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2005 Supreme(AP) 1132

Andhra Pradesh High Court
Judges : T.CH.SURYA RAO
K.Narayana Raju - Appellant
Versus
Union of India - Respondent
Decided On : 12-09-05

Headnote:Arbitration & Conciliation Act, 1996 - Section 11; Civil Procedure Code, 1908 - Section 114 - Review - Maintainability - power of review not being an inherent power, cannot be invoked under section 114, unless the statute specifically provides for review.

       Held : In the event of any controversy remaining concerning the grounds mentioned in clause (a) sub-section (1) of Section 14 viz. , the arbitrator becoming de jure or de facto unable to perform his functions or if he fails to act without undue delay, the party may apply to the Court to decide on the termination of the mandate. Sub-section (2) of Section 14 thus seems to be germane in the context. Having regard to the respective stands taken by the petitioner and the respondents it appears there is a controversy as regards the ground that the arbitrator failed to act without undue delay, which entails the termination of the mandate, the party has to invariably approach the Court to decide on the termination of the mandate. Without such termination of the mandate of an arbitrator the petitioner cannot seek the appointment of an arbitrator, inasmuch as the arbitral tribunal continues for all practical purposes. The Court which is competent to act in the event of filing of an application by eitherof the parties under sub-section (2) of Section 14 is the Court which is defined under clause (e) of sub-section (1) of Section 2 of the Act and also the High Court in exercise of its ordinary original civil jurisdiction. Therefore, the District court as well as the High Court have concurrent jurisdiction to act under sub- section (2) of Section 14. It is open to the parties to seek the termination of the mandate of an arbitrator and simultaneously to appoint a substitute arbitrator. Here in the instant case there has been no prayer for the termination of the mandate of the arbitrator, therefore the petitioner cannot automatically seek the appointment of his substitute arbitrator. It is not a case where the petitioner can fall back on sub-section (6) of Section 11 of the Act. None of the clauses (a), (b) and (c) enjoined under sub-section (6) of Section 11 is attracted in this case so as to enable the petitioner to approach the Chief Justice.

( 1 ) APPLICANT seeks appointment of an independent arbitratorundersection 11, subsections (5) and (6) of the Arbitration and conciliation Act, 1996.

( 2 ) PURSUANT to the tender notice, dated 19-7-1999, issued by the respondent for construction of pile foundations, R. C. C. columns and superstructure between Chirala and Stuartpuram railway station, Vijayawada, gudur section, the petitioner submitted his negotiated offer on 11-1-2000 and respondents accepted the same on 19-1 -2000. As perthe terms of the agreement, the work should be completed within 12 months from the date of acceptance letter i. e. , on or before 18-1-2001. Initially value of the work was Rs. 1,54,62,330/- The parties entered into an agreement bearing n0. 2/cao/c/sc/2000 on 7-2-2000. The petitioner deposited an amount of Rs. 53,358/- towards EMD out of three crores to be deposited and requested the respondents to recoverthe balance amounts from his running bills and accordingly they recovered an amount of Rs. 2,46,642/ -. The quantities mentioned in the tender schedule are only approximate and thev are liable to be varied up to 25% beyond the agreement at the time of actual execution of the work. Due to improper planning of the respondents, they could not hand over the site and could not obtain permission from the R and B Department of Government of A. P. , on account of which the work could not be progressed as planned. Contrary to the terms of the agreement, the respondents directed the petitioner to test drive the pile foundations and further directed to stop the work until a decision was taken. While the work was in progress, the site engineer asked the petitioner to stop the work until further instructions. On account of the stoppage of the work, the petitioner incurred an amount of Rs. 50,000/- per day for the establishment besides that he had to incur idling charges, therefore, the petitioner requested the respondents to extend the currency of contract upto 31-3-2002 on the condition that the respondents shall hand over the site after duly obtaining permission from R and B Department and arrange payment as demanded in his letter dated 23-10-2001. The respondents extended currency of the agreement up to 31 -3-2002, but no subsidiary agreement was entered into. Therefore, the agreement came to an end with the efflux of time on 30-6-2001. The applicant, therefore, raised certain disputes on 5-12-2001 and made claims on 5-4-2002. Eventually he requested the respondents to referthe matter to arbitration. The respondents issued a seven days notice on 6-2-2002 followed by forty eight hours notice on 18-2-2002 and thereafter terminated the contract. The competent authority in response to the request of the petitioner dated 5-4-2002 sent a panel of arbitrators on 26-11 -2002 to enable the petitioner to choose his nominee. As one of the officers in the panel was not available in India, the petitioner requested third respondent to furnish him a fresh panel of arbitrators on 23-12-2002. When the respondent furnished the fresh panel, the petitioner conveyed his nominee and accordingly the competent authority constituted arbitral tribunal on 24-4-2003.

( 3 ) THE tribunal asked the parties to file the respective claim statements along with necessary documents by 13-10-2003. The petitionerthus submitted his claim statements and the respondents too. The petitioner thereafter filed his rejoinder on 11-12-2003. However, as the tribunal did not proceed with the settlement, despite the request of the petitioner to proceed with the matter on 29-6-2004, the petitioner once again requested the tribunal to proceed with the matter on 11-8-2004. When the petitioner made discrete enquiries for the delay he came to know that one of the arbitrators was not interested to proceed with the matter, since huge amounts were due to him. Since the tribunal constituted was not proceeding with the adjudicating process, the petitioner requested the first respondent to reconstitute the tribun







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