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Smart Summary

Summary of Opinion — High Court of Judicature at Patna (Oral Judgment dated 04-10-2024)

Factual and Procedural Background

The State of Bihar (through various officers of the Building Construction Department) filed civil review petitions (Civil Review Nos. 181 & 182 of 2023) in relation to earlier judgments in two request cases which had appointed an arbitrator to decide disputes arising out of two separate contracts between the State's Construction Division and the 1st Respondent, Kashish Developers Limited. The two contract agreements considered were Agreement No. 04-SBD/2017-18 (in Request Case No. 12 of 2023) and Agreement No. 05-SBD/2015-16 (in Request Case No. 13 of 2023). The State challenged those judgments on the ground that the procedure for dispute resolution stipulated in Clause-25 of the contracts (steps involving the Superintending Engineer and the Chief Engineer before appointment of an arbitrator, and an appointment by the Engineer-in-Chief or administrative head) had not been complied with and, further, that under the Arbitration and Conciliation Act, 1996 (as amended), the designated official (Engineer-in-Chief / administrative head) would be disqualified from appointing an arbitrator.

The reviews were heard together because the issues were identical in nature even though the agreements were separate. The earlier request-case orders appointing a sole arbitrator were passed on the first posting date; the State contended it had not been afforded an opportunity to file a counter-affidavit before those orders.

Legal Issues Presented

  1. Whether this Court has the power to review and recall its earlier orders appointing an arbitrator under the Arbitration and Conciliation Act, 1996, in light of the Act and the Constitution (Article 215) and relevant precedents.
  2. Whether the arbitration clause in Clause-25 of the contracts remains operative after the statutory amendments (in particular the substitution to Sections 11 and 12 and the insertion of sub-section (5) to Section 12) and whether the Engineer-in-Chief or administrative head is disqualified from appointing an arbitrator under Section 12(5) and the Seventh Schedule.
  3. Whether, because of the contract clause that an arbitrator must be appointed by the Engineer-in-Chief or administrative head (and if that is not possible, the matter not referred to arbitration), there is any scope for appointment of an arbitrator by the court under Section 11, or whether the parties must instead resort to civil courts when the named appointing authority is disqualified or unable to appoint.

Arguments of the Parties

Petitioners (State of Bihar) — Principal Arguments

  • The request cases were allowed on the first posting date without giving the State a chance to file a counter-affidavit.
  • Clause-25 of the General Conditions of Contract prescribes a pre-arbitration procedure: disputes must be taken up with the Superintending Engineer within seven days; an appeal lies to the Chief Engineer who must decide within 30 days after hearing the contractor; only if dissatisfied may a notice be given to the Chief Engineer for appointment of an arbitrator by the Engineer-in-Chief or the administrative head.
  • The 1st Respondent failed to follow the internal dispute resolution steps (did not approach the Superintending Engineer or Chief Engineer), so an appointment of an arbitrator under Section 11(6) could not properly have been made.
  • By reason of statutory changes (post-amendment Section 12 and Schedule-V/Schedule-VII implications), the Engineer-in-Chief or administrative head (as named in the contract) is disqualified from appointing an arbitrator, rendering the arbitration clause ineffective unless the parties have in writing waived the disqualification — which did not happen.

