UNION OF INDIA AND ANR. versus M/S. V.S. ENGINEERING (P) LTD.

Citation: [2006] SUPP. 9 S.C.R. 125 · Decided: 16-11-2006 · Supreme Court of India · Bench: A.K. MATHUR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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UNION OF INDIA AND ANR. 
A 
v. 
MIS. V.S. ENGINEERING (P) LTD. 
NOVEMBER 16, 2006 
[A.K. MATHUR AND LOKESHWARSINGH PANT A, JJ.] 
B 
Arbitration and Conciliation Act, 1996-Section I I-Appointment of 
Arbitral Tribunal for Railways-High Court not justified in appointing an 
arbitrator under S.11 when Railway authorities already constituted arbitral C 
tribunal as per the General Conditions of Contract. 
Respondent-Contractor was awarded a work contract by railways for 
supply of crushed stone ballast and for loading the same into wagons. The 
dispute arose and respondent sought appointment of arbitrator under Clause 
64 of General Conditions of Contract. The arbitral tribunal was appointed to D 
adjudicate the claim. 
Subsequently, respondent filed arbitration application before High Court 
under Section 11 of Arbitratio11 and Conciliation Act, 1996 seeking 
appointment of an arbitrator to resolve the disputes. High Court appointed 
Mr. Justice Y. V. Narayana as Arbitrator. Aggrieved appellant filed writ E 
petition before High Court which was dismissed. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1. Railways and Public institutions are·very slow in reacting to 
the request made by a contractor for appointment of the arbitrator. Therefore, F 
in case appointment is not made in time on the request made by the contracting 
party, then in that ease the power of the High Court to appoint arbitrator under 
Section 11 of the Act will not be denuded. Administrative authorities cannot 
be allowed to sleep over the matter and leave the citizens without any remedy. 
Authorities shall be vigilant and their failure shall certainly give rise to cause G 
to the affected party. In case, the General Manager, Railway does not appoint 
the arbitral tribunal after expiry of the notice of 30 days or before the party 
approaches the High Court, in that case, the High Court will be fully justified 
in appointing arbitrator under section 11 of the Arbitration and Conciliation 
125 
H 
• 
126 
SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R. 
A Act, 1996. It is the discretion of the High Court that they can appoint any 
railway officer or they can appoint any High Court Judge according to the 
given situation. (130-F-H] 
2. The General Manager, Railway is directed to appoint arbitral tribunal 
within a period of 30 days from the date of receipt of a certified copy of this 
B order. The arbitral tribunal so appointed shall enter into the matter and dispose 
of the arbitration proceedings as expeditiously as possible. Consequently, the 
appointment of Justice Y.V.Narayana as arbitrator is set aside. (131-A-BI 
c 
D 
Union of India & Anr. v. MP.Gupta (2004) 10 SCC 504, relied on. 
Datar Switchgears Ltd. v. Tata Finance Ltd & Anr., (2002) 8 SCC 151; 
SBP & Co. v. Patel Engineering Ltd. & Anr., (20051 8 SCC 618 and Konkan 
Railway Corporation Ltd & Anr. v. Rani Construction Pvt. Ltd, (2002) 2 SCC 
388, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.6593-6594 of 
2005. 
From the final Judgments and Orders dated 27-4-2001and21-2-2002 of 
the High Court of Judicature, Andhra Pradesh at Hyderabad in Writ Petition 
No. 2465/200 I and Applicatioin No. 1615/2001 in Arbitration Application 
E No. 60/1998 respectively. 
Vikas Singh, A.S.G., Wasim A.Qadri, R.C. Kathia, Mrs. RekhaPandey, 
Shiva Lakshmi, Amrita Narayan, Anil Katiyar and D.S. Mahra for the Appellants. 
G. Ramakrishna Prasad, Dr. K.P. Kyalasnath, Mohd. Wasay Khan, 
F Suyodhan Byrapaneni and Venkat Subramaniam for the Respondent. 
The Judgment of the Court was delivered by 
A.K. MATHUR, J. These appeals are directed against the judgment and 
order passed by the High Court of Andhra Pradesh. By the impugned order 
G dated 27.4.2001 a batch of writ petitions were disposed of including the one 
before us whereby the High Court appointed arbitrator under Section 11 of 
the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as 'the 
Act'). In the present appeals, we are concerned with Writ Petition No.2465 
of2001 [Union of India & Anr. v. Mis. V.S. Engineering (P) Ltd & Anr.). So 
H far as order dated 27.4.2001 passed by the Division Bench of the High Court 
( 
<. 
.. 
U.0.1. v. V.S. ENGINEERING (P) LTD. [A.K. MATHUR, J.] 
127 
is concerned, all the issues raised in that order has already been decided by A 
this Court in the case of SBP & Co. v. Patel Engineering Ltd. & Anr. [2005) 
8 SCC 618 by a seven Judge Bench of this Court. Therefore, no purp
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