IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR C.R.NO. (73/2006 Applicant ,..€^ ^ ^^>t V^ <.^.,..•^3- ^ ^ ^- Non applicants 2. .f^: /. -•-^ "^' ^^1 o- ^l % ^.^ (^L^ .3. ^^ Umesh Chandra Panigrahi S/o Shri M.P. Panigrahi Aged about 43 years, R/o Kumhar para ,Jagdalpur Distt.Bastar (C.G) Yersus State of C.G Through: The Secretary Public Works Department D.K.S. Bhavan, Mantralaya Raipur (C.G) Executive Engineer Public Works Department. North Bastar Division Jagdalpur ,Distt.Bastar (C.G) C.G Madhyastham Adhikaran Through: The Registrar Raipur(C.G). CIVIL REVISION U/S 19 OF C.G MADHYASTHAM ADHDCARAN ADHINTYAM1983 ^^- mCTtCQURTOFCHHATTISGARH.BILASPUR DB: HON»BLB I. M. QUDDU8I & HON*BLE G. MINHAJUDDIN, JJ CIVIL RBVISION No.173 of 2006 Umesh Chandra Panigrahi Vs. State of Chhattisgarh and others ORDBR JUDGB /^/11/2011 HON>BLB SHRI JUSTICB G. MINHAJUDDIN x Sd/- G. Minhajuddin Judge Postfor /^/l 1/2011 Sd/- I.M. Quddusi Judge fi^ft- HIGH COURT OF CHHATTISGARH. BILASPUR DB: HON»BLB I. M. QUDDU8I 8s HON*BLB G. MINHAJUDDIN. JJ CIVIL RBVISION No.173 of 2006 APPLICANT: RBSPONDBNTS: Umesh Chandra Panigralii Vs. State of Chliatdsgarh & ofhers CIVIL REVISION U/S 19 OF THB C.G. MADHYABT1IAM ADHIKARAN ADHINIYAM. 1983 Appearance: Mr. PrafuU Bharat, counsel for the applicant ^-' Mr, Viaay Harit, Deputy Advocate General for the State/ respondents. ORALORDBR (f^.11.2011) Pcr I.M. QUDDUSI. J. 1, The applicaiit/petitioiier has filed this petition under Section 19 of the C.G. Madhyasfham Adhikaraa Adhmiyam, 1983 against the award dated 01.03.2006 passed by tfae C.G. Madhyastham Adhikaraii, Raipur-in Ref, Petition No.64/2005, 2. Brief facts of the case are fhat fhe appUcaat is a registered contractor, His tender was accepted m respect of construction of four units of laboratoiy blocks and wire fenciag for twro barracks including W/S, S/F aad electrificatton at open Jail Masgaon. Agreenient was entered into between fhe parties ia fhe year 1991. Accepted rate ofwork was 35% above C.S.R. of Bastar Circle. The period ofcoiapletion ofwork was 11 months and accordmgly, fhe work was to be completed by 30.05,1992, The work order was given on 30.05,1991, M,^ 3. Accordiag to tih.e applicaat, fhe work was coinpleted on 30.11.1993 and fhe final bffl amounting to Rs.16,54,216/- was subniitted, There was soine dispute regarding payment Therefore, fhe petitioner ia view of clause 29 of fhe Agreement submitted aa appUcation before fhe Executive Engmeer PWD. The Bxecutive Engiaeer did not proceed witfa fhe appUcation/ representation subiidtted by fhe petitioner. As fhe request of fhe appUcant was not aceeded to, he nioved fhe Arbitratlon Tribunal for redressal of his grievaace aad adjudication of fhe dispute. During the proceedmgs, atl fhe documents werc produced before fhe Tribunal. It is urged that iaitiaUy the proceediags before fhe Tnbunal were conducted in. tenas of Clause 29 ofthe Agrcement which provides for constitution of Tnbunal consistmg of aa OfHcer belongmg to fhe rank of Chief Engiaeer, but subsequently the Chief En^bieer did not participate ia fhe proceediags, The appUcaat raised objection regardiag constitiition of the Tribunal but ftie same was not heard aad zdtimately fhe Tribiinalvideorderdated 01.03.2006 passed fhe award, Leamed counsel for fhe appMcaat submits that m case of dispute or dtfferenees between fhe parties pertamiag to works contoract, Clause 29 of the Agreement provides that the State Govenuiient shall constitute aii arbitration board which shaU consist of 3 nieixibers one of whoni shall be chosen J&DHI the officers belonging to the department notbelow the raiik of Superintendiag Engiaeer aad ia fhe iastaiit