Notice For Appointment Of Arbitrator Need Not Be Addressed To General Manager, Registered Post To Railways Fulfils The Condition: Punjab & Haryana High Court
The Punjab and Haryana High Court single bench of Justice Vinod S. Bhardwaj held that notice for appointment of an Arbitrator was not necessarily required to be addressed to the General Manager of the Railways. Notice to invoke arbitration was said to be fulfilled as it was sent by a registered post to the Railways. Brief Facts: Northern Railway (“Respondent”) floated a tender...
The Punjab and Haryana High Court single bench of Justice Vinod S. Bhardwaj held that notice for appointment of an Arbitrator was not necessarily required to be addressed to the General Manager of the Railways. Notice to invoke arbitration was said to be fulfilled as it was sent by a registered post to the Railways.
Brief Facts:
Northern Railway (“Respondent”) floated a tender for improving of flooring of the second-class waiting hall at Amritsar and repairing of damaged flooring of Platform No. 2 at Beas Railway Station. M/S Dharam Pal Maddar And Sons' (“Petitioner”) bid was accepted and it was awarded the said contract. Later, disputes arose between the Petitioner and the Respondent concerning the disbursement of the dues. The Petitioner sent a notice to the Respondent, seeking invocation of arbitration and for reference of the matter for appropriate adjudication. Allegedly, the Respondent claimed that the notice was not received by them. However, as per the petitioner, contemporaneous evidence clearly showed that the Respondents sent a letter to the Petitioner for the appointment of a sole arbitrator/Arbitral Tribunal consisting of Railway's Gazetted Officers.
The Petitioner contended that the appointment of a sole arbitrator suggested by the Respondent was in conflict with the provisions of the Arbitration Act. Further, since the Respondent acknowledged the initiation of the process of arbitration, it cannot contend that the original notice was not received by it. Feeling aggrieved, the Petitioner filed a Section 11 application in the Punjab and Haryana High Court (“High Court”) for the appointment of an arbitrator.
The Respondents contended that as per the provisions of Clause 63 of the General Conditions of Contract, the request for referring the dispute for arbitration was required to be sent to the General Manager and that the said request has been sent to an officer other than the General Manager as stipulated in the General Conditions of Contract. The High Court dismissed the Section 11 application on the ground that initial notice under Clause 63 of the General Conditions of the Contract, had not been satisfied and liberty was granted to the Petitioner to seek appointment of an arbitrator after seeking recourse to Clause 63 providing for appointment of Arbitrator.
Dissatisfied by the order of the High Court, the Petitioner filed a review application under Order 47 Rule 1 of the CPC.
Observations by the High Court:
The High Court referred to its decision in M/s Akash Enterprises Vs. The General Manager, Northern Railway and others, and held that the request for appointment of an Arbitrator was not necessarily required to be addressed to the General Manager as contended by the Respondent. The High Court referred to the definition of 'Railway' and 'General Manager' as provided in the Conditions of the contract, emphasizing that the term 'Railway' includes Administrative Officers authorized to deal with matters concerned, and 'General Manager' refers to the Officer-in-charge of the General Superintendence and Control of the Railway.
The High Court found the contention refuted by the fact that a registered post notice for seeking reference of the dispute for arbitration was sent on 31.07.2015. Additionally, the High Court noted the contemporaneous evidence of an offer made by the Respondent to refer the dispute to arbitration, indicating their awareness of the dispute and their initial willingness to arbitrate.
“The only contention that was raised on behalf of the respondents is that the invocation of the arbitration has not been done in accordance with the contract executed between the parties and the necessary procedure as stipulated under Clause 63 of the General Clauses of Contract has not been followed. The said aspect stands refuted by the fact that a registered post notice for seeking reference of the dispute for arbitration had been sent on 31.07.2015.”
Consequently, the High Court allowed the petition and appointed S.P. Arora, IAS (Retd.), an empanelled arbitrator, as the Sole Arbitrator to adjudicate the dispute between the parties.
Case Title: M/S Dharam Pal Maddar And Sons Vs Union Of India Through Senior D.E.N. Iii Drm Office Northern Railway, Ferozepur.
2024 LiveLaw (PH) 91
Case Number: RA-CR-204-CII-2018 IN/AND ARB-222-2016 (O&M).
Advocate for the Petitioner: Mr Dheeraj Mahajan, Advocate, for the Petitioner.
Advocate for the Respondent: Mr. Sudhir Nar, Senior Standing Counsel, for respondent No.1/UOI.