Allowed

M/S Jay Bhawani Construction Company v. J D a through Commissioner

Rajasthan HC5 Dec 2014ARBAP/98/2013

Case brief

AI extract

What is this about?

The High Court of Rajasthan bench at Jaipur, allowed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator where the respondent failed to refer the dispute to the Empowered Standing Committee as per the arbitration clause, holding that minor non-compliance with procedural nuances like the name on the cheque preferred over the letter did

What did the court decide?

Applicant's application is allowed and S.K. Kesote (Retd.) is appointed as the arbitrator.

M/S Jay Bhawani Construction Company Vs J D a through… — Arbitration | Rajasthan HC (2014)

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 1

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I N THE HI GH COURT OF JUDI CATURE FOR RAJASTHAN BENCH AT JAI PUR

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13.

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M/ S. JAY BHAWANI CONSTRUCTI ON COMPANY – APPLI CANT. VS JAI PUR DEVELOPMENT AUTHORI TY & ANR. – NONAPPLI CANTS.

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DATE OF ORDER : 5TH DECEMBER, 2014.

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PRESENT

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HON' BLE MS. JUSTI CE BELA M. TRI VEDI

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Mr . Devi dut t Shar ma f or t he appl i cant . Mr . R. A Kat t a f or t he non- appl i cant s.

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ORDER

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BY THE COURT :

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The i nst ant appl i cat i on has been f i l ed by t he appl i cant seeki ng appoi nt ment of ar bi t r at or / ar bi t r al t r i bunal under Sect i on 11 of t he Ar bi t r at i on & Conci l i at i on Act , 1996 ( her ei naf t er r ef er r ed t o as ' t he sai d Act ' ) , on t he gr ound t hat t he r espondent s had f ai l ed t o r ef er t he di sput es t o t he Empower ed St adi ng Commi t t ee as per Cl ause 23 of t he agr eement i n quest i on.

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I n t he i nst ant case i t appear s t hat pur suant

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t o t he agr eement execut ed bet ween t he par t i es, t he pet i t i oner was awar ded t he wor k of const r uct i on of mi ssi ng l i nk r oad i n Gr am panchayat Jamwa Ramgar h and Rahot i i n Jai pur , under JDA j ur i sdi ct i on as per Wor k Or der No. F1( 85) JDA/ ZE- 12A/ 09/ D- 648 dat ed 28. 1. 09. On cer t ai n di sput es havi ng ar i sen bet ween t he par t i es, t he appl i cant had f i l ed an

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 2

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appl i cat i on dat ed 3. 5. 12 bef or e t he Execut i ve Engi neer ( PDC I I I ) JDA i n t he pr escr i bed pr of or ma al ongwi t h t he cheque of Rs. 1 l ac r equest i ng hi m t o f or war d det ai l s of t he di sput es t o t he Empower ed St andi ng Commi t t ee i n vi ew of Cl ause 23 of t he agr eement i n quest i on. The sai d not i ce was r epl i ed by t he r espondent s vi de l et t er dat ed 7. 5. 12 i nf or mi ng t he appl i cant t hat he had t o submi t t he demand dr af t i n t he name of Secr et ar y,

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JDA f or set t l ement of di sput es t hr ough t he Empower ed St andi ng Commi t t ee. The nonappl i cant t her eaf t er di d not r ef er t he sai d di sput e and hence t he pr esent appl i cat i on has been f i l ed by t he appl i cant f or t he appoi nt ment of i ndependent ar bi t r at or under Sect i on 11 of t he sai d Act . The appl i cat i on has been r esi st ed by t he r espondent s by f i l i ng t he r epl y cont endi ng i nt er al i a t hat t he appl i cant had t o make payment i n t he f or m of demand dr af t i n f avour of Secr et ar y, JDA and t hat havi ng not been done so, t he appl i cant was not ent i t l ed t o t he appoi nt ment of t he ar bi t r at or under Sect i on 11 of t he sai d Act .

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I t has been submi t t ed by t he l ear ned counsel Mr . Devi dut t Shar ma f or t he appl i cant t hat t hough t he appl i cant had cal l ed upon t he r espondent s t o r ef er t he di sput e t o t he

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 3

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Empower ed St andi ng Commi t t ee i n vi ew of Cl ause 23 of t he agr eement i n quest i on, t he r espondent s had f ai l ed t o do so. He f ur t her submi t t ed t hat t o show hi s bonaf i des, t he appl i cant had al so submi t t ed t he cheque of Rs. 1 l ac al ongwi t h hi s appl i cat i on i n t he pr escr i bed f or m as cont empl at ed under Cl ause 23 of t he sai d agr eement and hence had compl i ed wi t h al l t he f or mal i t i es, however , t he r espondent s di d not r ef er t he same t o t he

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Empower ed St andi ng Commi t t ee, as t her e was no St andi ng Commi t t ee exi st i ng at t he r el evant t i me.

