AI Structured Summary
Not yet generated for this judgment
Judgment
This application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 has been filed by the applicant, National Associates having its registered office at Bokel Tiniali, Dibrugrah, Assam through its Proprietor, Md. Rajib Ahmed, against the respondent North Eastern Indira Gandhi Regional Institute of Health and Medical Sciences (in short NEIGRIHMS), Shillong & 2 others, praying for appointment of Sole Arbitrator to adjudicate and decide all the disputes between the petitioner and the respondents arising out of and relating to the contract work for the
'... contract Agreement - Tender No. HSCC/BU - HP - 2/111/2005 for supply, installation, Testing and commissioning of Specialised mechanical services/equipment and associated works for 500 bedded super speciality hospital at NEIGRIHMS, Shillong - Package - VII (Hospital Waste Management system), dated 31.05.2006.'
According to the applicant, the respondents vide notice dated 05.04.2005 invited tenders from eligible bidders for supply, installation, testing and commissioning of Specialised mechanical services/equipments and associated works for 500 bedded super speciality hospital at NEIGRIHMS, Shillong - Package - VII (Hospital Waste Management system). The bid of the applicant was accepted by the respondents for an estimated price of Rs. 68,99,000/- (Rupees Sixty-Eight Lakhs Ninety-Nine Thousand) only vide notification of Award dated 31.03.2006 issued by the respondent No.2, Chief General Manager (PG-III), Project, HSCC (I) Ltd. E - 6 (A) Sector 1, Noida, (Uttar Pradesh). The petitioner submitted its performance security of Rs 68,99,000/- (Rupees Sixty-Eight Lakhs Ninety-Nine Thousand) only on 16.05.2006. The petitioner vide letter dated 25.05.2006 was requested to commence the work under the said tender and was also informed that the completion period for the said work shall be six months from the date of issue of the order of commencement i.e, 25.05.2006.
An agreement was entered into between the petitioner and respondent No. 1 on 31.05.2006. The petitioner vide letter dated 20.09.2006 submitted to respondent No. 1 copies of P&I Diagram and Layout Drawing and Datasheet for approval. The petitioner thereafter vide letter dated 15.11.2006 invited the respondents for giving an inspection call to the items for which he was to supply in terms of the said contract. The respondents vide letter dated 17.11.2006 informed the petitioner that inspection for the medical waste shredder, needle destroyer, waste collection container and waste collection bags have been waived off and the petitioner was requested to dispatch the items at NEIGRIHMS, Shillong at the earliest. Pursuant to the said letter, the petitioner delivered the items under the said contract.
It is further stated by the petitioner that at the time of delivery of the items/equipments, the respondents did not have any shed to store said items and therefore, they refused to accept the same. Under compulsion, the petitioner had to carry them back to his office at Guwahati at his own cost. However, only chimney was received at the site and was kept in the open. The petitioner apprised these facts to the respondents by stating that due to unavailability of proper space to install the incinerator, the work was getting delayed and the price of the materials were escalating.
The Director of NEIGRIHMS, Shillong vide letter dated 15.02.2010 almost four years after signing of the agreement between the parties, allotted a temporary place to the petitioner for installation of the incinerator. However, even this place was incomplete and was not having doors and windows which made the machineries vulnerable to theft and natural elements. The petitioner apprised the respondents of this situation vide letter dated 03.12.2010. Finally, the petitioner completed the twin chamber
2 Nos. incinerator and vide letter dated 13.06.2012 informed the respondent No. 2 about the same. The petitioner by letter dated 17.07.2012 informed the respondent No.2 about the clearance from the State Pollution Control Board. The respondents finally took over the work of the petitioner by way of handing over/taking over on 19.06.2013.
The temporary accommodation given to the petitioner for carrying out the works of the contract was vacated and handed over to the respondents on 05.09.2013. Since then, the petitioner has sent several communications to the respondents for releasing the payment for the works done by him under the contract but the respondents failed to release the entire dues to the petitioner. Finally, when the respondents failed to make payment of the outstanding dues of the petitioner, he, vide letter dated 26.12.2017, invoked the arbitration clause of the contract and requested appointment of Arbitrator as per clause 67.3 of the contract. The respondent No.2 by letter dated 30.01.2018, instead of appointing an Arbitrator to resolve the dispute stated that the petitioner has not performed the obligations under the contract.
