Ajay Rastogi, J. - (1.) INSTANT application has been filed for appointment of arbitrator u/s. 11 of Arbitration & Conciliation Act, 1996 ("Act, 1996"). The facts which are culled out from the present petition are that respondent -1 issued notice inviting tenders no. 05 (World (Bank)/2005 -06 for construction of BT roads in district Jhalawar under PMGSY with World (Bank Assistance Package no. RJ -WB -19 -14. The petitioner also submitted tender for the aforesaid work and after evaluation of the tenders received the tender submitted by the petitioner being the lowest (L1) was accepted and on furnishing performance security work order no. 6006 dt. 26.09.2005 was issued and the stipulated dates of commencement & completion were 09.10.2005 & 08.07.2006 respectively and the estimated cost was Rs. 28261337/ - and an agreement to this effect was executed between the parties and that contains clause -24 in the agreement to resolve the dispute by adjudicator and if either party to the dispute is not satisfied with the order of the Adjudicator, will be at liberty to move application under clause -25 for referring decision of the Adjudicator to Arbitrator within 28 days of the Adjudicator sent decision. However, where the initial contract price as mentioned in the acceptance letter is Rs. 5 Crore and below, adjudication has to be conducted under sub -clause -25.4, at the same time, where the contract price is more than Rs. 5 Crores or the contractor is a foreign contractor, it will be governed under clause 25.3 of the agreement. The extract of Clause -24 & 25 being relevant for the present purpose reads ad infra: - 24 Disputes 24.1 -If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contractor or that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of notification of the Engineers decision. Performance under the contract shall continue notwithstanding the reference to the Adjudicator, and payments by the Employer to the Contractor will not be withheld unless they are the subject matter of dispute. 25. Procedure for Resolution of Disputes. 25.1 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. 25.2 The Adjudicator shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses to the types specified in the Contract Data and the cost shall be divided equally between the 'Employer and the Contractor, whatever decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to Arbitration within 28 days of the Adjudicator's written decision. Arbitration shall be under the Arbitration and Conciliation Act 1996. If neither party refers the dispute to Arbitration within the above 28 days, the Adjudicator's decision will be final and binding. 25.3 The Arbitration shall be conducted in accordance with the following procedure, in case initial Contract Price is more than Rs. 5 Crore or the Contractor is a Foreign Contractor, who has bid under ICB: - a) In case of a decision of the Adjudicator in a (Dispute or difference arising between the Employer and a Contractor relating to any matter arising out of or connected with this Agreement, the matter will be referred to an Arbitral Tribunal. The Arbitral Tribunal shall consist of three Arbitrators, one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the parties and shall act as presiding Arbitrator. In case of failure of the two Arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the Arbitrator appointed subsequently, the presiding Arbitrator shall be appointed by the Chairman of the Executive Committee of the Indian Roads Congress. b) In the case of a decision of Adjudicator in a Dispute or difference between an Employer and a Foreign Contractor, under ICB, the dispute or difference shall be settled in accordance with provisions of UNCITRAL Arbitration Rules. The Arbitral Tribunal shall consist of three Arbitrators one each appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the parties, and shall act as presiding Arbitrator. In case of failure of the two Arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the Arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the Chairman of the Executive Committee of the Indian Roads Congress. c) If one of the parties fails to appoint its arbitrator in pursuance of sub -clause(a) and *(b) above within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the # Indian Council of Arbitration/President of the Institution of Engineers (India)/The International Centre for Alternative Dispute (Resolution (India), both in cases of the Foreign Contractors as well as Indian Contractor, shall appoint the arbitrator. A certified copy of the order of the Chairman of the Executive Committee of the Indian Roads Congress, making such an appointment shall be furnished to each of the parties. d) The decision of the majority of arbitrators shall be final and binding upon both parties. The cost and expenses incurred by each party will be paid as determined by the arbitral tribunal 'However, the expenses incurred by each party in connection with the preparation, presentation, etc. of its proceedings as also the fees and expenses paid to the arbitrator appointed by such party or on its behalf shall be borne by each party itself. 25.4 Where the Initial Contract (Price as mentioned in the Acceptance Letter is (Rs. 5 Crore and below disputes or differences in which an Adjudicator has given a decision shall be referred to sole Arbitrator. The Sole Arbitrator would be appointed by the agreement between the parties; failing such agreement within 15 days of the reference to arbitration, by the appointing authority, namely the Chairman of the Executive Committee of the Indian (Roads Congress. 25.5 Arbitration proceedings shall be held at Jaipur, India, and the language of the arbitration proceedings and that of all documents and communications between the parties shall be English. 25.6 -Performance under the contract shall continue even after reference to the arbitration and payments due to the contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings.
(2.) IT has been alleged by the petitioner that the work was completely executed by 08.07.2006 and a sum of Rs. 1,00,000/ - was deducted from the final bill in MD V. executed works during defect liability period and on expiry of the defect liability period request was made for refund of performance guarantee, security deposit and MD V amount, when no action was taken and the agreement contained the procedure for resolving the dispute invoking clause -24, application was submitted by the petitioner to the Adjudicator who after affording opportunity to the parties passed order on 18.01.2012 but the order passed by the Adjudicator was not acceptable to the respondent who made an application for referring the matter to arbitration by appointing Arbitrator invoking clause -25.2 to resolve the arbitral dispute. It has come on record that the application was filed by the petitioner on 19.01.2012 to the Indian Road Congress ("IRC") for appointment of arbitrator invoking clause -25.4 as the contract price in terms of acceptance letter was less than Rs. 5 Crores but the IRC failed to appoint arbitrator within 15 days stipulated in the agreement and after expiry of the said period application was submitted by the petitioner on 14.02.2012 in this Court for appointment of arbitrator invoking Sec. 11 of the Act. It has also come on record that on 16.04.2012 the IRC acknowledged the letter sent by the petitioner and asked for certain informations and indisputably the IRC failed to appoint arbitrator invoking clause -25.4 of the agreement upto the date of filing of the instant application.
(3.) AFTER notices of the present petition came to be served reply has been filed by the respondents but there is no defence on record to substantiate as to why the arbitrator may not be appointed in the facts of the instant case.;