Arbitration Case No.103 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No.103 of 2008 Date of Decision : 07.10.2009 Satish Kumar Contractors Ltd. ...Petitioner Versus T.C.Terrytex Ltd. ...Respondent 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: Mr. Puneet Pali, Advocate, for the petitioner. Mr. Arun Jain, Sr. Advocate, with Mr. Chetan Salatia, Advocate, for the respondent. HEMANT GUPTA, J. (ORAL) The petitioner has sought appointment of an Arbitrator by invoking jurisdiction of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter called as 'the Act') in respect of dispute arising out of contract dated 2.5.2007 awarded to the petitioner for construction of factory building, raw material godown and store building at Lalru for the respondent-company. The parties entered into a written agreement on 2.5.2007 in respect of the aforesaid construction work. As per the petitioner, the final bill was submitted on 23.2.2008 claiming a sum of Rs.79,03,831/- after completion of the entire work. Subsequently, reminders were also served upon the respondents i.e. Annexures P-5, P-6 and P-7 dated 8.3.2008, Arbitration Case No.103 of 2008 2 11.4.2008 and 28.4.2008 respectively to demand the payment due. It was only on 7.5.2008, the respondent communicated vide Annexure P-8 that the petitioner has, in fact, received excess payment and the petitioner is not entitled to any payment as claimed in the final bill. Thereafter, on 19.5.2008, the petitioner invoked the Clause-17 of the agreement dated 2.5.2007 to refer the disputes to Arbitrator and communicated three names to enable the respondent to nominate one of them. The relevant Clause-17 reads as under : “17. Any dispute or difference arising out of contract at any stage i.e. Whether the contract work is in progress or completed or terminated shall in the first place be resolved through mutual discussion between the parties. However, should the matter not be resolved through mutual discussion within three months of the cause of action the same shall be referred for arbitration of a sole arbitrator under the provisions of Arbitration and Conciliation Act, 1996 with all its statutory amendments as on date of reference and the rules framed thereunder. The said sole arbitrator shall be selected by the party invoking arbitration from out of a panel of three names to be proposed by the other party, within the time-frame stipulated in the afore-stated Arbitrator and Conciliation Act, 1996.” On 30.5.2008, the respondent communicated to the petitioner that copy of the agreement is required to be supplied to them with a view to give suitable reply to letter dated 19.5.2008. Though, it was communicated by the petitioner that the agreement is supposed to be in the custody of the respondent, but still a copy of the agreement was supplied on 2.6.2008. On 14.6.2008, the respondents again communicated to the petitioner demanding copy of the arbitration Arbitration Case No.103 of 2008 3 agreement. The petitioner again replied on 18.6.2008 (Annexure P-13) that the copy of the agreement has been dispatched on 3.6.2008, which is acknowledged to be received by the respondent-company on 4.6.2008. But again another copy of the agreement was sent to the respondent. Mr. Jain, learned counsel for the respondent has argued that notice dated 19.5.2008 invoking arbitration clause was defective, as it is the petitioner, who has communicated panel of Arbitrators, whereas in terms of Clause 17 of the arbitration agreement, the panel of Arbitrators was to be nominated by the respondent. Thus, the notice dated 19.5.2008 is defective. Therefore, the respondent has a right to communicate a panel of Arbitrators from which it is open to the petitioner to choose anyone of them as an Arbitrator. I have heard learned counsel for the parties at some length, but do not find any merit in the argument raised by the learned counsel for the respondent. No doubt, in terms of Clause 17 of the arbitration agreement, the panel of Arbitrators was to be communicated by the other party then the one, who has raised dispute. It is admitted fact on record that the demand of the petitioner demanding a sum of Rs.79,03,831/- was rejected vide communicated dated 7.5.2008 Annexure P-8. Thereafter, the petitioner has invoked arbitration clause. Though the petitioner was a contractor engaged by the respondent, but still surprisingly the respondent denied even having a copy of the agreement with it. By as it may, the fact remains that the respondent has not communicated the panel of the Arbitrators to the petitioner within 30 days of raising of dispute. The panel of the Arbitrators communicated by the petitioner in its notice dated 19.5.208 can be said to be surplusage. Such panel of Arbitrators Arbitration Case No.103 of 2008 4 will not oust the jurisdiction of the respondents in communicating its own panel to the petitioner. The respondent has defaulted in communicating panel of Arbitrators to the petitioner. Thus, the respondent lost his right to communicate panel of Arbitrators now during the hearing of present petition. Such is the view taken by the Hon'ble Supreme Court in Datar Switchgear Ltd. Vs. Tata Finance Ltd. (2000) 8 SCC 151. In view of the above, the disputes between the parties are referred to sole Arbitrator. Hon'ble Mr. Justice N.K. Aggarwal, former Judge of this Court, is appointed as an Arbitrator to adjudicate upon the dispute(s) between the parties. The Arbitrator shall be free to fix his fee in consultation with the parties. Parties are directed to appear before the Arbitrator on 9.11.2009 for further proceedings. 07.10.2009 (HEMANT GUPTA) Vimal JUDGE