Aparesh Kumar Singh, J. - (1.) Heard learned counsel for the parties.
(2.) Applicant is a party to 5 agreements with the Respondent, which are dated 08.06.2009, 22.09.2009, 12.08.2010, 19.08.2010 and 13.04.2012 in respect of which a dispute has arisen between them which are amenable to arbitration under Clause 25 of the agreements in question. Clause 25 is common in all agreements and is usefully quoted herein under:- "Clause 25 -Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:- (i) If the contractor considers that he is entitled to any extra payment or compensation in respect of the works over and above the amounts admitted as payable by the BSNL or in case the contractor wants to dispute the validity of any deductions or recoveries made or proposed to be made from the contract, the contractor shall forthwith give notice in writing of his claim, in this behalf to the Engineer-in-Charge within 30 days from the date of disallowance thereof for which the contractor claims such additional payment or compensation or disputes the validity of any deduction or recovery. The said notice shall give full particulars of the claim, grounds on which it is based and detailed calculations of the amount claimed and the contractor shall not be entitled to raise any claim nor shall the BSNL be in any way liable in respect of any claim by the contractor unless notice of such claim shall have been given by the contractor to the Engineer-in-Charge in the manner and within the time as aforesaid. The contractor shall be deemed to have waived and extinguished all his rights in respect of any claims not notified to the Engineer-in-Charge in writing in the manner and within the time aforesaid. (ii) The Engineer-in-Charge shall give his decision in writing on the claims notified by the contractor within 30 days of the receipt of the notice thereof. If the contractor is not satisfied with the decision of the Engineer-in-Charge, the contractor may within 15 days of the receipt of the decision of the Engineer-in-Charge submit his claims to the conciliating authority named in Schedule 'F' for conciliation along with all details and copies of correspondence exchanged between him and the Engineer-in-Charge. (iii) The party initiating conciliation shall send to the other party a written invitation to conciliate. Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate. If the other party rejects the invitation, or does not reply within thirty days from the date of invitation, there will be no conciliation proceedings. (iv) When it appears to the Conciliator that there exists element of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to parties for their observation after receiving the observations of the parties. He may reformulate the terms of a possible settlement in the light of such observations. If the parties reach agreement on settlement of the dispute, they may draw up and sign a written settlement agreement. Parties may request the Conciliator to draw up or assist them in drawing up the settlement agreement. Such settlement agreement shall have the same status and effect as if it were an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30 of Arbitration and Conciliation Act, 1996. If a settlement does not appear possible, the Conciliator, after consultation with the parties will give a written declaration that further efforts at Conciliation are no longer justified and the conciliation proceeding are terminated. (v) When conciliation proceeded have become infructuous or have been terminated, the party, which initiated the Conciliation shall, within a period of 30 days of termination thereof shall give a notice, in the form prescribed by the BSNL, to the Chief Engineer, Bharat Sanchar Nigam Limited in-charge of the work or if there be no Chief Engineer, to the Administrative Head of the Bharat Sanchar Nigam Limited for appointment of an arbitrator to adjudicate the notified claims failing which the claims of the contractor shall be deemed to have been considered absolutely barred and waived. (vi) Except where the decisions have become final, binding and conclusive in terms of the contract, all disputes arising out of the notified claims of the contractor as aforesaid and all claims of the BSNL shall be referred for adjudication through the arbitration by the sole arbitrator appointed by the Chief Engineer, Bharat Sanchar Nigam Limited in-charge of the work or if there be no Chief Engineer, the Administrative Head of the Bharat Sanchar Nigam Limited. It will also be no objection to any such appointment that the arbitrator so appointed is a BSNL Employee and that he had to deal with the matters to which the Contract relates in the course of his duties as BSNL Employee. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid by the said Chief Engineer. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each dispute along with the notice for appointment of arbitrator. It is also a term of this contract that no person other than a person appointed by such Chief Engineer, Bharat Sanchar Nigam Limited or the administrative head of the Bharat Sanchar Nigam Limited as aforesaid should act as arbitrator and if for any reasons that is not possible the matter shall not be referred to arbitration at all. The conciliation and arbitration shall be conducted in accordance with the provisions of the Arbitration & Conciliation Act 1996 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each disputes and claim referred to him. The arbitrator shall give reasons for the award for each dispute referred to him. It is also a term of the contract that if any fees are payable to the arbitrator these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter-statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published , be paid half and half by each of the parties. The cost of the reference and of the award(including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any, by whom and in what manner, such costs or any part thereof, shall be paid and fix or settle the amount of costs to be so paid".
(3.) It is also not in dispute that in terms of Clause 25, after efforts of conciliation failed, the Respondents proposed to appoint one Sri Saurabh Tyagi, Chief Engineer(E) BSNL Electrical Zone, Meerut, U.P. Vide letter dated 26.10.2016 (Annexure-7). This was preceded by a request for appointment of a neutral Arbitrator by the Applicant through legal notice dated 20.10.2016 (Annexure-6). The proposed Arbitrator furnished declaration in terms of Sixth Schedule of the Arbitration and Conciliation Act, 1996 as amended by the Act no. 3 of 2016 in respect of each of the 5 agreements vide letters dated 26.11.2016 (Annexure-9). The proposed Arbitrator fairly disclosed his relationship with the Respondent BSNL as a regular Senior Administrative Grade Employee looking after the Electrical/ Electromechanical work and H.R. Management also of U.P. (W) Circle. The proposed Arbitrator requested both the parties to give unconditional no objection certificate about his ability and his capacity to devote sufficient time to the arbitration proceedings and deliver the award within 12 months. In the meantime the applicant vide his letter dated 11.11.2016 (Annexure-8) gave his consent for appointment of Sri Saurabh Tyagi as sole Arbitrator to decide the dispute in relation to the aforesaid agreements on the following conditions:- (a) That the appointment as sole arbitrator shall not be disturbed till finalization of the arbitral proceedings, even if he retires. (b) He will act in an impartial manner. (c) The venue of the arbitral proceedings shall be at Ranchi and all costs, expenses, whatsoever shall be borne by BSNL. (d) Since the proposed arbitrator is drawing salary from BSNL, no further expenses in terms of fees or otherwise will be admissible to him. (e) The proceeding would be executed in accordance with the Act of 1996. The applicant further insisted upon compliance of the conditions contained in proviso to Section 12(5) of the Act of 1996. As per the said proviso, notwithstanding any prior agreement to the contrary, in case the relationship of the proposed Arbitrator falls under any of the category specified in the Seventh Schedule, he would be ineligible to be appointed as arbitrator; provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.;