M/s Gurdial Singh @ Co. Builders v. Union of India & Ors.

HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Vishal Gupta, Advocate for the petitioner Mr. Ajay Kaushik, Advocate for respondents. HEMANT GUPTA, J Present is the petition for appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’). The petitioner was awarded a contract number CBUZ-20/88-89 for providing of Additional single accommodation for airman at Pathankot. The Agreement executed in pursuance of such award of contract is governed by General Conditions of Contract (IAFW-2249) Clause 70 contains terms of adjudication of dispute between the parties by an Arbitrator. Such disputes between parties were referred for adjudication to Shri B. M Gupta, Chief Engineer, as a sole Arbitrator. Shri Gupta announced his Award dated 13.10.993. But the said Award Arb. Case No. 111 of 2009 2 was set aside by the Civil Court on 21.3.1995 when an application filed by the respondents for making such Award as rule of the Court was dismissed.

The objections filed by the petitioner herein against the said Award were also dismissed. Such order passed by learned trial Court was affirmed by learned first Appellate Court on 2.6.1998. Learned Civil Court has found that learned Arbitrator has announced its Award beyond the period prescribed in law. It may be noticed that the orders of the Civil Court are not to supersede the arbitration Agreement or remitting the matter back to the Arbitrator for re-decision. Petitioner served a notice for appointment of an Arbitrator under the Act on 22.12.2003. Since, the Arbitrator was not appointed, the present petitioner filed a petition before the learned District Judge on 29.5.2004. Consequent to the judgment of Hon’ble the Supreme Court rendered in M/s State Bank of Patiala and Company vs. M/s Patel Engineering Limited and another, (2005)8 SCC 618, the matter has been sent to this Court for appointment of an Arbitrator.

Learned counsel for the petitioner has vehemently argued that since the arbitration Agreement was not superseded nor the dispute remitted back to an Arbitrator by the Civil Court, therefore, the Arbitrator is required to be appointed by this Court under Section 11 (6) of the Act. Reliance is placed upon the judgment of Hon’ble Arb. Case No. 111 of 2009 3 the Supreme Court rendered in Juggilal vs. General Fibre Dealers AIR 1962 Supreme Court 1123, wherein it has been held that the further arbitration can take place, when the Civil Court has not decided to supersede the reference and the agreement subsists. It was held to the following effect: - (15….) What has happened in this case is that the previous tribunal made an Award. The award has been set aside on account of misconduct. In the circumstances we are of opinion that the previous tribunal has become incapable of acting as arbitrator to decided this dispute because of its misconduct.

Further as the reference has not been superseded and the arbitration agreement subsists, it was in our opinion open to the Chamber, on the request of the respondent to appoint another arbitral tribunal under R. X. Therefore, as there is a machinery by which fresh arbitrators can be appointed according to the terms of the arbitration agreement read with the rules of the Chamber and as the reference has not been superseded the appointment of a fresh tribunal and the carrying on of the arbitration further were within the terms of the arbitration agreement. Arb. Case No. 111 of 2009 4 On the other hand, learned counsel for respondents has raised an objection that the present petition for appointment of an Arbitrator is barred by limitation as the notice for appointment of an Arbitrator has been served on 22.12.2003 i.e. more than 5 years and 4 months after the appeal was dismissed by the Civil Court.

Thus, keeping in view the Section 43(1) of the Act read with Article 137 of the Limitation Act, 1963, the present petition for appointment of an Arbitrator is beyond by the three years from the date, cause of action accrues to the petitioner prescribed for seeking adjudication by an Arbitrator. The Award rendered by an Arbitrator has not been made the rule of the Court. The arbitration Agreement has not been superseded. Therefore, the arbitration Agreement between the parties continues to be subsisting. The judgment of the Civil Court rendered by the learned trial Court on 21.3.1995 has been affirmed by the learned first Appellate Court on 2.6.1998. Therefore, the cause of action to seek appointment of an Arbitrator, in the absence of superseding the arbitration agreement will arise on the said date. The petitioner has not made any grievance in respect of claim of the cause of arbitration after the decision of appeal for a period exceeding three years. Therefore, the present petition for appointment of an Arb. Case No. 111 of 2009 5 Arbitrator is beyond the period prescribed for filing such application. In view of the said fact, the present petition for appointment of an Arbitrator is dismissed being barred by limitation.

1.4. 2011 preeti (HEMANT GUPTA) JUDGE