The main legal point established in the judgment is that parties may waive the applicability of Section 12 (5) of the Arbitration & Conciliation Act, 1996 by their conduct, and the appointment of an Arbitrator by the respondent was held to be valid based on the applicant's conduct.

ORDER :

Subodh Abhyankar, J.

1. This is an application filed under Section 11 (6) of the Arbitration & Conciliation Act, 1996 (herein after referred to as the Act) for appointment of an Arbitrator to adjudicate the dispute between the parties.

2. The sole question which falls for consideration of this Court is whether the General Manager of the respondent, Union of India, West Central Railway can appoint an Arbitrator in terms of the arbitration clause, after the amendment in Section 12 (6) of the Act as per the Amendment Act of 2015 of the Act.

3. In brief, the facts of the case are that the applicant Smt. Asha Jain is the proprietary of M/s. D.K. Steels, an approved vendor for manufacture and supply of Composite Grooved Rubber Sole Plates (herein after referred to as CGRSP). Applicant is also duly approved by the Research Design & Standard Organization for supply of CGRSP to the Indian Railways. The respondent is the West Central Railway.

4. The case of the applicant is that in an e-tender floated on 8th February, 2013 by the respondent for manufacture and supply of Composite Grooved Rubber Sole Plate for 60 kilograms rail DRG, as per IRS specification for CGRSP for placing beneath rails. E-tender value as specified in the tender document was of Rs. 5,85,96,363/- (rupees five crore eighty five lakh ninety six thousand three hundred sixty three) and the completion period of the said work was eight months. It is not disputed that after some negotiation, the bid as submitted by the applicant was accepted by the respondent.

5. It is not disputed between the parties that in execution of the aforesaid works order, a dispute has arisen between them in respect of deduction of Rs. 34,42,337/- (rupees thirty four lakhs forty two thousand three hundred thirty seven) from the petitioner's different bills by the respondent. Thus, the petitioner is claiming the aforesaid sum along with interest from the respondent. To settle the dispute, the applicant has already resorted to the arbitration clause No. 2900 of the existing Indian Railways Standards Conditions of Contract, wherein it is provided that such dispute should be adjudicated by an Arbitrator to be appointed by the General Manager of the Indian Railways.

6. The contention of the applicant is that the Act stood amended with effect from 23rd October, 2015 and as per the new Amended Act of 2015, the respondent cannot now appoint a departmental arbitrator and procedure as laid down under the new Amendment Act has to be strictly followed. In view of the same, the applicant also issued a notice through its advocate on 5th December 2016 and proposed the name of Hon'ble Justice (Retired) Shri Alok Chakraborty of Calcutta High Court as an Arbitrator to adjudicate the dispute and claims of the parties but the said nomination was rejected by the respondent vide their letter dated 16th January, 2017.

7. Applicant's contention is that after the issuance of the letter dated 5th December, 2016, the respondent had revised the clause 2900 of the Indian Railway Standard Conditions of Contract vide its memo dated 16th February, 2017 in order to appoint an Arbitrator of their own choice.

8. Counsel for the applicant has vehemently argued before this court that a Retired Railway Officer cannot be appointed as the Sole Arbitrator to adjudicate the dispute between the parties, as the appointment of such Arbitrator would be contrary to the Act.

9. In support of his contention, Shri Satish Agrawal, learned counsel for the applicant has relied upon a decision rendered by the Hon'ble Supreme Court in the case of Perkins Eastman Architects DPC and another v. HSCC (India) Limited in Arbitration Application No. 32 of 2019 dated 26th of November 2019.

10. A reply to the aforesaid application has also been filed by the respondent Railways, refuting the averments made in the application under section 11 (6) of the Act