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2017 Supreme(P&H) 946
IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
M/s Gulshan Rai Jain-II - Petitioner
Versus
The Executive Engineer, Housing Board and anr. - Respondents
CR No.7616, 8553, 8569 of 2016
Decided On : 29-11-2017
For the Petitioner:Mr. Karan Bhardwaj, Advocate, Mr. Vishal Garg, Advocate
For the Respondents:Mr. Prateek Mahajan, Advocate
The validity of the security deposit provision and the appealability of the order passed by the Arbitral Tribunal under Section 17 of the Arbitration Act, 1996.
Headnote:
Security Deposit - Arbitration Agreement - Clause 33(7) of the contract - Arbitration Act, 1996 - Section 17 - The court discussed the validity of the security deposit provision, waiver, and the appealability of the order passed by the Arbitral Tribunal under Section 17 of the Arbitration Act, 1996.
Fact of the Case:
The Housing Board Haryana gave three contracts to M/s Gulshan Raj Jain-II with a provision for referring disputes to an Arbitrator nominated by the Chief Administrator. The contractor requested the Chief Administrator to appoint an Arbitrator, but the Housing Board called for a security deposit. The Arbitrator directed the contractor to deposit the security amount, and the Housing Board filed an application seeking the same.
Finding of the Court:
The court found that the security deposit provision was valid and had not been waived. It also held that the appeal was maintainable against the order passed by the Arbitral Tribunal under Section 17 of the Arbitration Act, 1996.
Issues: 1. Whether the security deposit provision was waived once the Arbitrator was appointed. 2. Whether the appeal was maintainable against the order passed by the Arbitral Tribunal.
Ratio Decidendi: The court held that the security deposit provision was not waived and that the appeal was maintainable against the order passed by the Arbitral Tribunal under Section 17 of the Arbitration Act, 1996.
Final Decision: Civil Revisions No.8553 and 8569 of 2016 were allowed, and Civil Revision No.7616 of 2016 filed by the Contractor was dismissed. The Contractor was required to deposit the security deposit as per clause 33(7) of the contract before requesting the Arbitrator to proceed and adjudicate upon the dispute.
ANIL KSHETARPAL, J.
1. By this order, Civil Revision Nos.7616, 8553 and 8569 of 2016 are being disposed of together, as a common issue is involved. For the facility of reference, facts are being culled out from CR No.7616 of 2016.
2. Housing Board Haryana gave three similarly worded contracts to M/s Gulshan Raj Jain-II. In all the three contracts, for settlement of the dispute(s), there was a provision for referring the dispute for adjudication to the Arbitrator nominated by the Chief Administrator, Housing Board, Haryana. Clause 33 of the agreement deals with the resolution of the dispute, which reads as as under:-
(1) If any dispute or difference of any kind whatsoever shall arise between the Housing Board Haryana or its authorized agent and the contractor in connection with or arising out of the contract or the execution of the work that is (i) whether before its commencement or duirng the progress of the work or after its completion, (ii) and whether before or after the termination abandonment or breach of the contract it shall in the first instance be referred to for being settled by the Executive Engineer at the time and he shall within a period of sixty days after being requested in writing by the contractor to do so convey his decision to the contractor and subject to arbitration as hereinafter provided such decision in respect of every matter so referred shall be final and binding upon the contractor. In case the work is already in progress the contractor will proceed with the execution of the work on receipt of the decision by the Executive Engineer as aforesaid with all due diligence whether he or the Housing Board Haryana/its authorized agent requires arbitration as hereinafter provided or not. If the Executive Engineer has conveyed his decision to the contractor and no claim to arbitration has been filed with him by the contractor within a period of sixty days from the receipt of letter communicating the decision, the said decision shall be final and binding upon the contractor and will not be a subject matter of arbitation at all. If the Executive Engineer fails to convey his decision within a period of sixty days after being requested as aforesaid the contractor may within further sixty days of the expiry of first sixty days from the date on which request has been made to the Executive Engineer request the Chief Administrator HBH hereinafter provided.
(2) All disputes or differences in respect of which the decision is not final and conclusive shall at the request in writing of either party, made in a communication sent through Registered A.D. post be referred to the sole Arbitrator to be nominated by the Chief Administrator from amongst officers who will be either.
(i) A serving Superintending Engineer or Chief Engineer of the Housing Board, or Haryana PWD B&R Branch.
(ii) A retired Superintending Engineer, Chief Engineer or an Executive Engineer of the Housing Board of Haryana PWD B&R or any the person to be selected out of panel of Arbitrator approved by the Chief Administrator. It will be no objection to any such an appointment that the Arbitrator so appointed is a Housing Board Employee/Government servant or that he had to deal with the matters to which the contract relates and that in the course of his duties as a Housing Board Employee/Government servant he had expressed his views on all or any of the matters in dispute. The Arbitrator to whom the matter is originally referred being transferred or vacating his office his successor in office as such shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.
3. In case the Arbitrator nominated by the Chief Administrator, Housing Board Haryana is unable or unwilling to act as such for any reason whatsoever, the Chief Administrator shall be competent to appoint and nominate any other Superintending Engineer or Chief Engineer as the case may be as Arbitrator in his place and the Arbitrator so appointed shall be en
