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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

Date of Decision: March 17, 2021

M/s Malwa & Company
Punjab Water Supply & Sewerage Board and others


Present: Mr. Jagdeep Singh Rana, Advocate,
for the petitioner.

Mr. Shaurya Punj, Advocate,
for Mr. A.S. Miglani, Advocate,
for the respondents.


This is a petition under Section 11(6) of the Arbitration and

Conciliation Act, 1996 (for short, ‘the Act’), for appointment of an


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:-


i) If any dispute or difference of any kind whatsoever shall

arise between the PWSSB, its authorized representative

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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.

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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

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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

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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


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

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purpose of payment/adjustment whichever is the


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.”

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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.

March 17, 2021
Pkapoor Whether Speaking/Reasoned:  YES/NO
Whether Reportable: YES/NO 

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