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2018 Supreme(P&H) 2489
IN THE HIGH COURT OF PUNJAB AND HARYANA
KRISHNA MURARI, J.
Dharam Pal Maddar and Sons - Appellant
Versus
Union of India - Respondent
Arbitration Case No. 222 of 2016
Decided On : 14-09-2018
Dheeraj Mahajan, Adv., Nitin Kumar, Adv.
Compliance with the procedure outlined in the General Conditions of Contract (GCC) is essential before demanding arbitration under the Arbitration and Conciliation Act, 1996.
Headnote:
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioner sought appointment of an arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996, due to disputes arising from a contract with the respondent-railways for improvement of flooring and repair work. The respondent-railways contested the petition, arguing that the claim was premature as per the General Conditions of Contract (GCC).
Finding of the Court:
The court found that the petitioner had not followed the procedure outlined in the GCC, specifically clauses 63 and 64, which required disputes to be referred to the railway authorities before demanding arbitration. The court dismissed the petition as premature, but allowed the petitioner to seek appointment of an arbitrator if the GCC provisions were not complied with by the respondent-railways.
Issues: The main issue was whether the petitioner's demand for appointment of an arbitrator was premature due to non-compliance with the GCC provisions.
Ratio Decidendi: The court held that the petitioner's failure to follow the procedure outlined in the GCC, specifically clauses 63 and 64, rendered the demand for appointment of an arbitrator premature.
Final Decision: The petition was dismissed as premature, but the petitioner was granted the liberty to seek appointment of an arbitrator if the GCC provisions were not complied with by the respondent-railways.
KRISHNA MURARI, J.
1. This is an application made by the applicant-petitioner under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment of an arbitrator.
2. In pursuance to a tender notice issued by the respondent-railways for improvement of flooring of second class waiting hall at Amritsar and repair of badly damaged flooring of platform No.2 at Beas Railway Station in the section of SSE/ML/ASR under ADEN/ASR, the bid offered by the applicant-petitioner was accepted and it was awarded contract vide letter dated 26.06.2012 with the estimate cost of work Rs. 3,66,672/-. An agreement dated 06.08.2012 was duly entered into between the parties. Under the terms of the contract the stipulated date of commencement of the work was 21.06.2012 and the stipulated date of completion was 21.10.2012. According to the petitioner-applicant, although the date of commencement of the work was 21.06.2012 but the acceptance letter was prepared on 26.06.2012 and dispatched on 03.07.2012 which was received by the applicant-petitioner on 05.07.2012.
3. It is also submitted that with a malafide intention, a condition was imposed in the acceptance letter ultimately with respect to supply of cement of 27% of the total value to be stored at the initial stage in the storage of the railways. The railways also violated the contractual obligation on their part with respect to providing of the site free from all type of hindrances and supplying of drawing and design without any further delay. After receiving the acceptance letter on 05.07.2012, the petitioner-applicant immediately submitted representation dated 06.07.2012 through registered post raising an objection with respect to incorporation of the condition regarding supply of cement to the extent of 27% of the total costs of the value in the storage of the railways. With the intention to complete the work in time, the petitioner-applicant arranged JCB machine and tractor-trolley for the purpose of demolishing and removing the material. However, he was not allowed to carry out the demolition mechanically but was directed to carry out the said work manually and the removal was also not permitted to be done by the tractor trolley but manually. Even the electric connection was not provided to the applicant-petitioner for execution of the work and various representations made by the petitioner pointing out the above anomalies were not heeded to.
4. Without discharging their part of obligation under the contract and providing site free from all hindrances, the respondent-railways issued a letter dated 16.04.2013 giving seven days notice to complete the work which was duly replied to. It is also pleaded that the authorized representative of the applicant-petitioner who was handling the work died on 27.02.2014 and without any notice or knowledge of the heirs, the respondent-railways got the remaining work executed from other agency without any consent of the heirs of the deceased.
5. Vide representation dated 03.12.2015 the applicant-petitioner bringing all the aforesaid facts to the notice of the railways made in total 10 claims and also claimed costs. By the same representation a prayer was also made to appoint an arbitrator to decide the claims made therein. The following prayer was made in the said representation "in the light of above noted facts, it is therefore prayed that an arbitrator may kindly be appointed to decide the above said claims in the interest of justice and equity and fair play".
6. However, since the respondent-railways failed to refer the claims raised by the applicant-petitioner for adjudication to arbitrator despite expiry of more than 30 days from the date of receipt of representation dated 03.12.2015, the present petition under section 11(6) of the Act has been filed for appointing an arbitrator.
7. Respondent-Railways have contested the petition by filing written statement pleading inter-alia that the claim made by the