Opposite Party (Kashish Developers Limited) — Principal Arguments

  • The contention regarding the appointment procedure and disqualification had already been raised before the sole arbitrator (a former Supreme Court Judge) and disposed of by a written communication (Annexure-B dated 02.05.2023) — a fact not disclosed in the review application.
  • Multiple request cases between the same parties had been allowed on the same day and arbitrators were appointed with consent; arbitration proceedings had advanced substantially and substantial amounts had been expended on those proceedings.
  • There is no ground for review of the judgment appointing a sole arbitrator; authority was placed on decisions such as Ashok Tubwell and Engineering Corporation v. Union of India and Demerara Distilleries (cited) in support of the position resisting review or recall of the appointment.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Municipal Corporation of Greater Mumbai v. Pratibha Industries Ltd., (2019) 3 SCC 203 The Supreme Court recognized that a High Court, as a court of record under Article 215, has jurisdiction to recall its own orders and that review of an order appointing an arbitrator may be permissible despite arguments that the Arbitration Act is a self-contained code. The Court found this precedent apposite to hold that review power is available to the High Court and that the Single Judge's exercise of recall/review in a similar earlier case was proper; this formed the basis for holding that review of its earlier order was permissible.
Voestalpine Schienen GmbH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665 Held that while the source of the arbitrator's appointment can be deduced from the agreement, non-independence and lack of impartiality render an arbitrator ineligible. The Court cited this case to support the proposition that appointment mechanisms derived from the contract do not cure ineligibility/partiality and to inform analysis of whether the designated appointing authority (Engineer-in-Chief) could validly appoint an arbitrator.
TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377 Held that a Managing Director of the awarder who falls within the categories of ineligibility under Section 12(5) is incapable of acting as arbitrator and is also ineligible to nominate another person as arbitrator. The Court relied on this principle to conclude that the Engineer-in-Chief (or equivalent administrative head) would be disqualified from appointing an arbitrator by operation of Section 12(5), rendering the contract's appointing mechanism ineffective.
Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760 Interpreted TRF to mean that ineligibility by operation of law extends to the power to nominate another arbitrator; logical deduction that disqualified officials cannot validly appoint substitutes. The Court used this reasoning to reinforce that the Engineer-in-Chief, having been disqualified by operation of law, could not validly appoint an arbitrator in terms of the contract.
Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), (2020) 14 SCC 712 Held that where the Railways' General Conditions provide a panel and the contractor has a right to nominate from the panel, the awarder's further nomination is counterbalanced and TRF may not apply; the decision has been referred to a Larger Bench. The Court observed this decision but noted the present contracts do not have the distinguishing clause (panel/contractor-choice) relied on in that case; therefore the case did not change the present analysis.
Ashok Tubwell and Engineering Corporation v. Union of India, (2015) 5 SCC 702 Considered a contractual term that only a specified officer could be arbitrator and that if that officer could not be appointed, the matter would not be referred to arbitration; it also noted that parties' later consent to a different arbitrator could indicate novation. Cited by the Court in assessing the effect of a contract clause that limits appointment to a specified official and in discussing that consent to a different arbitrator can be viewed as a novation; the Court examined whether consent was recorded in the earlier order (it was not).
Demerara Distilleries (P) Ltd. v. Demerara Distillers Ltd., (2015) 13 SCC 610 The opinion cites this case, but the text of the provided opinion does not state the specific principle cited from it. The case was relied on by the respondent; the Court recorded the citation but the provided opinion text does not elaborate a specific application beyond noting reliance by the respondent.
Nirman Engicons Private Limited v. State of Bihar & Ors. (Request Case No. 105 of 2019) A similar contractual provision (Clause-25-like provision) was considered; in that instance the request was declined by decision dated 25.11.2020. The Court referred to that decision as analogous, noting that a similar provision had led to refusal of the request in that earlier matter; it informed the Court's treatment of the Clause-25 issue in the present cases.

Court's Reasoning and Analysis

The Court proceeded in a stepwise manner, applying statutory provisions and precedents to the facts before it:

