Case: Om Construction Co Vs. Ahmedabad Municipal Corp. &amp; Another

arrived at a consensus regarding the passing of such an order. 9. Mr. Gambhir submitted that the Ahmedabad Municipal Corporation had themselves agreed to the appointment of an Arbitrator under the 1996 Act and could not, therefore, resile from such position in the instant case. 10. The stand taken by Mr. Gambhir was opposed by Mr. Shyam Divan, learned Senior Advocate, who supported the view taken by the High Court and submitted that the appellants remedy lay in the filing of a suit. In the alternative, it was also submitted that the decision in the matter could be deferred and a notice could be issued to the State of Gujarat to indicate as to whether it had any intention of publishing a Notification as contemplated in Section 2(k) of the Gujarat Tribunal Act. 11. Mr. Divan further submitted that in the absence of such Notification, clause 30 of Form B-I would remain inoperative and consequently the provisions relating to the settlement of disputes by arbitration would also not be available to the parties. 12. Mr. Divan urged that other than Clause 30 of Form B-I, there was no other provision for arbitration in the contract between the parties and the question of invoking jurisdiction under the 1996 Act was, therefore, misconceived. Mr. Divan urged that as the basic requirement of Sub-section (6) of Section 11 regarding an agreed procedure had not been fulfilled, neither the Chief Justice nor the Designated Court could assume jurisdiction thereunder for appointing an Arbitrator. 13. We have carefully considered the submissions made on behalf of the respective parties and it appears that we are called upon to decide two questions in order to decide this appeal. The first and possibly basic question is whether in the absence of a Notification in the Official Gazette, the Municipal Corporation can at all be considered as a Public Authority for the purpose of Section 2(1)(k) of the Gujarat Tribunal Act, 1992. The other question is whether the absence of a procedure for appointment of an Arbitrator in the Arbitration Agreement itself, would constitute a bar for the appointment of an Arbitrator under Section 11(6) or any other provision of the 1996 Act, when not only the parties to these proceedings, but the High Court as well, had arrived at a conclusion that the provisions of the Gujarat Tribunal Act, 1992, would not be applicable in the instant case. 14. In this regard, we are inclined to accept the submissions of Mr. Gambhir notwithstanding the fact that the Ahmedabad Municipal Corporation had not been notified to be a Public Undertaking as defined in Section 2(1)(iii) of the Gujarat Tribunal Act, 1992. There is no dispute that the Ahmedabad Municipal Corporation is a local authority and it could assume the garb of a Public Undertaking only pursuant to a Notification published in that regard in the Official Gazette. On the other hand, even if Form B-I loses its relevance as far as the present contract is concerned, since the parties have agreed to resolution of their disputes by arbitration, the provisions of Sub-section (5) of the 1996 Act can be pressed into service to enable the parties to invoke the powers of the Chief Justice to appoint an Arbitrator. The stand taken by Mr. Divan is highly technical and is not in aid of resolution of the disputes between the parties by an Arbitral Tribunal. While recognizing the right of the appellant to approach the Chief Justice or the Designated Court under Section 11(6) of the 1996 Act, the stand of the respondent Corporation has been that the party should be relegated to suit, which is quite contrary to the stand taken by it in the case of other employees. 15. Section 11 of the 1996 Act deals exclusively with the appointment of Arbitrators. Sub-section (2) provides that the parties are free to agree on a procedure for appointing the Arbitrator or Arbitrators but subject to Sub-section (6) which provides that if an agreed procedure had not been acted upon, the parties could approach the Chief Justice or his Designate for appointment of an Arbitrator. Sub-sections (3), (4) and (5) contemplate different situations in which the Chief Justice or his Designate could be requested to appoint an Arbitrator. In our view, in the facts of this case, the answer to the question thrown up in this appeal lies in Sub-clause (5) of Section 11 of the 1996 Act, which reads as follows: - (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him. 16. Having arrived at the aforesaid conclusion, the only question that remains to be decided is whether this matter should be remitted to the High Court for appointment of an Arbitrator or whether we should ourselves appoint an Arbitrator in terms of the Arbitration Agreement. Remitting the matter to the High Court would only mean another round of litigation, whereas if the appointment is made by us, the matter will achieve finality, which would ultimately be beneficial for all concerned. 17. We, accordingly, allow the appeal and appoint Honble Mr. Justice C.K. Thakker, a former Judge of the Supreme Court, presently settled at D-64, Akash Towers, Judges Bungalow Road, Vastrapur, Ahmedabad to be the Arbitrator for settlement of the disputes which have arisen between the parties. The learned Arbitrator shall fix his own fees and shall also formulate the procedure to be adopted by him during the arbitration proceedings. The Arbitrator shall try and publish his Award as expeditiously as possible, but positively within six months from the date of entering upon the Reference. The Arbitrator will also decide the venue and sittings of the Arbitral Tribunal in consultation with the parties.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Having arrived at the aforesaid conclusion, the only question that remains to be decided is whether this matter should be remitted to the High Court for appointment of an Arbitrator or whether we should ourselves appoint an Arbitrator in terms of the Arbitration Agreement. Remitting the matter to the High Court would only mean another round of litigation, whereas if the appointment is made by us, the matter will achieve finality, which would ultimately be beneficial for all concernedWe, accordingly, allow the appeal and appoint Honble Mr. Justice C.K. Thakker, a former Judge of the Supreme Court, presently settled at D-64, Akash Towers, Judges Bungalow Road, Vastrapur, Ahmedabad to be the Arbitrator for settlement of the disputes which have arisen between the parties. The learned Arbitrator shall fix his own fees and shall also formulate the procedure to be adopted by him during the arbitration proceedings. The Arbitrator shall try and publish his Award as expeditiously as possible, but positively within six months from the date of entering upon the Reference. The Arbitrator will also decide the venue and sittings of the Arbitral Tribunal in consultation with the parties