Calcutta High Court
Anamika Enterprises vs Union Of India on 4 August, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OC 54
ORDER SHEET
AP-COM/405/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
ANAMIKA ENTERPRISES
VS
UNION OF INDIA
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 4th August, 2025.
Appearance:
Ms. Sristi Barman Roy, Adv.
Mr. Kamal Kr. Chattopadhyay, Adv.
Mr. Aurin Chakraborty, Adv.
Ms. Rimi Chatterjee, Adv.
...for the petitioner
Mr. Shiv Chandra Prasad, Adv.
Ms. Sumita Sarkar, Adv.
...for CPWD
The Court:
1. This is an application for appointment of an arbitrator upon recording
termination of the mandate of the sole arbitrator, who was appointed
from the panel of Arbitrators maintained by the CPWD. The petitioner
was all along willing to cooperate and participate in the arbitral
proceedings which was being conducted by an Arbitrator chosen by the
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respondent. The petitioner invoked arbitration sometime in 2024 with
regard to a dispute which arose in 2022. Without having any
knowledge about the modification of Clause 25 of the GCC of 2020, the
petitioner prayed for constitution of a Dispute Redressal Commission for
adjudication of the claim, as a precursor to the invocation of the
arbitration clause. The respondent constituted the DRC. As the claims
remained unresolved, the petitioner invoked arbitration in terms of the
erstwhile clause 25 of the 2020, GCC.
2. The challenge is that, the appointment was violative of the procedure
prescribed in the modified GCC. The appointment was unilateral and
the petitioner was not given a chance to choose an arbitrator from the
panel maintained by the CPWD. The petitioner’s choice of a retired
officer from the panel maintained by the CPWD was ignored and the
Chief Engineer referred the dispute to a person of his own choice,
without any consent from the petitioner.
3. That participation in an arbitral proceeding would not debar the
petitioner from challenging the jurisdiction of the arbitrator on the
ground that the arbitrator was de jure unable to perform on account of
severe infractions of the law and the GCC.
4. During the pendency of the arbitration, the petitioner wanted to amend
the statement of claim, by incorporating further claims towards
escalation charges and compensation. Such prayer was disallowed by
the learned Arbitrator on the ground that the claim could not be
entertained and the statement of claim could not be amended. Only
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those disputes which were referred by the Chief Engineer of the
concerned department could be taken up by the arbitrator for
adjudication. After the order was passed, the petitioner came to know
that the Clause 25 of the GCC of 2020 was amended and the said
relevant clause discussed above had been done away with. The
procedure for dispute redressal through a DRC was deleted. Reference
of the dispute to conciliation was permitted only on limited grounds and
the same was not mandatory. The clause that, the arbitrator could
adjudicate only those disputes referred to him by the appointing
authority had been deleted, prior to the dispute having arisen between
the parties. Neither the arbitrator, nor the respondents had applied the
correct provisions of the GCC and the petitioner was misled. The
amended provisions stated that if the claim was below Rs.100 crores, a
sole arbitrator would be appointed. A party could also opt for
appointment of an Arbitrator from the Ministry of Housing and Urban
Affairs. In case, the party seeking arbitration applied for appointment of
an arbitrator from the Ministry of Housing and Urban Affairs, then an
express agreement towards waiver of Section 12(5) of the Arbitration
and Conciliation Act, 1996 was to be entered into. If the party did not
opt for an arbitrator of the Ministry of Housing and Urban Affairs or did
not submit the waiver agreement, the appointing authority was to
propose five arbitrators from the list of CPWD’s empanelled arbitrators
to the party seeking arbitration. The party seeking arbitration was to
give his choice for one of them within 15 days of receiving the notice and
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the arbitrator appointing authority was to appoint the chosen person as
the sole arbitrator within 15 days of the receipt of choice. The above
provisions were not followed. The appointment was not only contrary to
the modified conditions of clause 25 of the GCC, but also contrary to
law.
5. The relevant provisions are quoted below :-
“25.2 Arbitration: If the aforesaid conciliation proceedings fail or the
Conciliator fails to give proposal for settlement within the aforesaid
period, either party may promptly give notice in the proforma prescribed
in Appendix XVIII, under intimation to the other party, to the Chief
Engineer or the Superintending Engineer concerned with the work (as
applicable), hereinafter referred to as the Arbitrator Appointing
Authority as indicated in Schedule F. for appointment of Arbitrator.
However, a party may seek appointment of Arbitrator without taking
recourse to the process of conciliation mentioned in sub-clause 25.1
above.