  1. On the threshold question of whether the Court could review its earlier orders appointing an arbitrator, the Court found Municipal Corporation of Greater Mumbai v. Pratibha Industries (supra) directly apposite. The Supreme Court in that case emphasized Article 215 (High Courts being courts of record) and recognized a High Court's jurisdiction to recall its own order appointing an arbitrator. Accordingly, the Patna High Court concluded that review power is available to it with respect to proceedings under the Arbitration Act.
  2. The Court noted statutory changes effected by the Arbitration & Conciliation (Amendment) Act, 2015 (Act 3 of 2016): the substitution in Section 11 made appointments by the High Court (or Supreme Court) rather than by the Chief Justice acting in a personal capacity. The Court observed that an argument that an appointment was made by a persona designata (the Chief Justice acting individually) would not withstand scrutiny after the amendment. This supported the conclusion that the High Court retains review jurisdiction over appointment-related orders.
  3. The Court carefully examined Clause-25 of the contract. Clause-25 required (a) disputes to be brought to the Superintending Engineer within 7 days, (b) an appeal to the Chief Engineer within 30 days and (c) only on dissatisfaction could a notice be given for appointment of an arbitrator by the Engineer-in-Chief or administrative head — and the clause further stated that if such appointment by the named official was not possible, the matter shall not be referred to arbitration at all.
  4. The Court applied the jurisprudence interpreting Section 12(5) (and the Seventh Schedule) — notably TRF Ltd. and Perkins Eastman — to conclude that persons who fall within the categories of ineligibility under Section 12(5) are disqualified not only from acting as arbitrator but also from nominating another arbitrator. By parity of reasoning, the Engineer-in-Chief (or administrative head) under the present contracts would be disqualified from appointing an arbitrator by operation of law, absent an express written waiver by the parties after disputes arose.
  5. The Court observed the temporal aspect: one of the agreements (Request Case No.13) was executed on 10.08.2015 (before the amendment took effect on 23.10.2015) while the other agreement (Request Case No.12) was executed after the amendment. Importantly, there was no express written waiver recorded in the agreements waiving the applicability of Section 12(5). In those circumstances, the Court held the arbitration clause, insofar as it depended on the Engineer-in-Chief/administrative head to appoint an arbitrator, to be otiose — effectively meaning that there was no operative arbitration clause allowing appointment by that official.
  6. The Court also examined the record of the earlier request-case orders and noted the orders were passed on the first day after noticing presence of counsel for the respondent, but no consent was recorded in the judgment. The Court stated it could not infer consent. The respondent's assertion that consent existed was not supported by the earlier order's record.
  7. The Court reviewed analogous decisions (including Ashok Tubwell and a prior Nirman Engicons decision) and explained how those authorities influenced the present conclusion: where a contract restricts appointment to a named official and that officer cannot validly act or appoint under statutory rules, the contractual mechanism provides no route to arbitration and parties must approach civil courts or appropriate fora. The Court expressly acknowledged its earlier failure to notice the specific provision in the arbitration agreement as an error on the face of the record.

Holding and Implications

Holding: The review petitions are allowed and the judgments in both the request cases are recalled. As a consequence, the request cases are rejected on the same reasoning.

Implications / Consequences:

  • The immediate direct effect on the parties is that the earlier orders appointing a sole arbitrator have been recalled and the underlying request cases have been rejected.
  • Interlocutory applications, if any, in those matters are ordered to stand closed.
  • The Court concluded that, on the facts and law as interpreted in this opinion (statutory amendment, Section 12(5), and the absence of any written waiver), the contract's mechanism of appointment by the Engineer-in-Chief or administrative head cannot be given effect; therefore there is no operative arbitration clause in the sense required for appointment by that official. The parties would accordingly have to resort to civil courts or other appropriate forums unless they agree otherwise in writing.
  • The opinion does not purport to announce any new general principle beyond applying existing authorities and interpreting the contract clauses in light of statutory amendments; the decision's practical effect is to recall the earlier appointment orders and to reject the associated request cases between these parties.

Judge: K. Vinod Chandran, Chief Justice

Date of oral judgment: 04-10-2024. Uploading Date recorded in the file: 05.10.2024.

    The State of Bihar v. Kashish Developers Limited

    IN THE HIGH COURT OF JUDICATURE AT PATNA

    CIVIL REVIEW No.181 of 2023

    In

    REQUEST CASE No.12 of 2023

    ======================================================

    1. The State of Bihar through the Principal Secretary cum Commissioner Building Construction Department, Government of Bihar, Patna.

    2. The Engineer in Chief cum Additional Commissioner cum Special Secretary, Building Construction Department, Government of Bihar, Patna.

    3. The Chief Engineer, Building Construction Department, Government of Bihar, Patna.

    4. The Superintending Engineer, Building Division No. 2, Building Construction Department, Bihar, Patna.

    5. The Executive Engineer, Construction Division No. 2, Building Construction Department, Bihar, Patna.

    ... ... Petitioner/s

    Versus

    Kashish Developers Limited Registered Office at 87 Old A.G. Colony, Kadru, Ranchi Jharkhand 834002, Local Address at 201, Kamla Sadan Apartment, Punai Chak, District Patna through its Director Mukesh Kumar aged about 47 years, Gender Male, son of Sri Mukut Prasad Rao, resident of 171, Mushahari, Bijbaniya, P.S. Lauriya, West Champaran, District West Champaran.

    ... ... Opposite Party/s

    ====================================================== with

    CIVIL REVIEW No. 182 of 2023

    ======================================================

    1. The State of Bihar through the Principal Secretary cum Commissioner Building Construction Department, Government of Bihar, Patna.

