MRS. MISRA, J. - (1.) THIS Application has been filed by the applicant-M/s. Suri Construction for appointment of an arbitrator in terms of the agreement which had been executed between the applicant and the respondent-State of Rajasthan while awarding a contract to the applicant/contractor for manufacturing and supply of PCC Blocks and precast sleepers in pursuance of a tender notice.
(2.) ADMITTEDLY, the dispute between the applicant and the respondent is confined to the question whether the amount of sales tax in regard to the goods supplied and manufactured is payable by the contractor or by the respondent-State. It appears that Clause 36 D of the agreement between the parties has clearly fixed the liability in regard to the payment of sales tax which lays down as follows:- " In respect of goods and materials procured by the Contractor for use in works under the contract, sales tax will be paid by the Contractor himself. but in respect of all such goods manufactured and supplied by the Contractor and works executed under contract, the responsibility of payment of sales tax would be that of the Engineer-in-charge. " It is therefore, assertted by the applicant that the sales tax paid on account of manufactured goods has to be borne by the Engineer-in-charge of the Department of State. Be that as it may, it appears that a dispute between the parties in fact is existing in regard to the payment of sales tax which lies within the ambit and scope of the deed of agreement itself, nevertheless it exists and therefore, it is fit to be referred to the Standing Committee of the Department in terms of the agreement. But the counsel for the applicant has contended that the respondents have forfeited their right to adjudicate upon the dispute through the Standing Committee and it is the Court which should appoint an arbitrator. It is no doubt true that if one of the contracting parties has failed to appoint an arbitrator in terms of the agreement, the power lies with the Court in view of Section 11 of the Indian Arbitration and Conciliation Act, 1996 to appoint a suitable person as arbitrator to adjudicate upon the dispute and therefore, in the instant matter too, this power is vested with the Court due to the inaction alleged against the respondent- defendant. The Court, in exercise of its jurisdiction, and discretion therefore, cannot be precluded from referring the dispute to the Department itself in a given set of circumstance or if the situation so warrants as in the case at hand, where the mode and manner of payment of sales tax is prescribed in the deed of agreement itself under Clause 36 D quoted hereinbefore which is sufficiently clear. The same can therefore be decided by the Standing Committee itself. In fact the applicant had himself submitted to the jurisdiction of the Department in regard to the liability of payment of sales tax in view of specific Clause 36 D which prima facie specifies the liability and the same has to be held binding on the party which is liable after an opportunity of hearing is granted to the applicant and the respondent to submit their stand before the Standing Committee which is appointed as an arbitrator. Hence, this Court in exercise of its jurisdiction and discretion under Section 11 of the Act of 1996 is appointing the Standing Committee of the Department of State to decide the dispute specifying the reasons for passing the award. The Standing Committee therefore shall arbitrate upon the existing dispute between the parties and decide the matter in terms of the agreement which had been executed between them as this Court does not consider it fit and proper to appoint a new arbitrator under the existing facts and circumstances of this matter as this Court under exercise of its power and jurisdiction under Section 11 of the Act of 1996, cannot be compelled to necessarily appoint a new arbitrator to the exclusion of the Standing Committee of the Department in absence of any malafide or malicious motive attributed against the Standing Committee to whose jurisdiction the applicant had himself submitted in terms of the agreement but has now raised a technical plea that the Department did not refer the dispute within the stipulated time due to which its right to function as arbitrator ought to be seized which is not acceptable to this Court for the reason assigned hereinbefore.
(3.) THEREFORE, while exercising its powers under Section 11 of the Act of 1996, it is considered legally permissible to assign the matter to the Standing Committee in the capacity of an arbitrator since the dispute to be decided lies clearly with the parameters of the deed of agreement itself and would thus lead to expeditious disposal of the matter. The application, in view of the aforesaid discussion, be treated as disposed of. .;