-1- SB Civil Arbitration Application No.91/2013 M/s Hanuman Tube Well Co.v.Government of Rajasthan & ORS.Date of Order :: 30th September, 2014 HON'BLE MR.JUSTICE GOVIND MATHUR Mr.Vikas Balia ].Mr.V.D.Vaishnav].for the applicant.
Mr.S.M.Toshniwal for the respondents...This application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') is vehemently contested by the respondents with assertion that arbitral proceeding in the instant matter has already been concluded and an award has already been passed by the standing committee appointed as per clause 23 of the agreement in question, therefore, no direction can be given as prayed for.
The factual matrix, necessary to be noticed to examine merits of the issue involved, is that the applicant, a partnership firm, entered into an agreement with Executive Engineer, Narmada Canal Project, Division-IV, Sanchore for carrying out work meant for supplying, laying, jointing, testing and commissioning of distribution net-work of High Density Polyethylene (HDPE) pipes including supplying, erection, testing and commissioning of horizontal -2- centrifugal pump and electrical panel etc.suitable for required discharge for semi permanent sprinkler system of commanded area of Bhadrai lift distributary, Dangaria minor system, Virawa minor system, Kothala lift minor system and Bhimthal lift minor system (Narmada Canal Project) including designing and layout the three years operation and maintenance.
Some disputes arose between the parties and as such certain correspondence was made between them.
The respondent by invoking clause 2 of the General Rules and Directions for the guidance of the contract agreement imposed a levy of compensation for a sum of Rs.1,05,33,953/- only.
The applicant to resolve the disputes between the parties sought reference of the dispute to the standing committee as per clause 23 of the agreement.
A notice dated 1.10.2013 in this regard was served upon the respondent on 3.10.2013.
The applicant on receiving no information with regard to reference of the dispute to the standing committee within a period of 30 days filed this application before this Court on 18.11.2013.
A reply to the application was filed on behalf of the respondents on 9.1.2014 with assertion as under:- “21.
That the averments contained in para 21 of the application are not admitted as -3- alleged.
It is submitted here that Executive Engineer forwarded the matter to superintending Engineer on dated 15.10.2013.
Copy of same is filed herewith and marked as Annex.R/1.
Thereafter Superintending Engineer forwarded the matter to Chief Engineer, Narmada Canal Project Sanchore who is member Secretary of Standing Committee on dated 17.10.2013 and Chief Engineer, Narmada Canal Project, Sanchore forwarded the matter to The Chief Engineer, water Resources, Jaipur on dated 18.10.2013 copy of the same is filed herewith and marked as Annex.R/2 and Annex.R/3.
23.
That the averments contained in para 23 of the application are not admitted as alleged.
Since dispute has been referred to Standing Committee as per provisions of agreement and matter is pending before learned Standing Committee; hence application of applicant is not maintainable.”
.
The contents of the documents Annex.R/1 and R/2 as referred in para 21 of the reply to the application read as under:- “Anx.R/1 “M/s Hanuman Tubewell Co., Jaipur has submitted an application for settlement of claim regarding work of “Supplying Laying, Jointing, Testing & Commissioning of Distribution net-work (Mains And Sub Mains) of High Density Polyethylene (HDPE) Pipes including Supplying, erection, testing & Commissioning Horizontal Centrifugal Pump and Electric Panel etc.suitable for required -4- discharge for semi Permanent Sprinkler System of Command Area of Gudamalani Lift Minor System of NMC (Narmada Canal Project) Including Designing and layout With three Years Operation & maintenance”.Date of receipt of application in Division office is 04.10.2013.
Accordingly kindly find enclosed herewith RPWA-90, brief note on work & dispute of claiMs.claim wise replies, counter claim, Agenda note & Point wise replies in 7 copies for further necessary action and submission please.”
.
“Anx.R/2 “M/s Hanuman Tubewell Co., Jaipur has submitted an application for settlement of claim regarding work of “Supplying Laying, Jointing, Testing & Commissioning of Distribution net-work (Mains And Sub Mains) of High Density Polyethylene (HDPE) Pipes including Supplying, erection, testing & Commissioning Horizontal Centrifugal Pump and Electric Panel etc.suitable for required discharge for semi Permanent Sprinkler System of Command Area of Gudamalani Lift Minor System of NMC (Narmada Canal Project) Including Designing and layout With three Years Operation & maintenance”.Date of receipt of application in Division office is 04.10.2013.
