FAO No.3686 of 2010 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.3686 of 2010 (O&M). Decided on: May 19, 2011. Punjab State Electricity Board, Patiala, through Chief Engineer Sub Station, PSEB, Shakti Vihar, Patiala. .. Appellant VERSUS M/s Simple Power Solution and another. .. Respondents * * * CORAM: HON'BLE MR.JUSTICE M.M.S.BEDI 1. Whether reporters of local papers may be allowed to see the judgment? 2. Whether to be referred to the Reporter? 3. Whether the judgment should be reported in the Digest? * * * PRESENT Mr.Sukhvir Singh, Advocate, for the appellant. Mr.Sanjay Kaushal, Advocate, for the respondents. M.M.S. BEDI, J. Misc. application for impleading Punjab State Transmission Corporation Limited as party in place of Punjab State Electricity Board has already been allowed vide order dated . . . 1 FAO No.3686 of 2010 (O&M) 03.08.2011. The name of said Corporation will be incorporated in place of Punjab State Electricity Board, in the memo of parties. Aggrieved by the order dated 21.01.2010, passed by the Additional District Judge, Patiala, dismissing the objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'The Act'), the appellant, the Punjab State Electricity Board, has preferred this appeal under Section 37 of the Act. Briefly stated, the facts of the present case are that respondent No.1, was allotted work of construction of two 66 K.V. Sub Stations, at Ludhiana vide contract dated 07.04.2005. Pursuant to a dispute having arisen between the parties, the matter was referred to Er. K.D.Chaudhary, Engineer-in-Chief, PSEB, Ludhiana, to act as Empowered Officer, vide an order dated 14.09.2007. Award given by the Empowered Officer on 18.01.2008, was not acceptable to both the parties, as such, the matter was referred to the Arbitrator Er.Prem Kumar Nayyar, retired Chief Engineer vide order dated 31.01.2008. On account of inability shown by Er.Prem Kumar Nayyar, to arbitrate the matter, Er.Prem Sagar, was appointed as sole Arbitrator. The said Arbitrator gave award dated 27.12.2008. The appellant filed an objection petition under Section 34 of the Act, which was dismissed by the Additional District Judge on 21.01.2010. A perusal of the order passed by the Court below shows that large number of objections were taken but objection No.11, was seriously contested regarding the jurisdiction of the Arbitrator by the objector-appellant. The said objection was that the . . . 2 FAO No.3686 of 2010 (O&M) Arbitrator had no jurisdiction to decide the matter afresh after Er.K.D.Chaudhary, as Empowered Officer had already decided the dispute between the parties, as such, the Award is against public policy and liable to be set aside. Counsel for the appellant has contended that as per Clause 48.2 of the agreement between the parties in case of any dispute during the course of work or after its completion, the dispute was referrable at first place to the Empowered Officer appointed by the owner and as per Clause 48.4, in the event of either owner or contractor being dissatisfied, either party may require that matter in dispute be referred to the Arbitrator and the decision of the Empowered Officer could not be ignored by the arbitrator. Mr.Sukhvir Singh, learned counsel for the appellant has argued that the Punjab State Transmission Corporation Limited is required to be impleaded as a party as the Punjab State Electricity Board has been dissolved and two Corporations namely Punjab State Power Corporation Limited and Punjab State Transmission Corporation Limited, have been formed vide Notification dated 16.04.2010. I have heard the counsel for the appellant and carefully gone through the record of the case. The Arbitrator Er.Prem Sagar has taken into consideration the pleadings of the appellant Punjab State Electricity Board and the claim of the respondent on all the items raised before him which are as follows: - . . . 3 FAO No.3686 of 2010 (O&M) (i) Levy of Testing and Commission charges decided in favour of the respondent; (ii) Payment of additional 66 KV Bus-Bar at 66 KV Rajaaguru Nagar S/St. Ludhiana, holding that the payments had to be made to the respondent on the basis of weight of structure actually installed; (iii) Early payment incentive deductions (Max. 3 per cent). (iv) Contract completion time period holding that no penalty is leviable on the respondent-firm; (v) 10 per cent equipment performance guarantee for 39 months observing that the respondent-firm was not liable to extend the bank guarantee beyond 30.09.2008; (vi) Deductions from Civil Work holding that the payment should be made on the basis of actual measurement at the site; (vii) Deductions from Electrical Bills holding that whatever balance has been due was due to the respondent-firm out of lot price, same would be payable; (viii) Balance Erection, Testing and Commissioning Charges holding that the said charges which have not been released to the respondent-firm, were required to be released to them; . . . 4 FAO No.3686 of 2010 (O&M) (ix) Prices, taxes and duties holding that the above said duties and taxes were required to be paid or deducted as per prevailing rules and regulations; (x) So far as the decision on above said 9 items is concerned, these do not fall within the ambit of grounds of challenge laid in Section 34 of the Act. The only point which could be raised before the Court below was the jurisdiction of the Arbitrator to adjudicate upon the above said items in view of the matter having earlier been decided by the Empowered Officer Er.K.D.Chaudhary. I have carefully considered the contention of the counsel for the appellant and gone through the record and this Court is of the considered opinion that the objections under Section 34 of the Act, have been rightly dismissed by the learned Additional District Judge and this appeal under Section 37 of the Act, deserves to be dismissed on the ground that the arbitration agreement specifically provides that any dispute arising between the parties has to be referred to the Empowered Officer appointed by the owner as per Clause 48.2 of the arbitration agreement and Clause 48.4 elaborates that in the event of being dissatisfied with the decision of the Empowered Officer, any of the parties may require that matter in dispute be referred to the Arbitrator. It is not disputed that the appellant the Punjab State Electricity Board had opted for a reference to the Arbitrator. Once the appellant Board has exercised . . . 5 FAO No.3686 of 2010 (O&M) the option of referring the matter to Arbitrator as per the arbitration agreement, the plea that the Arbitrator did not have any jurisdiction to adjudicate the matter contrary to the decision of the Empowered Officer is not tenable. Besides this, the jurisdiction of the Arbitrator could have been challenged by the appellant before the Arbitrator itself but no such objection having been raised as per the statutory provisions of the Arbitration Act, it will be deemed that the objections as to jurisdiction stands waived of. By principle of estoppel, the appellant is not entitled to challenge the jurisdiction of the Arbitrator having itself referred the matter to the Arbitrator as per the arbitration agreement. In view of above circumstances, the order passed under Section 34 of the Act, is valid and this appeal under Section 37 of the Act, is liable to be dismissed. Ordered accordingly. (M.M.S.BEDI) JUDGE May 19, 2011. rka . . . 6