IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID THURSDAY, THE 15TH OCTOBER 2009 / 23RD ASWINA 1931 CRP.No. 175 of 2009() --------------------- OS.16/1996 of SUB COURT,KOTTARAKKARA .................... REVN. PETITIONER: PLAINTIFF --------------------------------------- K.T.KURIAKOSE,S/O.KURIAN THOMAS, KARUTHEDATHU,THIRUVANIYOOR, PUTHENCRUZ. BY ADV. SRI.VIVEK VARGHESE P.J. SRI.P.J.VINOD JOSEPH RESPONDENT(S): DEFENDANTS ------------------------------------------------ 1. STATE OF KERALA,REP.BY THE SECRETARY, IRRIGATION DEPARTMENT, GOVT.SECRETARIAT, THIRUVANANTHAPURAM. 2. THE CHIEF ENGINEER, PROJECT III (KALLADA), KOTTARAKKARA. 3. THE SUPERINTENDING ENGINEER, KIP R.B.CIRCLE,KOTTARAKKARA. GOVERNMENT PLEADER SRI.T.K.SAJEEV THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 15/10/2009, ALONG WITH CRP NO. 176 OF 2009 THE COURT ON 15/10/2009 PASSED THE FOLLOWING: HARUN-UL-RASHID, J. ---------------------------------------- C.R.P Nos. 175 & 176 of 2009 ---------------------------------------- Dated this the 15th day of October, 2009 ORDER The plaintiff in O.S. (Arb) Nos. 15/1996 and 16/1996 on the file of the Sub Court, Kottarakkara are the revision petitioners. The revision petitioner is a Government Contractor. The applications filed for appointing an Arbitrator under Section 20 of the Arbitration Act, 1940 were dismissed by the court below Hence the revisions. The parties in both revision petitions are the same. 2. The short facts leading to the filing of the revision petitions are as follows: A formal agreement was entered into between the revision petitioner and the superintending Engineer K.I.P Circle Kollam to execute the contract work of Kallada Irrigation project. As per the terms and conditions, the work has to be completed within 14 months from the date of handing over of the site. The contract work could not be completed by the revision petitioner due to continuous labour strikes and unprecedented rains. Hence the revision petitioner executed supplemental agreements even though the Department did note enhance the rate for the items of work considering the hike in labour rates and cost of materials prevailing in the locality in 1989. In spite of unwarranted impediments such as continuous labour strikes, unprecedented rains, non- supply of departmental materials such as cement the revision petitioner completed C.R.P Nos. 175 & 176 of 2009 -2- more than 70% of the total work. According to the revision petitioner on account of the delay in payment of part bill and because of the steep increase in the cost of labour and materials the Department is liable to compensate the loss caused to the revision petitioner by revising the rates. Even though the revision petitioner filed claim petitions before the authorities there was no reply from them. 3. It is not disputed that as per clause 51 of LCB conditions both parties have agreed to resolve the dispute by arbitration in view of the arbitration clause in the contract. The contract also provides that all the disputes or differences in respect of which decisions has not been final and conclusive shall be referred for arbitration to a sole arbitrator. On 23.6. 1993 the revision petitioner expressed his intention to refer the dispute to a sole arbitrator. The revision petitioner notified and requested the Chief Engineer , the 2nd defendant, for settlement of the dispute in arbitration. The Chief Engineer on 5.11.1993 forwarded a panel approved by the Government and requested the revision petitioner to select one person from the panel as the sole arbitrator. Accordingly,the plaintiff suggested Sri.P.S.Chandran Superintending Engineer Muvattupuzha circle as the sole arbitrator. The Arbitrator thus appointed registered the reference as ARB 13/1993. The Arbitrator conducted sittings and after several adjournments the matter was finally adjourned to 27.9.1994 for filing defence statement by the respondents. While the arbitration proceedings was pending consideration, on 20.6.1995 the Arbitrator issued a letter C.R.P Nos. 175 & 176 of 2009 -3- stating that he is relinquishing his acceptance as the sole Arbitrator on the direction of the Secretary to the Government. Thus the sole Arbitrator, during the course of arbitration has relinquished his acceptance on 20.6.1995. 