SURYA KANT,CJ,J. - (1.) The petitioner is a registered Government contractor to whom the work of Gravity Water Supply Scheme/Lift Water Scheme from Charoli Khad to Taprola Gar Charoli, Juru Sahalal, Kulag and Chunduli Khad to Chadwan Ghar, Noura, Boura and Chundli in Tehsil Kupvi (Chopal) District Shimla, H.P. was allotted on online participation in the tender process followed by negotiation held on 22nd January, 2018. The work was awarded on 24 th January, 2018. The Executive Engineer, Irrigation and Public Health Division, Nerwa has, vide impugned communication dated 31 st July, 2018, rescinded the agreement entered into between the parties by invoking Clause 3(b) of the said agreement and earnest money amounting to Rs.1,30,000/-, deposited by the petitioner, has also been forfeited. The action has been taken after serving several notices upon the petitioner.
(2.) The aforementioned act of the authorities is under challenge on the premise that the requisite material was not supplied to the petitioner despite repeated communications sent by him, some of which have been placed on record.
(3.) On our asking, learned Additional Advocate General has produced agreement dated 24th January, 2018, executed between the parties. Clause 25 of the agreement provides that in the event of any dispute arising out of agreement, the same shall be referable to arbitration. The clause reads as follows:- "Clause 25: Settlement of disputes by Arbitration Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions here-in force mentioned and as to the quality of work manship of materials used on the work or as to any other questions, claim, right, matter nothing whatsoever in any way arising out of relating to the contract designs, drawings, specifications, estimate, instructions, orders or these conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the works or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Engineer-in-charge/Chief Engineer, Himachal Pradesh Irrigation and Public Health Department. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant that he had to deal with matters to which the contract relates and that in course of his duties as Govt. servant. He had expressed views on all or any of the matters in dispute of difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason to Engineer-in-charge/Chief Engineer, Himachal Pradesh IPH, at the time of such transfer vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by the predecessor. It is also a term of this contract that no person other than a person appointed by the Engineer-in-charge/Chief Engineer, Himachal Pradesh IPH should act as arbitrator and, if for any reason, that is not possible, the matter is not to be refereed to arbitration at all. In all cases where the amount of the claim in dispute is Rs.50,000 and the above, the arbitrator shall give reasons for the award. Subject as aforesaid the provision of Arbitration Act, 1940 or any statutory modification or re-enactment and the rules made thereunder and for r the time being in force shall apply to the arbitration proceedings under his clause. It is also a term of the contract that the party invoking arbitration shall specify the disputes to be referred to arbitration under this clause together with the amounts claimed in respect of each such dispute. It is also a terms of the contract there if the contractor(s) do not make any demand for arbitrations is respect of any claim(s) in writing 90 days of receiving the information from the government, that the bills is ready for payment the claim of the contractor (s) will be deemed to have been waived and absolutely barred and the Govt. shall be discharged and released of all liabilities under the contract in respect of these claims. The arbitrators may from time to time with consent of parties enlarge the time for making and publishing the award." ;