Accordingly kindly find enclosed herewith RPWA-90, brief note on work & dispute of claiMs.claim wise replies, counter claim, Agenda note & Point wise replies in 6 copies -5- for further necessary action and submission please.”
.
The applicant contested the stand taken by the respondent by way of filing a rejoinder stating therein that no reference as a matter of fact was made within a period of 30 days as required.
The applicant asserted that no submission was made in compliance of clause 23 of the agreement for referring the dispute to all the members of the standing committee within a period of one month from the date of receipt of contractor's application.
During pendency of the application the applicant received a notice dated 11.2.2014 in relation to meeting of the standing committee.
The applicant responded the same on 21.2.2014 with specific stand that participation in meeting of the standing committee is not at all desirable in view of filing of an application for appointment of an independent arbitrator as per Section 11 of the Act of 1996.
No response to the stand taken by the applicant was given by the respondents, however, an another notice dated 2.4.2014 was received for appearing before the standing committee.
The applicant again reiterated its stand already conveyed by communication dated 21.2.2014, however, an exparte award was passed on 2.5.2014.
-6- In the instant application looking to the submission of the application that no reference was made within a period of 30 days, this Court directed the respondents to make available the original record relating to process of making reference as per clause 23 of the agreement.
The original record was made available to the Court for perusal on 26.8.2014 and 2.9.2014.
The original record was also made available for perusal on 26.9.2014 at the time of hearing of the application.
From perusal of the record available it reveals that on 25.10.2013 the record of the dispute was forwarded to have a note from financial advisor as per RPWA-90.
A decision was taken to place the matter before the standing committee on 30.10.2013 and then the matter was further placed before the concerned committee for perusal on 31.10.2013, however, the draft agenda at the fiRs.instance was placed for approval on 19.11.2013.
It is also pertinent to note that no information with regard to making of reference was given to the applicant uptil 11.2.2014, the day on which notice for meeting of standing committee was given.
The original record produced before the Court for perusal is also not adequate to satisfy the Court that the reference in fact was made within a period of 30 days from the date of receiving the notice for appointment of an independent arbitrator.
What reveals from perusal of the record is that the process was initiated for making reference on 21.10.2013.
The -7- important aspect of the matter is that the respondents filed reply to the application on 9.1.2014 wherein too they did not came out with a definite case about making reference of the dispute as per clause 23.
The two documents submitted alongwith the reply pertains only for initiation of proceedings for reference.
On basis of these two documents it cannot be presumed that any reference was made by the respondents as per clause 23.
The respondents, if would have referred the dispute within a period of 30 days, then they would have produced all necessary details including notice for meeting of the standing committee alongwith their reply.
It appears that the respondents referred the dispute for its adjudication to the standing committee at a later stage i.e.after filing the present application.
This Court in M/s Mahendra Singh & Co.v.State of Rajasthan & Anr., reported in 2014(1) RLW514(Raj.).while relying upon the judgment of Hon'ble Supreme Court in Deep Trading Co.(M/s.) versus M/S.Indian Oil Corporation, reported in 2013 DNJ (SC) 378, held that if appointment of arbitrator is made during pendency of the proceedings under Section 11(6) of the Act of 1996, then such reference is of no consequence and that does not disentitle a party to seek appointment of the arbitrator by the Chief Justice in accordance with the provisions of the Act of 1996.
-8- Looking to the facts discussed above, I am of considered opinion that in the instant matter the reference as per clause 23 was made during pendency of this application, hence, the reference made and its all consequential proceedings are not in consonance with the law established.
Accordingly, this application is allowed.
Hon'ble Mr.Justice Narayan Prasad Gupta, a retired Judge of this Court, is appointed as sole arbitrator to adjudicate and resolve the dispute agitated in the notice given by the applicant dated 4.10.2013.
The arbitrator shall be entitled for fee, remuneration and other perquisites in accordance with the alternative dispute resolution 2009 prescribed by the Rajasthan High Court.
A copy of this order is required to be sent to Hon'ble Mr.Justice Narayan Prasad Gupta (Retired) forthwith at his current address.
The award passed by the standing committee dated 2.5.2014 is set aside.
A copy of this order is required to be sent to Hon'ble Mr.Justice Narayan Prasad Gupta (Retired) forthwith at his current address.
The award passed by the standing committee dated 2.5.2014 is set aside.
( GOVIND MATHUR ),J.
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