REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 11824-11825     OF 2018 (Arising out of SLP(C) Nos.1274-75 of 2015)

SP SINGLA CONSTRUCTIONS PVT. LTD.          …Appellant

VERSUS

STATE OF HIMACHAL PRADESH AND  ANOTHER           …Respondents

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. These appeals arise out of the judgments dated 10.03.2014 in

Arbitration Case No.4049 of 2013 and dated 01.09.2014 in Review

Petition  No.  RPST/20087/2014  passed  by  the  High  Court  of

Himachal Pradesh in and by which the High Court dismissed the

Arbitration  Petition  and  Review  Petition  filed  by  the  appellant

declining to appoint arbitrator holding that as per the terms of the

agreement, arbitrator had already been appointed.  

3. Brief  facts  which  led  to  the  filing  of  these  appeals  are  as

follows:-

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The  appellant  was  awarded  construction  work  contract  on

19.12.2006  relating  to  balance  work  of  214.00  mtrs.  span  C/C

bearings  on  abutment  bridge  over  river  Beas  at  Harsipattan  on

Mandi  Rewalsar  Chandesh-Rakhota  Maserah  Sarkaghat  Tihra

Sandhole  Alampur  Jawalamukhi  road  for  a  sum  of

Rs.14,29,81,500/-.  An agreement was also entered into between

the parties and clause (65) of the General Conditions of Contract

contains arbitration  clause.  The  period allowed for  completion of

work was on or before 04.01.2009. However, extension was granted

to the appellant up to 30.06.2010. The work was completed by the

appellant on 04.06.2011 and payment for the execution of work was

made.  The  appellant  raised  a  dispute  and  requested  for  the

appointment of arbitrator  vide its letter dated 18.10.2013. Pursuant

to  the  request  of  the  appellant,  the  Chief  Engineer,  HPPWD

appointed the “Superintendent Engineer, Arbitration Circle, HPPWD,

Solan” as the arbitrator  on 30.10.2013 and the said appointment

had  been  made  in  terms  of  clause  (65)  of  the  agreement.  The

arbitrator  entered  upon  reference  on  11.11.2013.  The  appellant

after  requesting for  the appointment  of  arbitrator  either  remained

absent from the proceedings or sought adjournments stating that he

intends to challenge the appointment of arbitrator before the Chief

Justice  as  per  the  provisions  of  Arbitration  and  Conciliation  Act,

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1996.  Even after hearing, no statement of claim was filed by the

appellant. On 06.08.2014, arbitration proceedings were terminated

under Section 25(a) of the Arbitration and Conciliation Act, 1996.  

4. Being  aggrieved  by  the  appointment  of  “Superintendent

Engineer, Arbitration Circle, Solan, HPPWD” as the arbitrator,  the

appellant filed petition before the High Court under Section 11(6) of

the 1996 Act praying for appointment of independent arbitrator.  The

High  Court  placed  reliance  upon  the  judgment  of  this  Court  in

Antrix Corporation Limited v. Devas Multimedia Private Limited

(2014) 11 SCC 560 wherein it was held that in case, if any party is

dissatisfied or aggrieved by the appointment of arbitrator in terms of

the agreement by other party/parties, his remedy would be by way

of petition under Section 13 of the 1996 Act, and, thereafter while

challenging the award under Section 34 of the 1996 Act.  The High

Court  held that  the appointment  of  “Superintendent  Engineer”  as

arbitrator  being  in  terms  of  clause  (65)  of  the  agreement,

Section 11(6) of the Act cannot be invoked.  The appointment of

arbitrator could not be challenged by way of an application under

Section 11(6) of the 1996 Act. Being aggrieved by the dismissal of

the arbitration petition, the appellant is before us.

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5. On  behalf  of  the  appellant,  learned  senior  counsel  Mr.

Maninder  Singh  submitted  that  the  appointment  by  office  after

coming into operation of the 1996 Act, was no more permissible and

any appointment could only be made in terms of Section 11 of 1996

Act.  It was further submitted that since the arbitrator appointed by

office had entered upon the reference, the appellant was compelled

to  file  Arbitration  Petition  No.4049  of  2013  and  the  High  Court

erroneously rejected the prayer made on behalf of the appellant for

appointment of  an independent arbitrator  by name.  The learned

senior  counsel  further  submitted  that  the  arbitrator  appointed  by

office, is an employee in service of the HPPWD which the provision

of  Section  12(5)  bars  at  the  threshold.   Learned senior  counsel

placed reliance upon  Ratna Infrastructure Projects Pvt. Ltd. v.

