Failure to appoint an arbitrator within the stipulated time results in the loss of the right to make the appointment. Appointment of an arbitrator by an ineligible person is void ab initio.

JUDGMENT

Prakash Shrivastava, CJ. - This application under Section 11 of the arbitration and Conciliation act, 1996 has been filed for appointment of arbitrator to resolve the dispute between the parties.

2. Case of the applicant is that the applicant had submitted offer in pursuance to the Notice Inviting Tender floated by the respondents, and, thereafter, purchase order dated 10th of august 2019 was issued to the applicant for supply of 850 sets of joggled fishplates as per the specifications mentioned in the Tender Documents. The delivery period, at the instance of the applicant, was extended by the Railways by a letter dated 26th November 2018. There was some dispute about the inspection by the inspecting agency. Hence, the delivery period at the request of the applicant was again extended up to 8th March 2019 by a letter dated 8th of January 2019. according to the applicant, thereafter, the materials were duly inspected by the inspecting agency and the applicant had dispatched 265 sets of joggled fishplates to the respondents on 25th February, 2019 but respondents had refused to accept it. Hence the dispute arose between the parties. In paragraph 23 of the a.P., the applicant has disclosed that he suffered the loss of damages to the tune of Rs. 90,57,903/- (Rupees Ninety Lakhs Fifty Seven Thousand Nine Hundred Three). The applicant, vide letter dated 26th of June 2020, had invoked the arbitration clause and had sent a panel of three senior advocates seeking concurrence of the respondents for appointment of arbitrator from the said panel. Case of the applicant is that even after the letter dated 26th of June 2020, no arbitrator was appointed nor the dispute was resolved within 30 days. Hence, the respondents have lost their right to appoint arbitrator and, therefore, the applicant has approached this Court for appointment of arbitrator.

3. The arbitration clause in the agreement is undisputed which reads as under:

'2903 : Demand for arbitration:

2903(i): 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 if the Railway fails to make a decision within 120 days (as referred in 2902), then and in any such case, but except in any of the 'excepted matters' referred to in Clause 2902 of these Conditions, parties to the contract, after 120 days but within 180 days of their presenting their final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration. Provided that where the claim is raised by Railways para 2903(i) shall not apply.

2903(ii)(a): The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute or difference, in respect of which the demand has been made, together with counter claims or set off, shall be referred to arbitration and other matters shall not be included in the reference.

2903(ii)(b): The parties may waive off the applicability of Sub-Section 12(5) of arbitration and Conciliation act 1996 (as amended), if they agree for such waiver in writing, after dispute having arisen between them.

2903(iii)(a): The arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.

2903(iii)(b): The claimant shall submit his claims stating the facts supporting the claims alongwith all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the arbitral Tribunal.

2903(iii)(c): Respondent shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal, unless otherwise extension has been granted by arbitral Tribunal.

2903(iii)(d): Place or arbitration: The plac