PNP 1 ARP25-13.8 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION ARBITRATION PETITION NO.25 OF 2009 M/s.Shaktikumar M. Sancheti ..Petitioner. Vs. Maharashtra Sates Electricity Board Holding Company Ltd. and others ..Respondents. .... Mr.Vijay P. Kukday with Mr.P.V. Nelson Rajan for the Petitioner. Mr.L.M.Acharya for Respondents 1 to 3. ..... CORAM : DR.D.Y.CHANDRACHUD, J. 13 August 2010. P.C. : 1. On 19 September 1994 a work order was issued to the Petitioner for the construction of a starter earthen bund in valley No.4 at Nasik, in connection with the work of the Nasik Thermal Power Station. By Clause 18 a provision for arbitration was incorporated “as per the revised Arbitration clause as stipulated in pages 16 and 17 of Volume 2/2 of tender specification”. The arbitration clause as referred to in the tender specification is annexed as annexure II to the reply filed on behalf of the Respondents. 1A. From the material on the record it emerges that initially by a letter dated 27 September 1994 instructions were given to the Petitioner PNP 2 ARP25-13.8 “as regards not substituting item No.6(c ) with item No.6(b) and not operating item No.6(b) at all”. In pursuance of an internal memo dated 23 June 1995 that direction was withdrawn to the extent of a quantity of 1,65,000 cubic meters of murum. The quantity of item 6(b) was to be restricted to 1.65 lacs cubic meters and an undertaking was to be obtained from the contractor that no revision of rates of clause 9 of the work order for execution of a quantity beyond 130% in respect of item 6(b) shall be claimed. The contractor furnished an undertaking under cover of a letter dated 5 July 1995. The provisions of the arbitration agreement were invoked on 28 December 2006 after the final bill was prepared in November 2004. 2. The defence which is urged to the Petition under Section 11(6) of the Arbitration and Conciliation Act 1996 is that under clause b(2), all matters which are extraneous to the contract are excepted from the scope of arbitrability. Learned counsel submitted that the work which was carried out in pursuance of the withdrawal of the instructions dated 27 September 1994 was unrelated to the earlier work order dated 19 September 1994 and therefore the disputes which have arisen would not be arbitrable. 3. The internal memo of 23 June 1995 of the Respondents has been PNP 3 ARP25-13.8 relied upon by the Respondents and as a matter of fact is annexed as Exhibit 1 to the reply. The internal memo clearly contains a reference to the work order dated 19 September 1994 (incorrectly typed as 1984 in the reference). At this stage, from the material on the record it is clear that the original instructions dated 27 September 1994 as well as the withdrawal thereof subsequently were all covered within the purview of the original work order. Hence, the final bill dated 25 November 2004 as a matter of fact also refers to the work order dated 19 September 1994. In the circumstances, it is not possible to accede to the submission that the claim which has been raised is extraneous to the contract. Whether as a matter of fact, the Petitioner is entitled to raise the claim or whether the claim would survive in view of the undertaking which was tendered, is a matter which will go to the merits of the dispute and which will have to be adjudicated upon by the arbitrator. Of necessity, all the rights and contentions of the parties would have to be kept open and are accordingly kept open on merits. 4. From the material on the record it is not disputed that disputes have arisen between the parties. The provision for arbitration was invoked by the Petitioner’s notice dated 28 December 2006. In terms of the PNP 4 ARP25-13.8 arbitration agreement Shri Justice V.G.Palshikar, Former Judge of this Court is appointed as an arbitrator under the Arbitration and Conciliation Act 1996 to adjudicate upon the disputes and differences between the parties. The Arbitration Petition is accordingly disposed of. There shall be no order as to costs. (Dr. D.Y.Chandrachud, J.)