M/s Kothari Associates vs Chief Engineer, Public Works Department And Others

Vipin Sanghi, CJ

The present application has been preferred by the applicant, under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Act), to seek appointment of a sole arbitrator for adjudicating the disputes, which have arisen between the parties.

The parties entered into a contract agreement on 25.04.2006 bearing Contract Agreement No. 3/E.E./2006-07 for construction of residential and non-residential buildings at Fire Station, Vikasnagar, Dehradun, and for the residue work (i.e. windows, doors, flooring etc.) in residential and non-residential building at Fire Station, Vikasnagar, Dehradun.

Clause 32 of the agreement, which has also been placed on record, contains the arbitration agreement between the parties. As per the agreement, the appointment of the arbitrator had to be made by the Chief Engineer, Public Works Department. However, in the light of the amended law, contained in Section 12(5) read with the 7th Schedule to the Act, the appointment cannot be of an officer of the Respondents.

The applicant claims that its dues, to the tune of Rs. 20.00 lakhs, remain outstanding, despite the work having been completed. The applicant claims to have sent several demand notices to the respondents, but to no avail. Consequently, this application has been preferred.

Counsel for the respondent, who appears on advance notice, raises the plea that the claims are barred by limitation, as the last demand raised by the applicant was on 05.03.2016.

Since there is no dispute that an arbitration agreement exists between the parties, I am inclined to allow this application. All defenses, including the defense of limitation, would be available to be respondents, which the arbitrator shall specifically consider while dealing with the claims/ counter-claims. This is for the reason that limitation is always a mixed question of fact and law and, therefore, it would not be appropriate at this stage for me to go into the said issue.

Accordingly, I appoint Shri K.D. Bhatt, (Retd.) District Judge, R/o House No. 297, Lane No. 5, Madhur Vihar, Ajabpur, Dehradun, as the sole Arbitrator to adjudicate the disputes between the parties.

The present Arbitration Application stands disposed of in the aforesaid terms.