- (1.) This is an application for appointment of an arbitrator for adjudication of the dispute between the applicant M/s. Nitin Kumar Agarwal and the non-applicant-Public Works Department which arose on account of a construction of Air Strip at Kishangarh District Ajmer which had been undertaken by the applicant. The applicant after completion of the project raised his claim for payment which give rise to a dispute between the parties and hence the applicant filed an application on 14th October, 2002 before the non-applicant Public Works Department for referring the matter to the Standing Committee for settlement of disputes as per Clause 23 of the Agreement of Contract and it would be relevant to quote Clause 23 of the agreement in order to appreciate the controversy involved herein, which states as follows : "If any question, difference or objection, whatsoever arises in any way, in connection with or arising out of this instrument, or the meaning of operation of any part thereof, or the rights, duties or liabilities of either party then, save in so far, as the decision of any such matter, as hereinbefore 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 followings :- (i) Administrative Secretary concerned. (ii) Finance Secretary or his nominee not below the rank of Deputy Secretary. (iii) Law Secretary or his nominee not below the rank of Joint Legal Remembrancer (iv) Chief Engineer-cum-Additional 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 per cent of the amount in dispute, not exceeding Rs. one lac) from the Contractor, shall refer the disputes to the Committee, within a period of one month from the date of receipt of application."
(2.) In view of this Clause the applicant filed an application on 14th October, 2002 for referring the dispute to the Settlement Committee consisting of the aforesaid members of the Standing Committee. The applicant's grievance is that although he filed the application on 14th October, 2002 the matter was not referred to the Settlement Committee and hence he was compelled to file this application for appointment of an arbitrator.
(3.) A show cause notice was issued on the aforesaid averments in response to which the counsel for the non-applicant-Public Works Department Shri SP Sharma explained the position and submitted that Clause 23 of the Agreement quoted herein-before clearly lays down that in case of dispute arising between the parties, the matter has to be referred to the Standing Committee within a period of one month from the date of receipt of application and that has exactly been complied by the non-applicant PWD as the Chief Engineer of the PWD at Ajmer by letter dated 11-11-2002 as contained in Annexure R/2 had written to the Chief Engineer that in view of Clause 23 of the Agreement and in view of the application of the applicant-contractor the files are submitted to the Settlement Committee for adjudication of the dispute between the parties. Thereafter, in pursuance of this letter it was communicated to the applicant-contractor by the Chief Engineer by his letter dated 30-11-2002 as contained in Annexure-R/4 to the following effect. "We have taken cognizance of order/application and accordingly action is being taken." This communication clearly indicated in the subject column that cognizance was taken with reference to the application dated 3-11-2002 regarding contract Agreement No. 110/2000-2001 in connection with the construction of Air Strip at Kishangarh Famine Relief Work Samwat 2056. A copy of this letter was went to the Executive Engineer, PWD District Division Ajmer for submitting the case as procedure laid down for settlement of dispute by the Standing Committee including comments of Supertending Enginer & Additional Chief Engineer immediately. This is specifically indicated in the letter dated 30-11-2002 which was sent to the applicant. In view of this letter it was submitted that the dispute having been referred to the Settlement Committee as per Clause 23 of the Agreement, the applicant was under an obligation to appear before the Standing Committee for settlement of the dispute.;