Meja Urja Nigam Private Limited (2017) SCC Online Del 7808.

6. Refuting the above contention, on behalf of the respondent-

State,  learned  counsel  submitted  that  the  appointment  of

Superintendent Engineer, Arbitration Circle is as per clause (65) of

the agreement and as per the provisions of law.  In response to the

contention  that  Section  12(5)  of  the  Amendment  Act,  2015  bars

appointment of arbitrator by post, the learned  counsel for the State

placed reliance  upon  Board  of  Control  for  Cricket  in  India  v.

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Kochi Cricket Private Limited and others (2018) 6 SCC 287 and

submitted  that  the  provisions  of  the  Amendment  Act,  2015 shall

apply in relation to arbitral proceedings commenced on or after the

date of commencement of the Amendment Act, 2015 and shall not

apply  to  the  arbitral  proceedings  commenced  prior  to  the

Amendment  Act,  2015 unless  the  parties  otherwise  agree.   The

learned counsel  submitted that  the provision contained in  clause

(65) of the general conditions of the Contract would not amount to

agreement of the parties so as to imply application of the provisions

of the Amendment Act, 2015.  

7. We have carefully considered the contentions of the parties

and perused the impugned judgment and materials on record.  The

point falling for consideration in this appeal is that in the light of the

agreement  between  the  parties  in  clause  (65)  of  the  general

conditions  of  contract  whether  the  appellant/contractor  can

challenge  the  appointment  of  the  Superintendent  Engineer,

Arbitration Circle as Arbitrator to resolve the dispute between the

parties.

8. By  the  order  of  HPPWD  dated  30.10.2013,  the

Superintendent  Engineer,  Arbitration  Circle,  HPPWD,  Solan  was

appointed  as  the  sole  Arbitrator  to  decide  and  make  its  award

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regarding claim/dispute given by the appellant/contractor.  The main

thrust  of  challenge for  appointment  of  sole arbitrator  was on the

ground that the arbitrator had not been appointed by name but, had

been appointed by designation.  It was submitted that appointment

of arbitrator by office is not permissible and appointment ought to

have  been  made  by  name  and  the  same  is  evident  from  bare

perusal of clause (65) of the contract. It was submitted that as per

Section 11(1) of the 1996 Act  “a person of any nationality may be

an arbitrator, unless otherwise agreed by the parties…….”. It was

submitted  that  the  Arbitrator  appointed  by  the  office  is  not  an

appointment in terms of clause (65) of the contract and this aspect

has not been properly considered by the High Court.

9. For  proper appreciation of  the contentions,  we may usually

refer  to  Clause  (65)  of  the  general  conditions  of  contract  which

reads as under:-  

“Clause  65  of  the  General  Conditions  of  Contract-…..Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs drawings and instructions  therein  before  mentioned  and  as  to  the  quality  of workmanship  of  materials  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 contractor designs drawings, specification and  estimates,  instructions  orders  or  these  conditions  otherwise concerning  the  works  of  the  execution  or  failure  to  execute  the same whether arising during the progress of the work or  after the completion or abandonment thereof shall  be referred to the sole arbitration of the person appointed by the Engineer-in-Chief/Chief Engineer, Himachal Pradesh Public Works Department. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant that he had to deal with the matters to

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which the contract relates, and that in the course of his duties as Government servant he had expressed views on all or any of the matters in dispute or different. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason that (sic) the Chief Engineer, HPPWD at the time of such transfer vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor, it is also a terms of this contract that no person other than a person appointed by the Chief Engineer, HPPWD, should act as arbitrator and if for any reason that is not possible the matter is not be claim in dispute is Rs.50,000/- (Rupees Fifty Thousand) and above, the arbitrator shall give reasons for the award.

Subject as aforesaid the provision of the Arbitration Act, 1940 or any statutory  modification  or  re-enactment  thereof  and the  rules made  thereunder  and  for  the  time  being  shall  apply  to  the arbitration proceeding under this clause.” [Underlining added]

10. A perusal of clause (65) makes it apparently clear that it was

permissible  to  appoint  a  person  by  designation  and  this  will  be

evident from clause (65), in particular the sentence “the arbitrator to

whom the matter is originally referred being transferred or vacating

his office or being unable to act for any reason the Chief Engineer is

to  appoint  another  person….”.   If  appointments  were  only  to  be

made by name and not by designation there could be no question of

further appointment on the Arbitrator vacating his office.  It is only

when an Arbitrator is appointed by designation that the question of a

vacancy  upon  the  incumbent  vacating  office  could  arise  thereby

enabling the Chief  Engineer  to  appoint  another  person to act  as

arbitrator. The Superintendent Engineer, Arbitration Circle appointed

as the Arbitrator is from the very arbitration circle, HPPWD and such

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appointment is only as per clause (65) of the contract and we find

no merit in the objection raised by the appellant.   

