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2002 Supreme(Del) 35

High Court Of Delhi
ENKAY CONSTRUCTION COMPANY - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 01/10/2002

Headnote:Arbitration Act, 1940 - Section 20 r/w 8 — Appointment of arbitrator — Court appointed a retired Judge of Delhi High Court but he showed his inability to be arbitrator in the wake of his appointment as chairman in AAIFR — Application under Section 151, CPC for appointment of other arbitrator — Opposed by the respondent — Date of arbitral proceedings is to be reckoned from the date of request of arbitration — Date of request for arbitration was before the commencement of new act hence the old act will apply — If a vacancy is caused in view of any appointed arbitrator refusing to act, then a notice of 15 clear days to opposite party to concur in the appointment is required — Petitioner is required to give 15 days notice to respondent for the appointment of other arbitrator — Application dismissed.

B. N. CHATURVEDI

( 1 ) THE Delhi Development Authority, respondent no. 1, awarded a contract for construction of 136/188 csp Houses at Paschim Vihar, Pocket, GH-6, Near nangloi Sayed Village, to the petitioner, M/s. Enkay construction Company. A formal contract bearing n0. 21/ee/wd-6/89-90/dda dated 30. 9. 1989 was executed. The construction of houses could not be completed within the stipulated time frame. The petitioner attributed the delay in completion of construction work to acts of commission/omission on the part of respondent No. 1. On completion of work, the petitioner sought release of outstanding dues. The respondent No. 1, however, failed to pay the same. Thus, disputes and differences arose between the parties.

( 2 ) BY way of a letter dated 23/1/1995, the petitioner requested the Engineer Member of respondent no. 1 to refer the disputes/differences to arbitration in terms of Arbitration Clause 25 of the General conditions of Contract. The Engineer Member, however, according to the petitioner, refused and deliberately neglected to refer the disputes to arbitration and, thus, abdicated his power to appoint an arbitrator. The petitioner, accordingly, approached this Court by way of a petition under Section 20 read with Section 8 of the Arbitration Act, 1940 for appointment of an arbitrator.

( 3 ) OPPOSING the petition for appointment of an arbitrator, the respondent No. 1 asserted that the stipulated date of completion of work was 29th of september, 1990, but the petitioner could accomplish the same on 20th of January, 1997 only. It is claimed that the payment for the entire work done was made to the petitioner up to the final bill in accordance with the terms of the contract, and the petitioner accepted all payments in full and final settlement without any protest. According to the respondent No. 1, no disputes/differences actually existed, and there was, thus, no occasion for a reference to arbitration. It is added that the respondent No. 1, by its letter dated 23. 3. 1995, informed the petitioner that since its request for arbitration had been received in its office on 23rd of January, 1995, after expiry of the time prescribed under Clause 25 of the agreement, being barred, its claims were deemed to have been waived.

( 4 ) THE petition was eventually decided by this court by an order dated 14. 12. 2000 and Justice j. B. Goel, a retired Judge of this Court, was appointed as sole arbitrator to adjudicate upon the disputes raised by the petitioner. Justice (Retd.) J. B. Goel, however, by his letter dated 5/1/2001, expressed his inability to enter upon the reference. A verbatim reproduction of his letter reads as under :-

FROM: justice J. B. Goel (Retd.) ab-23, Tilak Marg, new Delhi. To, the Registrar, delhi High Court, new Delhi. Sub: Re-appointment of Arbitrator in suit No. 106 A/98. Sir, please refer to your office letter No. 28711/1 dated 19. 12. 2000. 2. From this letter, it is seen that i have been appointed as an Arbitrator vide order dated 14. 12. 2000 passed by hon ble Mr. Justice Madan B. Lokur, High court of Delhi in suit No. 106 A/90 m/s. Enkay Construction Co. Vs. DDA and another. 3. In this connection I have to inform you that I have since taken over as Chairman, Appellate Authority for industrial and Financial reconstruction (AAIFR) with effect from 13. 12. 2000. In view of my appointment as Chairman, AAIFR, I cannot take up new arbitration cases. As such, a new arbitrator will have to be appointed in this case by the High Court. 4. Letter No. 20711/1 dated 19. 12. 2000 along with its enclosures (in original) are returned herewith. Yours faithfully sd/ 5/1/2001 (J. B. GOEL)"

( 5 ) CONSEQUENTLY, the petitioner came up with the instant IA-No. 5007/01 under Section 151 Code of Civil Procedure seeking appointment of another arbitrator in place of justice (Retd.) J. B. Goel, which faces opposition from respondent No. 1 on the ground that in view of the refusal on the part of Justice (Retd.) J. B. Goel, the ar














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