UNION OF INDIA & ANR. versus PREMCO-DKSPL (JV) & ORS.

Citation: [2016] 3 S.C.R. 484 · Decided: 25-07-2016 · Supreme Court of India · Bench: SHIVA KIRTI SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
[2016] 3 S.C.R. 484 
UNION OF INDIA & ANR. 
v. 
PREMCO-DKSPL (JV) & ORS. 
(Civil Appeal No. 6179 of2016) 
JULY25,2016 
[SHIVA KIRTI SINGH AND R. BANUMATHI, JJ.] 
Arbitration and Conciliation Act. 1996: 
s.11 -Appointment 
of arbitrator - Stipulation in the agreement that on the request of 
respondent-contractor for arbitration. Railways shall send them a 
panel of more than 3 names of railway officers within 60 days 
whereafter the contractor would suggest at least two names out of 
that panel for appointment of contractors nominee - Such 
suggestion from contractor was required to be made within 30 days 
from the dispatch of request by Railway - Contractor sent a notice 
demanding arbitration on 12.6.2013 which was served on Railways 
on J.I. 6.2013 - Instead of waiting for 60 days, the contractor 
preferred application u/s.11 on 23. 7.2013 - Railways sent a panel 
of 4 names to the contractor on 30. 7.2013, well within 60 days -
Whether Railway had forfeited its right to appoint railway officers 
as arbitrators in terms of agreement - Held: Railway had not 
forfeited its right to appoint arbitrator - Rather the application ul 
s.11 (6) was premature - Notice of appointment was served on 
14. 06. 2013 - Contractor ought to have waited for a period of at least 
60 days before s.11 application could be filed - Instead of waiting 
for 60 days, the contractor/respondent preferred such application 
prematurely on 23.07.2013 - Thus, Railways had not committed 
default and had not forfeited their right to appoint arbitrators as 
per terms of the agreement. 
Allowing the appeal, the Court 
HELD: 1. In the facts and circumstances, it did not lie in 
the mouth of the respondent contractor that the appellants had 
committed a default and had forfeited their right to appoint 
arbitrators as per terms of the agreement. The Judge failed to 
read the relevant clause of the agreement properly and 
therefore wrongly placed reliance upon judgment in the case of 
Datar Switchgears. In that case this Court had extracted the 
484 
UNION OF INDIA & ANR. v. PREMCO-DKSPL (JV) & ORS. 
relevant terms of agreement which showed that there was no 
stipulation of any time limit like that of 60 days in the present 
case. The terms of the Agreement bind the parties unless they 
have chosen to repudiate the same. Relevant terms, if provided, 
will be material for deciding when the right of a party to appoint 
the arbitrator will suffer forfeiture and when the other party would 
be entitled to give notice and on failure, move application under 
Section 11(6) of the Act. Such terms deserve respect of the parties 
and attention of the Court. In case the respondent contractor is 
still desirous of pursuing its claim through arbitration in terms 
of the agreement, it is given the option to serve a fresh notice for 
arbitration within a month and on receipt of the same the 
appellants/railways shall be at liberty to send a panel of requisite 
number of names to the respondents within 60 days of receipt of 
the notice so that Arbitral Tribunal is constituted in terms of 
the Agreement. It goes without saying that ifthe Railways default 
in sending the panel within the stipulated time; the contractor 
will be at liberty to pursue its further remedies as per provisions 
of the Act and law. [Paras 6, 7) (488-B-G) 
Datar Switchgears Ltd. v. Tata Finance Ltd. & Anr. 
(2008) 8 sec 151 - referred to. 
Case Law Reference 
(2008) 8 sec 151 
referred to 
Para3 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6179 
of2016. 
From the Judgment and Order dated 25.02.2014 of the High Court 
ofGauhati in Arbitration Petition No. 14 of2013. 
Ms. Kiran Suri, Sr. Adv., N. K. Kashail, Ms. Sadhna Sandhu, 
Shreekant N. Terdal, Advs. for the Appellants. 
Anil Kumar Mishra, Advs. for the Respondents. 
485 
A 
B 
c 
D 
E 
F 
The Judgment of the Court was delivered by 
G 
SHIVA KIRTI SINGH, J. I. The appellants have assailed the 
legality and correctness of final order dated 25.02.2014 passed in 
Arbitration Petition No.14 of2013 by an Hon'ble Judge ofGauhati High 
Court designated by the Chief Justice of that Court to de9ide respondents' 
applications under Section 11 of the Arbitration and Conciliation Act, 
H 
486 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 3 S.C.R. 
1996 (hereinafter referred to as 'the Act'). By the impugned order the 
designated Judge allowed the application under Section 11 of the Act 
and appointed a former Judge of that 

Excerpt shown. Read the full judgment & AI analysis in Lexace.