TaxTMI 
TaxTMI 
2021 (9) TMI 1574
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....uality of workmanship or 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 contract, designs, drawings, specifications, estimates, instructions orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:- (i) If the contractor considers that he is entitled to any extra payment or compensation in respect of the works over and above the amounts admitted as payable by HLL or in case the contractor wants to dispute the validity of any deductions or recoveries made or proposed to be made from the contract, the contractor shall forthwith give notice in writing of his claim, in this behalf to the Engineer-in-Charge within 30 days from the date of disallowance thereof for which the contractor claims such additional payment or compensation or disputes the validity of any deduction or recovery. The said notice shall give full particulars of the claim, grounds on which it is based and de....
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....h it was left by his predecessor. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each dispute along-with the notice for appointment of arbitrator. It is also a term of this contract that no person other than a person appointed by such Chairman & Managing Director, HLL Lifecare Ltd as aforesaid should act as arbitrator and if for any reasons that is not possible, the matter shall not be referred to arbitration at all. The conciliation and arbitration shall be conducted in accordance with the provisions of the Arbitration & Conciliation Act 1996 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each disputes and claim referred to him. The arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator these shall be paid equally by ....
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....that the respondent, vide letter dated 20th July, 2019, unilaterally appointed a retired Chief Engineer of the Public Works Department, Government of Maharashtra, as the sole arbitrator to arbitrate on the disputes. 4. This, contends the petitioner, is in the teeth of Section 12(5) of the Arbitration and Conciliation Act, 1996 ("the 1996 Act"), read with the decisions of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd. [AIR 2020 SC 59], Bharat Broadband Network Ltd v. United Telecoms Ltd. [(2019) 5 SCC 755], and Haryana Space Application Centre v. Pan India Consultants Pvt Ltd. [AIR 2021 SC 653], as well as several decisions of this Court which have followed the said authorities. 5. Mr. Singh, learned Senior Counsel for the respondent, on the other hand, seeks to invoke the proviso to Section 12(5), of the 1996 Act to oppose the petition. Section 12(5) of the 1996 Act, read thus: "12. Grounds for challenge [(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....
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....tment of such arbitrator may be challenged under Sections 12(1) to 12(4) read with Section 13. However, where such person becomes "ineligible" to be appointed as an arbitrator, there is no question of challenge to such arbitrator, before such arbitrator. In such a case, i.e., a case which falls under Section 12(5), Section 14(1)(a) of the Act gets attracted inasmuch as the arbitrator becomes, as a matter of law (i.e. de jure), unable to perform his functions under Section 12(5), being ineligible to be appointed as an arbitrator. This being so, his mandate automatically terminates, and he shall then be substituted by another arbitrator under Section 14(1) itself. It is only if a controversy occurs concerning whether he has become de jure unable to perform his functions as such, that a party has to apply to the Court to decide on the termination of the mandate, unless otherwise agreed by the parties. Thus, in all Section 12(5) cases, there is no challenge procedure to be availed of. If an arbitrator continues as such, being de jure unable to perform his functions, as he falls within any of the categories mentioned in Section 12(5), read with the Seventh Schedule, a party may apply to....
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.... on the facts of the case is dated 17-01-2017. On this date, the Managing Director of the appellant was certainly not aware that Shri Khan could not be appointed by him as Section 12 (5) read with the Seventh Schedule only went to the invalidity of the appointment of the Managing Director himself as an arbitrator. Shri Khan's invalid appointment only became clear after the declaration of the law by the Supreme Court in TRF Ltd. (supra) which, as we have seen hereinabove, was only on 3-07-2017. After this date, far from there being an express agreement between the parties as to the validity of Shri Khan's appointment, the appellant filed an application on 710-2017 before the sole arbitrator, bringing the arbitrator's attention to the judgment in TRF Ltd. [AIR 2017 SC 3889] (supra) and asking him to declare that he has become de jure incapable of acting as an arbitrator. Equally, the fact that a statement of claim may have been filed before the arbitrator, would not mean that there is an express agreement in words which would make it clear that both parties wish Shri Khan to continue as arbitrator despite being ineligible to act as such. This being the case, the impugned judgme....
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....of arbitral proceedings by the existing learned sole arbitrator, as well as by communicating, via e-mails, to the learned sole arbitrator, on 6th January, 2020 and 20th January, 2020, seeking, inter alia, extension of time to file the affidavit by way of evidence of its witnesses, the petitioner has expressly consented, in writing, to the functioning of the learned sole arbitrator, as the arbitrator to adjudicate the disputes between the petitioner and the respondent. 34. -Express waiver of rights", as a jurisprudential concept, has invoked judicial cogitation, on more than one occasion. In Inderpreet Singh Kahlon v. State of Punjab [AIR 2006 SC 2571], it was held thus: "Waiver is the abandonment of a right, and thus is a defence against its subsequent enforcement. Waiver may be express or, where there is knowledge of the right, may be implied from conduct which is inconsistent with the continuance of the right. A mere statement of an intention not to insist on a right does not suffice in the absence of consideration; but a deliberate election not to insist on full rights, although made without first obtaining full disclosure of material facts, and to come to a settlement on th....
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.... decisions, chiefly, in Bharat Broadband Network Ltd. [(2019) 5 SCC 755], it is not possible to accede to the submissions of Mr. Mehta. 37. The Supreme Court has laid down clearly and unmistakably, that the "express agreement in writing", to which the proviso to Section 12(5) alludes, has to be exactly that, and no less; in other words, the parties must expressly agree in writing to a waiver of Section 12(5) of the 1996 Act. 38. The said agreement in writing must reflect awareness, on the parties, to the applicability of the said provision as well as the resultant invalidation, of the learned arbitrator, to arbitrate on the disputes between them, as well as a conscious intention to waive the applicability of the said provision, in the case of the disputes between them. 39. It is obvious that the filing of applications for extension of time for continuance and completion of the arbitral proceedings, or applications to the arbitrator, for extension of time to file the affidavit of evidence, etc., cannot constitute an "agreement in writing" within the meaning of the proviso to Section 12(5) of the 1996 Act. 40. In view of the aforesaid discussion, it is apparent that, by the o....