- (1.) This is an application Under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a sole arbitrator for adjudication of the disputes that have arisen between the parties to this application.
(2.) The admitted facts of the case in brief are that the petitioner entered into an agreement with the first respondent for execution of the work namely provision of LT UG 1.1 KV cable distribution work including street lighting in estate area at Mailaram near Shankerpally on 15-2-1985. The value of the contract was Rs.25,08,337-40 ps. only. The work was to be completed by 24-8-1985. The time for completion of the work was extended upon 30-5-1987. On 7-5-1987 the competent authority issued final notice and then the contract was cancelled on 1-6-1987.
(3.) The case of the petitioner in brief is that due to the default on the part of the first respondent there was delay in execution of the work because the required poles were not supplied within the stipulated time. Even so the first respondent illegally terminated the contract with effect from 1-6-1987 through letter dated 22-5-1987 on false allegations of slow progress of the work due to which the petitioner has been put to heavy financial loss. The petitioner served a notice under Section 80 of the Code of Civil Procedure demanding the payment due to be paid by the first respondent. In answer to that, the first respondent addressed a letter to Sri M.M.S. Nanda, Chief Engineer, Office of the Standing Panel of Arbitrators, dated 16-1-1997 that the contract in question contains an arbitration clause and a copy of that letter was served on the applicant on 25-1-1997. Through this letter, the said M.M.S. Nanda, Chief Engineer, was appointed arbitrator to resolve the disputes. On 27-1-1997, Sri Nanda informed the parties to file their respective written statements. The petitioner questioned the appointment of the sole arbitrator. Later Sri M.M.S. Nanda fixed 21-6-1997 as the date of first hearing and demanded the original documents as also sought enlargement of time to make and publish the award by 31-10-1997. Thereafter he did not fix any date for hearing till the filing of this application in the High Court. In the meantime, on 30-4-1998 the Engineer-in-Chief, Army Headquarters, New Delhi, addressed a letter to Sri G.S. Mehta and informed that the contract in question contains an arbitration clause and the Engineer-in-Chief had power to appoint sole arbitrator and because disputes have arisen, Sri M.M.S. Nanda had been appointed as the sole arbitrator who had resigned on 20-12-1997 and, therefore, the Engineer-in-chief, Army Headquarters had appointed Sri G.S. Mehta as the sole arbitrator to adjudicate the disputes, duly enclosing a list of disputes without referring the claims of the contractor. Thereupon, the third respondent issued a notice to the parties on 25-5-1998. It is alleged that since Sri M.M.S. Nanda did not publish the award within the stipulated time, that is to say by 31-10-1997 and no extension was granted by the parties or sanctioned by the Court and also because MMS. Nanda had resigned from the post of the sole arbitrator, the Engineer-in-chief, Army Headquarters, New Delhi, had no power or jurisdiction to appoint another arbitrator in place of MMS. Nanda who had not only become functus officio but later had also resigned. The Engineer-in-chief, Army Headquarters, is empowered to nominate the arbitrator only once as per the terms of the contract, though a vacancy had arisen but the arbitration clause in the agreement had ceased to exist, therefore the Engineer-in-Chief of Army Headquarters was incompetent to appoint a second arbitrator and, therefore, the Court should appoint an independent sole arbitrator to adjudicate the disputes.;