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2022 (4) TMI 1565 - HC - Indian LawsReasonableness of Clause 33 (7) of the Agreement/s between the petitioner and respondents - requirement of pre-deposit for invoking the arbitration - HELD THAT:- Clause 33(7) of the Agreement, which has been reproduced in the foregoing paras, especially provides that where the party invoking arbitration is the contractor, no reference for Arbitrator shall be maintainable unless the contractor furnishes a security deposit of a sum determined as per the table given therein. A specific percentage based on the claim amount is provided in Clause 33 (c). It is further provided that the sum so deposited on termination of Arbitration proceedings shall be adjusted against the cost, if any, awarded by the Arbitrator against the claimant party and the balance remaining after such adjustment, in the absence of any such cost being awarded, the whole of the sum shall be refunded to the contractor within one month from the date of the Award. Admittedly, in the case of M/s ICOMM Tele Limited’s case [2019 (3) TMI 600 - SUPREME COURT], the requirement was of ‘deposit – at-call’ of 10% of the amount claimed. Moreover, it was provided that in the event of an award in favour of the claimant, the deposit would be refunded to him in proportion to the amount awarded with respect to the amount claimed and the balance, if any, would be forfeited and paid to the other party. There was admittedly no provision of any refund or adjustment of the amount. Discussion of the judgement of S.K. Jain’s case [2009 (2) TMI 926 - SUPREME COURT] makes it crystal clear that such like clauses, which provide for adjustment and refund to the party making the deposit after the passing of the award are materially different from the clause which was under challenge in M/s ICOMM Tele Limited’s case. In case of M/s ICOMM Tele Limited’s case, the objectionable clause 25 (viii) was struck down finding the same to be arbitrary. Argument raised by learned counsel for the petitioner/s that once the Arbitrator was appointed by the Chief Administrator himself without the pre-deposit being made, there is no question of insistence upon the same, is an argument which is devoid of any merit, hence rejected. This is so for the reason that it is clearly mentioned in impugned order dated 09.11.2020 itself that Chief Administrator Housing Board Haryana, while appointing the Arbitrator directed the Arbitrator to ensure compliance of the Arbitration Agreement including the clause regarding the security deposit in respect of the claims (counter claims). Therefore, appointment of the Arbitrator cannot be in any manner be construed to be a waiver of the clause requiring pre-deposit by the petitioner. There are no illegality, irregularity or perversity in the impugned order dated 09.11.2020, Annexure P-4, passed by the learned Arbitrator - petition dismissed.
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