IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF APRIL 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE Civil Misc. Petition No.243 of 2018 BETWEEN:
M/S. RSR INFRA – KICPL (JV), NO.79-15-8/2, PRASHANTHI ESTATES, TILAK ROAD, RAJAMAHENDRAVARAM, EAST GODAVARI DISTRICT, ANDHRA PRADESH-533 103, REPRESENTED BY SRI. GOPALAKRISHNA (BY SRI. VASUDEVA NAIDU S., ADV.) AND:
THE UNION OF INDIA REPRESENTED BY 1. THE GENERAL MANAGER, SOUTH WESTERN RAILWAY, GADAG ROAD, HUBLI.
2. THE CHIEF ADMINISTRATIVE OFFICER, CONSTRUCTION, SOUTH WESTERN RAILWAY, NO.18, MILLERS ROAD, BENGALURU-560 046.
3. THE CHIEF ENGINEER (WEST), CONSTRUCTION, …PETITIONER SOUTH WESTERN RAILWAY, NO.18, MILLERS ROAD, BENGALURU-560 046 (BY SRI.C.BABU, ADV., FOR R1 TO R3) …RESPONDENTS THIS CMP IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT A SOLE ARBITRATOR TO RESOLVE THE DISPUTES AND OUTSTANDING ISSUES BETWEEN THE PARTIES IN ACCORDANCE WITH THE PROVISIONS OF AGREEMENT BEARING NO.CAO/CN/BNC/74084/A/37/V/16 DATED 10.05.2016 VIDE ANNEXURE – ‘B’ IN CONSONANCE WITH ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 1996 IN THE INTEREST OF JUSTICE AND EQUITY.
THIS CMP COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri. Vasudeva Naidu S., learned counsel for petitioner.
Sri. Babu C., learned counsel for respondents.
2. Petition is admitted for hearing. With consent of the parties, same is heard finally.
3. By means of this petition under Section 11(6) and 12(5) of the Arbitration and Conciliation Act, 1996, the petitioner seeks appointment of an arbitrator.
4. Facts giving rise to filing of the petition briefly stated are that the respondent No.2 had invited tender on 14.9.2015 for Construction of Doubling between Yelahanka – Penukonda, Earth work in Cutting, Embankment and construction of Minor bridges, side drains, trolley refuges, toe walls, retaining walls, gate lodges, extension of RUB’s/LC's and other connected works between Oddarahalli – Thodebhavi from KM- 45/000 to 64/000. The petitioner had submitted its bid in response to the aforesaid notice inviting tender. The contract was awarded to the petitioner on 10.2.2016 and a letter of acceptance was issued in his favour. Thereafter, the parties entered into an agreement on 10.5.2016. General conditions of the contract as well as special conditions of the contract also form part of the agreement. The respondents did not provide for an encumbrance free site. As a result of which, there was a delay in execution of the work. The petitioner furnished no claim certificate on 10.8.2017. However, payment was made to the petitioner on 16.12.2017 in respect of his final bills. Thereafter the petitioner raised a dispute with regard to payment of incentive bonus as he had completed the work well before the time stipulated in the contract and sent the notice on 09.05.2018 invoking the arbitration clause. However, the aforesaid notice failed to evoke any response from the respondent. In this background, the present petition has been filed.
5. Learned counsel for the petitioner submitted that the parties have entered into an agreement on 10.05.2016. It contains an arbitration clause and the petitioner was made to give the no claim certificate under coercion and undue influence and after submission of the no claim certificate, payment of amount due and payable to the petitioner under the final bill was paid to him after 3½ years i.e., on 16.12.2017.
6. On the other hand, learned counsel for the respondents while placing reliance on decision the of Hon’ble Supreme Court in ‘M/s. ONGC Mangalore Petro Chemical Limited vs. M/s. ANS Construction Limited and Another’, AIR 2018 Supreme Court 96, submitted that since the petitioner had furnished no claim certificate and the entire payment was made to the petitioner, there were no rights and obligations between the parties and therefore the arbitrator cannot be appointed.
7. I have considered the submission made by both the sides. Admittedly, in the instant case, the parties have entered into an agreement on 10.5.2016. It is also not in dispute that clause 63 & 64 of the general conditions of the contract contains an arbitration clause. The petitioner was made to furnish the no claim certificate on 10.8.2017. The aforesaid no claim certificate is in the prescribed proforma which states that the petitioner does not have any claim against the South Western Railway under or by virtue of or arising out of the contract agreement and no claim certificate in favour of the Railway has been signed after recording the final measurements. The no claim certificate further states that the petitioner is debarred from disputing in future regarding non-receipt of payment of any work item executed against the above contract and also for demanding a reference to arbitration in respect of the above agreement. It is pertinent to mention here that the aforesaid no claim certificate has obviously been obtained by exercising duress and coercion from the petitioner as payment of the amount due to the petitioner under the bill was paid to him after 3½ years of furnishing no claim certificate. Thus, it is evident that the requirement of furnishing the no claim certificate was a precedent for making payment of the amount due and payable to the petitioner. The petitioner has made a claim with regard to payment of the incentive bonus which is not covered in the no claim certificate. In any case, the question of admissibility of the aforesaid fact is a matter which is required to be adjudicated by the arbitrator. For the aforementioned reasons, the decision relied upon by the learned counsel for the respondents in M/s. ONGC Mangalore Petro Chemical Limited (SUPRA) has no application to the factual matrix of the case.
8. Since the dispute has arisen between the parties in relation to an agreement dated 10.05.2016 and admittedly the arbitration clause exists between the parties, keeping in mind the mandate contained under Section 11(6A) of the Act, I deem it appropriate to appoint Justice Ajit J. Gunjal, Former Judge of this Court as sole arbitrator to enter into the said reference of Arbitration and act as an Arbitrator in the present case in the Arbitration Centre, Bengaluru, as per the Rules governing in the said Arbitration Centre.
9. A copy of this order be sent to the Arbitration Centre, Khanija Bhavan, Bengaluru, for proceeding further in the matter on administrative side and also to Justice Ajit J. Gunjal, on the address available with the said Arbitration Centre, Bengaluru.
10. Accordingly, this petition is disposed of.
Sd/- JUDGE RD