.1^ c^y. IN THE HIGH COURT OF JUDICATURE AT BILASPUR (C.G.) M.C.C.No. 3L[ OF 200^ IN THE MATTER OF - APPLICANT ^. .e.'^fib^ M/s VI?IA?J CONSTRUCTIONS, a ^^'^ /)^^x partnership firm represented by the partner ^^Fil^^A (^-'"'' shri vimal Chand Jain, aged 54 years, son ofLate Shri Manik chandji Jain, resident of22-B, South Avenue, Choube Colony, Raipur C.G. 'i\ ^ ^" VERSUS STATE OF CHHATTISGARH / through - (1) The Secretary, Panchayat & Rural Development deptt., D.K.S.Bhawan, Mantralaya, Raipur C.G. (2) The ChiefEngineer, P.M.G.S.Y. Civil Lines, Raipur C.G. (3) The Executive Engmeer & Member Secretary, PIU, PMGSY, Jagdalpur C.G. APPLICATION UNDER SECTION-llf6) OF ARBITRATION AND CONCDLIATION ACT. 1996. The above named applicant begs to submit as under - NON-APPUCANT ^^^ ^•^"""/N^. ^•^ ...^...-._^_.-1.._.,._...... ^- HIGH COURT OF CHHATTISGARH AT BILASPUR M.C.C. No. 34/2006 M/s. Vimal Constructions Versus State ofChhattlsgarh & others Order post for 3.) -12-2006 Sd/- Dhirendra Mishra Judge ^' ^. <,_ ^.- HIGH COURT OF CHHATTISGARH AT BILASPUR M.C.C. No. 34/3006 M/s. Vimal Consttructions Versus State of Chhattis^urh 8s others Present: Shri P.K. Jaia, Adv. for fhe appUcaat. Shri V.V.S. Murfhy, Dy. Advocate General for the State. O RD B R Per Dhirendra Mishra* J< The appUcaat has preferred fhis application under Section 11(6) offhe Arbitration aad Conciliation Act, 1996 for appouitment of Arbitration Tribunal for setUement of disputes adsing between parties out ofcontoract agreement No. 6/2001-2002 vide Annexure A-8. 2. Case of the appUcaat is that fhe time aUowed for completion ofwork was 6 months excludiag raiay season aad the saine was to be reckoned from the date of issue of work order i.e, 13-3-2002 vide Annexure A-2, However during fhe course of execution of contracted work, nou-appUcaats committed various latches aad breaches of fhe contract and ultimately resciaded fhe contract of fhe appUcant vide raenio dated 3-4-2003 of Annexure A-3, As a result of fflegal rescission of conta-act by the non-appUcant, fhe applicant has snffered heavy finaacial losses aad he raised a claim of Rs. 250,50,197.00 vide Annexure A-4 dated 29-9-2003. On failure of non-appUcant No. 3 m payment ofabove deniaaded sum, arbitration clause No, 29 was invoked vide appUcaat's appUcation dated 3-2-2004 addressed to Supenntendiag Engnieer/non- appUcaat No. 3 vide Annexure A-5. The Superintendiag Engiaeer rejected the subinission of fhe appUcant aad, fherefore, aa appeal was preferred before fhe non-appUcaat/Chief Engiaeer No, 2 vide appUcation dated 26-2-2004 of Annexure A~6. Since the non- appllcaats did not take any action on fhe application of Annexm'e A-6 by fhe applicaiit, the appUcant vide its applfcation dated 26-9- 2005 of aanexurc A-7 reciuested for constltutiou of ArbitoTation '^.. (,, Tribunal, Siace fhe non-appUcants have decliaed to constitute Arbitration Tribunal, tihis appUcation iinder Section 11(6) of Arbitration and Conciiiation Act, 1996 has been filed for appointment of Arbitmtion Tribunal for settiement of fhe dispute arismg between fhe parties. 3. In reply to the above, the non-appUcaats have stated fhat as per Clause 29 of fhe agreement, if the party is unsatisfied with the decision of the Chief Engmeer, he caa refer such dispute for arbitration to arbitration tribiinal to be constituted bv fhe State Goverament aad only on failure of the State Govenimeut ia constitutiag the arbitration tnbunal, fhe aggrieved party can iavoke the Arbitration aad Conciliation Act, 1996 and siace fhe matter at the mstance of the appUcaat is pending before the Chief Engineer, fhe instant appUcation is premature. It is furfher submitted that State of Chhattisgarh has constituted