ORDER
The petitioner has filed the present civil miscellaneous petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, hereinafter referred to as 'the Act') for appointment of arbitrator under clause-24 of the Agreement dated 16.2.2016 entered into between the parties.
2. It is the case of the petitioner that it is a Company incorporated under the provisions of the Companies Act, 1956 and engaged, inter alia, in the business of developing the old monuments and structures in heritage style. On 2.6.2015, the respondent-Commissioner called for a Tender for the improvement of Lance Down Building in heritage style in Mysore. Accordingly, under a Letter of Acceptance dated 4.2.2016, the respondent notified the petitioner that its bid has been accepted on 4.2.2016. Thereafter, the petitioner and respondent entered into an
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Agreement on 16.2.2016 for engagement of petitioner's services for improvement of the Lance Down Building in heritage style in Mysore. In compliance of the terms of the agreement, the petitioner furnished a bank guarantee for a sum of Rs.13,76,668/- being 5% of the contract price on 16.2.2016 and commenced the work on 17.2.2016. When the things stood thus, the respondents by a letter dated 2.9.2016 instructed the petitioner to stop all the works at the site which the petitioner was compelled to do. On realising that the respondent would not permit to resume the work, petitioner raised its first Running Account Bill No.1 for a sum of Rs.1,10,00,000/- and second Running Account Bill No.2 for a sum of Rs.37,00,000/- but the respondent paid only a sum of Rs.87,48,480/- towards part-payment of the due to the petitioner on 21.9.2017. It is the further case of the petitioner that it called upon the respondent to pay the outstanding dues by its letter addressing the respondent that in the event of failure to
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comply with its request, it would have no other alternative except to initiate legal proceedings for recovery of dues from the respondent and hence issued a legal notice dated 1.9.2018.
3. In turn, the respondent neither replied nor complied with the request made by the petitioner. Therefore, the petitioner was forced to issue legal notice as contemplated under Sub-section (5) of Section 7 of the Act on 26.10.2018. Inspite of service of notice, the respondent neither replied nor cared to comply with the legal notice. Therefore, the petitioner is before this Court for the relief sought for.
4. The respondent has not filed objections to the civil miscellaneous petition.
5. I have Heard the learned Counsel for the parties to the lis.
6. Sri Dhananjay Joshi, learned Counsel for the petitioner contended that there is no dispute with
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regard to the agreement entered into between the parties dated 16.2.2016. He further contended that since the conditions of the agreement have not been complied with by the respondent, the petitioner was forced to issue legal notice and inspite of receiving the legal notice, the respondent has not complied with the terms of the agreement. Therefore, in view of the provisions of Clause 24 of the Agreement dated 16.2.2016, the sole Arbitrator has to be appointed and hence, he sought to allow the civil miscellaneous petition.
7. Per contra, Sri M.C. Jayakirthi for Smt. Geetha Devi. M.P., learned Counsel for the respondent does not dispute the Agreement entered into between the parties on 16.2.2016 wherein clause-24 of the said agreement provides an arbitration clause which reads as under:
"4. Arbitration (Clause 24)
4.1 - The procedure for arbitration shall be as follows:
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(a) In case of dispute or difference arising between the Employer and the Contractor relating to any matter arising out of or connected with this agreement it shall be settled in accordance with the Arbitration and Conciliation Act, 1996. The disputes or differences shall be referred to a Sole Arbitrator. The Sole Arbitrator shall be appointed by agreement between the parties. If the parties fail to reach such agreement/ consensus then the sole arbitrator shall be appointed by the Appointing Authority, namely, Institute of Engineers, Bangalore.
(b) Arbitration proceedings shall be held at Bangalore, Karnataka, India.
(c) The cost and expenses of arbitration proceedings will be paid as determined by the Arbitrator.
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However the expenses incurred by each party in connection with the preparation, presentation etc., shall be borne by each party itself.
(d) Performance under the contract shall continue during the arbitration proceedings and payments due the Contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings."
8. It is also not in dispute that the material on record clearly depicts that the petitioner has complied with the provisions of Sub-section (5) of Section 7 of the Act. Therefore, there is no impediment to appoint the Sole Arbitrator to adjudicate the dispute between the parties.
9. For the reasons stated above, civil miscellaneous petition is allowed. The Hon'ble Mr.
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Justice H.N. Nagamohan Das, Former Judge of this Court, is appointed as the sole Arbitrator to adjudicate the dispute between the parties in terms of Clause-24 of the Agreement dated 16.2.2016 entered into between the parties in accordance with law.
10. All the contentions raised by the parties are left open to be urged before the learned Arbitrator.
11. Registry is directed to send a copy of this order to - The Hon'ble Mr. Justice H.N. Nagamohan Das, Former Judge of this Court as well as to the Arbitration Centre forthwith for reference. Sd/-
Judge
Nsu/-
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