case wifhout fhere bemg aay such techiucal member, fhe constitation of fhe Tribunal cQnsisting of one HonTjle High Court Judge (Retd.) '^<. <"• aiid one District Judge (Retd.) was itself defective aad as such the decision rcndered by fhe Tribunal consistiag of two niemibers is illegal arid void ab-imtio. He further subxaits that the iachision of the ofiBcer of a techiucal departmeiit is notjiist a mere formality, it was wifh a view aad purpose tih.at tfae inatter bears technical iiiteipretation aad as fhe person haviag technical knowledge was not iacluded m the Arbitration Board,, tiie decision offhe Tribunalwas bad ia law and it is liable to be set aside. He placed reliance on a decision of the Apex Court m Northem Rcdtwey Adfninistratten^ SSlnistry ef Jtatluic^ New Delhi Vs. Patet BngineetFlng C^. Ltet^ reported (n (2008) 10 SCC 249wherew.it has been held m paras 12 to 13 as under: a12, A bare readiag of fhe scheme of Section 11 of Arbitration aad Conciliation Act, 1996 shows fhat fhe emphasis is on the terms ofagreement beiag adhered to aad/or given efiFect as closely as possible, In ofher words, fhe Court nxay ask to do what has not been done, The Court must first ensure that fhe remedies provided for are exhausted, It is true as contended by Mr, Desai that it is not maiidatory for fhe Chief Justice or aay person or iastitution designated by hixn to appoiat fhe named arbitrator or arbitrators. But at fhe same time, due regard has to be given to titie qualificatioiis required by fhe agreement aad otiier considerations. 13. The expression "due regardw xaeaas fhat proper atfeentiou to several circimistances have been focused. The expression "necessary^ as a general rule caa be broadly stated to be fhose fhiags which are reasonably required to be done or legaUy aaciUary to the acconiplishinent ofthe intended act Necessary ineasures caa be stated to be the reasonable steps required to be taken. '42. 14. In aU these cases at haiid the High Court does not appear to have focused 0x1 fhe reqiurement to have due regard to fhe quaUfications required by fhe agreenient or ofher considerations necessaxy to secure the appomtoaient of aa iadependent aad iExipartial arbitorator. It needs no reiteration fhat appoiaitxnent of the arbitrator or arbitrators named in fhe arbitration agreeinent is not niust, but whUe niakiiig fhe appomtotnent fhe twin. requirements of sub-section (8) of Section 11 have to be kept ia view, considered aad taken iato accoiiat Ifit is not done, fhe appoiritaaieiit becoines vulaerable. In tiie circiuastanees, weset aside the appoiatiHent niade ia each case, reiiiit fhe niatters to fhie Higb. Court to xaake finesh appoiiitGaents kee^uig in view fhe paraoieters indicated above^ Further m Indian Oit CarporeMan Limited cwd irtSters -ffs- Ra/a Transport Priifate Linviteft(2009) 8 SCC 520 vide Para 43 the decision rendered ia Northem Railway Adsninistratior^ Vs, Patel Engineering Co. Ltd. (supra) caoie up for consideration aad Hon'ble fhe Apex Court has quoted fhe above paragraphs. In para 48, fhe scope of sectton 11 of Arbitration aad ConciUation Act, 1996 has also been suinniarized, which reads as under: (i) Where fhe agreeinent provides for arbitration with three arbitrators (each party to appoiat one arbitcator aad the two appointed arbitrators to appoint a third arbittator), ia fhe event of a parly failing to appoiat an arbitrator wifhia 30 days fix>m fhe receipt of a request fix>m fhe ofher parly (or fhe two nomiaated arbitorators failiag to agree bn the third arbitrator within 30 days jfom the date of the appoiatcaent), the Chief Justice or his designate will exercise power under sub-section (4) of section 11 of fhe Act. (ii) Where fhe agreement provides for arbitration by a sole arbitrator aad fhe pardes have not agreed upon aay ...