IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 47 of 2011 (O&M) Date of Decision: 22.9.2011 Ravinder Kumar .....Petitioner Versus The Haryana Urban Development Authority and others ….Respondents CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Shri Kunal Dawar, Advocate, for the petitioner. Shri Raman Gaur, Advocate, for the respondents. Hemant Gupta, J. (Oral) The petitioner has sought appointment of an Arbitrator in respect of the disputes arising out of an agreement consequent to the acceptance of the offer of the petitioner communicated on 16.11.2006. In response to the offer of the petitioner, the petitioner was allotted the works for providing and fixing of Kebrs on Central Verge, Paining, good earth and reflective deliver on Suraj Kund Road, from Pali Crushing Zone Tee Junction to Delhi Border (Prahladpur), Faridabad and all other works contingent thereto. The petitioner was to Arb. Case No. 47 of 2011 (O&M) complete the contract work on or before 15.3.2007. The petitioner is alleged to have submitted the test report on 30.3.2007 that the work has been completed as per the condition of the tender notice. It was on 5.12.2008, the petitioner requested the respondents to release the balance payment, but when the payment was not made, the petitioner served a notice dated 18.9.2009 seeking to appoint an Arbitrator. The petitioner is alleged to have served notice dated 18.9.2009, for appointing an Arbitrator in terms of Clause 25(A) of the agreement, which reads as under:- “25(A) (i) If any dispute or difference of any kind whatsoever shall arise between the HUDA/or the authorized representative of HUDA and the contractor in connection with or arising out of the contract the execution of the work that is (i) whether before its commencement or during the progress of the work or after its completion, (ii) and whether before or after the termination, abandonment or breach of the contract. It shall in the first instance, be referred to for being settled by the Executive Engineer-in-Charge of the work at the time and Executive Engineer-in-Charge shall within a period of sixty days after being requested in writing by the contractor to do so, convey his decision to the contractor, and subject to arbitration as hereinafter provided such decision in respect of every matter so referred, shall be final and binding upon the contractor. In case the work is already in progress, the contractor will proceed with the execution of the work on the receipt of the decision by the Executive Engineer-in-Charge as aforesaid with all due diligence whether HUDA or authorized representative of HUDA or contractor requires arbitration as hereinafter provided for, or not. If the Executive Engineer-in-Charge of the work has conveyed his decision to the contractor and no claim to arbitration has been filed with him by the contractor within a period of sixty days from the receipt of letter communicating the decision, the said decision shall be final and binding upon the contractor and will not be a subject matter of arbitration at all. If the Executive Engineer-in-Charge of the work fails to convey his decision within a period of sixty days, as aforesaid the contractor may, within further sixty days of the expiry of first sixty days after being requested, from the date on which request has been made to the Executive Engineer-in-Charge request the ( 2) Arb. Case No. 47 of 2011 (O&M) Engineer-in-Chief/Chief Engineer, HUDA that the matters in dispute be referred to arbitration, as hereinafter provided. (ii) All disputes or differences in respect of which the decision is not final and conclusive, shall at the request in writing of either party, made in a communication sent through Registered A.D. Post, be referred to the sole arbitration of any serving Superintending Engineer of HUDA, to be nominated by designation by the Engineer-in- Chief/Chief Engineer, HUDA at the relevant time. It will be no objection to any such appointment that the arbitrator, so appointed, is a Govt. servant/in service of HUDA or that he had to deal with the matters to which the contract relates and the course of his duties as a Govt. servant/in service of HUDA, he has expressed his views on all or any of the matters in dispute. The Arbitrator to whom the matters are originally referred being transferred or vacating his office, his successor- in-office, as such shall be entitled to proceed with the reference from the stage at which it was left by his processor.” The grievance of the petitioner is that only an amount of Rs.17,20,030/- has been paid after deducting security, income tax etc. against the total work done of Rs.27,95,766/- and that the respondents are liable to make payment of Rs.14,50,776/- including interest @ 18% pa. on the balance amount. The present petition for appointment of an Arbitrator was filed on 16.3.2011. Learned counsel for the respondents has filed a counter affidavit dated 6.9.2011 to the effect that the Serving Superintending Engineer, HUDA Circle, Faridabad, has been appointed as an Arbitrator in respect of the disputes arising between the parties. Learned counsel for the petitioner has vehemently argued that such appointment of an Arbitrator is after the petitioner has invoked the jurisdiction of this Court, therefore in terms of the judgments of the Supreme Court in Punj Lloyd Ltd. v. Petronet MHB Ltd., (2006) 2 SCC 638 and Datar Switchgears Ltd. v. Tata Finance Ltd., (2000)8 SCC 151, the Arbitrator appointed by the respondents cannot be permitted to adjudicate upon the disputes between the parties. It is ( 3) Arb. Case No. 47 of 2011 (O&M) also argued that in the communication Annexure P.4, the respondents have blacklisted the petitioner and therefore, the petitioner seeks appointment of an independent arbitrator rather than an Arbitrator in terms of Clause 25(A) of the agreement. Having heard learned counsel for the parties at some length, I do not find any merit in the present petition. Though after invocation of the jurisdiction of this Court to seek appointment of an Arbitrator in terms of Section 11(6) of the Act, the respondents are precluded from appointing an Arbitrator, but Clause 25(A) of the agreement contemplates that the serving Superintending Engineer of the HUDA, shall be the Arbitrator. In terms of sub-clause (8) of Section 11 of the Act, the Arbitrator has to be appointed with due regard to the terms of the agreement. In terms of the agreement, the serving Superintending Engineer, HUDA, has to be appointed an Arbitrator. Therefore, even if the respondents have appointed an Arbitrator after invocation of the jurisdiction of this Court, but such appointment of Arbitrator is in terms of the agreement. Learned counsel for the petitioner could not point out any specific prejudice on the part of the serving Superintending Engineer, HUDA, who has been appointed as an Arbitrator, except that the Arbitrator appointed is an Official of the respondent-Department. The said fact is not sufficient to preclude the respondents from appointing an Arbitrator. In view of the above, finding no merit in the present petition, the same is dismissed. [HEMANT GUPTA ] JUDGE 22.9.2011 ds ( 4) Arb. Case No. 47 of 2011 (O&M) ( 5)