Chhattisgarh Arbitration Tribunal vide notification dated 1st March, 2005. The 'l'ribunal has already started functionmg with effect fiTom 2ad September, 2005. The instaat appUcation has been filed by fhe applicant on 14-12-2005 i.e. after constitution of Arbitmtion Tribunal under C.G. Madhyasthaoi Adhtkaraa Adhiaiyam, 1983 (hereinafter referred to as fhe Adhiniyam of 1983). Sub-section (1) of Sectiou 20 of the Adhmiyam of 1983 bars fhie jurisdiction of CivU Court to entertaia or decide aay dispute under Arbitration Act 1940 or aay ofher law of which cognizaace caa be taken by the Tribunal under fhis Adhiniyam and, therefore the instant appUcation is not inamtamable, 4, Leamed counsel for fhe appUcaoLt subniits tiiat a bare perusal of documents of Annexure A-5 aad A-6 clearly iadicates fhat even before constitution of fhe Arbitoration Tribunal iiader fhe Adhiniyam of 1983, the aufhority under Clause 29 was seized of the dispute arismg out of the contract a^reement and, fiierefore, fhe bar under sub-section (1) of Section 20 of the Adhiniyam of 1983 is not attracted as the same is saved by sub-section (2) of Section 20 of the Adhmiyam of 1983. ReUaace is placed ia fhe matter of State ofMadhua Preulesh and ofhcrs -v- SS/s, Chahdl <md cammuw reported in 199S A.TJ^.R. S37. 5, I have heard leamed counsel for the pardes. 6. Relevaat pordon of Arbiteation clause 29 of fhe Contract Agreenient ofAnnexure A-8 is reproduced below:- "Clause 29- Except as ofherwise provided ia fhis contract all question aad dispute relatuig to be nieaniag of fhe specifications, designs, drawiags aad instructions hereia before xnentioned as to fhing whatsoever ia aay way arisuig out of or relatmg to fhe contract, des^ns, drawiags spect&cations, estimate, concemmg the works, or fhe execution or failing to execute fhe sanie, whefher arisiag during fhe progress of the work or after the completion or abaiidoniaent fhei^of shall be referred to fhe Supermtendirig Engiaeer m writiag for his decision, wifhia a period of 30 days of such occurrcnce. Thereupon the Supenntending Engmeer shatl give his written mstructions and/or decisions wifhia a period of 60 days of such requesfc This period can be extended by inutual consent ofparties. Upou receipt of written iastructions or decisions the parties shall promptly proceed without delay to comply such mstructions or decisions. If the Superiatendmg Engiaeer fatls to give his mstnictions or decisions ia writing wifhm a period of 60 days or lautuaUy ^reed tihaie after beiag requested aad if the parties are aggrieved agaiast the decision of fhe SuperiiitendiDLg Engineer fhe parties inay wifhm 30 days prefer an appeal to fhe Chief Engmeer who shall afford aa opportunity to tide parties of being heard and to offer evidence ia support of his appeal. The Chief Engineer wiil give his decision wifhia 90 days. If any party is not satisfied with fhe decision offhe Chief Engineer he can refer such disputes for arbitration to aa Arbitration Tribunal to be constituted bv fhe State Gtoveniment. In case such aii arbitration Tribunal is not constituted by fhe Slate / 4 Govemment, fhen the aggrieved party shall invoke Arbitration and ConcUiaUon Act 1996- as ainended till tilie date ofsuch refercnce.'9 7, Thus from a barc penisal of fhe Arbitration Clause, it is observed fhat aUl questions aad disputes adsiag out of fhe contract agreement are to be referred firstly to fhe Superintending Engiaeer wifhia 30 days of occun'ence of such dispute. If fhe Superintenduig Engio^eer fails to give his instructions or decisions ia writing wifhui a period of60 days or niutually ^reed time after beiag requested, aa appeal may be preferrcd wifhia 30 days to fhe Chief Engiaeer who has