^fe. '^4- •ff^-^ ^ ;>1 \~S'<~^!'^ ' ^ ^c /' ' appoiatnient procedure, fhe Chief Justice or his designate will exercise power under sub-section (5) of Section 11, if the parties faU to agree on fhe arbitration wifhio. thirty days froin the receipt ofa request by a party froisi fhe ofher party, (iii) Where fhe arbitration agreement specifies the appoiatoient procedurc, fhen irrespective ofwhefher the arbitoration is by a sole arbitrator or by a fhree member Tribunal, fh.e ChiefJustice or his designate will exercise power under Sub-section (6) ofSection 11, ifaparty fails to act as required under fhe agreed procedure (or fhe pardes or the two appoiated arbitrators fail to reach an agreeinent expected of theni xnider fhe agreed procedure or axiy person/iastitution fails to perform any fdnction entrasted to him/it under that procedure). (iv) While failiire of fhe ofher party to act wifhia 30 days wffl fiimish a cause ofaction to fhe party seekmg arbitration to approach fhe ChiefJustice or his designate ia cases faUiag under sub-sections (4) and (5), such a time-bound requirement is not found ia sub-section (6) ofSection 11, The failure to act as per fhe agreed procediire wifhia the time-limit prescribed by fhe arbitration e^reement, or ia the absence of aay prescribed tmie-lioadt, wifhin a reasonable tiiae, will enable fhe aggrieved party to file a petition under Section 11(6) ofthe Act (v) Where the appoiataient procedure has been agreed between the parties, but fhe cause of action for iavokmg fhe jurisdiction of fhe Chief Justice or his des^nate under clauses (a) (b) or (c) of sub-section (6) has not arisen, fhen the question of the Chief Justice or his designate exercisiag power uiider sub-section (6) does not arise, The condition precedent for approachiag the Chief Justice or his designate for takiag necessary raeasures under sub-section (6) is fhat (i) a party faUing to act as requijred under fhe agreed appomtaient procedure; or (ii) fhe pardes (or fhe two appoiated arbitratoi^) failmg to reach aa agreeinent expected of ^^ t. ^ 1 ^-^•I'^^^^si^t^. |j ^:7|V^:£1"' "^^ ^ M< \^....^ fhem under fhe agreed appomtment procedure; or (iil) a person/mstitution who has been enta-asted with aay fanction iiader fhe agreed appoiataient procediire, failiag to perform. such function, (vi) The Chief Justice or his designate whUe exercisia.g power luider sub-section (6) of Section 11 shali endtecawur to giffe ^jgteet to the ctppaintownt procedure preseribed in the cirMtrcrtien clausc. If circuiastaaces exist, giving rise to justifiable doubts as to fhe iadependence aad iHipartiatity of fhe person nomiiiated, or if ofher circmnstaaces warrant appomtment of aa iadependent arbitraitor by ignormg the procedure prescnbed, the Chief Justice or his designate mLay, for reasons to be recorded ignore fhe designated arbitrator aad appoiat soiueone else. Learaed counsel for the State/respondents 1 8& 2 subiaits that the award sought to be revised by fhe appUcaiit has been passed by fhe Tribunal, therefore, fhe proceediags conducted and fhe award passed by fhe Tribunal are wifhia fhe jurisdictiQn so vested in it aad fhere was no illegaUty or niaterial irreguladly in fhe award passed by fhe Tribunal warraiitmg iiiterference by fhis Court. He further subinits fhat fhe powers of fhe Court in revisioiial jurisdiction are Umited aad fherefore, no mterference is caUed for m this revision. He placed reUance m Mcu^Id JSacfeha Tcmfc Vs^ Tufel Mehd^ 1991 Supplenwnt-U^ S€CPg. 270 wherem Hon^ble titie Apex Court held that u/ s 115 of the Code of Civil Procedzire the High Court caanot reappreciate fhe evidence aad set aside the concurrent findiags of fhe courts below by takiag a differcnt view, Interference with findiags of fact only justified if perverse .