Allowed

M/S Vimal Enterprises v. Deputy General Manager Power Distribution and 2 Others

Allahabad HC17 Mar 2023ARCO/26/2022

Case brief

AI extract

What is this about?

Applicant sought appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996, after a previous award was set aside by a District Judge without remand. The court allowed the application, found no laches, and appointed a retired judge.

What did the court decide?

Appointment of Hon'ble Mr. Justice Rajiv Joshi, Retired Judge, as the sole arbitrator to resolve the dispute.

M/S Vimal Enterprises Vs Deputy General Manager… — Service and Employment | Allahabad HC (2023)

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Neutral Citation No. - 2023:AHC:125389

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Court No. - 65

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Case :- ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 26 of 2022

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Applicant :- M/S Vimal Enterprises Opposite Party :- Deputy General Manager Power Distribution And 2 Others Counsel for Applicant :- Rajeev Ratan Shukla Counsel for Opposite Party :- Narendra Kumar Tiwari

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Hon'ble Rajeev Misra,J.

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Heard Mr. Rajeev Ratan Shukla, the learned counsel for applicant and Mr. Narendra Kumar Tiwari, the learned counsel representing opposite parties.

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Perused the record.

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This is an application under Section 11(5) of the Arbitration and Conciliation Act 1996 seeking appointment of an Arbitrator in respect of the dispute pending between the parties.

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Present application came up for admission on 29.08.2022 and this Court invited counter affidavit from opposite parties. Pursuant to above order dated 29.8.2022, opposite parties have filed their counter affidavit to which applicant has filed his rejoinder affidavit.

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As pleadings have been exchanged between the parties, the learned counsel for parties jointly submit that the present application may be heard and disposed of finally at the admission stage.

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Accordingly, with the consent of the counsel for the parties and as provided in the rules of the Court, the present application is being heard and disposed of finally at the admission stage itself.

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Record shows that an agreement dated 26.4.2021 was entered into by applicant and opposite party 2, Executive Engineer, Power Distribution, Division-II SA Mission Road, Allahabad. Clause 13 of the special conditions of the contract contains an arbitration clause.

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Upon completion of work under the agreement dated 26.4.2021 applicant raised his bill but the same were not paid. Resultantly, a dispute arose between the parties. Applicant accordingly approached the requisite authority, i.e., opposite party 2 for appointment of an arbitrator. However, opposite party 2 appointed the Superintending Engineer, Electricity Distribution, Circle II Allahabad as the sole arbitrator in terms of clause 13 of the special conditions of contract. However, no

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information was given to the applicant about the aforesaid. Moreover, no notice or opportunity of hearing was given by the arbitrator so appointed to the applicant regarding the arbitral proceedings which commenced subsequent to above. As a result, an ex parte award dated 15.10.2004 came to be passed by the sole arbitrator against applicant.

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Feeling aggrieved by the award dated 15.10.2004, applicant filed his objections under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge, Allahabad. The same came to be registered as Arbitration Case No.40 of 200 (Vimal Enterprises v. Deputy General Manager, Power Distribution, Zone-II, UP Power Corporation Allahabad.

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Aforesaid arbitration case came to be allowed by the District Judge Allahabad vide judgment dated 13.3.2019. However, perusal of the judgment dated 13.3.2019 passed by the District Judge Allahabad will go to show that though the objections filed by applicant were allowed, but the matter was not remanded before the Arbitrator for adjudication as fresh. The effect of the same is that on date the dispute of the applicant remains undecided till date.

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In view of above, applicant gave a notice dated 15.10.2019 to opposite party 2 for appointment of an Arbitrator in terms of clause 13 of the special conditions of contract as noted hereinabove. However, in spite of the expiry of the statutory period of 30 days from the date of notice, no consequential action was taken by opposite party 2.

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Feeling aggrieved by above, applicant has now approached this Court, by means of present application under Section 11 (5) of the Arbitration and Conciliation Act, 1996.

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Learned counsel for applicant contends that there is no dispute between the parties that there exists a valid agreement dated 26.4.2001 between parties. Clause 13 of the special conditions of the contract contains an arbitration clause. The claim of applicant was referred to the sole arbitrator as per the conditions of the contract but his claim was negated by the sole Arbitrator vide award dated 15.10.2004. The said award was challenged by the applicant by filing an objection under section 34 of the Arbitration and Conciliation Act 1996. The same came to be allowed vide judgment and order dated 13.3.2019 passed by District Judge Allahabad. Unfortunately, the District Judge Allahabad did not remand the matter before the Arbitrator for decision as fresh. As a result, grievance of the applicant remains undecided till date.

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On the above conspectus, the learned counsel for applicant contends that the award given by the arbitrator having been set aside and coupled with the fact that matter could not have been

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remanded to the arbitrator for decision afresh as the mandate of the arbitrator came to an end upon delivery of award the grievance of the applicant can be considered by a fresh arbitrator. The notice for appointment of a fresh arbitrator has already been given but no arbitrator has been appointed by opposite party 2. Consequently the present application is liable to be allowed.

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Per contra, Mr. Rakesh Kumar Tripathi, Advocate holding brief of Mr. Narendra Kumar Tiwari, the learned counsel representing opposite parties has opposed the present application. He submits that the present application is barred by laches. Moreover, the claim of the applicant is also barred by laches.

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In rejoinder, the learned counsel for applicant submits that dispute raised by applicant was adjudicated upon by the sole arbitrator in terms of clause 13 of the special conditions of contract vide award dated 15.10.2004. Objections to the same were filed by applicant under Section 34 of the Arbitration and Conciliation Act, 1996 which came to be decided by judgment and order dated 13.3.2019. Immediately thereafter, the applicant has filed the application dated 15.10.2019 for the appointment of an arbitrator as the claim of applicant has remained undecided till date.

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On the above premise, it is thus urged by the learned counsel for applicant that by no stretch of imagination, it can be said that the claim of applicant is barred by limitation or the application suffers from the voice of laches.

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Having heard the learned counsel for applicant, the learned AGA for State, Mr. Narendra Kumar Tiwari, the learned counsel for opposite party and upon perusal of record, this court finds that there exists a valid agreement in between the parties. Clause 13 of the special conditions of contract provides for the appointment of sole arbitrator by the Executive Engineer opposite party 2, Executive Engineer, Power Distribution, Division-II SA Mission Road, Allahabad. The statutory notice for appointment of arbitrator was duly given by the applicant on 15.10.2019. However, no resultant action has been taken by opposite party 2 even after expiry of the statutory period of 30 days from the date of notice.Consequently, by reason of above and the provisions contained in Section 11 of the Arbitration and Conciliation Act, 1996, the present application filed by applicant for appointment of an arbitrator is liable to be allowed.

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It is accordingly, allowed .

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Let Hon'ble Mr. Justice Rajiv Joshi, Retired Judge of this Court, Resident of 202, Vinayak Enclave, Ashok Nagar,

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Allahabad; Mobile No. 9415218815, be appointed as an Arbitrator to resolve the dispute between the parties subject to his consent in terms of Section 11(8) of the Arbitration and Conciliation Act, 1996.

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Registry is directed to obtain consent of proposed arbitrator in terms of Section 11(8) of the Act within three weeks.

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List thereafter. Order Date :- 17.3.2023 Vinay

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Digitally signed by :- VINAY KUMAR High Court of Judicature at Allahabad

M/S Vimal Enterprises v. Deputy General Manager Power Distribution and 2 Others

Case brief

What is this about?

What did the court decide?

M/S Vimal Enterprises v. Deputy General Manager Power Distribution and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

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