11. Likewise, there is no merit in the contention of the appellant-

contractor that the appointed arbitrator is an employee in service of

the HPPWD which the provision of Section 12(5) of the 1996 Act (as

amended w.e.f. 23.10.2015) bars at the threshold itself.  In a catena

of  judgments,  the Supreme Court  held that  arbitration clauses in

government contracts providing that an employee of the department

will  be  the  sole  arbitrator  are  neither  void  nor  unenforceable.

[Indian Oil  Corporation Limited and others v.  Raja Transport

Private Limited (2009) 8 SCC 520,  Ace Pipeline Contracts (P)

Ltd. v. Bharat Petroleum Corporation Limited (2007) 5 SCC 304,

Union of India and another v. M.P. Gupta (2004) 10 SCC 504]

The fact that a named arbitrator is an employee of one of the parties

is not ipso facto a ground to raise a presumption of bias or lack of

independence  on  his  part.   The  arbitration  agreements  in

government contracts providing that an employee of the department

or a higher official unconnected with the work or the contract will be

the arbitrator are neither void nor unenforceable.   

12. Observing  that,  in  government  contracts  before  appointing

arbitrators,  the  appointing  authority  should  be  more  vigilant  and

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more responsible in choosing arbitrators who are in a position to

conduct  arbitral  proceedings  in  an  efficient  manner  without

comprising  with  the  other  duties,  in  Union  of  India  v.  Uttar

Pradesh State Bridge Corporation Limited (2015) 2 SCC 52, it

was held as under:-

“17. In  the  case  of  contracts  between  government corporations/State-owned  companies  with  private parties/contractors, the terms of the agreement are usually drawn by  the  government  company  or  public  sector  undertakings. Government  contracts  have  broadly  two  kinds  of  arbitration clauses, first where a named officer is to act as sole arbitrator; and second, where a senior officer like a Managing Director, nominates a designated officer to act as the sole arbitrator.  No doubt, such clauses  which  give  the  Government  a  dominant  position  to constitute the Arbitral  Tribunal  are held to be valid.  At  the same time,  it  also  casts  an  onerous  and  responsible  duty  upon  the persona  designata  to  appoint  such  persons/officers  as  the arbitrators  who  are  not  only  able  to  function  independently  and impartially,  but  are  in  a  position  to  devote  adequate  time  in conducting the arbitration. If the Government has nominated those officers  as  arbitrators  who  are  not  able  to  devote  time  to  the arbitration proceedings or become incapable of acting as arbitrators because of frequent  transfers,  etc.,  then the principle of  “default procedure” at least in the cases where Government has assumed the role of appointment of arbitrators to itself, has to be applied in the case of substitute arbitrators as well and the Court will step in to appoint  the  arbitrator  by  keeping  aside  the  procedure  which  is agreed to between the parties. However, it will  depend upon the facts of  a particular case as to whether such a course of action should be taken or not. What we emphasise is that Court  is not powerless in this regard.”

As  pointed  out  earlier,  in  the  case  at  hand,  the  Superintendent

Engineer,  Arbitration  Circle,  HPPWD  was  appointed  as  the  sole

Arbitrator  who,  by  virtue  of  his  designation,  regularly  does  the

arbitration  devoting  time to  the  arbitration  proceedings  and  such

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appointment  of  Superintendent  Engineer  cannot  be said  to  be a

deviation from clause (65) of the agreement.

