1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR MISC. CIVIL APPLICATION NO. 364 OF 2007 (M/s. M.R. Malpani vs. M.S.E.T.C. & Anr. ) Office Notes, Office Memoranda of Coram, appearances, Court's orders Court's or Judge's orders or directions and Registrar's orders. CORAM : B.P. DHARMADHIKARI, J. AUGUST 22, 2008. Heard Shri Kukday with Shri Phadnis, Advocate for the applicant and Shri Moharir, Advocate for respondent No.1. Nobody appears for respondent No.2, though served. It is not in dispute that the applicant is a sub-contractor for work which was allotted by Respondent No.1 to Respondent No.2 and the dispute arose between the applicant and Respondent No.2. The applicant contends that as sub-contract was legally permitted, applicant replaces Respondent No.2 for all practical purposes and though there is no direct contract between the applicant and Respondent No.1, such contract stands created as there is a contract between Respondent No.2 and the applicant. Shri Kukday, Advocate states that existence of arbitration clause in contract between 2 the Respondents is not in dispute and therefore, said clause needs to be invoked and arbitrator needs to be appointed. He points out that the claims made on account of additional works done have not been cleared by Respondent No.1 at all. As against this, Shri Moharir, Advocate points out that there is an independent contract between Principal Contractor – Respondent No.2 and the present applicant and there is no privity of contract between the applicant and Respondent No.1. He states that all claims made by Respondent No.2 have been honoured by Respondent No.1 after verification and amount thereof has been made over to Respondent No.2. He points out that there is independent contract between the applicant and Respondent No.2 and that also has arbitration clause. He, therefore, contends that Arbitrator needs to be appointed for resolving the dispute between the applicant and Respondent No.2 as per initial agreement between them and Respondent No.1 is not at all concerned with the controversy. He places reliance upon the judgment of the Delhi High Court in the case of M.M. Aqua Technologies Ltd. vs. Wig Brothers Builders and Engineers Ltd., reported at 2001 (3) Arb. LR 301. In reply, Shri Kukday, Advocate places 3 reliance upon the judgment of the Delhi High Court reported at 2003 (3) Arb. LR 178 and he contends that for all practical purposes, the present applicant has replaced Respondent No.2. It is apparent that if argument of Shri Kukday, Advocate are accepted and if it is presumed that the applicant has replaced Respondent No.2, the payment made to Respondent No.2 will also have to be deemed as made to the applicant and the payment received by him has to be treated as received by applicant only. However, that does not seem to be the position here. The dispute is between Respondent No.2 and the applicant. Respondent No.2 after securing the payment from the Respondent No.1, does not prima facie seem to have passed it over to the applicant. In the circumstances, it is clear that the applicant does not have any cause of action against Respondent No.1 even on facts. The dispute essentially is between the applicant and Respondent No.2. It is, therefore, apparent that the claim for appointment of Arbitrator as per alleged agreement between the applicant and Respondent No.1 cannot be accepted and the same stands rejected. As the existence of independent agreement between the applicant and respondent 4 No.2 is accepted and also there is an arbitration clause in it, it is apparent that an arbitrable dispute arises between the parties. The applicant has served a notice dated 20.5.2006 upon Respondent No.1 as also Respondent No.2 invoking arbitration clause. Respondent No.2 has not taken any steps in response thereto. Respondent No.2 has also chosen not to appear in present proceedings. In the circumstances, an Arbitrator on panel viz. Shri S.S. Rao, Retired Chief Engineer of Western Coal Fields Limited, is hereby appointed to arbitrate in the dispute between the applicant and Respondent No.2 as per agreement between applicant and Respondent No.2. The processing fees of Rs.5,000/- shall be deposited by the applicant with the Registry of this Court by 3rd October 2008. Miscellaneous Civil Application is accordingly disposed of. JUDGE *GS.