V. S. SIRPURKAR, C. J.

( 1 ) THIS is an application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act), for appointment of an arbitrator. There was a contract between the petitioners herein and the union of India, represented by Divisional engineer (Co-ordination), Eastern Railway, sealdah. The petitioner company was awarded a contract of lifting of track from km 5/25 to km 8/21 all four lines, and PQS station limit for provision of ballast cushion with other ancillary works at a cost of Rs. 12,33,968/ -. This contract was awarded to the petitioner company vide letter dated 14th april, 2004. The work was to be completed within four months from the date of Issue of the contract. In pursuance of this offer an agreement was executed on 13th september, 2004. It seems that the petitioner company's claim is that due to default and breaches on the part of the respondents the execution of the work was prolonged and the extensions were also granted by the respondents without any penalty and when the work in question was successfully executed to the extent of 90% before the expiry of the extended period, a notice was sent to the petitioner company making some allegations. The petitioner company had given reply to the notice. However, it seems that the petitioner company has not been paid for the financial losses suffered by it on account of breach of contract by the respondents. The petitioner company by its letter dated 22nd February, 2005 claimed that its dues should be paid. However, no reply was ever received by the petitioner company.

( 2 ) THUS since this contract took place within the local jurisdiction of this Court, this Court has the territorial Jurisdiction to try and entertain this application and there is also a live issue in between the parties. Clause 63 (1) (i) of the agreement provides for the arbitration clause, which is as under :

"63 (l) (i) - Demand for Arbitration. In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case but except in any of the 'excepted matters' referred to in Clause 62 of these conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters, shall demand in writing that the dispute or difference be referred to arbitration. "

( 3 ) THUS, there is a valid arbitration clause in the agreement between the parties. The petitioner company's case is that in pursuance of this clause, the petitioner company sent a letter dated 22nd February, 2005 mentioning therein that in case nothing was heard or the letter was not complied with, the petitioner company would be compelled to Invoke the arbitration agreement. It is an admitted position that the Divisional Railway manager, to whom this letter was sent, received this letter and in that letter the petitioner company had claimed a sum of rs. 22,03,317/ -. However, there was no decision taken even within 120 days, as provided in the arbitration agreement, and the petitioner company therefore by letter dated 11th July, 2005 invoked the arbitration clause and requested the General Manager to refer the dispute to the arbitration as per the arbitration clause quoted above. It is apparent that no action was taken and therefore the petitioner company filed the present application.

( 4 ) IT is the case of the respondent that after this application was filed the Railway went on to appoint an arbitrator. However, as per the law settled by the Supreme Court in the case of Datar Switchgears Limited v. Tata Finance Ltd. , reported in (2000) 8 SCC 151 : (2000 AIR SCW 3925), there will be no que

Click Here to Read the rest of this document