Jain Traders vs The Chairman,Urban Improvement Trust

Ajay Rastogi, J.—Instant application has been filed u/S. 11 of the Arbitration And Conciliation Act, 1996 (Act, 1996) for appointment of Arbitrator.

The applicant was allotted work of construction and development of WBM (Water Bond Machadum) road in UIT Areas of Bhiwadi under annual contract amounting to Rs. 1.15 Crore approximately. It is not in dispute that the parties entered into agreement and that contains Clause-23 regarding arbitration to resolve Arbitral Dispute, if arises from terms and conditions of the agreement executed could be referred to the Empowered Standing Committee. Clause-23 relevant reads ad infra-

Clause-23. Standing Committee for settlement of disputes: If any question, difference or objection, whatsoever shall arise in any way, in connection with or arising out of this instrument of the meaning of operation of any part thereof, or the right duties or liabilities of either party then, save in so far as the decision of any such matter, as herein before provided has been otherwise provided for and whether it has been finally decided accordingly, or whether the contract should be terminated, or has been rightly terminated and as regards the rights or obligations of the parties as the result of such termination, shall be referred for decision to the empowered Standing Committee, which would consist of the followings:

i) Administrative Secretary concerned

ii) Finance Secretary or his nominee, not below the rank of Dy. Secretary and/or Chief Accounts Officer.

iii) Law Secretary or his nominee, not below the rank of Joint Legal Remembrancer.

iv) Chief Engineer-cum-Additional Secretary of the concerned department.

v) Chief Engineer concerned (Member Secretary)

The Engineer-in-Charge on receipt of application along with non refundable prescribed fee, (the fee would be two percent of the amount in dispute, not exceeding Rs. One Lac) from the Contractor shall refer the disputes to the Committee within a period of one month from the date of receipt of application.

Procedure and Application for referring cases for settlement by the Standing Committee shall be as given in Form RPWA 90.

As it reveals, dispute arose between the parties arising from the contract agreement executed between the parties and in order to settle the dispute by the Standing Empowered Committee, a notice was sent by the applicant to the Engineer in charge and enclosed a cheque in the name of Executive Engineer, Urban Improvement Trust, Bhiwadi, Alwar in terms of Clause-23 of the agreement but when no action was taken and the non applicant failed to refer to the empowered standing committee under the prescribed form of Clause-23 of the agreement, he is entitled to appointment of arbitrator and therefore the applicant has filed the present application for appointment of sole arbitrator.

After notices of the present application came to be served, reply was filed by the respondent and there objection is that along with the notice sent by the applicant cheque was sent in the name of the Executive Engineer, Urban Improvement Trust, Bhiwadi, Alwar, however, it was required to be sent in the name of Secretary, Urban improvement Trust, Bhiwadi, Alwar and despite information being sent from their office for making necessary compliance, the applicant failed to comply and accordingly was not entitled to invoke jurisdiction of this Court for appointment of sole arbitrator u/S. 11(6) of the Act.

This Court find that the only objection raised that the cheque was sent in the name of Executive Engineer, UIT, Bhiwadi instead sending it in the name of Secretary, UIT, Bhiwadi, and as per Clause-23 of the agreement cheque was to be sent to Engineer in charge and that apart there appears no other objection which can be traced out from the reply filed by the respondent and indisputably the respondent has failed to refer the matter to the standing committee in terms of clause-23 of the agreement until filing of the present application and that certainly seizes the power of the non applicant to appoint arbitrator and it is within the jurisdiction of this Court and the Chief Justice or the Designated Judge to hold jurisdiction to consider the application for appointment of Arbitrator u/S. 11(6) of the Act, 1996.

Taking note thereof, I consider it appropriate to appoint Hon''ble Mr. Justice Guman Singh (Retd.) as Sole Arbitrator to resolve the Arbitral dispute arising out of the terms & conditions of agreement. The fee & expenses/cost of Arbitration shall be determined in terms of arbitration manual.

With the above observations, the application stands disposed of. A copy of this order be sent to Hon''ble Mr. Justice Guman Singh (Retd.), C-254, Hans Marg, Malviya Nagar, Jaipur and the parties are directed to appear before the Arbitrator on 25.8.2014 at 11.00 AM.