IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR-6764-2025(O&M)

Date of Decision:22.09.2025 PUNJAB WATER SUPPLY AND SEWARGE BOARD, THROUGH ITS EXECUTIVE ENGINEER, PATIALA ....Appellants(s)

Versus JAI BHUSHAN MALIK, CONTRACTOR AND ANOTHER .....Respondent(s)

CORAM: HON’BLE MR. JUSTICE JASGURPREET SINGH PURI Present: Mr. Angadpreet Singh, Advocate, for the petitioner.

Mr. Dheeraj Mahajan, Advocate, for respondent No.1.

****

JASGURPREET SINGH PURI , J. (Oral)

1. The present petition has been filed under Article 227 of the Constitution of India for setting aside the order dated 29.08.2025 (Annexure P-6) passed by the learned Additional District Judge, Patiala, whereby the petitioner department i.e. Punjab Water Supply and Sewerage Board has been directed to deposit/pay the balance fee amount to the Arbitrator on or before 05.09.2025 under the provisions of Section 39 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act').

2. Learned counsel appearing on behalf of the petitioner submitted that in the present case the dispute is with regard to the payment of fee to the learned Arbitrator. He submitted that it is a settled law that when the parties have agreed to and settled upon the fee of the Arbitrator, then the Arbitrator cannot charge fee as per Schedule IV of the Act because in that eventuality the fee is to be governed by the agreement between the parties and in the present case, the parties had agreed upon payment of a total sum of Rs. 2,00,000/- towards the fee of the Arbitrator which was to be borne equally by both the parties and the petitioner-Board undisputedly has paid an amount of Rs. 1,00,000/- to the learned Arbitrator but the learned Arbitrator had demanded the fee as per Schedule IV to the tune of Rs. 15,00,000/- which was to be equally shared by both the parties and in this way, the petitioner was burdened with an amount of Rs. 7,50,000/-, although the petitioner has already paid an amount of Rs. 1,00,000/-, as per agreement between the parties. He further submitted that when an award was passed against the petitioner, then objections were filed by the petitioner under Section 34 of the Act before the learned Additional District Judge, Patiala in which two separate applications were filed under Section 39 of the Act. First application was filed by respondent No.1 who is the decree-holder and second application was filed by respondent No.2 who is the Sole Arbitrator and both the applications were adjudicated upon by way of a common order which is the impugned order (Annexure P-6) in the present case whereby by allowing both the applications, the petitioner was directed to deposit/pay the balance fee amount to the Arbitrator on or before 05.09.2025.

3. Learned counsel submitted that the aforesaid order is erroneous in law in view of the fact that once the parties have agreed with regard to the fixation of fee, then the provisions of Schedule IV of the Act will not apply. To substantiate his arguments, he referred to Annexure P-1 which was the appointment order passed by the Chief Executive Officer of the petitioner- Board by which the Sole Arbitrator who is respondent No.2 in the present case was appointed and by making reference to the aforesaid Annexure P-1 dated 31.08.2023, he submitted that the detailed schedule was mentioned therein. He submitted that although there is no such provision for the fee of the Arbitrator in the terms of the contract between the parties but as per the aforesaid Annexure P-1, the aforesaid fee has been mentioned and therefore, the provisions of Schedule IV of the Act would not apply in the present case. He submitted that considering the aforesaid facts and circumstances, the impugned order is liable to be set aside.

4. On the other hand, learned counsel appearing on behalf of respondent No.1 submitted that the petitioner has not stated the true facts in the present case. He submitted that although it is settled law that when there is an express agreement b