Arbitration No.212 of 2006 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration No.212 of 2006 Decided on : 30-01-2009 Vijay Co-op Labour & Construction Society Ltd. ....Petitioner VERSUS State of Haryana and others ....Respondents CORAM:-HON'BLE MR. JUSTICE HEMANT GUPTA. 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? -.- Present:- Mr. Shiv Kumar, Advocate for the petitioner. Mr. Ajay Gupta, Addl. A.G., Haryana. HEMANT GUPTA, J The petitioner is a Labour & construction Society carrying on the business of construction of buildings/roads in the State. The petitioner was allotted the work of construction of Road from Village Janauli to Baghola in District Faridabad including supply of stone metal, laying of stone metal, providing and laying of first and second coat surfacing etc. vide allotment letter dated 6.1.2003 by the respondents. The quarries of stone metal and stone chips were closed under the Orders of Hon'ble Supreme Court of India, in the month of December, 2002 at Faridabad, after submission of tender by the petitioner. It is the case of the petitioner that on account of fault of the respondents, the petitioner could not start the construction work and the labour, machinery and staff remained idle at the site. Therefore, the petitioner has to bring raw material Arbitration No.212 of 2006 -2- from Kama Zone (Rajasthan). The petitioner has constructed the road measuring 5125 running meters, but the payment has been made only for 4615 running meters. The petitioner claims for the payment of amount of Rs.11, 37, 636/- from the respondents. The petitioner has sought appointment of an Arbitrator vide communication dated 8.1.2006. The petitioner was informed on 10.3.2006 (Annexure R-1) that in terms of the Clause 25-A of the contract agreement, if the party invoking arbitration is contractor, he has to deposit 7.5% of his claim as a security if the claim is more than Rs.1.00 lakhs before appointment of an Arbitrator. It is pointed out that since the petitioner has not deposited the security amount, therefore, the Arbitrator cannot be appointed. During the course of hearing, learned counsel for the petitioner has stated that the petitioner shall deposit the necessary security amount within a period of two months and therefore, the respondents are bound to appoint an Arbitrator. The learned counsel for the petitioner has also argued that an Arbitrator, out of the names mentioned by the petitioner in para 5 of the application, be appointed, whereas as per the respondents, the Arbitrator is required to be appointed by Engineer -in-Chief, Haryana, PWD B& R Branch, Chandigarh in terms of sub-Clause 2 of Clause 25-A of the agreement. The relevant Clause reads as under:- “All disputes of differences in respect of which the decision is not final and conclusive shall at the request in writing of either party, made in communication sent through registered A.D. Post be referred to the sole arbitration of any serving Superintending Er. or Chief Er. of Haryana PWD B & R Branch to be nominated by Arbitration No.212 of 2006 -3- designation by the Engineer-in-Chief Haryana PWD B & R Branch at the relevant time, it will be no objection to any such appointment that the arbitrator so appointed is a Government servant or that he had to deal with the matters to which the contract relates and that in the course of his duties as a Government servant he had expressed his views on all or any of the matters in dispute. The Arbitrator to whom the matter is originally referred being transferred or vacating his office his successor in office as such shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. In case the arbitrator nominated by the Engineer-in- Chief is unable or unwilling to act as such for any reason whatsoever the Engineer-in-Chief shall be competent to appoint and nominate any other Superintending Engineer of chief Engineer as the case may be as arbitrator in his place and the Arbitrator so appointed shall be entitled to proceed with the reference.” A perusal of the record shows that the respondents have not refused to appoint an Arbitrator in terms of sub-Clause 2 as reproduced above. It was only on account of non-deposit of security amount in terms of Sub-Clause 7 of Clause 25-A, the Arbitrator could not be appointed by the respondents. Therefore, I do not find any reason not to appoint an Arbitrator other than in terms of the agreement entered between the parties. It shall be open to the Engineer-in-Chief to appoint an Arbitrator out of panel maintained by the respondents for the said purpose. In view of the above, the present application is allowed. The Arbitration No.212 of 2006 -4- Engineer-in-Chief is directed to appoint an Arbitrator in terms of the agreement between the parties on deposit of the security amount within the period of two months. Consequently, the application stands disposed of accordingly. (Hemant Gupta) Judge 30th January, 2009. monika