect of work “ construction of road from Neharan Pukhar to Kohasn K. 0/0 to 2/0 (SH: formation cutting, retaining walls, cross drainage works, road side drains, parapets, providing and fixing sign board and metalling & tarring) including routine maintenance for five years after completion of construction work under RRP-II Tranche-I under package No. HP-04-198.” The expenditure to be incurred for completion of the aforesaid work was approximately to the tune of Rs. 94,76,474/-. The aforesaid work was required to be completed within one year to be reckoned from 15th May, 2014. On receipt of notice to proceed with the work on 10.12.2014, the petitioner requested the respondents to hand over the complete length of road hindrance free in all respects. The Department handed over the site on 10.01.2015 from KM 0/000 to 1/500 without legally acquiring or procuring gift deeds from the private land owners of the land coming in road alignment. Resultantly, objection was raised by private land owners hindering execution of the work. It was only through intervention of Dhaliara Gram Panchayat that consent from private land owners from KM 0/000 to 1/660 could be obtained in the month of October, 2015 i.e. after lapse of 10 months out of the total completion period of twelve months. Further case of the petitioner is that the formation cutting from KM 0/000 to 01/660 was completed up to 15.12.2015, but further execution was hindered on account of a street (gully) portion between km 1/525 to 1/660 with the existence of houses on both sides resulting into stoppage of work. The Department failed to take possession of land from km 1/660 to 2/000 as the land owners were not ready to donate their land. Thereafter, the Executive Engineer levied liquidate damages for Rs. 94,76,474/-vide communication dated 03.04.2019 despite the report of the Assistant Engineer in which he had mentioned that road from km 1/000 to 1/660 has been completed after facing big litigation problem from land owners. Thereafter, the Executive Engineer rescinded the contract vide communication dated 12.04.2019. Since the payments were not released, the petitioner was left with no other remedy but to invoke arbitration clause for redressal of his grievances. Clause 25 of the Agreement provides for appointment of an Arbitrator.

Notice of the petition was served upon the respondents. However, they did not file reply to the petition, but they opposed the same verbally.

Having regard to the rival submissions taken note of, it is found: (i) that it is not disputed that there exists an arbitration clause in the Arbitration Agreement (Annexure P-1) between the parties; (ii) that certain disputes arose between the parties and, therefore, the existence of dispute is not doubted; (iii) that the petitioner invoked the arbitration clause calling upon the respondents to refer the dispute to the arbitrator; and (iv) that the respondents have failed to act in accordance with the agreed procedure in the arbitration agreement to refer the dispute to the arbitrator.

Under these circumstances, it is a fit case for making a reference to an independent arbitrator and this application deserves to be allowed and the dispute referred to arbitration.

Accordingly, Hon’ble Mr. Justice Kuldeep Singh, Judge of this Court (Retd.), R/o 2nd Floor, Balson Apartments, Near Hotel Himland Estate, Circular Road, Shimla-171001, is ordered to be appointed as an Arbitrator, 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, Hon’ble Mr. Justice Kuldeep Singh, Judge of this Court (Retd.), 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 Arbitration and Conciliation Act, 1996.

The arbitration petition is disposed of accordingly, so also pending miscellaneous application(s), if any.