IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -.- Arbitration Case No. 259 of 2006 Date of Decision:- 24.4.2009. R.C.Energy Metering Pvt. Ltd. .... Petitioner. Versus Chairman, Punjab State Electricity Board & Ors. .... Respondents. CORAM:- HON'BLE MR. JUSTICE HEMANT GUPTA. Present:- Mr. P.S.Guglani , Advocate, for the petitioner. Mr. N.S.Boparai, Advocate, for the respondent. Hemant Gupta, J (Oral). The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as the 'Act') for appointment of Arbitrator to resolve the dispute arisen between the parties regarding Purchase Order dated 6.9.1999. Clause 10 (a) of the agreement containing the Arbitration Clause reads as under:- “ a) If any time any question, dispute or difference whatsoever shall arise between the Purchaser/Board and the contractor/supplier upon or in relation to or in connection with the Purchase Order/contract either party may forthwith give to the other notice in writing of the existance of such question dispute or difference and the same shall be referred for sole arbitration to the nominee of the purchaser/Board who shall give a reasoned/speaking order/award. The award of the sole arbitrator shall be final and binding on the parties under the Arbitration Case No. 259 of 2006 -2- provisions of the Indian Arbitration Act, 1940 and of the rules made thereunder. Any statutory amendment, modification or re- enactment thereof for the time being in force shall be deemed to apply to and incorporated in the contract/purchase order. It will not be objectionable if the sole arbitrator is an officer of the Board and has expressed his views on all or any of the matters in question of dispute or difference etc.” The petitioner sought an appointment of Arbitrator vide notice dated 16.10.2004 and reminder dated 25.11.2004. Since no arbitrator was appointed, the petitioner filed a petition invoking the jurisdiction of the learned District judge under Section 11(6) of the Act on 5.3.2005. The same stand transferred to this Court after the judgment of Hon'ble Supreme Court in M/s State Bank of Patiala & Co Vs. M/s Patel Engineering Ltd & Anr. (2005) 3, SCC 618. As per the Purchase Order, petitioner was to supply 49,000 Energy Meters. The dispute arose in respect of re-calibration of 2500 Meters. It was the stand of the respondent in written statement that ME Lab was sealed as per the orders of the Court where the meters were stored. Therefore, it is not possible for release the payment against the material which is not in the custody of the Board. It was further averred that the respondents have not appointed the Arbitrator since the matter is sub-judice. It is argued by learned counsel for the petitioner that the small quantity of meters could not be re-calibrated on account of sealing of the ME lab in inter se dispute between respondent and its landlord. Therefore, Arbitration Case No. 259 of 2006 -3- the dispute raised was required to be adjudicated upon by the Arbitrator in terms of the agreement. Hon'ble Chief Justice vide order dated 14.3.2007 appointed Hon'ble Mr. Justice A.L.Bahri, a former Judge of this Court, as sole Arbitrator. Hon'ble Supreme Court in Civil Appeal No. 5067 of 2008 Northern Railway Administration, Ministry of Railway, New Delhi Vs. Patel Engineering and in connected matters including Civil Appeal No. 5068 of 2008 arising out of the order passed by this Court, has set aside the order of appointment of sole Arbitrator, on the ground that the Court while appointing an Arbitrator is required to consider the qualifications for appointment of an Arbitrator under the agreement in terms of Sub Section 8 of Section 11 of the Act. Learned counsel for the petitioner argued that the Clause 10-A of the Agreement does not contain any qualification for appointment of an Arbitrator. Therefore, the principles laid down by the Hon'ble Supreme Court are not applicable in the present case. It is argued that civil appeal against the order of this Court was tagged along with other case and that no qualifiction is contemplated for appointment as an Arbitrator in the agreement was not brought to the notice of the Supreme Court. It is further submitted that Arbitrator has completed the evidence and only arguments are to be addressed by the parties. Learned counsel for the respondent could not refer to any qualification of an Arbitrator, contemplated in the agreement. It is only argued that the Arbitrator should be a person nominated by the respondent. Therefore, an opportunity should be granted to the respondent to appoint an Arbitration Case No. 259 of 2006 -4- Arbitrator. The arguments raised by learned counsel for the respondent are not tenable. The respondents have failed to appoint an Arbitrator within a period of 30 days. In fact the Arbitrator was not appointed for the reason that the matter is sub-judice. The sub-judice matter was inter se dispute between the landlord and tenant and has no reference to the contract between the parties. Therefore, in terms of Datar Switchgers Vs. Tata Finance Ltd (2000) 8 SCC 151 & Union of India Vs. Bharat Battery Mfg. Co. (P) Ltd, (2007) 7 SCC 684, the respondents have forfeited their right to appoint an Arbitrator. In view of the above, Hon'ble Mr. Justice A.L.Bahri, is reappointed as an Arbitrator to complete the arbitration proceedings. Parties are directed to appear before the Arbitrator on 25.5.2009. April 24, 2009 (Hemant Gupta) tripti Judge