In the event of either party giving a notice to the Arbitrator Appointing
Authority for appointment of Arbitrator, the said Authority shall appoint
Arbitrator as per the procedure given below and refer such disputes to
arbitration.
(a) Number of Arbitrators: If the contract amount is lass than Rs.100
crore, the disputes may be referred for adjudication by a sole Arbitrator.
If the contract amount is Rs. 100 crore or more, the disputes may be
referred to an Arbitral Tribunal of three Arbitrators.
(b) Qualification of Arbitrators: It is a term of this contract that each
member of the Arbitral Tribunal shall be Graduate Engineer with
experience in execution of public works engineering contracts, and he
should have worked earlier at a level not lower than the Chief Engineer
(equivalent to level of Joint Secretary to the Government of India).
The aforesaid educational qualification and work experience shall be
mandatory for appointment as Arbitrator.
The age of Arbitrator at the time of appointment shall not exceed 70
years. An Arbitrator may be appointed notwithstanding the total
number of active arbitration cases with him.
(c) Parties to select Arbitrator: Based on the criteria specified above, a
list of empaneled Arbitrators has been prepared in CPWD, and the
parties shall have option to select an Arbitrator from the list sent to
them.
25.3 Appointment of Sole Arbitrator: The parties may opt for
appointment of the Arbitrator of the Ministry of Housing and Urban
Affairs. In such cases, the party seeking arbitration has to submit án
express agreement in writing as per Appendix XIX towards waiver of
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Section 12(5) of the Arbitration and Conciliation Act, 1996 along with
the notice for appointment of Arbitrator in the proforma prescribed in
Appendix XVIII. under intimation to the other party. The Arbitrator
Appointing Authority shall, within 30 days of receipt of the said notice,
appoint Arbitrator of the Ministry of Housing and Urban Affairs as
Arbitrator in the matter, provided the other party also submits waiver of
Section 12(5), ibid in Appendix XIX within 7 days of the receipt of the
said notice.
Where any one of the parties does not opt for the Arbitrator of the
Ministry of Housing and Urban Affairs, or does not submit the waiver
agreement, the Arbitrator Appointing Authority shall propose five
Arbitrators from the list of CPWD Empaneled Arbitrators 10 the party
seeking arbitration under intimation to the other party within 15 days of
receiving the notice. The party seeking arbitration shall give his choice
for one of them within 15 days of receiving the list, and the Arbitrator
Appointing Authority shall appoint the chosen personas the Sole
Arbitrator within 15 days of the receipt of choice.
It is a term of this arbitration agreement that if the parties fail to select,
within the period prescribed above, an Arbitrator of their choice from
the list of CPWD Empaneled Arbitrators forwarded to them, the
Arbitrator Appointing Authority shall himself select and appoint
Arbitrator from the said list.”
6. In view of the above non-compliances and also because the appointing
authority unilaterally appointed the arbitrator, the mandate must be
terminated. It is submitted by the petitioner that upon coming to know
of the amendment, the petitioner realized that the procedure followed by
the authority was vitiated and the learned arbitrator could not continue
as he was de jure unable to perform his duty in terms of Section 12(5) of
the Act and modified provision of the GCC. Even if the GCC was not
known to the petitioner, the authority being aware of such fact, should
not have misguided the petitioner. The amended provision is also
inoperative to the extent that the petitioner cannot be forced to chose
from the list of five arbitrators to be supplied by the respondents, unless
the petitioner chooses voluntarily.
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7. The court records termination of the mandate.
8. This Court appoints a substitute arbitrator from the list provided by the
petitioner. The petitioner submits before this Court that a retired officer
from the CPWD’s panel should be appointed as the dispute arises out of
a construction contract, which requires intricate measurements to be
carried out by experts.
9. Under such circumstances, I do not find that the respondent should
have any objection at all if one of their own retired engineers is
appointed. Sri Sansar Pattanayak (Mobile: 7504213002; Email ID:
[email protected]) is appointed as a substitute arbitrator. The
proceedings shall continue before the substitute arbitrator from the
stage it was last held. The award shall be published within one year
from the date of communication of this order. The petitioner may pray
for amendment of the statement of claim before the newly appointed
arbitrator. Such prayer will be considered in accordance with law. Both
the parties shall pray for return of the arbitral records from the
erstwhile learned arbitrator.
10. All points are left open, to be agitated before the learned arbitrator.
The fee of the learned arbitrator shall be as per schedule of rates
prescribed by CPWD.
11. Liberty is granted to file the affidavit in opposition in the department.
12. The application is disposed of.
(SHAMPA SARKAR, J.)
B.Pal/S.Kumar