MOHAMMAD RAFIQ,J. - (1.) This application under Section 11(6) of the Arbitration & Conciliation Act, 1996, has been filed by applicant - M/s. Khubi Construction Company, praying for appointment of an independent arbitrator for resolving its dispute with respondent No. 1 M/s. ARSS Infrastructure Projects Limited, in regard to construction of BRTS Corridor and Development of Road (package IB-C Zone Bye Pas to Panipech via Sikar Road) under Jaipur Development Authority, Jaipur. The sub contract agreement was executed between the parties on 25.11.2007, which was modified on 04.08.2008 and thereafter supplementary agreement was executed on 19.02.2009, with regard to settlement of account between the parties till that date regarding the work performed in BRTS-I Phase. In the modified sub contract agreement dated 04.08.2008, Clause 11 was inserted, which deals with the procedure for resolving the dispute for further works and provides that any dispute arising out of the sub contract agreement between either of the parties thereto shall be referred to sole arbitrator to be decided by the Chairman of ARSS Infrastructure Projects Limited, "who will be mutually agreed by both parties", and that no civil court can entertain any dispute, so arising as per provisions of the Arbitration and Conciliation Act, 1996, and further that the decision of the sole arbitrator shall be final and binding on both the parties. As noted above, final settlement was arrived at between the two parties on 19.02.2009 at Jaipur and supplementary agreement was executed between them at Jaipur, whereby all accounts between them were settled till that date regarding the work performed in BRTS-I Phase. However, it was agreed that a part work of Road/Bituminous work of BRTS-II will be given to the applicant to enable them to make payment of costs of Bitumen supplied to them and yet to be recovered.
(2.) Service on respondents No. 1 and 2 having been affected, they have filed reply to the application through their counsel. Service on respondent No. 3 has been substituted by publication of notice in daily newspaper 'Times of India' (Bhubneshwar edition) dated 23.11.2016.
(3.) Mr. Narendra Singh Yadav, learned counsel for applicant, submitted that the respondents No. 1 and 2 agreed to return the Cheque No. 069068, which was kept with them as security, vide agreement dated 04.08.2008, but for no valid reasons and for their ulterior motive only to harass the applicant, they did not return the Cheque and unauthorizedly submitted the same with their banker and on its return unpaid, they initiated the proceedings under section 138 of the Negotiable Instruments Act against the applicant. The respondents issued a notice to the applicant on 04.11.2010 for payment of amount arising out of sub contract, which is totally without any basis. The applicant sent a reply to the said notice to them on 04.12.2010. Even though the respondent by their notice dated 04.11.2010 expressed the intention to appoint arbitrator as per Clause 11, supra, of the modified sub contract agreement dated 04.08.2008, but the applicant in their reply not only denied the facts alleged in the notice dated 04.11.2010 but also suggested the name of three retired Judges of this Court and required the respondent to accept name of anyone of them for appointment, as arbitrator to conduct the arbitral proceedings at Jaipur. Respondents failed to consent any one of the three names proposed by the applicant and failed to suggest any alternative name to solicit consent of the appointment. In view of section 11(4) and (6) of the Arbitration and Conciliation Act, 1996, the respondent forfeited the right to appoint the arbitrator. The respondent No. 1, however, in contravention of the provisions of arbitration clause and the Arbitration and Conciliation Act, 1996, forwarded the matter to respondent No. 2 vide letter dated 03.12.2010. The applicant sent a letter on 21.12.2010 to the respondent claiming Rs. 2,80,87,007.97 and suggested to appoint a committee of arbitrators, with each party nominating one member. It was suggested that the arbitrator nominated by the respondent and arbitrator nominated by the applicant can jointly decide the dispute. The respondent did not pay any heed to the aforesaid letter. Respondent No. 2 without seeking consent of the applicant, straightaway appointed respondent No. 3 Justice B. Panigrihi (former Judge), as sole arbitrator to function at Cuttack in the State of Orissa. The letter of appointment of arbitrator dated 09.03.2011 has been placed on record of the application. The applicant then sent his objections regarding appointment of respondent No. 3 as sole arbitrator by letter dated 21.03.2011.;