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Smt. Shila Banerjee Vs. State of West Bengal - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberMatter No. 1656 of 1980
Judge
Reported inAIR1982Cal9
ActsArbitration Act, 1940 - Section 8(1)
AppellantSmt. Shila Banerjee
RespondentState of West Bengal
Cases Referred and Niranjan Swain v. State of Orissa
Excerpt:
- .....the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the chief engineer of the department. should the chief engineer be for any reason unwilling unable to act as such arbitrator, such question and dispute shall be referred to an arbitrator to be appointed by the chief engineer. the award of the arbitrator shall be final, conclusive and binding on all parties to this contract.''2. according to the petitioner some payments were made in respect of the works done under the said two contracts. but she bas still a claim for a sum of rs. 5,39,845/- on account of the first contract and a sum of rupees l,37,500/- on account of the second contract then her total claim is rupees 6,77,345/-.3. the petitioner's case is that in spite of.....
Judgment:
ORDER

R.N. Pyne, J.

1. By a writing and/or work order dated 9-4-1976/15-4-1976 being Tender No. 34/S/M of 1976-77, the petitioner and the respondent entered into a contract for construction of a road bridge over the 'Madaria Khal' at chain 1237.00 at an estimated cost and/or value of Rs. 2,69,115/-. By another writing and/or work order dated August 9, 1976 being reference No. 1182 and Tender No. 9 (M) of 76-77 the parties entered 79 E/Minto another contract for the work of putting, maintaining, removing the cross bundh, construction of diversion channel and refilling the same after construction and construction of the approach road at the site of minor road bridge at chain 1237.00 On 'Madaria Khal' an estimated cost and/or value of Rs. 23,300/-. It is stated that the said two contracts consist of the following documents :--

(i) West Bengal Form No. 2911 (ii)---- In the case of First Contract -- and 2911 (i), in the case of Second Contract,

(ii) Schedule of rates attached to the respective contracts;

(iii) Specification attached to the respective contracts;

(iv) Additional terms and conditions] and

(v) Drawings.

The said contracts, inter alia, contain an arbitration clause as follows :--

'Except as otherwise provided in the contract all questions and disputes, relating to the meaning of the specification, design, drawing and instruction hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arisen out of or relating to the contract, design, drawing, specification, estimates, instruction, orders or those conditions or otherwise consigning the works of the execution, or failure to execute the same, whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Chief Engineer of the Department. Should the Chief Engineer be for any reason unwilling unable to act as such arbitrator, such question and dispute shall be referred to an arbitrator to be appointed by the Chief Engineer. The Award of the arbitrator shall be final, conclusive and binding on all parties to this contract.''

2. According to the petitioner some payments were made in respect of the works done under the said two contracts. But she bas still a claim for a sum of Rs. 5,39,845/- on account of the first contract and a sum of Rupees l,37,500/- on account of the second contract then her total claim is Rupees 6,77,345/-.

3. The petitioner's case is that in spite of demands the respondent No .1 failed and neglected to pay the said sum of Rs. 6,77,345/- or any portion thereof to the petitioner. Therefore according to the petitioner disputes and differences and/or questions of claims and/or right had arisen out of or relating to or within the ambit of the said arbitration clause by and between the parties herein.

4. As the petitioner's aforesaid claim was not paid by a letter No. B/J/491/78 dated December 12, 1978 the petitioner duly applied in terms of the aforesaidarbitration clause to the Chief Engineer of the respondent No. 1 for appointment of an arbitrator to decide and settle the disputes that had arisen between the parties in terms of the said arbitration clause. In spite of such requests the respondent No. 2 failed and/ or neglected to act as an arbitrator or to appoint a sole arbitrator in terms of the said arbitration clause Ultimately bv a letter and/or an order dated Dec. 21. 1979 Mr. S. P. Sen. Chief Engineer-1, West Bengal Irrigation and Waterways Directorate of the respondent No. 2 (hereinafter referred to as 'the Chief Engineer') appointed, by virtue of the said arbitration clause one Mr. P. K. De, retired Chief Engineer of the Irrigation and Waterways Directorate. Government of West Bengal as the sole arbitrator to, settle the aforesaid disputes. By a letter dated January 15, 1980 the appointed arbitrator Shri P. K. De agreed to act as a sole arbitrator in the aforesaid disputes, inter alia, on the terms and conditions that the fees of the arbitrator should be Rs. 200/- for each day of hearing and the same would be shared equally by the two parties. Thereafter, the petitioner received a letter dated June 6, 1980 from the said sole arbitrator wherein he had declined and/or refused and/or evinced his incapability to act as such arbitrator due to his pre-occupation. The petitioner has stated that at all material times she was and still is interested in and/or desirous of settling the aforesaid disputes through the machinery of arbitration the chosen forum of the party and indeed has made ail efforts to have the said disputes settled through the machinery of arbitration and to recover her legitimate dues According to the petitioner all such efforts have been frustrated. In the above circumstances by a letter dated June 21, 1980 the petitioner appointed one Mr. Arabindo Ghosh Barrister-at-Law to act as the sole arbitrator to decide the aforesaid disputes and duly called upon the respondent to concur in the said appointment within a period of 15 days from the date of the receipt of the said letter. In spite of the receipt of said letter, the respondents neither had concurred in the said appointment nor had objected to the same, nor filled up the vacancy. The petitioner's case is that the Chief Engineer having appointed the said Mr. P. K. Dey in terms of theaforesaid arbitration clauses and as the said P. K. Dey having declined and/or refused and/or became incapable of acting in terms thereof the power conferred on the said Chief Engineer in terms of the said arbitration clause had exhausted and indeed he had or has no further power and/or authority and/or jurisdiction to make any further appointment. Therefore on or about 14th August, 1980 the petitioner has made the instant application praying that Mr. Arabindo Ghose, Barrister-at-Law would be appointed as. the sole arbitrator to fill up the vacancy caused by the resignation of P. K. Dey or alternatively the Court should appoint any person as an arbitrator as it would deem fit and proper.