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Per cont r a, t he l ear ned counsel Ms. Soni a Shandi l ya f or t he non- appl i cant s submi t t ed t hat t he appl i cat i on bei ng not i n t he pr escr i bed f or m and t he payment al so havi ng not been made by t he appl i cant as per Cl ause 23 of t he agr eement , i t coul d not be sai d t hat t he appl i cant had gi ven pr oper not i ce t o t he r espondent s bef or e pr esent i ng t he pr esent appl i cat i on under Sect i on 11 of t he sai d Act . I t was al so submi t t ed t hat t he cheque submi t t ed by t he appl i cant al ongwi t h t he appl i cat i on was r et ur ned t o t he appl i cant as t he same was not i n t he name of Secr et ar y, JDA, Jai pur .

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I n t he i nst ant case i t i s not di sput ed t hat t he par t i es had agr eed t o r ef er t hei r f ut ur e

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 4

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di sput es t o t he Empower ed St andi ng Commi t t ee of JDA as per Cl ause 23 of t he agr eement i n quest i on. I t i s al so not di sput ed t hat t he appl i cant had cal l ed upon t he non- appl i cant s t o f or war d t he di sput es t o t he sai d commi t t ee, al ongwi t h t he cheque of Rs. 1 l ac i n vi ew of sai d Cl ause 23. I t i s al so not di sput ed t hat t he non- appl i cant s had nei t her r ef er r ed t he sai d di sput es t o t he Empower ed St andi ng Commi t t ee nor had appoi nt ed any

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ot her ar bi t r at or . The onl y cont ent i on r ai sed by t he non- appl i cant s was t hat t he payment by cheque made by t he appl i cant was not i n t he name of Secr et ar y JDA, Jai pur . I n t he opi ni on of t he cour t , t her e was no condi t i on st i pul at ed i n Cl ause 23 of t he agr eement i n quest i on t o make payment i n t he f or m of demand dr af t and t hat t oo i n f avour of Secr et ar y, JDA, Jai pur as sought t o be submi t t ed by t he l ear ned counsel f or t he r espondent s. Hence, i f t he appl i cant had submi t t ed t he cheque i n f avour of t he Execut i ve Engi neer , i t coul d not be sai d t hat t he appl i cant had not compl i ed wi t h t he t er m of ar bi t r at i on cl ause.

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I t cannot be gai nsai d t hat i f t he par t i es had agr eed t o f ol l ow a par t i cul ar pr ocedur e f or appoi nt i ng t he ar bi t r at or , t hen t he ar bi t r at or has t o be appoi nt ed as per t he

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 5

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sai d pr ocedur e onl y and i n such a si t uat i on, t he cour t cannot appoi nt t he ar bi t r at or , unl ess t he var i ous cont i ngenci es pr ovi ded i n sub- sect i on 6 of Sect i on 11 have ar i sen. I f

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t he par t y who was obl i ged t o appoi nt t he ar bi t r at or as per t he agr eed pr ocedur e f ai l s t o do so t hough cal l ed upon by t he ot her par t y, t hen t he par t y f ai l i ng t o appoi nt f or f ei t s i t s r i ght , i f t he ot her par t y appr oaches t he cour t af t er t he pr escr i bed

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per i od of t hi r t y days, and i n t hat case, t he cour t i s r equi r ed t o appoi nt t he ar bi t r at or under Sect i on 11( 6) of t he sai d Act . A benef i ci al r ef er ence of t he deci si ons of t he Apex Cour t i n t he case of Dat ar Swi t chgear s Lt d. Vs. Tat a Fi nance Lt d. ( 2000) 8 SCC, 151 and i n t he case of M/ s. Deep Tr adi ng Company Vs. M/ s. I ndi an Oi l Cor por at i on & Or s. 2013 ( 2) R. A. J. 433 ( SC) , be made i n t hi s r egar d.

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I n t he i nst ant case, t he r espondent s havi ng f ai l ed t o r ef er t he di sput e t o t he Empower ed St andi ng Commi t t ee as per Cl ause 23 of t he agr eement , t hough r equest ed by t he appl i cant , t he appl i cant was j ust i f i ed i n appr oachi ng t he cour t f or appoi nt ment under Sect i on 11( 6) of t he sai d Act .

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I n t hat vi ew of t he mat t er t he pr esent appl i cat i on deser ves t o be al l owed and i s al l owed accor di ngl y, Hon' bl e Mr . Just i ce S. K.

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SB CI VI L ARBI TRATI ON APPLI CATI ON NO. 98/ 13. 6

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Keshot e ( Ret d. ) R/ o 10, Eden Gar den, Fl at No. 302, Baj aj Nagar Encl ave, Near Gandhi Nagar Rai l way St at i on, Jai pur - 302015 i s her eby appoi nt ed as t he ar bi t r at or t o r esol ve t he di sput es bet ween t he par t i es. The cost of ar bi t r at i on pr oceedi ngs and t he ar bi t r at i on f ees shal l be as per t he Raj ast han Hi gh Cour t Ar bi t r at i on Manual . A copy of t hi s or der be sent t o Hon' bl e Mr . Just i ce S. K. Keshot e ( Ret d. ) .

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( BELA M. TRI VEDI ) J. MRG Al l cor r ect i ons made i n t he j udgment / or der have been i ncor por at ed i n t he j udgment / or der bei ng emai l ed. MRG/ PS

M/S Jay Bhawani Construction Company v. J D a through Commissioner

Case brief

What is this about?

What did the court decide?

M/S Jay Bhawani Construction Company v. J D a through Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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