IN THE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH Date of Decision: 22.09.2011 Arb. Case No.126 of 2010 Chief Engineer (NH) Punjab PWD B&R, Patiala …Petitioners and others Versus M/s Satish Aggarwal & Co. …Respondent CORAM: HON’BLE MR. JUSTICE HEMANT GUPTA Present: Mr. A.P.S.Mann, Addl. AG, Punjab, for the petitioners. Mr. B.S.Walia, Advocate, for the respondent. HEMANT GUPTA, J. The Chief Engineer (NH) Punjab, PWD B&R, Patiala has sought appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’). The respondent was allotted work of periodic maintenance of Ajnala Ramdas and Charrata Dhand Bir Road in pursuance of notice inviting tender published by the petitioner. In pursuance of such acceptance, the contract agreement dated 24.11.2006 was executed. There is Arbitration Clause in the said contract agreement. Relevant Clauses contained in the contract agreement read as under: “24. Disputes 24.1 If the contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contractor or that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineer’s decision. 25. Procedure for Disputes 25.1 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. Arb. Case No.126 of 2010 2 25.2 The Adjudicator shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whether decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator’s written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicator’s decision will be final and binding. 25.3 The arbitration shall be conducted in accordance with the arbitration procedure state in the Special Conditions of Contract.” In terms of the clauses, referred to above, the disputes arisen between the parties were referred to the Adjudicator on 14.07.2008. The Adjudicator decided in favour of the respondent on 26.08.2008. A copy of such decision has been attached as Annexure A-3. In terms of Clause 25.2 of the agreement, Chief Engineer (NH) addressed a letter to the Executive Engineer, Central Works Division No.2, Punjab PWD B&R, Amritsar on 18.09.2008 (Annexure A-5) to challenge the decision of Adjudicator before Arbitral Tribunal and appointing Mr. G.S.Mann, Superintending Engineer (Retd.) as an Arbitrator on behalf of the employer. The Executive Engineer vide communication dated 19.09.2008 (Annexure A-8) informed the Contractor in respect of such decision of the Chief Engineer. Another letter was written by the Executive Engineer to the Arbitrator on 22.09.2008 (Annexure A-4) to the effect that the grounds for arbitration will be submitted before the Arbitral Tribunal during the course of arbitration proceedings. Since respondent has not consented to the appointment of an Arbitrator, the petitioners invoked the jurisdiction of this Court on 23.09.2009. In the written statement on behalf of the respondent reference is made to term ‘Employer’ in the Agreement to mean the Chief Engineer (IP) Punjab, PWD B&R Branch, Chandigarh. It is contended that the decision to Arb. Case No.126 of 2010 3 refer disputes to Arbitration is required to be taken by the Employer and not by the Executive Engineer, as is apparent from Annexures A-4 and A-8. It is also pointed out that applicant No.2 i.e. Executive Engineer, Central Works Division No.2, Amritsar was under suspension w.e.f. 16.09.2008 and, therefore, the communications issued by the Executive Engineer are not valid. It is further pointed out that the said letters were signed by the Superintendent of the office of the Executive Engineer, which fact is not reflected in the communications Annexures A-4 and A-8. In rejoinder, in respect of issuance of letters dated 19.09.2008 and 22.09.2008, it has been pointed out that the Superintendent of the Office of the Executive Engineer has rightly issued these letters and that the respondent has no concern with the suspension of applicant No.2 i.e. Executive Engineer. During the course of arguments, learned counsel for the respondent has vehemently argued that the communications Annexure A-4 and A-8 are purportedly on behalf of the Executive Engineer, but are not signed by him on the day, when he was under suspension. Therefore, such communications are not legal and valid. Still further, the communication dated 19.09.2008 has been received by the respondent after 28 days, therefore, the petitioners have lost right for appointment of an Arbitrator. Having heard learned counsel for the parties at some length, I do not find any merit in the arguments raised by the learned counsel for the respondent. A perusal of the record shows that Mr. Rajkaran Singh Boprai, Adjudicator gave its decision on 26.08.2008 in favour of the contractor to pay a sum of Rs.25,23,620/-. Since such decision was not acceptable to the petitioners, the Chief Engineer communicated to the Executive Engineer on 18.09.2008 disputing the decision of the Adjudicator and appointment of Arb. Case No.126 of 2010 4 Mr.G.S.Mann, Superintending Engineer (Retd.) as an Arbitrator on behalf of the employer. Such decision of the Employer is in terms of the agreement. Such decision was communicated to the respondent on 19.09.2008 by the office of Executive Engineer. The said communication is a ministerial part and could be authenticated by any authorized person in the office