5. An affidavit affirmed by one Bhas-kar Sen, Assistant Engineer of Hooghly Irrigation Division. Irrigation and Waterways Department, Government of West Bengal on the 12th September 1980 has been filed on behalf of the respondent in opposition to the instant application. In paragraph 12 of the said affidavit it is stated that inasmuch as the appointed arbitrator Shri P. K. Dey had declined to act as such arbitrator before entering upon the reference the power of the respondents to appoint another arbitrator has not been exhausted and therefore the respondents should be given opportunity to appoint another arbitrator in the place and stead of the said P. K. Dey.

6. In the instant case the arbitration clause confers two powers and/or authorities upon the Chief Engineer, that is. (i) to act as the sole arbitrator or (ii) to act as a person designated under the agreement to appoint an arbitrator for the parties if he himself is unwilling or unable to act as arbitrator. The Chief Engineer when approached by the parties did not act as the sole arbitrator but as persona designate appointed an arbitrator to whom the disputes and differences were referred. The appointed arbitrator accepted the said appointment. But thereafter by his letter dated 6th June, 1980 declined and/ or refused and/or expressed his inability to act as such arbitrator as stated hereinbefore. Therefore, the power or authority conferred upon the Chief Engineer to appoint an arbitrator having been once exercised cannot be exercised again. The arbitration agreement how-ever does not provide for a situation when the arbitrator appointed by the persona designate under the agreement has declined and/or refused and/or expressed his unwillingness to act as an arbitrator. The arbitration clause in my view does not show any such intention of 'he parties. There is no evidence to show that the parties intended that, in such a case, the power of the appointing authority to appoint a new arbitrator would revive. That being the position it is only the Court who can appoint an arbitrator in the instant case if otherwise all the conditions as laid down in Section 8(1)(b) of the Arbitration Act are satisfied. In the instant case the arbitration agreement does not show the intention of the parties that the vacancy should not be filled up. Therefore, in this case it is necessary that the vacancy should be filled up by the Court by appointing an arbitrator under the said section. In this connection reference may be made to the cases of Union of India v. Raghunath Singh and Co.. : [1980]1SCR128 ; Pra-bhat General Agencies v. Union of India. : [1971]2SCR564 : East India Construction Private Limited v. Union of India : AIR1970Cal243 : V. G. Ghawda Pvt. Ltd v. Union of India, : AIR1978Cal271 : Excalcer v. State of West Bengal. : AIR1980Cal86 and Niranjan Swain v. State of Orissa, : AIR1980Ori142 .

7. On the question of the personnel of the arbitrator it has been submitted on behalf of the respondents that as, in the instant case, the disputes involve consideration of technical matters a Departmental Engineer of the respondent No. 1 should be appointed as arbitrator. On the contrary, it has been submitted on behalf of the petitioner that hi view of the facts and circumstances of this case a person not connected with the parties should be appointed as arbitrator. Further, in respect of technical matters evidence can be given before the arbitrator.

8. Considering the facts and circumstances of this case, in my view, in the instant case a person not connected with the parties should be appointed as arbitrator. I, therefore, appoint Mr. A. M. Pal, Barrister-at-Law as the sole arbitrator and all disputes and difference between the parties under the two contracts mentioned in the petition are referred to him. The arbitratorwill be entitled to a remuneration of 30 G. Ms. for each effective sitting of not less than two hours and such remuneration will be paid by the parties in equal shares. The arbitrator will make his award within six months from the date of his entering upon the reference. The respondents will pay the cost of this application to the petitioner.

9. All parties and the arbitrator are to act on a signed copy of the minutes of this order upon usual undertaking.


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