C.R. No. 6410 of 2009 -1- ***** IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH C.R. No. 6410 of 2009 (O&M) Date of Decision : 30.08.2010 Union of India & others .......... Petitioners Versus Gursharan Singh ...... Respondent CORAM : HON'BLE MR. JUSTICE VINOD K. SHARMA Present : Mr. Puneet Jindal, Advocate for the petitioners. Mr. Kanwaljit Singh, Sr. Advocate with Mr. Anurag Chopra, Advocate for the respondent. **** VINOD K. SHARMA, J. (ORAL) This revision petition is directed against the order dated 20.8.2009, passed by the learned Addl. Civil Judge (Sr. Div.), Kapurthala, vide which application moved under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to the Arbitral Tribunal, stands declined. The parties to the suit had entered into an agreement for 'Replacement of Existing Sky Light by Polycarbonate FRP Sheet'. The agreement was executed on 29.8.2007, and the work was completed within the prescribed time frame on 15.2.2008. The plaintiff / respondent was issued the completion certificate. Thereafter a Vigilance enquiry was conducted by the C.R. No. 6410 of 2009 -2- ***** petitioner department. The Dy. Chief Vigilance Officer after Vigilance enquiry on 8.9.2008, passed the following order :- “During investigation into a case regarding execution of work contract for fixing of polycarbonate sheet on existing skylight in workshop area against agreement No. 2007100048, some irregularities such as making advance payment to the firm without actual execution of work, use of other brand of material than specified, non deduction of payment on account of non engagement of degree/diploma holder by the contractor, use of polycarbonate sheet without testing etc, were observed. After making detailed investigation and taking PHOD/HOD comments the case was put up to GM who accepted the recommendations of vigilance, where an amount of Rs. 21,45,717/-- is to be recovered from M/s G.S. Builders on account of cheating Railway by supplying inferior brand of material non deployment Decgree/ diploma holder during execution of contract. For the action on other responsible Railway Officials, case has been sent to Railway Board for obtaining CVC view and final action against RCF official will be advised in due course. Compliance on recovery may kindly be advised to the vigilance at the earliest for further action at this end please.” In compliance with the order passed by the Dy. Chief Vigilance Officer, the Dy. Chief Engineer, Rail Coach Factory, C.R. No. 6410 of 2009 -3- ***** Kapurthala ordered the recovery of an amount of Rs. 21,45,717/- for cheating the Railway, by supplying inferior brand of material, and on account of non deployment of Degree/Diploma holder during execution of abovesaid contract. The order was passed in compliance of the order passed by the Dy. Chief Vigilance Officer. The petitioner in support of the case relied on Clause 63, of the agreement executed between the parties, which reads as under :- “63. Matters finally determined by the Railway.- All disputes and differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract shall be referred by the contractor to the Railway and the Railway shall within 120 days after receipt of the Contractor's representation make and notify decision on all matters referred to by the contractor in writing provided that matters for which provision has been made in clauses 8(a), 18, 22(5), 39, 43 (2), 45(a), 55, 55-A(5), 57, 57A, 61(1), 61(2) and 62(1)(b) of General Conditions of Contract or in any clause of the Special Conditions of the Contract shall be deemed as 'excepted matters' and decisions of the Railway Authority, thereon shall be final and binding on the contractor provided further that 'excepted matters' shall stand specifically excluded from the purview of the C.R. No. 6410 of 2009 -4- ***** arbitration clause and not be referred to arbitration.” The contention of the learned counsel for the petitioner was, that the learned trial Court committed an error in coming to the conclusion, that after the issuance of completion certificate, the contract had come to an end as also the arbitration clause. The contention raised, was that the reading of Clause 63 would show, that the dispute arising out of contract, was to be adjudicated by the arbitrator even after completion of the contract. The contention of the learned counsel for the petitioner, can not be disputed, that the matter covered under the Contract, were to be referred to the arbitrator even after the completion of the contract. In the case in hand, the order challenged in Civil Court has not been passed in terms of the contract, but by their own Agency i.e. the Dy. Chief Vigilance Officer, in pursuance to the enquiry report. The Dy. Chief Engineer, Rail Coach Factory, thereafter did not hold any independent enquiry, nor adjudicated the matter, but imposed the penalty, as directed by the Vigilance department. The order impugned in Civil Court, therefore, can not be said to be arising out of or in connection with the contract, between the parties, but by an agency which is not party to the contract, which could be referred for adjudication by the arbitrator. For the reasons stated, it is held that the dispute in the C.R. No. 6410 of 2009 -5- ***** suit filed by the plaintiff / respondent is not covered under Clause 63 of the Contract. No ground, therefore, is made out to interfere with the order in exercise of revisional jurisdiction. No merit. Dismissed. 30.08.2010 (VINOD K. SHARMA) 'sp' JUDGE