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Punjab-Haryana High Court
M/S Malwa And Company vs Punjab Water Supply And Sewerage … on 17 March, 2021 ARB-87-2020 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
ARB-87-2020
Date of Decision: March 17, 2021
M/s Malwa & Company
…Petitioner
Versus
Punjab Water Supply & Sewerage Board and others
…Respondents
CORAM: HON’BLE MR. JUSTICE MAHABIR SINGH SINDHU.
Present: Mr. Jagdeep Singh Rana, Advocate,
for the petitioner.
Mr. Shaurya Punj, Advocate,
for Mr. A.S. Miglani, Advocate,
for the respondents.
MAHABIR SINGH SINDHU, J.
This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (for short, ‘the Act’), for appointment of an
Arbitrator.
It transpires that the parties entered into an agreement
(Annexure P-1), for desilting/cleaning of existing Sewar lines by
mechanised system using Super Sucker machine and CCTV including
disposal of silt for a period of 3 years in the towns falling under West Zone
(Jalandhar and Amritsar Circles) of Punjab Water Supply & Sewerage
Board and clause 25 of the same, being relevant is reproduced as under:-
“CLAUSE-25: DISPUTES AND ARBITRATION
i) If any dispute or difference of any kind whatsoever shall
arise between the PWSSB, its authorized representative
PRASHANT KAPOOR
2021.03.22 16:36
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integrity of this document
ARB-87-2020 2
and the contractor in connection with or arising out of
this contract or the execution of work there under.
ii) Whether before its commencement or during the
progress of work or after the termination, abandonment
or breach of the contract, it shall, in the first instance, be
referred for settlement to the Engineer-in-charge of the
work and he shall within a period of sixty days after
being requested in writing by the contractor to do so
convey his decision to the contractor. Such decision in
respect of every matter so referred shall, subject to
arbitration as hereunder provided, be final and binding
upon the contractor in case the work is already in
progress, the contractor shall proceed with the execution
of the work on receipt of the decision of the Engineer-
in-charge as aforesaid with all due diligence whether
any of the parties requests arbitration as hereinafter
provided or not.
iii) If the Engineer-in-charge has conveyed his decision to
the contractor and no claim for arbitration has been filed
by the contractor within a period of first sixty days from
the receipt of the letter communicating the decision the
said decision shall be final and binding upon the
contractor and will not be a subject matter of arbitration
at all.
PRASHANT KAPOOR
2021.03.22 16:36
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ARB-87-2020 3
iv) If the Engineer-in-charge fails to convey his decision
within a period of sixty days after being requested as
aforesaid the contractor may within further sixty days of
the expiry of the first sixty days after being requested as
said request was made by the contractor refer the
dispute for arbitration as hereinafter provided.
v) All disputes or differences in respect of which the
decision is not final and conclusive shall at the request
of either party made in a communication sent through
registered A.D. Post be referred to the sole arbitration of
the Superintending Engineer of the circle concerned in
the PWSSB acting as such at the time of reference
unless debarred from acting as an arbitrator by an order
of the CEO, PWSSB/Court, in which event, the CEO
shall appoint any other technical officer not below the
rank of Superintending Engineer to act as an arbitrator
on receipt of a request from either party.
vi) CEO, PWSSB shall have the authority to change the
arbitrator on an application by either the contractor or
the Engineer-in-charge requesting change of arbitrator
giving reasons thereof, either before the start of the
arbitration proceedings or during the course of such
proceedings. The arbitration proceedings would stand
suspended as soon as application for change of
PRASHANT KAPOOR
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ARB-87-2020 4
arbitrator is filed before the CEO, PWSSB and a notice
thereof is given by the application to the arbitrator. The
CEO after hearing both the parties may pass the
speaking order rejecting the application or accepting to
change the arbitrator simultaneously, appointing a
technical officer not below the rank of a Superintending
Engineer as arbitrator under the contract. The new
arbitrator so appointed may enter upon the reference a
fresh or he may continue the hearings from the point
these were suspended before the previous arbitrator.
vii) The reference to the Arbitrator shall be made by the
claimant party within one hundred twenty days from the
date of dispute of claim arises during the execution of
work. If the claim pertains to rates or recoveries
introduced in the final bill, the reference to the arbitrator
shall be made within six calendar months from the date
of payment of the final bill to the contractor from the
date a registered notice is sent to the contractor to the
effect that his final bill is ready by the Engineer-in-
charge (whose decision in respect shall be final and
binding) whichever is earlier.
viii) It shall be an essential term of this contract that in order
to avoid frivolous claims, the party invoking arbitration
shall specify the disputes based on facts and
PRASHANT KAPOOR
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ARB-87-2020 5
calculations stating the amount claimed under each
claim and shall furnish a “deposit-at-call” for ten
percent of the amount claimed on a scheduled bank in
the name of the Arbitrator, by his official designation
who shall keep the amount in deposit till the
announcement of the award. In the event of an award in
favour of the claimant, the deposit shall be refunded to
him in proportion to the amount awarded with respect to
the amount claimed and the balance, if any, shall be
forfeited and paid to the other party.
ix) The provisions of the Indian Arbitration Act 1940 or
any other statutory enactment there under or
modification thereof and for the time being in force
shall apply to the arbitration proceedings under this
clause.
x) The Arbitrator shall award separately giving his award
against each claim and dispute and counter claim raised
by either party giving reasons for his award. Any lump
sum award shall not be legally enforceable.
xi) The independent claims of the party other than the one
seeking arbitration as also the counter claims of any
party shall be entertained by the Arbitrator.
xii) The venue of arbitration shall be such place or places as
may be fixed by the Arbitrator in his sole discretion.
