:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO. 174 OF 2005 V.A. Shetty & Shetty .. Applicant Vs. Shree Mangirish Co-op. Housing Society Ltd. .. Respondent Mr. A.S. Karvande for applicant. Mr. R.V. Govilkar i/b Milind More for respondent. CORAM CORAM CORAM : : : B. H. MARLAPALLE,J. B. H. MARLAPALLE,J. B. H. MARLAPALLE,J. Date Date Date : March 03, 2006. : March 03, 2006. : March 03, 2006. P.C.: P.C.: P.C.: 1. This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of the arbitral Tribunal of two Arbitrators. Mr. Karvande, the learned counsel for the applicant-contractor states that pursuant to the agreement dated 12/4/2002 for construction of the seven storied building of the respondent-society, the construction of building (stilt + five upper floors) was constructed by 4th March, 2004 and the tenements upto the 5th floor came to be occupied by the respective members of the respondent-society. So far as the flats on the 6th and 7th floors are concerned, external brick work, plaster and painting was completed in both the Wings i.e. "A" and "B" and on :2: account of the society’s written instructions, the further work of completing the 6th and 7th floors flats could not be undertaken. The Architect appointed by the society, therefore, issued a certificate on 9th April 2004 stating that complete finishing work upto stilt plus five upper floors was completed and in respect of 6th and 7th floors external brick work, plaster and painting was completed. The cost of the total work done on site was 92% as per the mode of payment accepted in the agreement with the contractor. Based on this certificate, the applicant-contractor has been claiming the payment of the bills upto 92% of the total amount and the learned counsel for the applicant claims that there has been no response from the society and, therefore, by its letter dated 6/6/2005 the applicant sought to invoke Clause No.55 of the agreement for referring the dispute of non payment of 92% of the contract value for arbitration. It has communicated the name of Mr. R.M. Purandare, retired Judge of the City Civil Court at Mumbai as its nominee. There was no response from the respondent-society and, in fact, by its letter dated 13/6/2005 the society has stated that the appointment of Mr. Purandare as the nominee of the applicant is contrary to the agreement. :3: 2. The society has also filed affidavit in reply and opposed this application on several grounds. It is submitted that the Architect has not finalised the bills and, therefore, the payments could not be released. Secondly, it is stated that unless the Architect gives his decision in respect of the bills submitted, the applicant cannot invoke the arbitration clause and thirdly, Mr. Gawade, who is one of the members of the respondent-society, has received advance payments on behalf of the applicant and, therefore, unless those payments are considered, the claim of the applicant-contractor cannot be entertained. 3. Clause 55 of the agreement reads as under:- "55. Except in matters where the decision of the Engineer/Architect shall be conclusive under the terms of the contract, all disputes or differences arising between the society and the contractor, or his legal representatives or successors under and in respect of the contract including any claim of one against the other, for money or otherwise or on the question of interpretation or meaning of any provision of the contract shall be referred to Arbitration of two Arbitrators one to be appointed by each party to the dispute or difference and the Arbitration will be governed by the Arbitration Act, 1940." 4. It is not disputed that the Architect of the respondent-society has issued a certificate on :4: 9/4/2004 regarding completion of 92% of the construction work and the entitlement of the contractor to receive payment to that extent in terms of the agreement. In what manner and how this certificate has been issued is a matter of dispute between the respondent-society and its Architect. Similarly, if the society has released payment by way of advance to one of its members, including Mr. Gawade and if said payments are related to the instant construction work, these are all the matters which will have to be placed before the Arbitrator and releasing of such payments cannot be an issue which will come in the way of the appointment of Arbitrators. The first part of Clause 55 will not come in the way of this application in view of the certificate issued by the Architect on 9/4/2004. All other defences taken by the society are unsustainable and it is bound by the terms of agreement executed between the applicant and itself. 5. This application is, therefore, allowed and the respondent-society is directed to intimate the name of its nominee as the 2nd Arbitrator within a period of four weeks from today so that Mr. Purandare, the nominee appointed by the applicant and the society’s nominee shall constitute the arbitral Tribunal within the meaning of Clause 55 of the :5: agreement. In the alternative the society may choose to release payments to the extent of 92% of the contract value within the stipulated period of four weeks, so that there is no need to constitute the arbitral Tribunal. 6. The arbitral proceedings to commence from 15th April, 2006 on failure of the respondent-society to invoke the choice in the alternate. (B.H. (B.H. (B.H. Marlapalle, J.) Marlapalle, J.) Marlapalle, J.)