Orissa Concrete and Allied Industries Ltd. Vs. East Central Railway - Court Judgment

Excerpt:
arbitration — section 11, arbitration and reconcilation act, 1996 — petitioner to appoint arbitrator under section 11 — petitioner firm entered into a work agreement with east central railway — dispute arose — arbitration clause invoked — requested g.m., east central railway to appoint arbitrator by serving notice on 10th january, 2005 — notice received on 17th january, 2005 — appointment of arbitrator on 18th february, 2005 — delayed appointment by two days — petitioner filing suit on 15th february, 2005 for appointment of arbitrator — held, appointment of arbitrator beyond 30 days and after filing of suit was violative of section 11(4) and (6) of the act — appointment was quashed and another arbitrator appointed by court - v.n. sinha, j.1. heard learned counsel for the applicant and learned counsel appearing on behalf of the railway.2. the petitioner/applicant is a firm and has entered into agreement for execution of civil works with the east central railway. in terms of the agreement entered between the parties work order dated 18.7.2003. annexure-p/1 was issued, during the execution of the civil works dispute arose between the parties and invoking clause 2900 of the standard conditions of contract the petitioner served a notice dated 10.1.2005 on the general manager, east central railway requesting him to appoint an arbitrator to resolve the dispute between them. it appears the notice was received in the office of the general manager vide receipt no. 2313 dated 17.1.2005 and was registered vide registration no. 1120p dated 20.1.2005. before the general manager could appoint the arbitrator as requested under notice dated 10.1.2005 the petitioner moved this court for appointment of the arbitrator by filing the present request case on 15. 2.2005.3. this court took up the case for the first firm on 15.7.2005 and issued notice to the opposite parties including the general manager, east central railway and in response to the notice the general manager filed counter affidavit and the supplementary counter affidavit placing on record the order dated 18.2.2005 appointing sri sunil kumar one of the railways officer as the sole arbitrator to adjudicate the dispute between the parties. the petitioner having received the counter affidavit filed re-joinder stating that the appointment of sri sunil kumar as sole arbitrator under order dated 18.2.2005 has been made contrary to the provisions contained in different sub-sections of section 11 of the arbitration and reconciliation act, 1996 (hereinafter referred to as the act) as the appointment has been made by the general manager on 32nd day of the receipt of the notice after the petitioner had moved this court by filing the present case and thus the arbitrator should not be allowed to continue with the arbitration rather this court should intervene and not only cancel his appointment but appoint another arbitrator. in this connection, learned counsel for the applicant with reference to the judgment of the hon'ble supreme court in the case of punj lloyd ltd v. petronet mhb ltd. reported in (2006) 2 scc 638 has submitted that the railway administration lost its right to make an appointment after the passage of 30 days from the date of receipt of notice and in any case after the date of filing of the present case which was filed on 15.2.2005 one day before completion of 30 days from the date of service of notice. he further pointed out that even if the date of filing of this case is taken as 16.2.2005 then also appointment has been made after 30 days of the service of notice and filling of the present case and in any view of the matter the appointment of the arbitrator by the railway administration is contrary to the provisions contained in sub- sections (4) and (d) of section 11 of the act.4. learned counsel for the railway on the other hand with reference to the notice elated 10.1.2005, annexure-d has submitted that no sooner the same was received in the office of the general manager it was registered in his office on 20.1.2005 vide registration no. 1120p and then appointment was made on 18.2.2005, as such, the delay of 2 days be condoned.5. having heard learned counsel for the parties i am of the view that the appointment of the arbitrator made by the general manager is not only beyond 30 days of the receipt of notice but has also been made after filing of the present request case as such, is violative of the provisions of the arbitration clause read with sub-sections (4) and (6) of section 11 of the act, having found as above the order dated 18.2.2005 of the general manager is set aside and another arbitrator sri justice nagendra rai, a retired judge of this court is appointed as sole arbitrator to adjudicate the dispute between the parties.6. his lordship shall be at liberty to fix his remuneration as also the procedure to be adopted for conducting the arbitral proceedings.7. let a copy of this order be forwarded to his lordship at his patna residence.8. the request case is accordingly disposed of.

