IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No. 62 of 2007 Decided on : 30.1.2009 M/s Krishna Construction Co. ....Petitioner VERSUS Engineer-in-Chief, Haryana and others ....Respondent 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:- Shri Manoj Kumar Sood, Advocate, for the petitioner. Shri Ajay Gupta, Additional AG, Haryana. HEMANT GUPTA, J (Oral). The petitioner has sought appointment of an Arbitrator in respect of non-payment of due amount of contract for providing Hard Shouldering on Palwal Yamnua Bridge Road in District Faridabad. The petitioner was allotted a contract for providing Hard Shouldering on Palwal Yamuna Bridge Road (0 to 15.41 Kilometres), in Faridabad District, amounting to Rs.48.50 lacs approximately, vide letter of allotment dated 5.5.1999. The work was to be completed within six months. As per the petitioner, the specification of the Draft Notice Inviting Tender, was changed, which increased the cost. The petitioner completed 10% of the total agreed contract and a sum of Rs.13 lacs became payable, but due to Arbitration Case No. 62 of 2007 (2) shortage of LOC/funds, the payment was not made in time. The work came to stand still and that instead of making payment, the respondents imposed penalty under Clause-II of the contract agreement. The material brought for the purpose of execution of the work could not be utilised and the labour also remained idle due to change of specification and delay in taking decision by the department. The bitumen for execution of the work has also not been issued and on account of shortage of LOC, there was no chance to complete the work. Subsequently, the estimate of the road was proposed to be de-sanctioned and a fresh estimate with the changed specification was prepared. The changed specification was not within the scope of the contract agreement. Thus, the petitioner raised a claim of Rs.16.49 lacs, excluding interest and cost on account of various disputes said to be arising between the parties. The petitioner submitted a final bill dated 23.8.2004 and made a request for appointment of an Arbitrator on 23.9.2004. On account of failure of the respondents to appoint an Arbitrator, the petitioner invoked the jurisdiction of this Court vide the present petition filed on 24.4.2007. A perusal of the documents attached with the petition shows that on 23.8.2004, the first and final bill amounting to Rs.56,668.89p was accepted, though the said amount was adjusted towards the amount of work done at the risk and cost of the petitioner. In reply, it has been pointed out that the petitioner has not deposited the security as per Clause 25-A of the contract agreement amounting to Rs.1,27,050/-, therefore, the present petition is not maintainable. It is also pointed out that the petition for appointment of an Arbitrator is badly time barred as the work was completed by other Agency. Arbitration Case No. 62 of 2007 (3) It is pointed out that the petitioner failed to complete the work despite good persuasion and under compulsive circumstances, the respondents have initiated action under Clause-II of the agreement as the petitioner miserably failed to complete the work within the stipulated period as per the agreement. It is pointed out that the Engineer-in-Chief , Haryana, PWD (B&R), is empowered for appointment of an Arbitrator, subject to deposit of security @ 7.5% of the amount claimed by the petitioner. The petitioner has not deposited the security even when called upon to do so by the respondents vide letter dated 26.10.2005. 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. As per the respondents, the Arbitrator is required to be appointed by the 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 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 Arbitration Case No. 62 of 2007 (4) 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 to appoint an Arbitrator other than in terms of the agreement entered between the parties. In view of the above, the present petition is allowed. The 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 petition stands disposed of accordingly. (Hemant Gupta) Judge 30.1.2009 ds