•sc3^ /y , ^^^^^ i;fi^SS:h ^sw&< 6. or if fhere was non-appreciation or non-consideration of fhe xnaterial evidence on record, He has also placed reUance ia Keilpatartt Vidya Scmuxsthe emd wfwther -Vs- S.B. Gupta and. ctnother (2005) Vot. W SCC Peige^S24 aad Kushro S. Gandhi and others -vs- jy.A» Qwed.erd (deewl) AIR 1970 SC Page 1468. Here fhe question adses as to whether fhe statute, fh.at is, CG. Mc^dhyasthmn. Adhikaran Adhimyam, 1983 faciUtates the appoiatinent of Chief Engineer or such aa ofl&cer of fhe State PubUc Works Department as one of the members of the Tribunal aad whether such appomtment would have been m consonaace wifh the terms of fhe agreement regardiag arbitratiou aad what would be the effect of non-mclusion of Chief Engmeer ia the Tribuiial for decidiag the dispute m question, Therefore, it is purely a legal question whicfa conies withia the revisional jurisdiction offhis Court, In fhe above context, it is relevant here to refer to Section 3 of the C& Mculhyastham Adlnkaran Adhimyam, 1983 (for short 'fhe Act\ 1983) which provides for constitution ofTribunal. It fiirther provides that the Slate Goverament shaU by nottGication constitute aa Arbitration Tribuiial for resolviag all such disputes or differences pertamiag to works contaract or adsing out of or connected wifh execution, discharge or satisfaction ofaay such works contract Section 4 of the Act, 1983 is relevaat aad quoted hereia below: 4. Cliairman aiid members of Trtbuaal aad tlieir quaUficatioiis." (1) Subject to sub-sections (2) aad (3), the State Govemment may appomt a chaiaaaa aad ,^$^^ .;.:^. 7. as inaay ineiabers to the Tribunal as it xiiay consider necessaiy, 1-a. The State Govemment may, m consxiltation wifh the ChairDiaa, designate one of fhe Judicial Members as the Vice-Chainnaa who ia the event of occurrence of aay vacaacy m fhe ofl&ce of fhe Chairmaii by reasou of his deafh, rcsignation, leave or otherwise, shall during such vacaacy, dischax^e the fiinctions offhe Chairaian.3". (2) No person shaU be appomted as Chairmaa of fhe Tribiuial, iinless he is or has been a Judge ofa High Court, (3) No person shaU be quaUfied for appoiatment as a mLeinber of the Tnbim.al, unless— (i) he is or has been a Distdct Judge of not less thaa seven years staadmg, or (ii) he is or has been a Revenue Conimissioner or has held a post equivalent to fhe rank of Revenue Cominissioner for a total period of not less fhaa five years, or, (iii) he is or has been : (a) Chief Eneineer in the swsrviee ofthe State GavCTnmeat iii Public Wdrks, Irrtesitlon ai PubUc Health Bnelneeriiiff Denartmeat, or (b) A Chief Engiaeer ia fhe sendce of fhe Madhya Pradesh Electricity Board, or (c) A Senior Deputy Accountant General of fhe Of&ce of the Accountaat General, Madhya Pradesh, For a period ofnot less thaii five years: (provided fhat ia the case of clause (iii), in. exceptional circunistances, fhe State GovemiELent niay, relax fhe prescribed mminiTim period offive years to fhree years), Hon'ble fhe Supreme Court m Bhdrcrt Scmchar Nlgemt lAmitcd cand cinothcr -Vs- BPL MoJWte CeUuIar I.