Union of
India Vs. M/S Premier Files Ltd. [2009] INSC 1395 (4 August 2009)
Judgment
NON
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL
APPEAL NO.5075 OF 2009 Arising out of SLP) No.19288 of 2008] Union of India ...
.Appellant VERSUS M/s. Premier Files Ltd. ...Respondent
TARUN
CHATTERJEE, J.
1.
Leave granted.
2.
An agreement was entered into between M/s. Premier Files Ltd., the
respondent herein, with the appellant- Union of India for piling work in
respect of which clause 25 provides for settlement of disputes in relation to
the said work. The work agreement was completed and final bill for the said
work was paid along with incentive for one week early completion of work under
clause 34 of the Agreement. Some differences and disputes in relation to 2 the
said work arose between the parties. The respondent requested the appointing
authority of the appellant to appoint an Arbitrator as per arbitration clause
to adjudicate the dispute between the parties. The appellant appointed one Shri
O.P.Gaddhyan as an Arbitrator to adjudicate the said dispute. The said Arbitrator
entered into the reference and thereafter Shri O.P.Gaddhyan resigned. After his
resignation, the respondent filed an arbitration application for appointment of
an Arbitrator before the High Court at Calcutta. It is not in dispute that when
the application for appointment of Arbitrator was pending before the High
Court, another Arbitrator was appointed by the appointing authority on 14th of
July, 2006. However, by the impugned order, the High Court had disposed of the
said application filed by the respondent appointing a senior advocate of the
Calcutta High Court as an Arbitrator in terms of Section 11(6) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act').
3.
Feeling aggrieved, the Union of India has come up to this Court by
way of a special leave petition which, on grant of leave, was heard in presence
of the learned counsel for the parties.
4.
It is not in dispute that clause 25 provides for settlement of
dispute in relation to the work agreement for piling work. It is also not in
dispute that the work agreement was completed and final bill was passed. Since
some differences and disputes arose, an Arbitrator was appointed by the
competent authority who subsequently resigned. After the resignation of the
Arbitrator appointed by the competent authority, no appointment was made by the
competent authority after the resignation for about two months. As noted herein
above, a lawyer Arbitrator was appointed by the High Court by the impugned
order. In our view, in the facts and circumstances of the present case and in
view of the specific clause being clause 25 of the Arbitration Agreement, the
impugned order appointing a lawyer Arbitrator in the aforesaid matter must be
said to be in 4 violation of the provisions of clause 25 of the agreement which
clearly says that the Arbitrator must be appointed by the competent authority.
That apart, before the appointment of a lawyer Arbitrator in the matter, the
competent authority has already appointed Shri S.C.Padhi as an Arbitrator and
in fact the said Arbitrator has already entered appearance and proceeded with
the arbitration and, therefore, it would not be justified for appointing a
lawyer Arbitrator at that stage. Considering the fact that the Arbitrator has
already been appointed in terms of the agreement and that such appointment was
made before the final order was passed under section 11 of the Act appointing a
lawyer Arbitrator to decide the disputes between the parties, we set aside the
order of the High Court and restore the order of the competent authority
appointing Shri S.C.Padhi as a sole Arbitrator to decide the disputes between
the parties. The learned Arbitrator is directed to pass an award within six
months from the date of communication of this order to him after giving hearing
to the parties and pass a reasoned award in accordance with law.
5.
For the reasons aforesaid, the impugned order is set aside. The
appeal is allowed to the extent indicated above. The application filed by the
respondent under Section 11(6) of the Act, therefore, stands rejected. No order
as to costs.
..........................J. [Tarun Chatterjee]
..........................J.
New Delhi;
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