M/S. A.B.Singh vs Central Coalfields Ltd. & Ors on 8 May, 2009

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Jharkhand High Court
M/S. A.B.Singh vs Central Coalfields Ltd. & Ors on 8 May, 2009
                        IN THE HIGH COURT OF JHARKHAND, RANCHI
                                 A.A No. 37       OF 2007
                                          With
                                 A.A No. 38       OF 2007
                                          With
                                 A.A No. 39       OF 2007
                                          -------

       M/s. A.B.Singh                                         Petitioner in all the cases

                                          Versus
       Central Coalfields Ltd. & Ors.                         Respondents in all the cases
                                                   -------

       CORAM;                               HON'BLE THE CHIEF JUSTICE


       For the Appellant/Petitioner               M/s.B.Poddar, P.Poddar, D.Sinha

       For the Respondent/Opp. Party                                 Mr.A.K.Das

                                                  ---------


14/ 8.5.2009

In all the three applications, a common question has been raised as

to whether an Arbitrator can be appointed for adjudication of a dispute beyond the

contractual period under section 11(6) of the Arbitration & Conciliation Act, 1996

(hereinafter referred to as the Act) in absence of existence of any contractual

agreement between the petitioner and the respondents.

These applications have been filed by the petitioner-firm for

appointment of an Arbitrator under section 11(6) of the Act on the ground that

there is a bona-fide dispute between the petitioner-firm and the respondent-

company, i.e. Central Coalfields Ltd., since the petitioner had received contracts

for transportation of coal, for which three contracts had been executed between

the parties on different dates. It was stated that there is a clause in the agreement

that in the event of existence of a dispute, the respondents shall appoint an

Arbitrator to adjudicate the dispute and the award passed by him shall be treated

as final. It was contended that as the respondent-CCL had failed to appoint an

Arbitrator, although a dispute in regard to the claim of payment had been raised at

the instance of the petitioner, this Court, in view of section 11(6) of the Act, ought

to appoint an Arbitrator for adjudication of the dispute.

Countering the submission of the counsel for the petitioner, it was

submitted by the counsel for the respondent-CCL that the petitioner has not made

out a case for appointment of an Arbitrator as the contractual relationship of the

petitioner-firm and the respondent-company was only for a period from 1.8.2000 to

31.7.2001 in A.A No.37/2007, from 1.4.2002 to 30.6.2002 in A.A No.38/2007

(only for a period of three months) and from 23.7.2000 to 22.7.2001 in A.A

No.39/2007 and for this purpose, three different contracts had been executed

between the parties. However, the petitioner admittedly has received the entire

payment for these periods as per his own averment, which is to the following

effect:-

“4(ix) 100% payment was made for the transportation in
contract period and 80% payment was made for the
period beyond the contract period and 20% payment
was not released to the petitioner”

(From rejoinder to counter in AA No.37/2007)

Admittedly the petitioner has already received payment for the contractual periods

involved in A.A No.38 /2007 and A.A No.39 /2007.

Relying on this averments of the petitioner, it was submitted that

100% payment for the contract period involved in three applications has already

been received by the petitioner and thus, nothing remains to be paid under the

contractual obligation. It was further submitted that since the entire payment have

been received by the petitioner, a case for referring the dispute to the Arbitrator or

for appointing an Arbitrator is not made out at all.

On consideration of the aforesaid submission and counter-

submission of the counsel for the parties, I find substance in the plea of the

counsel for the respondent-CCL, who has rightly stated that the claim for

appointment of an Arbitrator even under section 11(6) read with section 11(8) of

the Act flows only from the contract which had been entered into between the

petitioner and the respondent-CCL, but the said contracts were only for a limited

period as mentioned hereinabove and the petitioner having received the entire

payment for these periods, the claim for appointment of an Arbitrator is not made

out. It cannot be disputed that appointment of an Arbitrator has to be made under

section 11(6) of the Act only if, in terms of the agreement, one of the contracting
parties has failed to appoint an Arbitrator in the event of existence of a dispute and

on failure to appoint an Arbitrator, the jurisdiction of the Court comes into play, in

so far as appointment of Arbitrator by the Court is concerned. Since the petitioner,

as per his own averment, has received the entire payment for the contractual

period, obviously the clause for appointment of an Arbitrator comes to a complete

halt and there is no occasion for this Court to appoint an Arbitrator in terms of the

clause incorporated in the contractual agreement. If the petitioner has any claim for

additional payment beyond the terms and period of the contract, he will have to

take recourse to the civil remedy that may be available to him under the law.

In so far as the prayer to appoint an Arbitrator is concerned, the

same cannot be entertained as there is no contractual relationship existing

between the petitioner and the respondent-CCL by virtue of any agreement or

contract. The Court, therefore, cannot mechanically appoint an Arbitrator in

absence of any agreement or contractual relationship, which was reduced into a

document of contract or agreement. In absence of any contractual agreement

between the parties beyond 31.7.2001 in A.A No.37/2007, 30.6.2002 in A.A

No.38/2007 and 22.7.2001 in A.A No.39/2007, the matter cannot be entertained

for the reasons stated hereinbefore.

All the three applications, therefore, are dismissed.

(Gyan Sudha Misra, C.J)

dey

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