M/S R.B.Rajesh v. The Chief Engineer And Administrator And ORS

IN THE HIGH COURT AT CALCUTTA

[ CIRCUIT BENCH AT PORT BLAIR ] *** AP/3/2024 M/s R. B. Rajesh Vs The Chief Engineer and Administrator and others Mr. Gopala Binnu Kumar ... for the petitioner Mr. V.D. Sivabalan ... for the respondents September 04, 2024 [SR] Item No.6 This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the said Act'). The Andaman Lakshadweep Harbour Works (in short 'ALHW') through its Executive Engineer (Civil), Rangat Bay, by a notice inviting tender dated on 09.01.2012 for construction of a new berthing jetty and approach jetty in Sagar Dweep in North Andaman (hereinafter refer to as 'the said work'). The petitioner became the successful bidder and was awarded the said work.

An agreement was entered into by and between the petitioner and ALHW. The said agreement was forwarded to the petitioner by the Executive Engineer (C), Rangat Bay of ALHW on 24.09.2012 (hereinafter referred as to 'the said agreement'). The General Condition of Contract of CPWD Work, 2010 (in short 'GCC') was made a part of the said agreement. The said GCC in clause 25 provides for settlement of disputes and arbitration wherein it was provided that in case of failure of amicable settlement or through the Dispute Redressal

Committee (in short DRC), the disputes are to be referred to arbitration for adjudication. The said arbitration clause contained the GCC is set out hereunder.

"Clause 25 (i) ...

...

....

(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above, disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General of Works, CPWD. 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. 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 such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal. It is also a term of this contract that no person, other than a person appointed by such Chief Engineer CPWD or Additional Director General or Director General of works, CPWD, as aforesaid, should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all.

It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-incharge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the contract in respect of these claims.

The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modifications 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 dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000/-, the arbitrator shall give reasons for the award.

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."

The work was completed on 20.03.2016 for a value of Rs. 2,12,08,230/- as will appear from the copy of the completion certificate annexed at page-16 of the petition, being Annexure P-2 thereto.

The petitioner says that, despite completion of work and the final bill having been submitted, a huge amount of money remained unpaid. The petitioner made several request in writing to ALHW for releasing the payment due and payable to the petitioner but the issue remained unresolved. The petitioner, therefore, by a letter dated 24th October, 2019 submitted its claim which includes the amount payable to the petitioner as also interest and damages said to have been suffered by the petitioner for non-payment.

On 30.11.2019, a Dispute Redressal Committee (in short 'DRC') was constituted and the same was communicated to the petitioner. After discussion between the parties, it was decided that the parties would make an effort to settle the claim amicably without the intervention of DRC. The DRC was, therefore, decedent. The claim of the petitioner remained unresolved even thereafter and as such by a letter dated 21.12.2022, the petitioner requested the ALHW to release the claims failing which an arbitrator to be appointed. Despite exchange of letters nothing progressed. ALHW by a letter dated 14.06.2024 informed the petitioner that the prayer for appointing an arbitrator is under examination with reference to the records available to the ALHW. The stalemate condition remained un-resolved even thereafter.

By a letter dated 15th July, 2024, the Executive Engineer, ALHW ultimately turned down the request for appointment of arbitrator on the ground that the claim has been made after lapse of eight years from the date of completion and 212 days after the final bill. The petitioner, therefore, has filed this application.

After hearing the parties and considering the materials on record, I find that there is a subsisting arbitration agreement between the parties, although, appointment procedure envisaged thereunder cannot be adhered to in view of the amendment brought to the said Act by introduction of Section 12(5) with effect from 23.10.2015 read with Schedule V & VII of the said Act as held in the judgment of Hon'ble Supreme Court

reported in (2024) 4 SCC 341 (Lombardi Engineering Limited vs. Uttarakhan Jal Vidyut Nigam Limited). It is also prima facie noticed that the claim of the petitioner is neither long barred nor a stale claim which is not required to be considered at the threshold that is at the stage of appointment of an arbitrator. The petitioner has invoked the arbitration agreement and there has been a specific denial in respect of appointment of arbitrator.

Although, the respondents say that the petitioner has raised the claim after eight years and have asked for appointment of arbitrator after a lapse of 212 days from the final bill but the same is untenable on being considered in the light of the documents annexed to the petition. It is apparent that the final bill was submitted on 21.04.2017 but the same has been settled on 10.03.2023 from the letter of the respondents dated 15.07.2024. The substantive claim of the petitioner against the work done cannot, therefore, be said to be barred by limitation at this stage as the petitioner has approached this Court on 29.08.2024 that is within three years from the settlement of the final bill. The rejection of request for appointment of arbitrator has taken place from the side of the respondent on a communication letter dated 15th July, 2024.

The petitioner has approached this Court with a request to appoint an Arbitrator by this Court within three years from the refusal on the part of the respondents to go to arbitration.

Chief Justice" to whom an application for appointment of an Arbitrator is required to be made under section 11(6) of the said Act.

In view of the delegation of power to this Bench, now holding the Circuit Bench at Port Blair, this Bench is authorised to appoint an arbitrator. In the facts and circumstances of the case, I find that this is a fit case for appointment of an Arbitrator by this Court and the arbitration agreement provides for appointment of sole arbitrator. Mr. Ranjan Deb, Barristor & Senior Advocate and a member of the Bar Library Club, High Court, Calcutta having Mobile Phone No.9830162035 is appointed as the Sole Arbitrator to adjudicate the dispute and difference that have been arisen between the parties. The learned Arbitrator, so appointed, shall be entitled to fix his fees in view of the ratio laid down in the Judgment of the Hon'ble Supreme Court reported in (2024) 4 SCC 481 (Oil and Natural Gas Corporation Limited vs. Afcons Gunanusa JV), as also the venue as per the arbitration agreement.

The arbitration proceeding shall be conducted in terms of the provisions of the Arbitration and Conciliation Act, 1996 and adhering to the stipulations contained in the arbitration agreement between the parties.

AP/3/2024 is, accordingly, disposed of.

( Arindam Mukherjee, J. )