ORDER
A.K. Sikri, J.
1.
This petition is filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator as according to the petitioner disputes have arisen between the parties. The contract awarded to the petitioner by the respondents was terminated by the respondents vide Order dated 14-9-99. Thereafter, on 4-11-99 the petitioner made request for appointment of an Arbitrator. By letter dated 13-11-99 in reply to the aforesaid letter of the petitioner dated 4-11-99 the respondents stated that as per condition 70 of IAFW-2249 reference to arbitration could not take place until alternative arrangement had been finalised by the Government to get the works completed by or through any other contractor or contractors or agency or agencies. It was also stated that action was in hand to get the left over work completed, at petitioner’s risk and cost, through other agency or agencies and request of the petitioner for appointment of Arbitrator would be considered only after making alternative arrangement to get the work completed. As the respondents did not appoint the Arbitrator due to aforesaid reason, the present petition was filed on 4-5-2000 for appointment of Arbitrator by the Court. Notice of this petition was directed to be served upon the respondents returnable on 2-8-2000. It was received by the respondents on 7-6-2000. The respondent i.e. persona designata appointed Brig R.R. Singh as sole Arbitrator by order dated 25-7-2000.
2. However, the petitioner does not accept this appointment and the submission of the petitioner is that the respondents have forfeited their right to appoint the Arbitrator, when the Arbitrator was not appointed after the request made by the petitioner for appointment of the Arbitrator and in any case till the date of filling of the present petition. In support of this submission the petitioner has relied upon the judgment of the Supreme Court in the case of Datar Switchgears Ltd. Vs. Tata Finance Ltd. and another 2000 (3) Arb. L.R. 447 (SC).
3.
On the other hand, learned counsel for the respondent argued that as per Clause 70 of the terms and conditions of the Contract entered into between the parties, there was no occasion to appoint the Arbitrator earlier and, therefore, on the facts of this case judgment in the case of Datar Switchgears Ltd. (Supra) shall not be applicable. Elaborating the submission, learned counsel for the respondents argued that the petitioner had filed OMP No. 365/99 in this Court which was petition under Section 9 of the Arbitration and Conciliation Act, 1996 and in that case this Court had passed interim order dated 22-12-99 restraining the respondents from carrying out any addition or alteration in the work done by the petitioner. By order dated 7-1-2000 this interim order was extended with the clarification that the said interim order will not stand in the way of respondents in taking necessary steps for entrusting the remaining work to another party. Thus it was only after the respondents were allowed to entrust the remaining work to another party that the contractor accepted the same on 12-6-2000 although he had been awarded work earlier. It was further submitted that even this order entitled the respondents to only entrust the work to anther party. Complete embargo was lifted only by order dated 29-8-2000 in the aforesaid OMP. Therefore, it was not a case of inaction on the part of the respondents, after receiving the request of the petitioner for appointment of the Arbitrator. Due to the aforesaid OMP and the orders passed therein respondents were precluded from awarding the remaining work to the third party and getting the same completed at the risk and cost of the petitioner.
4. Although there is a dispute as to whether the work awarded to the other contractor related to balance work or the entire work which was earlier given to the petitioner which aspect can be adjudicated by the Arbitrator, fact remains that when the contract was cancelled the petitioner had not completed the work and, therefore, certain works still had to be completed (this is not to comment as to who is at fault for non-completion of the work which aspect is also to be dealt with by the Arbitrator) and, therefore, provisions of Clause 70 relating to appointment of arbitration would clearly be attracted. As per Clause 70 all disputes between the parties of contract are to be referred to sole arbitration of an officer to be appointed by the Engineering-in-Chief or in his absence the officer officiating as Engineer in Chief or Director General of Works if specially delegated in writing by the Engineer in Chief. The portion of the Clause which is material for our purposes reads as under:
“Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the Works or termination or determination of the contract under Condition Nos. 55, 56 and 57 hereof.
Provided that in the event of abandonment of the works or cancellation of the contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies”.
5.
In view of the aforesaid provision in Clause 70 the respondents were having bona fide belief that till alternative arrangements have been finalised by the Government to get the work completed by or through any other Contractor or contractors or agency or agencies the reference to the sole arbitration had not to take place.
6.
I am inclined to agree with the submission of the learned counsel for the respondents. It is not a case where the respondents were sitting tight over the matter or had shown disinclination for appointment of an Arbitrator. In their estimation and on interpretation of Clause 70 in fact time had not ripened when the arbitrator was to be appointed. Thus till the eventuality as provided by proviso to Clause 70 takes place there was no cause of action for the petitioner to request for an arbitration. In view of this the judgment in the case of Datar Switchgears Ltd. Vs. Tata Finance Ltd. and another (Supra) shall not be applicable in the present case. The main intention behind the observation made in para-19 of the said judgment to condemn lethargy or inaction of the respondents in not appointing the Arbitrator within 30 days of the demand or within reasonable time and it is in that context the Supreme Court has observed that appointment has to be made before the application under Section 11 is filed for appointment of an Arbitrator. However, in the present case where the contingency as provided under Clause 70 had not arisen, the respondent could not be blamed for not appointing the Arbitrator and the request for appointment of the arbitrator to the respondent or in this application was pre-mature. In fact in para-23 of the same judgment the Apex Court had observed that when parties have entered into a contract and settled on a procedure, due importance has to be given to such procedure.
7.
In view of the aforesaid discussion, I do not find any infirmity in the order dated 25-7-2000 appointing Mr. R.R. Singh as sole Arbitrator. The said Arbitrator would enter upon the reference and after giving notice to both the parties would proceed with the adjudication of the disputes. This AA is accordingly disposed of.
8. IA. 7564/2000.
9. Learned counsel for the respondents seeks a short adjournment to have instructions from the respondents. At his request, adjourned to 31st May, 2001