Bela M. Trivedi, J. - (1.) THE petitioner has filed the present arbitration petition seeking appointment of retired High Court Judge or retired Chief Engineer as the Arbitral Tribunal to resolve the disputes between the parties, under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the said Act").
(2.) THE short facts are that the petitioner, which is the company incorporated under the Companies Act 1956, was awarded the contract pursuant to the tender dated 28.06.2011 for the construction of minor bridges, wing/return walls, earthwork in formation and all ancillary other works between Jaipur and Ringus stations of Jaipur -Ringus section, as per the letter dated 11.02.2011. It appears that on account of certain disputes having taken place between the parties, the said contract was terminated by the respondents. It also appears that some of the officers of the respondents were also trapped by the CBI on account of the FIR lodged by the petitioner. Since the respondents were likely to invoke the bank guarantee furnished by the petitioner, the petitioner had filed the proceedings under Section 9 of the said Act, and thereafter had also demanded settlement of disputes through Arbitrator by sending notice dated 19.10.2012 (Annexure/2), in view of General Conditions of Contract/Tender document. The concerned respondent replied to the said notice vide the letter dated 06.11.2012 (Annexure/3) contending inter alia that as per the clause 64 of the GCC, the petitioner was required to submit the claims item -wise alongwith all relevant documents, and therefore the petitioner was advised to submit those documents. Since the respondents thereafter did not appoint the Arbitrator, the petitioner filed the present petition seeking appointment of an independent Arbitrator under Section 11 of the said Act. The petition has been resisted by the respondents by filing the reply contending inter alia that the petitioner could not pray for the appointment of retired High Court Judge as the Arbitrator, in view of the specific conditions of the agreement. It is also contended that the petitioner having not waited for the time period fixed under Clause 64, the present petition is premature and liable to be dismissed. The petitioner has filed the rejoinder to the said reply by contending that the respondent had refused to appoint the Arbitrator on flimsy ground on account of personal enmity with the petitioner, and therefore the officers of the respondents should not be appointed. It is sought to be submitted by the learned counsel Dr. P.C. Jain for the petitioner that there being valid arbitration clause contained in the agreement and the respondents having failed to appoint the Arbitrator, despite the notice having been given by the petitioner, the petitioner was entitled to the appointment of the independent Arbitrator dehors the contract. He further submitted that it is not mandatory for the Court to appoint the Arbitrator named in the agreement. Relying upon the decision of the Apex court in cases of Union of India Versus Singh Builders Syndicate, : 2009 (4) SCC 523 and Reliance Industries Limited & Others Versus Union of India,, 2014 (11) SCC 576, Mr. Jain submitted that the respondents having refused to appoint the Arbitrator on flimsy ground and keeping personal enmity with the petitioner, the petitioner was entitled to get the independent Arbitrator appointed under the said Act. However, the learned counsel Mr. P.C. Sharma for the respondents vehemently submitted that the petitioner was bound to follow the procedure as mentioned in the General Conditions of Contract specially contained in clause 64 to which the petitioner had failed to comply with. According to him, the demand for independent Arbitrator is not maintainable in view of clause 64 of the GCC. Mr. Sharma further submitted that as per Section 11(8)(a) of the said Act, the qualification of the Arbitrator has to be given due regard and accordingly the petitioner had also agreed to clause 64(3) of the GCC, in which officers having qualification of junior administrative grade have to be appointed as Arbitrators. Mr. Sharma has relied upon the decision of the Apex Court in case of Northern Railway Administration, Ministry of Railway, New Delhi v. Patel Engineering Company Ltd., : 2008 (10) SCC 240 in this regard. Placing reliance upon the decision of the Supreme Court in case of Union of India Versus M.P. Gupta,, 2004 (10) SCC 504, he submitted that appointment of a retired Judge as sole arbitrator contrary to clause 64, which is requiring serving gazetted railway officers being appointed, was impermissible. Mr. Sharma has relied upon the decision in case of The Iron and Steel Company Limited v. Tiwari Road Lines, : AIR 2007 SC 2064, to submit that when the parties have agreed on a procedure for appointing the Arbitrator as contemplated by sub -section 2 thereof, then the disputes between the parties has to be decided in accordance with the said procedure and the party can not take recourse to the Chief Justice or his designate straightway.
(3.) HAVING regard to the submissions made by the learned counsels for the parties, it appears that there is no dispute with regard to the parties having agreed to the terms and conditions of the agreement in question, and more particularly clause 64 of the GCC. There is also no dispute with regard to the correspondence that ensued between the parties. Now, it is to be noted that the legislative scheme of Section 11 of the said Act has been interpreted by the Supreme Court in catena of decisions to the effect that a party can approach the Chief Justice or his designate, when the parties have not agreed on a procedure for appointing the Arbitrator as contemplated by sub -section 2 of Section 11, or when various contingencies provided in sub -section 6 thereof have arisen. The moot question therefore that falls for consideration in the instant case is, whether the petitioner was entitled to approach this Court seeking appointment of Arbitrator under Section 11(6) of the said Act?;