Judgment

Ranjan Gogoi, J.

1. The challenge in this appeal is to order dated 27.06.2012 of the Patna High Court by which a former Chief Justice of the Sikkim High Court had been appointed as the arbitrator to resolve the disputes and differences between the parties to the present proceedings arising out of two contracts bearing No. CAO/CON/722 dated 01.11.1993 and CAO/CON/738 dated 28.04.1994.

2. Both the contracts awarded to the respondent-contractor were terminated on 7.11.1994. Admittedly, the General Conditions of Contract of the Railways, which included an arbitration clause, governed the parties. After the termination of the two contracts the respondent-contractor approached the Patna High Court by means of a writ petition challenging the terminations. The writ petition was dismissed, which dismissal was challenged before this Court in SLP(C) No. 17189/1995. The said special leave petition was also dismissed leaving parties to resolve the differences in an appropriate proceeding i.e. a civil suit or by reference to arbitration, as the case may be.

3. Though a panel of arbitrators as per Clauses 64(3)(a)(ii) and (iii) of the General Conditions of Contract was appointed as far back as in the year 1996, till date the award(s) in respect of the disputes arising out of either of the two contracts is yet to be passed. According to the appellant-railways, the proceedings of arbitration has been completed in respect of the disputes arising out of Contract No. CAO/CON/722 dated 01.11.1993. Even if the said statement of the appellant-railways is to be accepted, though no material has been laid in support thereof, what cannot be denied is the fact that till date the award is yet to be passed. Admittedly, the arbitration in respect of the contract No. CAO/CON/738 dated 28.04.1994 has not even commenced. This is on account of the fact that in the year 2002 the North Eastern Railway, which had entered into the contracts with the respondent-contractor, was bifurcated into North Eastern Railway and East Central Railway. As the jurisdiction in respect of the aforesaid contract No. CAO/CON/738 was to be exercised by the East Central Railway it appears that the appellant has disclaimed all responsibility with regard to holding of arbitration proceedings in respect of the said contract and at the same time the East Central Railway has not responded in any positive manner to the several demands for arbitration lodged by the contractor.

Insofar as contract No. CAO/CON/722 is concerned, naturally, both the parties have tried to lay the blame for the delay in the process of arbitration on each other and the huge number of correspondence exchanged in this regard and the frequent change of the arbitration panel on account of exigencies of service of the panel members (retirement, transfer etc.) has made it impossible to pinpoint the responsibility in this regard on any one of the contracting parties. But what is glaring is the fact that though the arbitration proceedings in respect of the said contract No. CAO/CON/722 had commenced as far back as in the year 1996 the award is yet to see the light of the day notwithstanding the assertions made by the Union that the proceedings have been completed though as already noted, no clinching material in this regard has been brought on record; not to speak about the award of the arbitrators though such an award would have been the natural consequence of the completion of arbitration proceedings. It is in the totality of these facts that the High Court had thought it proper to travel beyond the framework of Clauses 64(3)(a)(ii) and (iii) of the General Conditions of Contract and appoint a retired Chief Justice as the arbitrator.

4. The correctness of the said decision necessarily has to be judged in the light of the facts and circumstances enumerated above. The necessary legal discourse that would be required to be gone into to answer the question as posed above could begin by extracting the provisions of Clauses