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The work under the contract shall continue during the
arbitration proceedings.
xiii) The stamp duty due on the award shall be payable by
the party as desired by the Arbitrator and in the event of
such party’s default, the stamp fee shall be recoverable
from any other sum due to such party under this or any
other contract.
xiv) Neither party shall be entitled to bring a claim for
arbitration, if it is not filed as per the time period
already specified or within six months of the following:-
a) Of the date of completion of the work as certified
by the Engineer-in-charge or
b) Of the date of abandonment of the work or breach
of contract under any of its clauses, or
commencement or resumption as application, or
c) Of its non-commencement or no resumption or
work within 10 days of written notice for
commencement or resumption as applicable, or
d) Of the cancellation, termination or withdrawal of
the work from the contractor in whole or in part
and/or revision or foreclosure of the contract, or
e) Of receiving intimation from the Engineer-in-
charge that the final payment due or recovery
from the contractor had been determined, for the
PRASHANT KAPOOR
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purpose of payment/adjustment whichever is the
latest.
If the matter is not referred to arbitration within
the period prescribed above, all the rights and claims of
either party under the contract shall be deemed to have
been forfeited and absolutely barred by time for
arbitration and even for civil litigation.
xv) No question relating to this contract shall be brought
before any civil court without first invoking and
completing the arbitration proceedings, if the issue is
covered by the scopes of arbitration under this contract.
The pending of arbitration proceedings shall not
disentitle the Engineer-in-charge to terminate the
contract and to make alternate arrangements for
completion of the works.
xvi) The arbitrator shall be deemed to have entered on the
reference on the day, he issues notices to the parties
fixing the first date of hearing. The arbitrator may from
time to time with the consent of the parties enlarge the
initial time for marking and publishing the award.
xvii) The expiry of the contractual time limit, whether
originally fixed or extended shall not invalidate the
provisions of this clause.”
In terms of clause 25, reproduced herein above, the petitioner
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sent a notice dated 31.01.2020 (Annexure P-5), to the respondents for
settlement of disputes through arbitration.
Necessary to mention here that the petitioner also made a
request dated 04.04.2020 (Annexure P-6), for change of arbitrator
(Superintending Engineer), in view of the amended provisions of the Act,
i.e. Fifth Schedule read with Seventh Schedule, which were inserted by the
Arbitration and Conciliation (Amendment) Act, 2015, vide Act No. 3 of
2016, dated 31.12.2015. Since, there was no response from the
respondents, therefore, petitioner filed the present petition.
In pursuance of the notice of motion, short reply has been filed
on behalf of the respondents and paragraph Nos. 3 and 4 of the same read
as under:-
“3. That the notice under clause 25 was received from M/s
Malwa & Company on 31.01.2020, and was being
considered by the Respondent officials. Nevertheless, it
is submitted that the claims/disputes raised by the
Petitioner/Claimant are wholly denied, being contrary to
facts as well as law.
4. That however, the Respondents have no objection if an
independent and impartial arbitrator is appointed by this
Hon’ble Court in view of the arbitration clause
contained in the agreement. The same may not be taken
to be an admission of any claims or averments made by
the Petitioner.”
PRASHANT KAPOOR
2021.03.22 16:36
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ARB-87-2020 9
Perusal of para 3 & 4, extracted above, clearly reveal that
respondents have failed to act upon the request of the petitioner and they
have raised no objection against the appointment of an Arbitrator.
As a result of the agreed stand taken by both sides, and in
terms of the provisions of Section 11(6) of the Act, Shri Justice Rakesh
Kumar Jain (former Judge of this Court) is appointed as the sole arbitrator
to decide all the disputes arising out of the agreement (Annexure P-1),
between the parties, subject to the mandatory declaration made under the
amended Section 12 of the Act with respect to independence as well as
impartiality and the ability to devote sufficient time to complete the
arbitration within the period as per Section 29A of the Act. Learned
arbitrator shall be entitled to charge fees in terms of the Fourth Schedule to
the Act. Needless to say that fees and other expenses shall be shared by the
parties equally.
Registry will send copy of this order to Shri Justice Rakesh
Kumar Jain, Former Judge, Punjab and Haryana High Court, at House No.
133, Sector 35, Chandigarh.
The parties are directed to appear before the learned Arbitrator
after seeking his convenience.
The matter is disposed off in the above terms.
(MAHABIR SINGH SINDHU)
JUDGE
March 17, 2021
Pkapoor Whether Speaking/Reasoned: YES/NO
Whether Reportable: YES/NO
PRASHANT KAPOOR
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