IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.2848 of 2009 M/S VIJETA CONSTRUCTION LTD. Versus THE STATE OF BIHAR & ORS ----------- 2. 3.3.2009 Heard Mr. Kamal Nayan Chaubey, learned Senior counsel for the petitioner and Mr. J.P. Karna, learned A.A.G.-9, appearing for the State. In this writ application the prayer of the petitioner is to quash an order dated 8.12.2008 cancelling the work order and the consequential contract. The order in question reads as follows: bl izeaMy vUrxZr [kM+xiqj&rkjkiqj iFk ¼12-3 fd0 eh0½ ds pkSM+hdj.k ,oa etcwrhdj.k dk dk;Z dk ,djkjukek la[;k& 3F2 2007-08 }kjk esllZ fotsrk dUlVªD'ku fyfeVsM osLV eksjkcknh] eSnku jkWaph ¼fuca/ku la[;k& vfHk;ark izeq[k@Js.kh&1&97@2007@iFk½ dks vkoafVr fd;k x;k FkkA ,djkjukek dh jkf'k :0 8-6804 djksM+ dk;Z izkjHk djus dh frfFk 20-08-2007 rFkk dk;Z lekIr djus dh frfFk 19-11-2008 FkhA 2- mDr dk;Z dh izxfr dkQh /kheh jgus ds dkj.k S.B.D. Clause of contract dh dafMdk 3 (iii) ds v/khu bl dk;kZy; ds i=kakd&280 (3) fnukad 31- 3-2008] 469 ¼3½ fnukad & 06-05-2008] 514 ¼4½ fnukad 14-05-2008] 1032 (2) fnukad 29-08-2008] 1117 (2) fnukad 09-09-2008] 1198 fnukad & 29-09-2008 }kjk ckj&ckj laosnd dks dk;Z esa rsth ykus dk funsZ'k fn;k x;k ijUrq dk;Z esa rsth ugha yk;k x;kA 3- ,djkjukek dh schedule F esa fu/kkZfjr izFke] f}rh;] r`rh; ,oa vafre ekbZy LVksu ds dk;Z dh izxfr dkQh ihNs jghA dk;Z dh le; lhek iw.kZ gksus ds ckn vHkh foRrh; izxfr ek=k :0 154-32 yk[k rFkk ,djkjukek dh jkf'k dk ek=k 17-76 izfr'kr ds lerqY; dk;Z fd;k x;k gSA 4- vkius vius }kjk lefiZr odZ izksxzke tks 31-07-2008 rd iw.kZ djuk Fkk ijUrq] vius fn;s x;s dk;Z ;kstuk ds vuqlkj Hkh lacaf/kr dk;Z iwjk ugha dj ldsA 5- bl dk;kZy; ds i=kkad 1241 (2) fnukad 13-10-2008] 1259 ¼3½ fnukad & 22-10-2008] 1309 ¼3½ fnukad 30-10-2008 ,oa 1372 ¼2½ fnukad 28-11-2008 }kjk izklafxd ,djkjukek dks fo[kafMr (Rescind)djus ds laca/k esa dkj.k i`PNk dh xbZ ,oa laosnd 2 ls izkIr Li"Vhdj.k dks lE;d leh{kksijkUr Li"Vhdj.k dks vLohdkj fd;k x;kA bl vkyksd esa esllZ fotsrk dULVªD'ku fyfeVsM osLV eksjkoknh eSnku jkWaph ds lkFk fd;s x;s ,djkjukek la[;k & 3 F2 2007-08 dks S.B.D. clause of contract dh dafMdk 3(iii)ds v/khu fo[kafMr (Rescind) fd;k tkrk gSA 6- ,djkjukek dh dafMdk 14 (b) ds v/khu 'ks"kk dk;ksZa dk fdz;kU;ou esllZ fotsrk dULVªD'ku fyfeVsM osLV eksjkoknh eSnku jkWaph ds Risk & Cost ij gksxkA 7- vkids }kjk djk;s x;s dk;Z dh vafre ekih fnukad & 18-12-2008 dks dh tk,xhA ftlesa foHkkx dh vksj ls lgk;d vfHk;ark] iFk voj izeaMy [kM+xiqj ,oa duh; vfHk;ark] iFk iz'kk[kk [kM+xiqj&2 mifLFkr jgsaxsA vki Lo;a ;k vius }kjk izkf/kd`r O;fDr dh mifLFkfr mDr frfFk dks lqfuf'pr djsaxsA vkids vuqifLFkfr esa foHkkx }kjk yh xbZ ekih vkidks ekU; gksxhA 8- ,djkjukek dks izko/kkuksa ds vuqlkj vU; lacaf/kr dkjZokbZ vyx ls dh tk;sxhA Counsel for the petitioner would submit that the writ application should be heard alongwith another writ application i.e. C.W.J.C.No. 74/2009 which has been filed by the petitioner challenging alteration in the rate of the earth work. In the opinion of this Court the said prayer is fit to be rejected because that matter relating to challenging alteration in rate of earth work has no co- relation with subject matter of this writ application. As a matter of fact, this writ application is not maintainable because the agreement on the basis of which the impugned order cancelling the work order has been 3 passed itself contains an arbitration clause which reads as follows: “Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in- before mentioned and as to the quality 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 contract, designs, drawings, specification, 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 considered any work demanded of him to be outside the requirements of the contract, or dispute any drawings, record or decision given in writing by the Engineer-in-charge on any matter in connection with or arising out of the contract or carrying out of the contract or carrying out of the work, to be unacceptable, he shall 4 promptly within 7 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of fifteen days from the receipt of the contractor’s letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instruction or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer’s decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor’s appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Chief Engineer for appointment of arbitrator failing which the said decision shall be final binding and conclusive and not referable to 5 adjudication by the arbitrator. ii) Except where the decision has become final, binding and conclusive in terms of sub para (i) above disputes or difference shall be referred for adjudication through arbitrator appointed by Engineer-in-chief or the administrative head of the said P.W.D. If the arbitrator so appointed is unable or unwilling to act or resign his appointment or vacates his office due to any reason whatsoever another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which 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 such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal. It is also a term of this contract that no person other than a person appointed by such Engineer-in-Chief or the administrative head of the department as aforesaid should act 6 as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitrator at all. It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 45 days of receiving the intimation from the Engineer-in-chief that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the contract in respect of these claims. