- (1.) HEARD learned counsel for the parties on the application u/s 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') for appointment of the Arbitrator.
(2.) THERE is no dispute about the fact that Clause 23 exists in the Agreement No.30/2005-2006 which provides for settlement of the dispute by the Empowered Standing Committee. In the last part of Clause No.23, it is mentioned that the Chief Engineer (Member Secretary) on receipt of application shall refer the dispute to the Standing Committee. Submission of counsel for the applicant is that for referring the dispute to the Empowered Standing Committee, the applicant has given notice on 29.5.2010 (Anx.R-1)along with demand draft of Rs.1,00,000/- being the requisite fees, which was received in the office of the respondents on 14.6.2010 and the Superintending Engineer, Water Resources Division, Aklera Distt. Jhalawar vide his letter dated 23.6.2010 (Anx.R-2)(which has been inadvertently marked as Annexure-2 with the reply), forwarded the claim to the Chief Engineer, Water Resources, Division Kota mentioning therein that the counter claim will be filed by the Executive Engineer, Water Resources, Division Aklera separately. However, on 14.7.2010, the Executive Engineer, Water Resources, Division Aklera wrote a letter to the applicant that the dispute has been submitted to the Chief Engineer, Water Resources, Zone Kota cum Member Secretary, Empowered Standing Committee and the information regarding the date and time of the meeting of the Committee shall be sent to him separately. Counsel further submits that the dispute was not referred by the Chief Engineer, Water Resources to the Empowered Standing Committee as per Clause 5 of the Form RPWA 90, as referred in Clause 23, within a period of thirty days / one month from the date of receipt of the notice. Thus, no reference of the dispute was made by the Chief Engineer, Water Resources within a period of thirty days/one month from the date of receipt of application for referring the dispute and the respondents have lost their right to refer the dispute to the Empowered Standing Committee as per Sec.11(4) of the Act of 1996 read with Clause 23 of the Agreement. Counsel for the respondents submits that the Executive Engineer was the Engineer-in-charge and he has rightly submitted the dispute to the Chief Engineer, Water Resources, Division Kota vide letter dated 14.7.2010 (Anx.R-4) which is reference of the dispute to the Empowered Standing Committee and thus the dispute was rightly referred within the stipulated period. I have gone through record of the arbitration application and further considered the aforesaid submission of counsel for the parties. Before proceeding further, it is relevant to quote Sec.11(4) of the Arbitration and Conciliation Act,1996, Clause 23 of the Arbitration Agreement and Condition No.5 of the Form RPWA 90. The same are as under: Sec.11(4) of the Arbitration and Conciliation Act, 1996 "11. Appointment of arbitrators (1) ..... (2) ...... (3) ...... (4) If the appointment procedure in sub-section (3) applies and - (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request to a party, by the Chief Justice or any person or institution designated by him. (5) to (12) ..." (emphasis supplied) Clause 23 of the Agreement "Clause 23: Standing Committee for Settlement of Disputes ? If any question, difference or objection, whatsoever, shall arise in anyway, in connection with or arising out of this instrument, or in the meaning of operation of any part thereof, or the right, duties or liabilities of either party then, save in so far, as the decision of any such matter, as herein before provided for, and been so decided every such matter constituting a total claim of Rs.50,000/- or above, whether its decision has been otherwise provided for and whether it has been finally decided accordingly, or whether the contract should be terminated, or has been rightly terminated, and as regards the rights or obligations of the parties, as the result of such termination shall be referred for decision to the empowered standing committee, which would consist of the following: (i)Administrative Secretary concerned. (ii)Finance Secretary or his nominee, not below the rank of Deputy Secretary and/or Chief Accounts Officer. (iii)Law Secretary or his nominee, not below the rank of Joint Legal Remembrancer. (iv)Chief Engineer-cum-Addl.Secretary of the concerned department. (v)Chief Engineer concerned (Member Secretary) ? The Engineer-in-charge, on receipt of application along with non-refundable prescribed fee, (the fee would be two percent of the amount in dispute, not exceeding Rs. One lac) from the Contractor, shall refer the dispute to the committee, within a period of one month from the date of receipt of application. Procedure and Application for referred cases for settlement by the Standing Committee shall be as given in Form RPWA 90." (emphasis supplied) Clause 5 of Form RPWA 90 "5. Before sending the case for settlement by the Standing Committee under Clause 23, Chief Engineer will get the views of the F.A./C.A.O. recorded in the columnar statement and after recording his own views, will refer the case to Administrative Secretary concerned. All such correspondence should be through confidential D.O. letters and should be sent through Special Messenger if located at the same station, or otherwise considered expedient." (emphasis supplied)
(3.) IN my view, letter dated 14.7.2010 (Anx.R-4) has not been passed by the Chief Engineer as per Form RPWA 90, therefore, the same is not in consonance with Sec.11(4) of the Act of 1996 read with Clause 23 of the Agreement as well as Clause 5 of the Form RPWA 90 according to which the reference was to be made by the Chief Engineer to the Administrative Secretary concerned within thirty days/one month from the date of receipt of the notice i.e. 14.6.2010, therefore, the respondents have lost their right to make reference to the Empowered Standing Committee. Counsel for both the parties agree that Mr.Justice I.S.Israni, Retired Judge of the Rajasthan High Court may be appointed as the Sole Arbitrator. I also deem it proper to appoint Mr.Justice I.S.Israni, retired Judge of this Court as the Sole Arbitrator. The application u/s 11(4) of the Arbitration and Conciliation Act, 1996 is allowed. I, therefore, appoint Mr.Justice I.S. Israni, retired Judge of this Court as the Sole Arbitrator, and the matter is referred to him for resolving the dispute between the parties, arising out of the Agreement No.30/2005-2006. The Sole Arbitrator will fix his fee according to the Arbitration Manual. All objections would be open to be raised by the respondents before the Sole Arbitrator. ;