to give his decision within 90 days after affordiag an opportiuiily of hearing to the parties and to offer evidence m support of his appeal. An unsatisfied partv with the decision of the Chief Engiaeer caa fhen refer such dispute for arbitration by aa Arbitration Board to be constituted by fhe State Govenunent, However, after prefemng appeal under Clause 29 of fhe confcrcict agreeiaent, fhe Chief Engineer has not given any mstniction or decisk>n m the appeal. The applicant has also not referred the dispute to fhe State Gpveroinent for appoiatment of Arbitration Board for refemng the dispute for arbitration. 8. Section 20 of fhe Adhiniyam of 1983 is reproduced as under:- a(20) Bar ofjurisdlction otClvil Court- (1) As froBi fhe date of constitutions of the Tribunal and notwifhstandmg aayfhing contamed m Arbitration Act 1940 (No. 10 of 1940) or aay ofher law, for fhe time being ia force, or ia aay agreement or usage to fhe contrary, no civil court shall have jurisdiction to entertam or decide aay dispute of which cognizaace caB. be taken by fhe Tribunal iiader this Act 1(104) Notwitihistandmg aaythiag contained ia sub-section (1), a civil Court may entertaui and decide any dispute of fhe 1 iv h (C ^.- nature spect&ed ia fhe said sub section rcferred to it by a person ia fhe capacity of iadigent person. Explaaation- For the purpose of tihis sub-section ffmdigent person5? shall have fhe meaiimg assigned to it m fhe code of CivU Procediire, 1908 (No. 5 of 1908)1. (2) Nofhiag m sub-section (1) shall apply to aay arbitration proceediiig eifher pendiag before any arbitarator or unipire or before aay court or authority under the provisions of Arbitration Act, or any ofher law relating to arbitration, aad such proceedings may be contmued, heard aad decided m accordance with agreement or usa^e or provisions of Arbitration Act or aay ofher law relatmg to arbitration m aU fheir stages, as tffhis Act had not conie iato force, 9. In ffae matter of Stcite of Madhya Prcidesh emd ofhers (supra), fhe question before fhe FliU Bench of High Court of Madhya Pradesh was whether aa application iinder Section 20 of the Arbitration Act pendiag ia ttie Civil Court prior to fhe date of constitution ofArbitration Tribunal ie. 1-3-1985 would be saved by fhe provisions of Section 20(2) of fhe M.P. Madhyasfhain Adhikaraa Adhiniyam, 1983 and aaswermg the above question it was held fhat aa application uiider Section 20{ 1) offhe Arbitration Act which is pendiag prior to fhe date on which the Arbitration Tribujial was constituted under the Adhiniyam of 1983 would be saved by sub-section (2) of Section 20 of the AdhioiyaDi of 1983.The above judgment has no appUcation ia fhe present case as no appUcation is pending before aay Court or aufhority under Arbiteation Act. 10, In fhe iastaat case, we have already poiated out fhat fhe applicant preferred an appeal under Clause 29 of fhe contract agrcement before fhe Chief Engmeer. As per clause 29 of fhe agreement, the appUcaat catled upon fhe non-applicants to appoint fheir arbitrator vide fheir letter dated 26-9-2005 of Annexure A-7. It would be pertment to mention here fhat on 26-9" 2005 Arbitration Tribunal iznder fhe Adhmiyam of 1983 was 6 ((. already constituted and fiinctionmg in the State of Chhattisgarh, fherefore, there was a bar of Section 20(1) of the Adhiniyam of 1983 aad the only fonmi available to the appUcaat was to refer dispute to the Arbitration Tribunal constituted under Section 7 of fhe Adhiaiyam of 1983 and this Court is of fhe opiaion fhat cognizaace of fhis application caanot be taken by fhis Court. 11. In fhe result, the mstaat appUcation is dismissed for the aforesaid rcasons. I ! Sd/- Dhirendra Mishra Judge ^\ -12-2006