    2. Construction Department, Government of Bihar, Patna.

    3. The Chief Engineer, Building Construction Department, Government of Bihar, Patna.

    4. The Superintending Engineer, Building Division No. 2, Building Construction Department, Bihar, Patna.

    5. The Executive Engineer, Construction Division No. 2, Building Construction Department, Bihar, Patna.

    ... ... Petitioner/s

    Versus

    1

    2/13

    Kashish Developers Limited, Registered office at 87 Old A.G. Colony, Kadru, Ranchi, Jharkhand 834002, Local Address at 201, Kamla Sadan Apartment, Punai Chak, District Patna through its Director Mukesh Kumar aged about 47 years, Gender Male, son of Sri Mukut Prasad Rao, resident of 171, Mushahari, Bijbaniya, P.S. Lauriya, West Champaran, District West Champaran.

    ... ... Opposite Party/s

    ======================================================

    Appearance :

    (In CIVIL REVIEW No. 181 of 2023) For the Petitioner/s : Mr. P. K. Shahi, AG Mr. Ajay, GA-5

    Mr. Pratik Kumar Sinha, AC to GA-5 Mr. Uday Bhan Singh (Ac To Gp 19) For the Opposite Party/s : Mr. Lalit Kishore, Sr. Advocate Mr. Ranjeet Kumar, Advocate

    Mr. Ayush Kumar, Advocate

    Mr. Shikhar Mani, Advocate

    Mr. Kanishka Shankar, Advocate

    Mr. Lakshmi Kumari, Advocate

    Mr. Rajnish Prakash, Advocate

    (In CIVIL REVIEW No. 182 of 2023)

    For the Petitioner/s : Mr. P. K. Shahi, AG Mr. Ajay, GA-5

    Mr. Pratik Kumar Sinha, AC to GA-5

    Mr. Uday Bhan Singh(Ac To Gp 19)

    For the Opposite Party/s : Mr. Lalit Kishore, Sr. Advocate Mr. Ranjeet Kumar, Advocate

    Mr. Ayush Kumar, Advocate

    Mr. Shikhar Mani, Advocate

    Mr. Kanishka Shankar, Advocate

    Mr. Lakshmi Kumari, Advocate

    Mr. Rajnish Prakash, Advocate

    ======================================================

    CORAM: HONOURABLE THE CHIEF JUSTICE

    ORAL JUDGMENT

    Date : 04-10-2024

    The State is in review from the judgments in the request cases, which appointed an arbitrator to decide the disputes arising out of two contracts entered into between the Construction Division of the State, with the 1stRespondent; who

    3/13

    was the petitioner in the request cases.

    2. Two civil reviews are considered together, since the issues raised are identical though the agreements executed are separate; Agreement No. 04-SBD/2017-18 in Request Case No. 12 of 2023 and Agreement No. 05-SBD/2015-16 in Request Case No. 13 of 2023. The nature of the work awarded to the 1st Respondent is also identical being the work of construction of Vidhayak Awasan (MLA Parisar) at Patna, Bihar. The review petitions are also on the same ground of the petitioner having not approached the review petitioner/the Respondent-State, as per the procedure stipulated in the arbitration clause, found in the agreement.

    3. The learned Advocate General appeared for the State and pointed out that the request cases were allowed on the first posting date; without even giving the State a chance to file a counter affidavit. Clause-25 of the General Conditions of Contract, which deals with settlement of disputes & arbitration is pointed out. It is the specific contention that any dispute arising out of the contract or in execution of the work should be taken up with the Superintending Engineer within 07 days, from whose decision there is an appeal provided to the Chief Engineer who also should give a decision within 30 days of

    4/13

    receipt of appeal, after affording an opportunity to the contractor to be heard. It is also provided that if the contractor is dissatisfied with the decision of the Chief Engineer, then a notice shall be given to the Chief Engineer for appointment of an arbitrator, which appointment shall be made by the Engineer- in-Chief or the administrative head of the Public Works Division. The 1stRespondent had completely failed to take up the issue with the Superintending Engineer or the Chief Engineer and in such circumstances, there can be no appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for brevity 'Act of 1996'), is the contention.

    4. A similar provision was considered in Request Case No. 105 of 2019, titled as Nirman Engicons Private Limited Vs. The State of Bihar & Ors, and analogous cases, by decision dated 25.11.2020, in which the request was declined noticing the provision available under Clause-25. Reliance is also placed on the judgment of the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai v. Pratibha Industries Limited, (2019) 3 SCC 203, to contend that a review is possible to an order appointing an arbitrator under the Act of 1996.

