JUDGMENT
Anil Kumar, J.
1. This order shall dispose of Petitioner’s petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator in terms of arbitration agreement between the parties.
2. Brief facts to comprehend the disputes between the parties are that petitioner is carrying on business of supplying building material under the name and style of M/s. Ramesh Lal which is a proprietary concern of the petitioner. The petitioner contended that he is a registered Government contractor and he participated in a tender which was invited in July, 2002 for construction of footpath near dispensary Block 12, Geeta Colony, C-73, Shahdara Zone for a total contractual value of Rs. 1,56,474/-.
3. The petitioner gave a tender which was accepted pursuant to which the work order bearing No. 69 dated 7.8.2002 was awarded by respondent No. 2 on behalf of respondent No. 1. The work was to be completed within two months.
4. It was asserted by the petitioner that the work was completed without any delay and to the satisfaction of the Engineer in charge within two months that is by 14.10.2002 and after completion of the work the work was surveyed and was found to be according to the specification of the work order and the work executed by the petitioner was also entered in MB No. 1493/59. The petitioner submitted bills, and final bill of the petitioner for total sum of Rs. 1,56,474/- was passed on 23.12.2002, however, the respondents failed to release the payment.
5. On failure of the respondents to make payment to the petitioner, notice was given and after the expiry of the period of notice demanding the amounts due to the petitioner, a suit for recovery of Rs. 1,19,690/- was filed which was decreed by Sh. Mukesh Kumar, learned Civil Judge by judgment and decree dated 27.4.2004
6. The respondents aggrieved by the judgment and decree passed by learned Civil Judge filed an appeal which was allowed by Sh. Sanjay Kumar Garg, Additional District Judge and judgment and decree were set aside. However liberty was granted to the petitioner to invoke the arbitration clause for any of the remaining claims against the respondents as some of the amounts were paid during the pendency of suit and appeal.
7. The arbitration agreement between the parties in terms of Clause 25 of the work order is as under:-
Settlement of Disputes and Arbitration Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in-before mentioned and as to the quality of workmanship or materials as used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:
(i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-charge on any matter in connection with or arising out of the contract of carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor’s letter.
If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer’s decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be head, if the latter so desires, and to offer evidence in support of his appeal. The chief Engineer shall give his decision within 30 days of receipt of contractors appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Commissioner M.C.D. for appointment of arbitrator failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator.
(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or difference shall be referred for adjudication through arbitration a sole arbitrator appointed by the Commissioner M.C.D. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.
8. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal.
9. It is also a term of this contract that no person other than a person appointed by such Commissioner M.C.D. as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all.
10. It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-in- Charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the M.C.D. shall be discharged and released of all liabilities under the contract in respect of these claims.
11. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modifications or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under this clause.
12. If is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000/- the arbitrator shall give reason for the award.
13. It is also a term of the contract that if any fees are payable to the arbitrator these shall be paid equally by the both parties.
14. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid.
15. That pursuant to the order dated 10.12.2004 setting aside the judgment and decree passed in favor of petitioner and giving liberty to the petitioner to invoke the arbitration agreement between the parties, the petitioner sent a notice dated 27.4.2005 to the respondents invoking arbitration agreement in terms of Clause 25 and seeking appointment of a sole arbitrator to be appointed by Commissioner, MCD. The petitioner claimed appointment of Arbitrator for adjudication of disputes regarding damages, interest and costs payable by the respondents to the petitioner.
16. Despite the notice dated 27.4.2005 which was duly served on the respondents, the respondents have failed to appoint an arbitrator in terms of the arbitration agreement incorporated under Clause 25. The disputes raised by the petitioner were not pertaining any work demanded from the contractor to be outside the requirements of the contract which had to be decided by the Engineer-in-charge.
17. On failure of the respondents to appoint an arbitrator the petitioner filed the present petition under Section 11(6) of the Arbitration and Conciliation Act before the Court of Senior Civil Judge which was ultimately transferred and was to be put up before the Chief Justice. Court notices were issued to both the parties and on 4.4.2006 it was observed by the Joint Registrar that the notices had been served and since no one was present the matter was placed before the Court, as Judge designate of Chief Justice.
18. Today the learned Counsel for the petitioner contended that since the respondents have failed to appoint an arbitrator in terms of the arbitration agreement incorporated in Clause 25, they have forfeited their right to appoint an arbitrator of their choice. The learned Counsel for the petitioner, however, stated that considering the amount claimed which comprises of cost and further damage of Rs. 1,00,000/- besides interest and the cost and pendentilite and future interest, the respondents be directed to appoint an arbitrator in terms of the arbitration agreement incorporated in Clause 25.
19. The arbitration agreement between the parties contemplates that in case any dispute or difference shall arise between the parties the same shall be referred for adjudication through arbitration of a sole arbitrator to be appointed by the Commissioner, MCD. The disputes have arisen between the parties as the petitioner is claiming the cost and damages besides the interest and the cost which the respondents have not paid.
20. On account of a valid arbitration agreement, the respondents are liable to appoint an arbitrator for adjudication of disputes by the sole arbitration of an arbitrator to be appointed by the Commissioner, MCD.
21. Considering the facts and circumstances the petition is allowed and the respondents are directed to appoint a sole arbitrator to be appointed by the Commissioner, MCD within a period of four weeks. On appointment of Arbitrator, the intimation thereof be given by the respondents to the petitioner, forthwith. With these directions the petition is disposed of.