M.C. Katoch Vs. Union of India (Uoi) and anr. - Court Judgment

Excerpt:
in the instant case, the petitioner and the respondent entered into the contract for constructing different parts of the drain - it was found that as the site was not made available for construction, the petitioner suffered losses - in this view, the arbitration clause was invoked by the petitioner, but no reply was given by the respondents - on this account, a petition was filed by the petitioner and the respondents denied to the said agreement - it was adjudged that under sections 8 and 20 of the arbitration act, 1940, since work was not commenced, thereforee, no disputes were referred for the arbitration - also, the respondents were directed to appoint the arbitrator on the ground that the arbitration agreement was valid - - that clause 25 was wide enough to include within its ambit a dispute like the present which dispute had arisen even prior to the work having commenced but after the agreement had been entered into.b.n. kirpal j. 1. this judgment will dispose of suit nos. 1908-a, 1909-a and 1910-a of 1984 which are similar petitions under sections 8 and 20 of the arbitration act. 2. the petitioners in all the three cases had entered into contracts, each dated 29th september, 1981 with the union of india for the construction of different parts of the same drain according to the petitioners the site was not made available to them with the result that they suffered losses. 3. it is alleged that the agreements dated 29th september, 1981 contained an arbitration clause being clause no. 25 which, inter alia, provided that all disputes arising out of the contract amongst the parties should be referred to sole arbitration of a person appointed by the chief engineer irrigation & flood, delhi administration, respondent no. 2. according to the petitioners disputes did arise and the said disputes have been enumerated in paragraph 13 of the petitions. it is the case of the petitioners that they invoked the arbitration on 31st october, 1983 when they requested for the said disputes to be referred to arbitration. no reply was received and, thereforee the present petitions were filed. 4. in the reply it is not denied that the aforesaid agreements were entered into and that the said agreements also contained an arbitration clause. the submission of the respondents, however, is that clause 25 cannot be invoked inasmuch as the said clause postulated disputes arising amongst the parties after the work had commenced. the submission is that in the present case the work had not commenced and, thereforee, no disputes could be said to arise which were said to be referable to arbitration. 5. it is not disputed between the parties that another similar agreement was entered into by the union of india with one madan mukesh. this agreement was also identical and was entered into on 29th september, 1981 containing the arbitration clause and pertained to the same work. the work was not commenced and the contractor therein filed an application under section 20 of the arbitration act being suit no. 424-a of 1984, madan mukesh v. union of india. in that case also the counsel for the respondents had raised a similar objection with regard to the applicability of clause 25 to disputes arising amongst the parties prior to the work having commenced. by judgment dated 18th december, 1985 the application under section 20 was allowed and the contention of the respondents with regard to the construction which it sought to place on clause 25 was rejected. it was held by m.k chawla, j. that clause 25 was wide enough to include within its ambit a dispute like the present which dispute had arisen even prior to the work having commenced but after the agreement had been entered into. following the aforesaid decision, the contention raised by the learned counsel before me must also be rejected. 6. inasmuch as it is accepted that there is a valid arbitration agreement between the parties and as disputes between them have arisen and following the aforesaid decision of m.k. chawla, j., i allow this petition and direct respondent no. 2 to appoint an arbitrator within 4 months from today who shall make his award within 4 months of his entering upon the reference. parties to bear their own costs.