    5. Shri Lalit Kishore, learned Senior Counsel

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    appearing for the respondent would point out that the very same contention was raised before the Hon'ble Sole Arbitrator, who is a former Judge of the Hon'ble Supreme Court, which was disposed of by Annexure-B dated 02.05.2023; which is not stated in the review application. It is also asserted that five request cases, between the same parties, were allowed on the same day and in all the five cases, an arbitrator was appointed with consent and hence, there is no case for review. It is also pointed out that the arbitration had proceeded considerably before the sole arbitrator and substantial amounts have been expended for the arbitration proceeding. There is absolutely no ground for review of the judgment passed appointing a sole arbitrator. Reliance is placed on Ashok Tubwell and Engineering Corporation v. Union of India, (2015) 5 SCC 702

    and Demerara Distilleries (P) Ltd. v. Demerara Distillers Ltd.,

    (2015) 13 SCC 610.

    6. On the question of whether review is permissible,

    Municipal Corporation of Greater Mumbai (supra) is apposite. That was a case in which the General Conditions of Contract specified that no arbitration shall be allowed; despite which the court appointed an arbitrator in an application filed under Section 9 of the Act of 1996. An application for review was

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    allowed by the learned Single Judge recalling the order appointing the sole arbitrator, which was reversed by a Division Bench. The Division Bench relied on Section 5 of the Act of 1996, which, according to the Division Bench, mandated that there would be no judicial intervention with respect to anything included in Part-1 of the Act of 1996. It was also found that there was no provision enabling the court to review its own order. It was also argued by the respondents before the Hon'ble Supreme Court that the Arbitration Act is a self-contained Code and the court cannot look outside the four-corners of the Act to find a power of review. The Hon'ble Supreme Court, however, emphasised Article 215 of the Constitution of India, which designates the High Courts as courts of record; in which inheres jurisdiction to recall its own order. Reliance was placed on a number of judgments of the Hon'ble Supreme Court and the arguments of the respondents were rejected. The judgment of the Division Bench of the High Court was set aside and the power of review exercised by the learned Single Judge was held to be proper.

    7. It is also a fact that by Arbitration & Conciliation (Amendment) Act, 2015 (Act 3 of 2016), the words "the Chief Justice or any person or institution designated by him" in sub-

    7/13

    sections 4, 5 and 6 of Section 11 of the Act of 1996 was substituted by the words, "the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court". After the said amendment, the appointment made of an arbitrator is by the High Court and even an argument that it was passed by a persona designata; the Chief Justice will not stand scrutiny. Hence, there is no question of the review power not being available to this Court with respect to the proceedings under the Act of 1996.

    8. This Court has also perused the Judges papers of the request cases, and it is seen that the judgment was passed on the first day; but after noticing the presence of the learned Counsel for the respondent also. However, there is no consent recorded in the judgment and we cannot infer it. The contention also is only that there was a procedure available under the contract, which had to be scrupulously followed, insofar as the appointment of an arbitrator for settlement of disputes, through arbitration. The procedure also prescribes an appointment to be made by the Engineer-in-Chief or the head of the Public Works Division, which, as of now, is not permissible under Section 12 read with Schedule-V of the Act of 1996.

    9. Voestalpine Schienen Gmbh v. Delhi Metro Rail Corporation Limited .

    8/13

    Corpn. Ltd, (2017) 4 SCC 665 held that though the nature and source of arbitrator's appointment could be deduced from the agreement entered into between the parties, yet non- independence and non-impartiality of such arbitrator would render him ineligible to conduct the arbitration. TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, further held that the Managing Director of the awarder is rendered incapable of carrying out arbitration by virtue of Section 12(5) of the Act of 1996, who would also be rendered ineligible to nominate another person as arbitrator. Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760

    found that the logical deduction from TRF Ltd.(supra) would be that that Managing Director after becoming ineligible by operation of law, would also be ineligible to nominate an arbitrator. The ineligibility as a result of operation of law, would not only be the ineligibility to act as an arbitrator, but also to appoint anyone else as an arbitrator. Hence, as of now, the Engineer-in-Chief would not be entitled to appoint an arbitrator; the particular designate having been disqualified by operation of law.

