AI Structured Summary
Not yet generated for this judgment
Judgment
S.K. Gangele, J.—Applicant has filed this application under Section 11(4)(b) and 11(6)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter called "the Act 1966").
The applicant was awarded a contract for supply online GPS based vehicle tracking units for 48 Buses and Passenger Information System at designated 100 bus stops. An agreement was entered between the applicant company and non-applicant to complete the contract named as BUILD-OWN, OPERATE AND TRANSFER AGREEMENT (hereinafter called as "BOOT" Agreement). As per the applicant an amount of Rs. 37,50,676/- towards deemed operation and Rs. 3,57,102/- towards PIS display units was due against the non-applicant. The aforesaid outstanding was not paid to the applicant. Thereafter the applicant submitted a notice for appointment of an Arbitrator in accordance with the clause 13.1 of the agreement.
The applicant appointed Justice Subhash Samvatsar retired High Court Judge as an Arbitrator from its side. When no arbitrator was appointed on behalf of the non-applicant, the applicant filed an application before this Court for appointment of Arbitrator which was registered as Arbitration Case No. 26/2012. During the pendency of the application Mr. O.P. Gupta was appointed as Arbitrator by the non-applicant, hence, the application filed by the applicant was dismissed as infructuous.
Mr. O.P. Gupta, refused to work as an Arbitrator, hence, Mr. Kamal Nagar was appointed as an Arbitrator. He was transferred and thereafter no substitute Arbitrator was appointed by the non-applicant. Hence, the applicant again filed an application for appointment of Arbitrator by the non-applicant before this court which was registered as Arbitration Case No. 42/2013. During the pendency of the application Mr. Vishesh Garhpale, was appointed as Arbitrator by the non-applicant. The application filed by the applicant was dismissed by this Court as infructuous in view of the appointment of an Arbitrator. As per the applicant Mr. Vishesh Garhpale did not commence functioning as an Arbitrator inspite of several opportunity thereafter, the applicant submitted an application dated 07/06/2014 to the non-applicant for appointment of third Arbitrator, that has not been done.
During the pendency of the application learned counsel for the non-applicant has submitted that after transfer of Mr. Vishesh Garhpale, Mr. Tejaswi S. Naik, Commissioner Municipal Corporation, Bhopal has been appointed Arbitrator vide order dated 22/01/2015 on behalf of the non-applicant, hence, this application has become infructuous.
From the facts of the case, it is clear that the applicant made an application on 07/06/2014 for appointment of Arbitrator and thereafter Mr. Tejaswi S. Naik, was appointed as Arbitrator.
Clause 13 of the agreement prescribes arbitration which reads as under:-
"13.1 All disputes arising in connection with this Agreement shall, to the extent possible, be settled amicably by prompt good faith negotiations between the representatives of the Parties. In default of such amicable settlement within sixty (60) days of the commencement of discussions, the dispute shall be finally settled under the provisions of the Indian Arbitration and Conciliation Act, 1996 by three arbitrators, one arbitrator to be appointed by each Party and the third arbitrator shall be appointed by the two arbitrators appointed by the Parties. The decision of the arbitrators shall be final and binding upon the Parties without any right of appeal or review on any grounds whether in law or equity before any judicial or government body. Any such arbitration proceeding shall be held at Bhopal."
In accordance with the aforesaid clause, it is obligatory on the part of the parties to appoint Arbitrator within 60 days from the date of commencement of discussion, the non-applicant failed to appoint Arbitrator within the stipulated period. The Supreme Court in the case of Deep Trading Company Vs. Indian Oil Corporation and Others, has held as under in regard to power of the Court to appoint Arbitrator if the parties fails to appoint Arbitrator in accordance with terms and conditions of the agreement within the stipulated period as mentioned in the agreement:-
"19. If we apply the legal position exposited by this Court in Datar Switchgears to the admitted facts, it will be seen that the Corporation has forfeited its right to appoint the arbitrator. It is so for the reason that on 9.8.2004, the dealer called upon the Corporation to appoint the arbitrator in accordance with the terms of Clause 29 of the agreement but that was not done till the dealer had made application under Section 11(6) to the Chief Justice of the Allahabad High Court for appointment of the arbitrator. The appointment was made by the Corporation only during the pendency of the proceedings under Section 11(6) . Such appointment by the Corporation after forfeiture of its right is of no consequence and has not disentitled the dealer to seek appointment of the arbitrator by the Chief Justice under Section 11(6) . We answer the above questions accordingly.
In the present case, the non-applicant failed to appoint Arbitrator of its choice within the stipulated period. Earlier Arbitrators were appointed by the non-applicant could not function because they were transferred.
In this view of the matter, this Court appoints Miss Sheela Khanna, retired High Court Judge of this Court Arbitrator on behalf of the non-applicant, and Justice Subhash Samvatsar, appointed by the applicant as its Arbitrator shall continue to work as Arbitrator. Justice Sheela Khanna shall receive the remuneration in accordance with the provision of the Act of 1996.
A copy of this order be sent to Justice Sheela Khana.
The application is allowed. No order as to costs.