13. Any challenge regarding the appointment of an arbitrator as

per the terms of the agreement between the parties must be viewed

in the context of the agreement between the parties. As pointed out

earlier,  the  parties  have  mutually  agreed  that  there  will  be  sole

Arbitration by the person appointed by the Engineer-in-Chief  and

that the appellant shall have no objection to any such appointment

that  the Arbitrator  so  appointed is  a  Government  Servant.  If  the

appellant has any grievance that the appointment of the arbitrator is

by ‘post’ and not by ‘person’, the appellant ought to have raised the

challenge before the arbitrator in the first instance.  Be it noted, in

the petition filed before the High Court under Section 11(6) of the

Arbitration and Conciliation Act, 1996 on 28.12.2013, the appellant

has only prayed for quashing the appointment of the Superintendent

Engineer, Arbitration Circle, HPPWD, Solan as the sole arbitrator as

unconstitutional and sought for appointment of an independent and

impartial  sole  arbitrator  to  adjudicate  the  dispute  between  the

parties.  It is fairly well settled that any challenge to the arbitrator

appointed ought to have been raised before the arbitrator himself in

the first instance.

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14. Drawing our attention to the wordings in Clause (65) “that the

agreement is subject to any statutory modification or re-enactment

thereof and the rules made thereunder and for the time being shall

apply to the arbitration proceeding under this clause” the learned

senior counsel contended that these words would certainly attract

Section 12(5) of the Act as amended with effect from 23.10.2015. In

this regard, the learned senior counsel placed reliance upon Delhi

High Court judgment in Ratna Infrastructure Projects Pvt. Ltd. v.

Meja Urja  Nigam Private Limited (2017)  SCC Online Del  7808

wherein interpreting the similar words in a contract, Delhi High Court

held  that  those  words  satisfy  the  requirement  of  Section  26

(amended Act of 2015) of there being an agreement between the

parties that  the Act  as amended with effect  from 23.10.2015 will

apply and held as under:-

“22. ……. The words “any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall  apply to the arbitration…” satisfies the requirement of Section 26 of there being an agreement between the parties that the Act as amended with effect from 23rd October 2015 will apply. The  Court  is  not  prepared  to  draw  the  fine  distinction  between ‘agree’ and ‘agreed’.  Once the amendment to  the clause clearly stated  that  all  statutory  modidications  and  re-enactments  would apply, then there is no need for further agreement in that respect after 23rd October, 2015. The plea of the Respondent in this regard is rejected.

23. The net result is that Section 12(5) as amended with effect from 23rd October 2015 would apply. Section 12(5) clearly prohibits the employee of one of the parties from being an Arbitrator. This would straightway disqualify Mr. Kher who happens to be a serving GM of the Respondent. Therefore it is to no avail that the Respondent has by  its  letter  dated  21st August  2016  appointed  Mr.  Kher  as  an

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Arbitrator to adjudicate the Arbitration Case Nos. 1 of 2013 and 1 of 2014. His mandate stands terminated.”

15. Considering the facts and circumstances of the present case,

we are not inclined to go into the merits of this contention of the

appellant nor examine the correctness or otherwise of the above

view taken by the Delhi High Court in Ratna Infrastructure Projects

case; suffice it to note that as per Section 26 of the Arbitration and

Conciliation (Amendment) Act, 2015 the provisions of the Amended

Act, 2015 shall not apply to the arbitral proceedings commenced in

accordance with the provisions of Section 21 of the Principal Act

before the commencement of the Amendment Act unless the parties

otherwise agree.   In  the facts  and circumstances of  the present

case,  the proviso in  clause (65)  of  the general  conditions of  the

contract cannot be taken to be the agreement between the parties

so as to apply the provisions of the amended Act.  As per Section

26 of the Act, the provisions of the Amendment Act, 2015 shall apply

in relation to arbitral proceedings commenced on or after the date of

commencement of  the Amendment Act,  2015 (w.e.f.  23.10.2015).

In the present case, arbitration proceedings commenced way back

in 2013, much prior to coming into force of the amended Act and

therefore, provisions of the Amended Act cannot be invoked.

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16. In  Board of Control for Cricket in India v. Kochi Cricket

Private Limited and others, (2018) 6 SCC 287, this Court has held

that  the  provisions  of  Amendment  Act,  2015  (with  effect  from

23.10.2015)  cannot  have  retrospective  operation  in  the  arbitral

proceedings  already  commenced  unless  the  parties  otherwise

agree and held as under:-

“37. What  will  be  noticed,  so far  as  the first  part  is  concerned, which states—

“26.  Act  not  to  apply  to  pending  arbitral proceedings.—Nothing  contained  in  this  Act  shall apply  to  the  arbitral  proceedings  commenced,  in accordance with the provisions of Section 21 of the principal  Act,  before the commencement  of  this  Act unless the parties otherwise agree.…”

is that: (1) “the arbitral proceedings” and their commencement is mentioned in the context of Section 21 of the principal Act; (2) the expression used is “to” and not “in relation to”; and (3) parties may otherwise  agree.  So  far  as  the  second  part  of  Section  26  is concerned, namely, the part which reads, “… but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act” makes it clear that the expression “in relation to” is used; and the expression “the” arbitral proceedings and “in accordance with the provisions of Section 21 of the principal Act” is conspicuous by its absence.”