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modifications or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under the clause. It is also a term of the contract that if any fees are payable to the arbitrator these shall be paid equally by both the parties. It is also a term of the 7 contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid. All arbitration shall be held at Patna and at no other place.” This Court would thus hold that the entire dispute and differences between the parties to the agreement as sought to be raised in this writ petition should be decided as per the terms of the agreement through the mode of arbitration. The refusal of writ jurisdiction 8 under Article 226 of the Constitution in a case where the parties are bound by an earlier agreement providing for arbitration by now is a well settled law. Reference in this connection may be made to the judgment of Apex Court in the case of State of U.P. Vs. Bridge & Roof Co. (India) Ltd. reported in (1996)6 SCC 22 wherein the Apex Court had held as follows:- "Further, the contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration. The Arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy - in this case, provided in the contract itself-is a good ground for the court to 9 decline to exercise its extraordinary jurisdiction under Article 226." The same view in fact has been reiterated by the Apex Court even in the case of ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and others, reported in (2004)3 SCC 553 where it had been held as follows: - "It is well known that if the parties to a dispute had agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless of course both the parties to the dispute agreed on an other mode of dispute resolution." In view of the fact that in the present case also, the petitioner is bound by the clauses of their agreements, this Court would hold that the writ application enforcing a term of contract of assailing any decision taken under the terms of the contract to be not maintainable and the only 10 option for the petitioner is to take recourse to the remedy of arbitration as provided in the agreement. Mr. Chaubey, however, as a last ditch, would take a stand that Clause 25 will not cover the cases of the present kind where power for cancellation of contract has been resorted in terms of Clause 3 of the Agreement. Counsel for the petitioner, in this regard would contend that since the order of cancellation of contract and the consequential work order, is based on a presumption that the petitioner did not discharge its duty it while doing the needful for completion of work in time, that issue infact cannot be raised by the respondents because they also did not choose to complete their part of duty. In other words, the case of the petitioner is that since the raw materials were not made available in terms of the contract and/or payment were not made in terms of the contract, the petitioner cannot be faulted in not completing the work. Such dispute with regard to non-fulfilment of one part of the contract by one party and yet expecting 11 other party to abide by the terms of the contract, in the opinion of this Court cannot be made subject matter of this writ petition which has to be necessarily gone into in the light of the pleadings and the evidence by both the parties. This court again is not in a position to accept such submission of the learned counsel for the petitioner also because of the very wide and for reaching effect of the Clause 25 of the agreement which in its sweep will definitely include resolution of a dispute through arbitration even in respect of an order of cancellation of contract in as much as such power itself has been exercised by the respondents in terms of the contract. However if the petitioner would take a plea that the arbitration clause will not be applicable against an order cancelling contract, the only remedy to the petitioner in that case against the impugned order will be to file a civil suit where these thicketed disputed question of fact as with regard to allegations and counter allegations by the parties can be decided in the light of 12 evidence to be adduced by them. Let it be however made clear that this Court is not pronouncing that the arbitration clause is not applicable against the impugned order but then it is always open for a party to abdicate the particular remedy, and take chance even before a forum or court having no jurisdiction because even in such case the civil court may itself in exercise of powers under Section 89 of the Code of Civil Procedure by relegating the petitioner to avail the remedy of arbitration. As a matter of fact whether the petitioner may or may not seek the remedy of arbitration or civil suit, it can not maintain its writ petition because it has been held by the Apex Court in the case of M/s Radha Krishna Agrawal & ors. vs. State of Bihar & ors, reported in AIR 1977 SC 1496, that the terms and conditions of a contract cannot be enforced by a writ petition. The Apex Court in fact had prescribed three conditions for maintainability of a writ petition as would be found from the ratio of the said judgment in the case of M/s Radha Krishna Agrawal & 13 ors. (supra). To that the only addition which has been made in the recent times by this Court and the Apex Court is that a writ petition can also be maintained if the cancellation is dehors the terms of the contract. Reference may be made to the case of M/s Pancham Singh vs. State of Bihar & ors., reported in 1991(1) PLJR 352. Patently the case of the petitioner would not be governed by the ratio of the case of Pancham Singh supra and thus following the law laid down by the Apex Court in the case of Radha Krishna Agrawal (supra) this Court must hold that this writ application against an order canceling the contract and the work order is not maintainable and accordingly, the same is dismissed. (Mihir Kumar Jha,J.) Surendra/