Judgment:

V.N. Sinha, J.

1. Heard learned Counsel for the applicant and learned Counsel appearing on behalf of the Railway.

2. The petitioner/applicant is a Firm and has entered into agreement for execution of civil works with the East Central Railway. In terms of the agreement entered between the parties work order dated 18.7.2003. Annexure-P/1 was issued, During the execution of the civil works dispute arose between the parties and invoking Clause 2900 of the Standard Conditions of Contract the petitioner served a notice dated 10.1.2005 on the General Manager, East Central Railway requesting him to appoint an arbitrator to resolve the dispute between them. It appears the notice was received in the office of the General Manager vide receipt No. 2313 dated 17.1.2005 and was registered vide Registration No. 1120P dated 20.1.2005. Before the General Manager could appoint the arbitrator as requested under notice dated 10.1.2005 the petitioner moved this Court for appointment of the arbitrator by filing the present request case on 15. 2.2005.

3. This Court took up the case for the first firm on 15.7.2005 and issued notice to the opposite parties including the General Manager, East Central Railway and in response to the notice the General Manager filed counter affidavit and the supplementary counter affidavit placing on record the order dated 18.2.2005 appointing Sri Sunil Kumar one of the Railways officer as the sole arbitrator to adjudicate the dispute between the parties. The petitioner having received the counter affidavit filed re-joinder stating that the appointment of Sri Sunil Kumar as sole arbitrator under order dated 18.2.2005 has been made contrary to the provisions contained in different sub-sections of Section 11 of the Arbitration and Reconciliation Act, 1996 (hereinafter referred to as the Act) as the appointment has been made by the General Manager on 32nd day of the receipt of the notice after the petitioner had moved this Court by filing the present case and thus the arbitrator should not be allowed to continue with the arbitration rather this Court should intervene and not only cancel his appointment but appoint another arbitrator. In this connection, learned Counsel for the applicant with reference to the judgment of the Hon'ble Supreme Court in the case of Punj Lloyd Ltd v. Petronet Mhb Ltd. reported in (2006) 2 SCC 638 has submitted that the Railway administration lost its right to make an appointment after the passage of 30 days from the date of receipt of notice and in any case after the date of filing of the present case which was filed on 15.2.2005 one day before completion of 30 days from the date of service of notice. He further pointed out that even if the date of filing of this case is taken as 16.2.2005 then also appointment has been made after 30 days of the service of notice and filling of the present case and in any view of the matter the appointment of the arbitrator by the Railway administration is contrary to the provisions contained in Sub- sections (4) and (d) of Section 11 of the Act.

4. Learned Counsel for the Railway on the other hand with reference to the notice elated 10.1.2005, Annexure-D has submitted that no sooner the same was received in the office of the General Manager it was registered in his office on 20.1.2005 vide Registration No. 1120P and then appointment was made on 18.2.2005, as such, the delay of 2 days be condoned.

5. Having heard learned Counsel for the parties I am of the view that the appointment of the arbitrator made by the General manager is not only beyond 30 days of the receipt of notice but has also been made after filing of the present request case as such, is violative of the provisions of the arbitration clause read with Sub-sections (4) and (6) of Section 11 of the Act, Having found as above the order dated 18.2.2005 of the General Manager is set aside and another arbitrator Sri Justice Nagendra Rai, a retired judge of this Court is appointed as sole arbitrator to adjudicate the dispute between the parties.

6. HiS lordship shall be at liberty to fix his remuneration as also the procedure to be adopted for conducting the arbitral proceedings.

7. Let a copy of this order be forwarded to his Lordship at his Patna residence.

8. The request case is accordingly disposed of.