17. Immediately  after  the  appointment  of  the  Superintendent

Engineer, Arbitration Circle as the sole Arbitrator (30.10.2013), the

appellant preferred Arbitration Petition No.4049/2013 (28.12.2013)

before  the  High  Court  under  Section  11(6),  14  and  15  of  the

Arbitration  and  Conciliation  Act,  1996  for  appointment  of  an

independent sole Arbitrator.   

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18. The High Court placed reliance upon the judgment in Antrix

Corporation Limited v. Devas Multimedia Private Limited (2014)

11  SCC  560  and  held  that  when  the  Superintendent  Engineer,

Arbitration Circle was appointed as the Arbitrator  in terms of  the

agreement (or arbitration clause), the provisions of sub-section (6)

of  Section 11 cannot  be invoked again.   The High Court  further

observed that in case, the other party is dissatisfied or aggrieved by

the  appointment  of  an  arbitrator  in  terms  of  the  agreement,  his

remedy would be by way of petition under Section 13 and thereafter

while challenging the award under Section 34 of the 1996 Act.   

19. The  High  Court  in  the  impugned judgment  placed  reliance

upon  the  judgment  in  Antrix  Corporation  Limited  v.  Devas

Multimedia  Private  Limited (2014)  11  SCC  560  wherein  the

Supreme Court held as under:-

“31. The matter is not as complex as it seems and in our view, once the  arbitration  agreement  had  been  invoked  by  Devas  and  a nominee arbitrator had also been appointed by it,  the arbitration agreement could not have been invoked for a second time by the petitioner, which was fully aware of the appointment made by the respondent.  It  would lead to an anomalous state of affairs if  the appointment of an arbitrator once made, could be questioned in a subsequent  proceeding  initiated  by  the  other  party  also  for  the appointment of an arbitrator. In our view, while the petitioner was certainly entitled to challenge the appointment of the arbitrator at the instance of Devas, it could not do so by way of an independent proceeding under Section 11(6) of the 1996 Act. While power has been  vested  in  the  Chief  Justice  to  appoint  an  arbitrator  under Section 11(6) of the 1996 Act, such appointment can be questioned under Section 13 thereof. In a proceeding under Section 11 of the 1996 Act, the Chief Justice cannot replace one arbitrator already appointed in exercise of the arbitration agreement.”

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………. 33. Sub-section  (6)  of  Section  11  of  the  1996  Act,  quite categorically provides that where the parties fail to act in terms of a procedure agreed upon by them, the provisions of sub-section (6) may  be  invoked  by  any  of  the  parties.  Where  in  terms  of  the agreement, the arbitration clause has already been invoked by one of the parties thereto under the ICC Rules, the provisions of sub- section (6) cannot be invoked again, and, in case the other party is dissatisfied  or  aggrieved  by  the  appointment  of  an  arbitrator  in terms  of  the  agreement,  his/its  remedy  would  be  by  way  of  a petition under Section 13, and, thereafter, under Section 34 of the 1996 Act.”

In the present case, the Arbitrator has been appointed as per clause

(65) of the agreement and as per the provisions of law.  Once, the

appointment  of  an  arbitrator  is  made  at  the  instance  of  the

government, the arbitration agreement could not have been invoked

for the second time.

20. As pointed out earlier the Arbitrator has already entered upon

reference  on  11.11.2013.  The  Arbitrator  had  first  hearing  on

07.12.2013; on which date appellant-contractor was absent. For the

next date of hearing on 13.03.2014 the Arbitrator has recorded the

finding  that  the  appellant-claimant-contractor  was  absent  without

any intimation to the Tribunal. In this regard, Mr. Maninder Singh,

the learned Senior Council for the appellant has drawn our attention

to the letter dated 12.03.2014 sent by the appellant requesting for

adjournment.  Similarly,  in  the  next  date  of  hearings  before  the

arbitrator  namely,  03.04.2014,  25.04.2014  and  06.08.2014  the

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appellant-contractor  did  not  appear;  but  only  sent  the  letters

requesting  for  adjournment.  On  03.04.2014,  the  matter  was

adjourned  to  25.04.2014  directing  that  both  parties  to  come

prepared for the next date of hearing on 25.04.2014. Similar was

the order  passed on 25.04.2014 that  both  parties have to  come

prepared  for  the  next  date  of  hearing  on  06.08.2014.  Since  the

appellant-claimant did not appear before the Arbitrator, the Arbitrator

terminated the proceedings on 06.08.2014 under Section 25(a) of

the 1996 Act.

