IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 6 of 2011 Date of decision: 25.5.2011 Mohan Lal …..Petitioner vs. State of Haryana and ors …..Respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Sandeep Goyat, Advocate for the petitioner. Mr. Pardeep Singh Poonia, Addl. AG, Haryana for respondents. HEMANT GUPTA, J Petitioner has invoked the jurisdiction of this Court for appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the 'Act') in respect of the disputes arising between the parties out of letter of allotment of work dated 5.10.2007 (Annexure P-1). The petitioner has sought appointment of an Arbitrator vide the communication/notice dated 9.6.2010 (Anneuxre P-3). Since, the Arbitrator was not appointed within a period of 30 days, the present petition for seeking appointment of an Arbitrator was filed on 6.1.2011. In the reply, it is pointed out that the competent authority vide the communication dated 3.5.2011 has appointed Shri Inderjeet Bishnoi, Superintending Engineer, PWD (B&R), Haryana subject to deposit of security amount by the petitioner. In terms of the Agreement, before the Arb. Case No. 6 of 2011 appointment of an Arbitrator, the petitioner was required to deposit the security amount as per the claim raised by the Contractor. Learned counsel for the petitioner has vehemently argued that the Arbitrator was appointed by the respondents after the petitioner invoked the jurisdiction of this Court and thus in terms of Supreme Court judgments rendered in (2006) 2 SCC 638, Punj Lloyd Ltd. vs. Petronet MHB Ltd and (2000) 8 SCC 151, Datar Switchgears Ltd. Vs. Tata Finance Ltd and another, the respondents are precluded from appointing any Arbitrator. The said argument raised by learned counsel for the petitioner appears to be attractive but in the facts and circumstances of the case, I do not find that the Arbitrator appointed by the respondents should not be permitted to continue with the arbitration proceedings. The Agreement itself contemplates that before an Arbitrator is appointed by the Engineer-in-Chief, Haryana the contractor has to furnish, to the satisfaction of the Executive Engineer-in-Charge of the work, a security of the sum determined according to the details mentioned in the Agreement: - (25A.5) The appointment of the arbitration for arbitrating the disputes/differences so referred to arbitration shall be made only by the Engineer-in-Chief, Haryana PWD (B&R) after the contractor furnishes to the satisfaction of Executive Engineer-in-Charge of the work, a security deposit of the sum determined according to details given below: - 2 Arb. Case No. 6 of 2011 Amount of Claim Security Deposit Total Claim value less than or equal to Rs. 10,000/- 2% of the Claim Amount Total Claim Value> Rs. 10,000/- but less than or equal to Rs. 1 Lacs 5% of the Claim Amount Claim > Rs. 1 Lacs 7% of the Claim Amount In terms of the said Clause, the petitioner has not complied with the pre-condition of the deposit of the security amount before invoking the jurisdiction of this Court. Thus, it cannot be said that the respondents have lost their right for appointment of an Arbitrator under the Agreement. Hon’ble the Supreme Court in a judgment reported as (2007)5 SCC 344, Municipal Corporation, Jabalpur and ors vs. Rajesh Construction Company has held that in the event of non deposit of the security amount, an Arbitrator could not be appointed by the Court under Section 11(6) of the Act. In view of the said fact, I do not find any merit in the present petition. The Arbitrator already appointed by the respondents shall continue with the arbitration proceedings, subject to deposit of security amount as per the communication dated 3.5.2011. Dismissed. (HEMANT GUPTA) JUDGE 25.5.2011 preeti 3