Allowed

M/S Sital and Sons through One of Its Partners Jag Mohan Singh v. Union of India through the Secretary Ministry of Defence

Jharkhand HC11 Mar 2024A.APPL/9/2023

Case brief

AI extract

What is this about?

Contractor sought appointment of arbitrator over disputes on sand procurement restrictions, delayed RA bills, cancellation of contract and unpaid final bill with a compensation demand. The court held the section 11(6)(c) application maintainable given the arbitration clause and waiver agreement, and appointed a practising advocate as sole arbitrator.

What did the court decide?

Arbitrator appointed (Ms. Aprajita Bhardwaj); disclosure under s.12(5), fee per Fourth Schedule, award within six months.

M/S Sital and Sons through One of Its Partners Jag Mohan Singh… — Arbitration | Jharkhand HC (2024)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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Arbitration Application No. 9 of 2023

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M/s Sital and Sons, through one of its partners Jag Mohan Singh, aged about 50 years, s/o Gurdev Singh, having office at 421(P), Shakti Puram, Shiv Katra, Harzindar Nagar, Kanpur, Uttar Pradesh-208007 ... … Petitioner

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Versus

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Union of India through the Secretary, Ministry of Defence, 101-A, South Block, PO+PS-South Avenue, New Delhi-110011

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The Chief Engineer, Military Engineering Services (M.E.S.), Jabalpur Zone, 1 Ridge Road, PO+PS-Jabalpur, District-Jabalpur, Madhya Pradesh 3. The Commander Works Engineer, Ranchi, Dipatoli, Cantt. PO-Bariatu, PSSadar, District-Ranchi-834009, Jharkhand.

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The Garrison Engineer (M.E.S), Ramgarh Cantt., PO+PS+DistrictRamgarh-829122, Jharkhand … ... Respondents

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CORAM: HON’BLE THE ACTING CHIEF JUSTICE

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For the Petitioner : Mr. Shresth Gautam, Advocate For the Respondents : Mr. Anil Kumar, ASGI Mr. Abhijeet Kumar Singh, Advocate -------

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Order No.11 / Dated: 11^th March 2024

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This arbitration application has been filed for appointment of an Arbitrator under section 11(6)(c) of the Arbitration and Conciliation Act, 1996 (in short, AC Act), for resolution of the dispute arising out of Agreement No. GE/RAM/03 of 2017-18.

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The petitioner-Firm has pleaded that in connection to the subject agreement certain disputes arose as regards mobilization at the work site and severe hindrances faced in procurement of raw materials at the work site on account of complete restriction by the Government of Jharkhand on the mining and transportation of “fine aggregate sand”. Another area of dispute was payments of RA Bills which according to the petitioner-Firm were not paid in time. Therefore, the petitioner-Firm vide letter dated 18^th October 2017 requested the respondents to close the contract under the aforesaid circumstances but it was served with show-cause notice vide letter dated 9^th December 2017 for delay in the contractual work. The petitioner-Firm filed its reply to the abovementioned show-cause vide letter dated 19^th December 2017. However, the respondent no.4 vide letter dated 29^th December 2017 communicated the decision to reject its reply having been found

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unsatisfactory. The petitioner-Firm has made reference of communications through various letters dated 15^th May 2018, 29^th May 2018, 21^st July 2018, 17^th August 2018 and 5^th September 2018 intimating the Garrison Engineer in this regard but the subject contract was cancelled through letter dated 23^rd October 2018. The petitioner-Firm further pleads that it made representation and raised Final Bill on 23^rd July 2019 but no payment thereon was made. On the contrary, the respondent issued letter dated 27^th January 2020 seeking compensation of Rs.4,63,867.30 from the petitioner-Firm under the “Risk and Cost Contract”.

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By the communication dated 15^th October 2020, the respondent denied the payment of Final Bill whereafter the petitioner-Firm invoked the arbitration clause for appointment of the Arbitrator through letter dated 21^st October 2020 which was followed by the letter dated 14^th December 2020. However, the Garrison Engineer declined to accede to the request for appointment of the Arbitrator on the ground that no dispute can be said to have arisen between the parties and a communication in this regard has been made to the petitioner-Firm through letter dated 29^th November 2022.

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Now there is no dispute that the petitioner-Firm signed the agreement for waiver of sub-section 5 of section 12 of the AC Act for the appointment of a serving officer of the Garrison Engineer as the Arbitrator. There is also no dispute that clause 70 of the Contract contains the arbitration clause for resolution of dispute by the sole Arbitrator. Therefore, the application under section 11(6) (c) of the AC Act is maintainable, in view of the raising of Final Bill by the petitioner-Firm, claim of compensation by the respondent and the communication dated 7^th June 2021 from the AEE (QS&C) Assistant Director (Contracts) to the Military Engineer Services.

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While so, Arbitration Application No.9 of 2023 is allowed and Ms. Aprajita Bhardwaj, a practicing lawyer of this Court, is appointed as the Arbitrator.

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Before entering upon the reference, the learned Arbitrator shall make disclosure if any in terms of sub-section (5) of section 12 of the AC Act. 7. The fee payable to the learned Arbitrator shall be as per Fourth Schedule of the AC Act.

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It is expected that the learned Arbitrator shall make the Award in the matter within six months or as early as possible.

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(Shree Chandrashekhar, A.C.J.)

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Amit

M/S Sital and Sons through One of Its Partners Jag Mohan Singh v. Union of India through the Secretary Ministry of Defence

Case brief

What is this about?

What did the court decide?

M/S Sital and Sons through One of Its Partners Jag Mohan Singh v. Union of India through the Secretary Ministry of Defence

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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