21. Section 25 of the Arbitration Act, 1996 deals with the situation

where the parties commit default without showing sufficient cause

and  consequent  termination  of  the  proceedings.   Section  25

provides three situations where on account of the default of a party,

the arbitral  tribunal shall  terminate the proceedings which are as

under:-

(i) Under  Section  25(a)  where  the  claimant  fails  to

communicate his statement  of  claim in accordance

with sub-section (1) of Section 23;

(ii) Under Section 25(b) continue the proceedings on the

failure of the respondent to communicate his claim of

defence  in  accordance  with  sub-section  (1)  of

Section 23;

(iii) Under Section 25(c) continue the proceedings, and

make the arbitral award on the evidence before it, in

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the  event  of  a  party  failing  to  appear  at  an  oral

hearing or produce documentary evidence.

Section 25(a) provides that the Arbitral Tribunal shall terminate the

proceedings where the claimants failed to communicate his claim in

accordance with sub-section (1) of Section 23 of the Act.  In the

present case, the appellant has failed to file his statement of claim;

and  only  sent  the  communication  to  the  arbitrator  seeking

adjournment on the ground that the appellant has approached the

High Court by filing petition under Section 11(6) of the Act.  When

the  parties  have  specifically  agreed  for  appointment  of  sole

Arbitrator  of  the person appointed by the Engineer-in-Chief/Chief

Engineer, HPPWD, the appellant was not right in approaching the

High Court seeking appointment of an independent Arbitrator.  

22. Inspite of extension of time, since the appellant-contractor had

not  filed  statement  of  claim,  the  arbitrator  terminated  the

proceedings under Section 25(a) of the 1996 Act by proceedings

dated  06.08.2014.  The  appellant-contractor  did  not  file  his

statement  of  claim  before  the  arbitrator  since  the  appellant  had

approached the High Court by filing petition under Section 11(6) of

the 1996 Act, probably under the advice that the appellant can get

an  independent  arbitrator  appointed.   The  appellant  had  been

writing  letters  to  the  arbitrator  before  the  hearing  seeking

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adjournment. However, on the fourth occasion, proceedings were

simply terminated since no hearings were held on earlier occasions,

he  expected  that  his  request  might  be  accepted.  The  arbitrator

could  have  issued  a  notice  warning  the  appellant  that  no

adjournment would be granted under any circumstances. Since, no

such warning was given, we deem it appropriate to set aside the

order of termination.  Appellant had made a claim on account of

delay  as  indicated  in  his  letter  dated  18.10.2013  under  various

heads.  In  the  interest  of  justice,  in  our  considered  view,  an

opportunity  is  to  be  afforded  to  the  appellant  to  go  before  the

departmental arbitrator (as agreed by the parties in clause (65) of

the  general  conditions  of  contract)  and  the  proceedings  of  the

arbitrator dated 06.08.2014 terminating the proceedings is to be set

aside. We are conscious that after the Amendment Act, 2015, there

cannot  be a  departmental  arbitrator.  As discussed earlier,  in  this

case, the agreement between the parties is dated 19.12.2006 and

the relationship between the parties are governed by the general

conditions of the contract dated 19.12.2006, the provisions of the

Amendment Act, 2015 cannot be invoked.  

23. In the result, the appeals are disposed of with the following

directions:-

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(i)  the  proceedings  of  the  arbitrator  dated  06.08.2014

terminating the arbitral proceedings is set aside. In terms

of clause (65) of the general conditions of contract, the

Chief  Engineer,  Himachal  Pradesh  Public  Works

Department is directed to appoint an arbitrator in terms

of clause (65) of the agreement.  

(ii) the appellant shall file his claim before the arbitrator

so  nominated  and  the  arbitrator  shall  afford  sufficient

opportunities to both the parties and proceed with the

matter in accordance with law.  

We make it clear that we have not expressed any opinion on the

merits of the claim of the appellant.

…………….……………J.  [R. BANUMATHI]

…………….……………J.      [INDIRA BANERJEE]

New Delhi; December 04, 2018

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