4. On 29.10.1995 the revision petitioner issued notice to the Chief Engineer calling upon him to forward another panel of the arbitrators in order to enable him to nominate another person as the sole arbitrator. The notice was marked as Ext.A16 in O.S. No. 16/1996. Ext.A16 is the statutory notice issued under Section 8(1) of the Act The Chief Engineer by letter dated 18.11.1995 ( marked as Ext.A17 in O.S. No. 16/1996) replied that the the revision petitioner's request for another panel cannot be considered and therefore rejected. Hence O.S. No. 16/1998 was filed by the revision petitioner under Section 20 of the Act to appoint an Arbitrator. The said suit was dismissed by the court below holding that the case of the revision petitioner does not come within the purview of Section 8(2) of the Act and the revision petitioner is not entitled to any reliefs. 5. The facts in O.S. Nos 15/1996 are also more or less the same as in O.S. No. 16/1996. O.S. No. 15/1996 was also dismissed by the court below holding that the revision petitioner is not entitled to the reliefs for the same reasons stated in O.S. 16/1996 O.S No. 15/1996 is also a petition filed by the revision petitioner under Section 20 of the Act to appoint an Arbitrator. The notice issued by the revision petitioner under C.R.P Nos. 175 & 176 of 2009 -4- Section 8 (1) is produced in this suit and marked as Ext.A17 and the reply by the Chief Engineerwas marked as Ext.A18. 6. It is admitted that Sri.P.S. Chandran, the Sole Arbitrator appointed in these cases conducted sittings during the year 1993-1994 and relinquished his acceptance as the Sole Arbitrator on the direction of the Secretary to Government. It is also not disputed that the plaintiff vide Ext.A16 letter (produced in O.S. No. 16/1996) requested the Chief Engineer(2nd respondent) to forward another panel of Arbitrators and vide Ext.A17 reply (produced in O.S No. 16/1996) the Chief Engineer rejected the request and directed the revision petitioner to file a suit in this regard. Section 8 1(b) of the Act reads as follows: 7. S.8 Power of Court to appoint arbitrator or umpire--(1) In any of the following cases (a) xxxxxxx (b) if any appointed arbitrator or umpire neglects or refuses to act or is incapable of acting, or dies and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy, or (c) xxxxxxxxxxxxxxxxx 8. It is very clear that Section 8 1(b) is intended to fill up the absentee Arbitrator by appointing another Arbitrator Here, whatever the reason may be the Arbitrator relinquished his engagement and thus refused to act as Arbitrator. So there is absence of an Arbitrator. This is C.R.P Nos. 175 & 176 of 2009 -5- more than enough to attract Section 8(1)(b). Ext.A16 notice produced in O.S No. 16/1996 issued to the 2nd defendant who is a Government Officer by the revision petitioner shows that the same was issued under Section 8 (1) of the Act Therefore the court below is not justified in saying that the ingredients of Section 8 are not satisfied and that the suits are not maintainable . The further finding of the court below that there is no notice issued to the Government as provided under Section 8 (1) of the Act is also unsustainable. In the above circumstances the court below acted wrongly in declining the prayer of the plaintiff for appointing an arbitrator. I am of the view that this a a fit case where a Civil Court can invoke Section 8 of the Act and the revision petitioner is entitled to the reliefs sought for in the suits. In the result, the judgments and decrees under appeal are set aside The court below is directed to appoint a sole Arbitrator as prayed for in the suits. The cases are remanded to the court below for fresh consideration. The court below shall dispose of the suits within a period of 3 months from the date of receipt of this copy of the order. (HARUN-UL-RASHID, JUDGE) es. HARUN-UL-RASHID, J. --------------------------- C.R.P. Nos. 175 & 176 of 2009 ---------------------------- ORDER 15th October, 2009