of the Executive Engineer. The suspension of incumbent of Executive Engineer does not render the communication from the office of Executive Engineer as illegal or void. Since the decision has been taken by the Chief Engineer, the consequent communication could be made by any responsible person in the office of the Executive Engineer. Therefore, the suspension of incumbent of Executive Engineer on 19.09.2008 does not render the communication to the respondent as ineffective or illegal. As per the agreement, the dispute is required to be referred to arbitration within 28 days. The Adjudicator has announced its decision on 26.08.2008 and the communication was addressed to the respondent on 19.09.2008, a copy of which was sent through special messenger and by speed post. It has also come on record that the speed post communication was returned by the Postal Authorities on 27.09.2008, when repeated attempts were made to serve the respondent from 24.09.2008. In respect of letter sent through chowkidar, the report dated 20.09.2008 is to the effect that firstly the servant of Mr. Satish Aggarwal told him that he cannot accept the letter and later at about 5.00 pm, he found the house locked. I do not find any merit in the argument that since letter has not been received by the respondent within 28 days, therefore, the petitioner lost right to seek adjudication through an arbitrator. Once the communication is put in the course of transmission, it is complete as against the addressee. It is so held by the Hon’ble Supreme Court in Bhagwandas Goverdhandas Arb. Case No.126 of 2010 5 Kedia v. Girdharilal Parshottamdas & Co., AIR 1966 SC 543, wherein it has been held to the following effect: “By the second clause of Section 4 the communication of an acceptance is complete as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor. This implies that where communication of an acceptance is made and it is put in a course of transmission to the proposer, the acceptance is complete as against the proposer: as against the acceptor, it becomes complete when it comes to the knowledge of the proposer. In the matter of communication of revocation it is provided that as against the person who makes the revocation it becomes complete when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it, and as against the person to whom it is made when it comes to his knowledge”. Subsequently in State of Punjab v. Khemi Ram, AIR 1970 SC 214, the Court observed as: “It will be seen that in all the decisions cited before us it was the communication of the impugned order which was held to be essential and not its actual receipt by the officer concerned and such communication was held to be necessary because till the order is issued and actually sent out to the person concerned the authority making such order would be in a position to change its mind and modify it if it thought fit. But once such an order is sent out, it goes out of the control of such an authority, and therefore, there would be no chance whatsoever of its changing its mind or modifying it. In our view, once an order is issued and it is sent out to the concerned government servant, it must be held to have been communicated to him, no matter when he actually received it. We find it difficult to persuade ourselves to accept the view that it is only from the date of the actual receipt by him that the order becomes effective. If that be the true meaning of communication, it would be possible for a government servant to effectively thwart an order by avoiding receipt of it by one method or the other till after the date of his retirement even though such an order is passed and despatched to him before such date. An officer against whom action is sought to be taken, thus, may go away from the address given by him for service of such orders or may deliberately give a wrong address and thus prevent or delay its receipt and be able to defeat its service on him. Such a meaning of the word “communication” ought not to be given unless the provision in question expressly so provides. Arb. Case No.126 of 2010 6 Actual knowledge by him of an order where it is one of dismissal, may, perhaps, become necessary because of the consequences which the decision in The State of Punjab v. Amar Singh contemplates. But such consequences would not occur in the case of an officer who has proceeded on leave and against whom an order of suspension is passed because in his case there is no question of his doing any act or passing any order and such act or order being challenged as invalid.” Therefore, the moment the communication dated 19.09.2008 was put in the course of transmission, the communication is complete qua the respondent. The petitioners have complied with the terms of Clause 25.2 of the agreement. Therefore, there is no reason as to why the Arbitrator nominated by the petitioners is not appointed as an Arbitrator. In view of the above, Mr. G.S.Mann, Superintending Engineer (Retd.) is appointed as an Arbitrator to adjudicate upon the disputes between the parties. He shall be entitled to fee as per Punjab and Haryana High Court (Arbitrator's Panel and Fee) Rules, 2011. Disposed of. (HEMANT GUPTA) JUDGE 22.09.2011 Vimal