(mteed cind others (2008) 13 SCC 597 has held that in Para 35 that "fhe rights aad liabilities of the pardes have been laid down under .:"•<-''-%. •^;w. :^^^'":':"^ 8> '^°) the Act as also the Rules fraiaed tihiereiinder. An agreeraent/contract inay be entered iato, subject to fhe provisions of a statute or the rules Jframed fhereunder. The contract, itself, inay refer to the statutory provisions or refer to fhe same by way of mcorporation by reference. A contract qua contract niust be consensual. It raust ineet fhe statutoxy requirements aad reasons under fhe provisions of fhe Contract Act When a contract is entered mto by aad beteveen tiie parties, what is detemimative is enforcement offhe terms aad conditions to be goveraed by fhe Contract subject to fhe application of fhe statate aad statutoxy provisions, Whereas a statutoiy contract would be goveraed by a statute, other contracts woxild not." 8« Hereia in fhe present case, accordiag to fhe petitioner, clause 29 of the Arbitration Agreenient provides that tf aay party is aggrieved by the decision of the Chief Engmeer, he caa refer such disputes for arbitration by aa Arbitration Board to be constituted by the State Goverament, which shall consist of thrce aiembers ofwhoici one shaU be chosen froau among fhe officers belongiag to the department, Accordmg to him, sub- clause (a) of Clause 29 of fhe Agrcenient further provides fhat no person ofher thaa fhe aforesaid Arbitration Board constitoLited by the Govenunent (to haiidle cases of all Technical Departments) shall act as Arbitrator aad if for aay reason fhat is not possible, flie matter shatl not be referred to Arbitration at an. In sub-clauses (a) & (c) of Clause (iii) of sub-section 3 of Section 4 of C.G. Madhyctstham AdSzikaran Adhiniyajn^ 1983 it has also been clearly raentioned fhat Chief Engineer in service '"%. -.^ \- r~'\ 10. of the State Gk>vemraLent ia PubUc Works, Irrigation or public Healfh Engmeermg Department, or a Senior Deputy Accountant General of fhe Office of fhe Accountaat Geiieral, Madhya Pradesh shall be quaUfied for appoiatment by fhe State Gk)vemment as a nieinber of fhe Tribunal, In the iastaat case, the concenied departxiient is PWD aad fherefore, accordiag to fhe agreeinent if the Chief Engiaeer or such aa oflGLcer belongia.g to PWD would have been appointed by fhe State Govermnent for fhe purpose of dealiag wifh the iastaat case? fhere woiild not have been violation of aay statutory provisions aad fhe terais of fhe agreeiaent could be conipUed withi ia consonaace wifh fhe statue. It is urged by fhe leamed counsel for the appUcant fhat fhe State Goverament ia exercise of fhe powers conferrcd under Sectioii 3 of the Act constituted fhe Arbitration Tribunal consistmg of a ChairmaoL aiid two members and when one ofthe members i.e., ojBicer of fhe Conceraed Department has not partlcipated ia fhe proceediags, fhe applicaat raised objection regardiag constitution of fhe Tribiinal but fhe saaie was not heard aad ultimately fhe Tribunal vide order dated 01,03,2006 passed fhe award. In view of fhe above discussion, we are of the opioion that in absence of Chief Engineer or such ao. ofl&cer of the State PubUc Works Departaient as provided ia the Act, 1983 or ia arbitration agreement, the constitution of Tribunal was not proper aad the decision rendered by fhe said Tribiinal consisting of Chairmaa aad one Meiaber wiflioxit there beiag an Officer of fhe conceraed Departnient is not in. accordaace ^o ".^'^ "'%. ^ ,,,•'^^ y- /"K;'..^""^ l :-—'.;, wifh fhe temis of fhe Agreement entered iato between fhe parties especially when fhe statute facilltates the appoiatment of Chief Engineer of fhe State PubUc Works Departinent ia fhe Arbitration Tribunal, Therefore, fhe iaipugned award dated 01,03.2006 passed by C.G. Arbiteation Tnbunal deser^es to be set aside aad is hereby set aside. 11. In fhe result, fhe revision is aUowed. No order as to cost(s). Sd/- I.M. Quddusi Judge Sd/- G. Minhajuddin Judge Rao