Mrs. P.D.Bujarbaruah, learned Sr. counsel for the petitioner submitted that the petitioner after completion of the twin chamber 2 Nos Incinerator started operating them as per the instruction of the respondents. Though the system required atleast 3(three) persons to smoothly operate it, but the respondents allowed only 1(one) person for the same. The petitioner had to carry out the operation of the system with much difficulties and he communicated to the respondents about the same by various letters.
As per the contract between the parties, the respondents were required to make payment of 80% of the contract rates to the petitioner upon delivery of equipments at site and after inspection and passing 15% of the contract rates on satisfactory erection and installation of the equipments. Till date, the respondents have released only 75% as advance payment to the petitioner. The petitioner wrote a detailed letter to respondent No. 1 on 01.04.2014 demanding payment of the outstanding dues followed by another letter dated 04.04.2014 and 02.06.2014. Petitioner operated the system on its own cost from the date of handing over on 19.06.2013, but the respondents by their letter dated 09.07.2015 raised unfounded issues to unduly saddle the petitioner with responsibilities of delay and execution of the work. By letter dated 10.09.2015, the petitioner was required to repair the incinerator within 15 days failing which necessary action would be taken against them.
It is contended that Clause 67.1 of the Agreement dated 31.05.2006 executed between the parties provides that if a dispute of any kind, whatsoever arises between the parties or arising out of the contract or execution of the works, whether during the execution of the works or after its completion, the matter in dispute shall be in the first place referred in writing to the engineer with a copy to the other party. Petitioner sent letter dated 08.06.2017 as per Clause 67.1 of the contract to respondent No. 2 by registered post for decision of the Engineer. However, no response was received to the aforesaid letter even after expiry of eighty-four days from receipt thereof. As such, the petitioner sent another letter dated 08.09.2017 in accordance with Clause 67.2 of the contract by registered post. No response whatsoever was received even to this letter dated 08.09.2017. Petitioner thereafter wrote letter dated 26.12.2017 to the Director NEIGRIHMS invoking arbitration clause and requesting for appointment of Arbitrator and refer the matter to arbitration as per Clause 67.03. On receiving the aforesaid letter, respondent No. 2 instead of appointing an Arbitrator, sent a letter dated 30.01.2018 to the petitioner alleging that he has not performed the work under the contract.
That the Clause 67.3.1 reads as under:
"67.3.1 Any dispute and differences arising out of this contract or concerning the works involved in this contract, either during the progress of the work or after the completion or abandonment thereof, in respect of which
a) the decision, if any, of the Engineer has not become final and binding pursuant to Sub Clause 67.1 and
b) Conciliation has not been reached as per the provisions of Clause 67.2 shall be referred to arbitration by a sole arbitrator to be appointed by the Director, NEIGRIHMS, within 30 days of the receipt of the letter of invocation of arbitration. Such arbitration shall be held at Shillong."
Even though the learned counsel for the respondents opposed the application but was not in a position to dispute that the contract agreement between the parties contains the arbitration clause and on certain disputes arising between the parties in the execution of the work under the aforesaid contract, and that the petitioner invoked the arbitration clause but the respondents have failed to appoint the arbitrator despite lapse of 30 (thirty) days from the date of receipt of the notice dated 26.12.2017 invoking the arbitration clause.
In view of the above, it is just and proper that an independent arbitrator is appointed to adjudicate and decide the dispute between the parties including their claims, counter claims and objections. There was consensus between learned counsel for the parties for appointment of Hon'ble Justice (Retd) B.P.Katakey, Retd. Judge Hon'ble Gauhati High Court to be an arbitrator. Accordingly, Hon'ble Justice (Retd) B.P.Katakey, Retd. Judge Hon'ble Gauhati High Court is appointed as arbitrator in this case to adjudicate upon and decide all the disputes between the parties including their claims, counter claims and objections relating to the contract in question.
All other aspects relating to the cost of proceedings and fees are left to be determined by the arbitrator while keeping in view the law applicable and compliance of the provisions, contained in Fourth Schedule to the Arbitration and Conciliation Act, 1996 (as amended up to date).
Arbitration petition stands disposed of accordingly.