IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Reserved on 18.12.2024.

Date of decision :07.01.2025 S.P.Singla Constructions Pvt. Ltd.

... Petitioner Vs.

State of Punjab and another ... Respondents CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL Present:- Mr. Anirudh Wadhwa, Advocate (through V.C.)

Mr. Gurmohan Singh Bedi, Advocate Mr. Pawandeep Singh, Advocate Mr. Anand Vardhan Khanna, Advocate Mr. Kartik Gupta, Advocate for the petitioner.

Mr. Brijesh, AAG, Punjab.

SUVIR SEHGAL J.

1. By way of present petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Arbitration Act') petitioner has approached this Court for declaration of the appointment of Er. G.S. Mann, a nominee of the respondents, as void and for appointment of an impartial arbitrator in his place.

2. Facts leading to the filing of the petition are that the petitioner was awarded a contract for construction of a railway overbridge vide letter of acceptance dated 31.5.2007 Annexure P-2.

The terms and conditions of the contract entered into between the parties contained a provision for resolution of disputes or differences by arbitration under Clause 25.3, Annexure P-3. Disputes arose between the parties and by letter dated 28.04.2010 Annexure P-4, petitioner invoked the arbitration clause while proposing names for appointment as a sole Arbitrator. Respondents rejected the names proposed by the petitioner and nominated Er. S.P. Banwait as their Arbitrator by letter dated 10.05.2010, Annexure P-5 and the petitioner nominated Mr. Inder J. Mamtani as its nominee arbitrator by letter dated 26.05.2010, Annexure P-6. Both the Arbitrators appointed Mr. A.K. Sarin as the Presiding Arbitrator, who accepted his appointment. The Arbitral Tribunal entered upon reference at Chandigarh on 16.08.2010 Annexure P-9, but Mr. S.P. Banwait resigned on 19.01.2015, Annexure P-10 and Er. Kuldip Singh was appointed as an Arbitrator by the respondents on 04.02.2015, Annexure P-11. The Arbitration and Conciliation (Amendment) Ordinance, 2015 was promulgated on 23.10.2015, which was brought to the notice of the Tribunal by the petitioner during the proceedings held on 30.11.2015 Annexure P-12. On 22.12.2015, Annexure P-13, Er. Kuldip Singh, recused from the Tribunal and by communication dated 30.12.2015, Annexure P-14, the respondents purported to appoint Er. G.S. Mann as their nominee Arbitrator. By protest letter dated 07.01.2016, Annexure P- 15, petitioner objected to his appointment, but Er. G.S. Mann accepted his appointment on 07.01.2016, Annexure P-16. By his communication dated 10.01.2016 Annexure P-17, the nominee Er. G.S. Mann intimated that he will not proceed with the matter till the controversy over his appointment is settled. Some communications were exchanged between the parties and on 31.03.2016, Annexure P-26, arbitral proceedings were postponed and the petitioner was granted time to get orders from the Court.

3. Counsel for the petitioner has contended that Er. G.S.Mann, retired as Superintending Engineer from the Punjab PWD (B & R) and being an ex-employee of the respondents, his appointment is hit by Section 12(5) of the Arbitration Act, which has been incorporated w.e.f. 23.10.2015. He submits that Er. G.S. Mann is ineligible to be appointed as an Arbitrator by the respondents. He has placed reliance upon:-

(i) E l lora Paper Mills Ltd. Versus State of Madhya Pradesh, (2022) 3 SCC 1;

(ii) KRR Infra Projets Limited versus Union of India, 2018 SCC Online Delhi 12418;

(ii) Perkins Eastmen Architets DPC and anoher Versus HSCC (India) Limited (2020)20 SCC 760; and (iv) Oyo Hotels and Homes Pvt. Ltd. Versus Rajan Tiwari and another, 2021 SCC OnLine Delhi 446

4. Petition has been contested by the respondents by filing a reply wherein the factual position has not been disputed. It has been submitted that Er. S.P Banwait recused from the Arbitral Tribunal as the petitioner had objected to his continuing after he had delivered an award against the petitioner