- (1.) The Court : This is an application for vacating and recalling the order passed by this Court on 17th June, 1991 in A.P. No. 117 of 1999 which is as follows :- "This is an application under section 11(5) of the Arbitration & Conciliation Act, 1996. The contention of the petitioner is that although the demand was made to comply with the formalities for appointment of arbitrator in the dispute in between the parties, but the authorities concerned, being the respondent herein, did not adhere to give due concurrence to such demand for the purpose of appointment of arbitrator; as a result whereof the jurisdiction of this Court has been invoked. It appears from sub-section (2) of section 11 of the Act that subject to sub-section (6), which is not the subject matter herein, parties are free to agree on a procedure for appointing arbitrator or arbitrators. Sub-section (5) prescribes for failing in agreement referred to in sub-section (2) in on arbitrator with a sole arbitrator. If the parties fail to agree on the arbitrator within thirty days from the receipt of a request by one party from another party to so agree, the appointment shall be made, upon request of a party, by the Hon'ble the Chief Justice or any person or institution designated by him. The expression "or any person or institution designated by him" under the said sub-section (5) is creating lot of confusion in the mind of the people and causing unnecessary delay in arbitration proceedings. Such is contrary to the very basis of Act. The law prescribes that the principal Civil Court has jurisdiction to entertain, try and determine, the subject matter of the context. The principal Civil Court does not necessarily mean the Chief Justice alone. The pusne judges too are the part and parcel of Chief Justice of the High Court. The problem is now-a-days that the administrators are becoming defecto law maker due to lack of potentiality is the legislative body. Hence such result is inevitable. However, it is high time for the legislature to take this issue for necessary clarification. Now, let us confine to the cause of action of this applicaton. Cause of action is refusal or failure on the part of the authority to give concurrence as to notice of appointment of Arbitrator within 30 days from the date of notice. Therefore appointment of Arbitrator with the intervention of the Court is obvious. A single Bench Judgment of Andhra Pradesh High Court reported in 1999(1) Arbi LR 179 (V. Ramana Reddy v. Union of India etc.) also took the similar view. As a result whereof I pass an order in terms of prayer (b) of the petition and send the matter to the Hon'ble the Acting Chief Justice for the purpose of filling up the vacancy of the arbitrator and for further directions, if any, for the purose of giving a particular time frame for making and publishing the award. Therefore, this application is disposed of one the above terms. Cost of this application will be costs in the arbitration proceedings. The Department and all parties concerned are to act on a signed copy minutes of the operative part of this judgment on the usual undertaking."
(2.) As soon as the matter was placed before the Hon'ble Chief Justice for the purpose of filling up the vacancy, the petitioner in this application took the objection about the appointment of the Arbitrator through the intervention of the Court. As a result whereof, this petitioner with a supporting affidavit dated 6th December, 1999 moved an application with such prayer as above for vacating and recalling the order passed by this Court and direction upon the Chief Engineer, Central Public Works Department to appoint Arbitrator in terms of Clause 5 of the agreement being annexure-C to the petition.
(3.) Annexure-C to the petition prescribes as follows :- "Clause 25. Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality or workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Central Public Works Department, in charge of the work at the time of dispute or if there be no Chief Engineer, the administrative head of the said Central Public Works Department at the time of such appointment. It will be no objection to any such appointment that the Arbitrator so appointed is a Government servant that he had to deal with the matters to which the contract relates that in the course of his duties as Government servent he had expressed views on all or any of the matters in dispute or difference. The arbitration to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Chief Engineer or Administrative head as aforesaid at the time of such transfer, vacation 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 State at which it was left by his predecessor. It is also a term of his contract that no person other than a person appointed by such Chief Engineer or Administration head of the CPWD, and aforesaid should act as Arbitrator and if for any reason, that is not possible, the matter is not to be referred to Arbitration at all. In all cases where the amount of the claim in dispute is Rs. 75,000/- (written in ink pen), and above, the arbitrator shall give reasons for the award. 3a.Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. 3b.It is also a term of the contract that the party invoking arbitration shall specify the dispute or disputes to the referred to arbitration under this clause together with the amount or amounts claimed in respect of each such disputes. 3c.It is also a term of the contract that if the contractor(s) do/does not make any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the Government that the bill is ready for payment, the claim of the contractor(s) will be deemed to have been waived and absolutely beared and the Government shall be discharged and released of all liabilities under the contract in respect of these claims. 3d.The arbitrator(s) may from time to time with consent of the parties enlarged the time, for making and publishing the award. 3e.The decision of superintending Engineer regarding the quantum of reduction as well as justification thereof in respect rules for substandard work which may be decided to be accepted will be final and would not be open to arbitration.";