Shri Satya Dev Sharma vs State of Himachal Pradesh

Kuldip Singh, Judge

This is a petition u/s 11 (6) of the Arbitration and Conciliation Act, 1996 (for short ''Act'') for appointment of Arbitrator. It has been stated that the parties had entered into an agreement under which the petitioner had been awarded the contract for the works relating to installation of road devices on NH 22 - Location Shoghi Bazar by the respondents. The contract between the parties also contained an arbitration agreement embodied in Clause 25 thereof requiring all disputes or differences arising out of the contract to be adjudicated upon by a sole Arbitrator to be appointed by the Engineer-in-Chief/Chief Engineer, HPPWD. It has been stated that no Arbitrator has been appointed till date.

The work was awarded to the petitioner vide letter dated 10.5.2007 for a total cost of Rs. 2,02,215/- with a time limit of 2 months for its completion. The petitioner had arranged the materials required for the work, however, despite the requests no instruction were given to the petitioner to start and execute the work as a result of which the aggregate and sand stacked in the length of the reach where the work was to be executed, were used by the PWD officials from the site though the cement which had been stacked in a store had to be utilized for other works.

The petitioner has claimed the following amounts towards the cost of materials and damages sustained:

(i)

Sand 80 cum @ 1000 per cum

Rs. 80,000/-

(ii)

Aggregate 20 mm 35 cum @ 1000 cum

Rs. 35,000/-

(iii)

Aggregate 40mm 45 cum @ 800 cum

Rs. 36,000/-

(iv)

Watch and ward 36 months @ 3000/- p.m.

Rs. 1,08,000/-

(v)

Loss of profit 15% of 2,02,215/-

Rs. 30,332/-.

The payment of the above amounts has not been made to the petitioner despite requests, thus a dispute has arisen between the parties. A letter dated 15.11.2010 was also written to the Chief Engineer (NH) to appoint an Arbitrator. It has been submitted that earlier petitioner filed arbitration case No. 14 of 2011 for appointment of Arbitrator but that petition was disposed of on 20.5.2011 with observation that since the authorities named in the Arbitration Clause have not been approached, for appointing the Arbitrator, the petition is not competent. Thereafter the petitioner submitted an application dated 22.6.2011 to Engineer-in-Chief for appointment of Arbitrator in terms of Clause 25 of the agreement but despite that Arbitrator has not been appointed.

The petition has been contested by the respondents by filing reply. The Arbitration Clause 25 of agreement No. 16 of 2007-08 has not been denied. It has been submitted that the petitioner did not execute any work nor any material was collected/stacked at the site after issue of award letter dated 10.5.2007, therefore, the petition is not maintainable. The petitioner was requested to start the work vide letters dated 28.12.2007 and 3.3.2008 but despite that petitioner did not start the work.

I have gone through the agreement, the Clause 25 of the agreement is as follows:

Clause 25 :Settlement and Disputes by Arbitration.

Provided in the contract, all questions and disputes relating to the meaning of the specification, designs, drawings, and instructions herein force mentioned and as to the quality or workmanship of materials used on the work or as to any other claim right, matter or thing whatsoever, in any way arising out of or relating to the contract designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the works or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Engineer-in-Charge/Chief Engineer, Himachal Pradesh Public Works Department

It is clear from the aforesaid Clause 25 that all questions and disputes relating to the contract in any way arising out of or relating to the contract regarding the execution or failure to execute the same whether arising during the progress of the works or after the completion or abandonment thereof shall be referred to the sole arbitrator. The respondents have taken the plea that the petitioner has not at all started the work, therefore, in view of Clause 25, Arbitrator cannot be appointed. The clause 25 is quite pervasive and it covers a dispute of abandonment of work also.

The petitioner had approached the authority under Clause 25 for appointment of the Arbitrator but despite that Arbitrator has not been appointed. The Arbitration case No. 14 of 2011 filed by the petitioner was dismissed only on the ground that the petitioner had not approached the competent authority before appointment of the Arbitrator. It is clear that there is a dispute between the parties in view of the claim raised by the petitioner and denied by the respondents. In view of the above, the petition is allowed. The Superintending Engineer Arbitration, HPPWD, Solan is appointed as Arbitrator, to adjudicate the dispute between the parties in accordance with the agreement and law by making reasoned award. The petition stands disposed of.