THE HON’BLE SRI JUSTICE K.S. APPA RAO CIVIL REVISION PETITION No. 3689 of 1995 Date: 02nd September, 2011 Between: The Government of Andhra Pradesh rep. by its Superintending Engineer and another … Petitioners / respondents And: Y. Jaya Venkata Rao and another … Respondents / petitioners THE HON’BLE SRI JUSTICE K.S. APPA RAO CIVIL REVISION PETITION No. 3689 of 1995 ORDER: This Civil Revision Petition is filed against the order dated 13.07.1995 in O.P. No.274 of 1994, whereby and whereunder, the petition was allowed, appointing Sri. C. Veerabhadra Rao, Retired District Judge, as Sole Arbitrator for settling the dispute between the petitioner and the respondents with regard to the work of excavation of Yeluru Left Main Canal (YLMC) from KM 74.500 to KM.76.000, including lining under S.E.’s Agreement No. 18/86-87. The petitioners herein are the respondents and the respondent herein is the petitioner in the said O.P. For the sake of convenience, they will be referred to as they are arrayed in the O.P. The case in brief is that the petitioner is a Class-I Contractor carrying on the business of Engineering Contracts. The 1st respondent entrusted the work relating to excavation of YLMC from KM 74.500 to 76.000 including lining under S.E’s Agreement No.18/86- 87. The work site was handed over to the petitioner on 18.02.1887 and the scheduled date of completion of work is 17.05.1988. However, the petitioner completed the work on extension of time by the 1st respondent. The petitioner contended that he sustained loss due to commissions and omissions of the respondent. The petitioner submitted a consolidated claim petition to the 1st respondent for settlement within 15 days. The 1st respondent rejected the claims as the value of the claims is more than Rs.50,000/- and thus the disputes/differences arose between them. Since the disputes/differences arising out of the aforesaid agreement are to be settled by way of arbitration, the petitioner invoked the Arbitration Clause and requested Principal Sub Judge, Visakhapatnam, who is the nominated Arbitrator to settle the disputes of value of more than Rs.50,000/-. However, the Principal Sub Judge, Visakhapatnam did not accept the reference, thereby the vacancy arose in the Office of the Arbitrator. The petitioner issued a notice to the 1st respondent to concur within 15 days of receipt of the said notice by appointing any one of the three eminent persons mentioned therein to act as Sole Arbitrator. But the Superintending Engineer refused to give his concurrence stating that all claims above Rs.50,000/- shall be decided by way of regular civil suit. Thereafter, the petitioner filed O.P.No.274 of 1994 on the file of Principal Subordinate Judge, Visakhapatnam, under Sections 8 and 33 of the Act, praying the Court to appoint a Sole Arbitrator to adjudicate the disputes/differences between the parties. The respondent vehemently opposed the application by filing a counter stating that, firstly, as per amended G.O.Ms.No.160 dated 01.06.1987, all the claims above Rs.50,000/- shall be decided by a Civil Court of competent jurisdiction by way of a regular civil suit, but not by way of arbitration. Secondly, the petitioner is not entitled to any claims raised by him as there is delay in completion of work, and thirdly, the nominated arbitrator i.e. the Principal Sub Judge, Visakhapatnam refused to enter upon the reference to settle the dispute. The trial Court framed following three issues: (i) whether there is an Arbitration Agreement to refer disputes/differences of the value of more than Rs.50,000/- to the arbitration of a named Arbitrator? (ii) if so, whether that vacancy has arisen in the office of the Arbitrator? and (iii) whether a Sole Arbitrator has to be appointed by the Court to fill up the vacancy? The trial Court, after due enquiry, allowed the petition appointing Sri. C. Veerabhadra Rao, Retired District Judge, as Sole Arbitrator to settle the dispute as pleaded. Being aggrieved, the present CRP is filed. Now the point for consideration is whether the order of the trial Court is sustainable. In the trial Court, none were examined. However, Exs.A1 to A8 were marked by consent. It is contended by the learned counsel for the petitioner that as the disputes between the parties are to be settled by way of arbitration and as Principal Subordinate Judge, Visakhapatnam, has refused to enter upon the reference, the petitioner issued notice under Section 8(1)(b) of the Act for which the respondent has not concurred, and the petitioner filed the said O.P. and the trial Court had rightly allowed the petition by appointing a sole arbitrator. The learned Government Pleader for Arbitration mainly urged that the Court below ought to have seen that there is no Arbitration Agreement between the parties and as the dispute claim is over Rs.50,000/-, the petition under Section 8 of the Act is not maintainable, and the petitioner has to file a regular civil suit as per the Terms of Agreement. The learned Government Pleader placed reliance in the decision reported in the case between VISHAKAPATNAM URBAN DEVELOPMENT AUTHORITY v. V. NARAYANA RAJU[1]. As could be seen from Ex.A1, there are Arbitration Clauses and as per the Additional Conditions of the Contract under Schedule-D of the written Agreement No.18/86-87 executed by the Government of Andhra Pradesh, at Visakhapatnam, Clause 11 read with Clause 73 of P.S. to A.P.S.S. provides for settlement of disputes, including disputes of value of above Rs.50,000/- by way of arbitration. However, for disputes of value of above Rs.50,000/-the Court of competent jurisdiction is the nominated Arbitrator. Further, as seen from the impugned order, the Superintending Engineer refused to give his concurrence stating that all the claims exceeding Rs.50,000/- shall be decided by way of a regular civil suit. Therefore, in view of the provisions under Section 8 of the Act, the claim of the petitioner is not maintainable and the petitioner has to file a regular civil suit. But the lower Court failed to note the Terms of Agreement, and thereby passed the impugned order. The Court ought to have seen that as per the Terms of Agreement, the Arbitration Clause 11 reads as follows: (i) Claims upto Rs.10,000/- - Superintending Engineer Y.R.P. Circle, Kakinada-3 (ii) Claims above Rs.10,000 and upto Rs.50,000 - Chief Engineer, Srirama Sagar Project (iii) Claims above Rs.50,000/- - Court of Competent Jurisdiction The Supreme Court, as stated in 1-supra, interpreted an identical clause. Since there is no Arbitration Agreement between the parties and as the value of the claim exceeds Rs.50,000/-, the parties will have to file a regular civil suit. Therefore, in the said circumstances, the impugned order dated 13.07.1995 in O.P.No.274 of 1994 is set aside; and the parties may file a regular civil suit for redressal of their grievance. Accordingly, the Civil Revision Petition is allowed. There shall be no order as to costs. _________________________ JUSTICE K.S. APPA RAO Date: 02nd September, 2011 KSM [1] 1995(2) SCALE 234