Arbitration Case No. 207 of 2006 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 207 of 2006 Date of Decision: 01.05.2009 M/s Hanuman Construction Company and another ..Petitioners versus Haryana State Agricultural Marketing Board and another ..Respondents CORAM: HON'BLE THE CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present : Mr. Amit Kumar Jain, Advocate for the petitioners Mr. Amit Jaiswal, Advocate for the respondents ***** T.S.Thakur, C.J. (Oral) The material facts leading to the filing of this application under Section 11 of the Arbitration & Conciliation Act, 1996 ( for short 'the Act' ) are not in dispute. It is not in dispute that the parties had entered into an agreement which inter-alia provides for adjudication of the disputes arising between them by reference to an Arbitrator to be nominated by the Chief Administrator of the Haryana State Agricultural Arbitration Case No. 207 of 2006 [2] Marketing Board. Although a copy of the arbitration clause has not been produced by the petitioner, it is common ground that the clause is in the following words:- Clause 25-A: If any question, difference or object whatsoever shall arise in any way connected with or arising out of this instrument or the meaning or operation of any part thereof or the right, duties or liabilities of either party then save in so far as the decision of any such matter hereinbefore provided for and has been so decided every such matter including whether its decision has been otherwise provided for and/or whether it has been finally decided accordingly or whether the contract should be terminated or has been rightly terminated and as regards the rights and obligations of the parties as the result of such termination shall be referred for arbitration to the arbitrator capable officer to be appointed by the Chief Administrator of the Board within 180 days viz six months from the date of making final payment to the contractor or when the contractor is not willing to receive the payment from the date registered notice is sent to him that his final bill is ready for payment and his decision shall be final and binding and where the matter involves. A claim for the payment or recovery or deduction of money, only the amount, if any, awarded in such arbitration shall be recoverable in respect of the matter so referred. “ If the matter is not referred to arbitration within the specified period all the rights and claims under the contract shall be deemed to have been forfeited and absolutely barred”. Clause 25-A- “ It shall be a term of the contract agreement that arbitrator shall give a Arbitration Case No. 207 of 2006 [3] speaking award otherwise the award shall be null and void and will not be binding on the parties, it shall also be a term of this contract that in any dispute/difference referred to the Arbitrator, the arbitrator shall not award interest to the parties on any of the items of the contract agreement executed in between the parties, if the arbitrator awards interest, the same shall not be binding on the parties.” It is also not in dispute that the petitioner had in terms of an intimation dated 30.05.2000 requested the Chief Administrator to appoint an Arbitrator for adjudication of the disputes. The fact that the Chief Administrator failed to appoint an Arbitrator in terms of the arbitration clause despite receipt of the aforesaid intimation is also admitted. The only question therefore is whether the Chief Administrator, the designated authority has forfeited his power to make an appointment at this stage. My answer to that question is in affirmative. The legal position in regard to power of the Court to make an appointment upon failure of the competent authority to appoint an Arbitrator stands settled by a long line decisions with the Supreme Court including Datar Switchgears Ltd. V. Tata Finance Ltd. 2001(1) RCR (Civil) 267. The legal position has been summed up in the said case in the following words:- “ So far as Section 11(6) is concerned, if one party demands the opposite party to appoint an Arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand but Arbitration Case No. 207 of 2006 [4] before the first party has moved the Court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an Arbitrator. Only then the right of the opposite party ceases.” Keeping in view the fact that the Designated Authority had not admittedly made an appointment of the Arbitrator despite receipt of the notice by it within the period of 30 days or even till date, despite lapse of considerable period, there is no option for this Court to step in and make an appointment. Having regard to the nature of the disputes and the amount being claimed by the petitioner, I consider it just and proper to nominate Shri B.R.Gupta, retired Addl. District & Sessions Judge, as sole Arbitrator to adjudicate upon the disputes between the parties. The Arbitrator shall be entitled to fee of Rs. 5000/- per hearing subject to maximum of Rs. 50,000/-. The fee shall be deposited in equal proportion by the parties before the Arbitrator as and when demanded by him. Parties are directed to appear before the Arbitrator for further directions on 30.05.2009. (T.S.THAKUR) CHIEF JUSTICE 01.05.2009 'ravinder'