    10. Nirman Engicons Private Limited (supra) was a case in which reliance was placed on another judgment of the

    9/13

    Hon'ble Supreme Court in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML(JV), (2020) 14 SCC

    712. Therein, a Co-ordinate Bench, after considering TRF Ltd.

    (supra), held that when a panel of retired employees is proffered by the Railways as per Clause 64(3)(b) of the General Conditions of Contract; with the details of those retired officers, and the contractor is required to nominate two persons from the list, then the further nomination made by the awarder gets counter balanced by the power of choice given to the contractor. The decision in TRF Ltd. (supra) was held to be not applicable to the General Conditions of Contract of the Railways; which enables the parties to choose two arbitrators. This Court is informed that the aforesaid decision has been referred by a Co- ordinate Bench to a Larger Bench. However, it has to be pertinently observed that there is no such distinguishing clause, in the present contract as is available in the General Conditions of Contract of the Railways.

    11. Insofar as the present contract is concerned, what is relevant is the specific condition in Clause-25, which reads as under:-

    "It is also a term of this contract that no person other than a person appointed by such Engineer- in-Charge or the administrative head of the

    10/13

    department as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitrator at all."

    Hence, by reason of substitution of Section 12 by Act 3 of 2016, the arbitration clause enabling settlement of dispute through arbitration becomes otiose since the Engineer-in-Chief or the administrative head of the Public Works Division is dis-entitled from appointing an arbitrator.

    12. Sub-section (5) of Section 12 is also relevant, which is extracted hereunder:-

    "12(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing."

    One of the agreements; ie: the one in Request Case No. 13 of 2023 was executed on 10.08.2015, prior to the amendment; which was made effective retrospectively from 23.10.2015. The agreement in Request Case No. 12 of 2023 was after the amendment was enforced. Obviously, after the amendment by

    11/13

    substitution and insertion, there was no agreement entered into by the parties to waive the applicability of this sub-section by an express agreement in writing. In the teeth of the above circumstances, this Court has to find that there is no arbitration clause in the agreement entered into between the parties.

    13. Ashok Tubwell and Engineering Corporation

    (supra) considered the term in the arbitration agreement that no person other than the gazetted railway officers should act as arbitrator and if that is not possible, matter not to be referred to arbitration at all. It was held that if such officer is not appointed as arbitrator, the only option available to the parties is to approach the Civil Court by way of a suit. It was also noticed by the Hon'ble Supreme Court that in that case when the application under Section 11 was moved before the Chief Justice for appointment of an arbitrator, both parties agreed to the appointment of a former Judge; which consent raises a presumption that there was a new contract by way of novation, whereby parties stand agreed to the appointment of someone else other than the named arbitrator.

    14. In the present case, as we noticed at the outset, despite a contention having been raised of consent, there is nothing recorded in the order, to find a consent of the parties. In

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    fact, the order indicates that there are no disputes about a number of aspects from(a) to (g); out of which, (g) refers to the respondents having failed to appoint an arbitrator pursuant to the invocation of the arbitration clause by the petitioner. The contention that the arbitration clause was never invoked by the petitioner stands undisputed. Even if it was so invoked, the Engineer-in-Chief could not have appointed an arbitrator due to the disqualification arising from the Act of 1996, which disqualification has also been declared by the binding precedents of the Hon'ble Supreme Court.

    15. On the above reasoning, this Court finds that the present cases are almost similar to Municipal Corporation of Greater Mumbai (supra); wherein there was a specific clause that there shall be no arbitration. In the present case, there is no provision for arbitration, if the appointment is not made by the Engineer In Chief or the administrative head of the Public Works Division. In the context of the disability visited on the Engineer-in-Chief and the administrative head to make appointment of an arbitrator; the agreement does not have a clause for arbitration and the parties will have to approach the Civil Court or any other appropriate forum. That this Court failed to notice the specific provision in the arbitration

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    agreement is an error on the face of the record.

    16. Review petitions are allowed and the judgments in both the request cases are recalled. The request cases, hence, as a consequence, on the very same reasoning stand rejected.

    17. Interlocutory applications, if any, shall stand closed.

    (K. Vinod Chandran, CJ)

    Sujit/-

    AFR/NAFR NAFR
    CAV DATE
    Uploading Date 05.10.2024
    Transmission Date

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    The State of Bihar v. Kashish Developers Limited
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