^ ^^ ^ IN THE HIGH COURT OF JUDICATURE AT BILASPUR (C.G.) M.C.C.No. -3/ OF 200^ Sjm IN THE MATTER OF - " w APPLICANT.^i^ ^ •;;y;^&s-' ^.••••' M/S VIMAL CONSTRUCTIONS, a partnership firm represented by the partner Vimal Chand Jain, aged 54 years, ofLate Shri Manik chandji Jain, resident of22-B, South Avenue, Choube Colony, Raipur C.G. NON-APPLICANT 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 Engineer & Member Secretary, PIU, PMGSY, Jagdalpur C.G. 'APPLICATION UNDER SECTION-11{6) OF ARBITRATION AND CONCILIATION ACT. 1996. The above named applicant begs to submit as under - ^";; •."- HIGH COURT OF CHHATTISGARH AT BILASPUR M.C.a No. 31/ 2006 M/s. Vlmal Coastructioas VCTSUS State of Clihattisgprh & others Oiderpostfor ^(-12-2006 Sd/- Dhirendra Mishra Judge '^ i^ •&•y l\ HIGH COURT OP CHHATTISGARH AT BILASPUR MC.C. No. 31/ 2006 M/s. VlmaA Cottstaruetloas Versus State of Chhatti^arh & others Present: Shri P.K. Jam, Adv. for tfae appUcant. Shri V,V.S. Murthy, Dy, Advocate General for fhe State. ORDBR Per Dhlrendra Mishrat J» The applicaat has preferrcd this appUcation under Section 11(6) ofthe Arbitration aad Conciliation Act, 1996 for appoiatment of Arbitration Tnbunal for settlexnent of disputes arising between parties out ofcontract agrcement No. 5/2001-2002 vide Annexurc A-8. 2. Case of fhe applicaat is fhat fhe time aUowed for completion ofwork was 6 monfhs excludiag raiay season and tiie same was to be reckoned from fhe date ofissue ofwork onler Le. 13-3-2002 of Annexure A-2. However dunng fhe course of execution of contoracted work, non-applicaats committed vanous latches and breaches of contract aad iiltiinately resciaded fhe contract of fhe appMcant vide xneino dated 1-4-2003 ofAnnexurc A-3, As a result of illegal rescission of contoract by the non-appMcant, the appUcaat has suffercd heayy fmaacial losses and he raised a claim of Rs. 426,57,247.00 vide Amiexure A-4, On faUure of non-appUcant No. 3 ia paynient of above dexnanded siun, arbitration clause No, 29 was mvoked vide appUcant's application dated 3-2-2004 addressed to Superuitending Engmeer/non-applicaD^t No. 3 vide Annexure A- 5, The Superintending Engiaeer rejected fhe subxxiission of the applicant aad, fherefore, ao. appeal was preferred before fhe non- appUcaiit/ChiefEngmeer No. 2 vide application dated 26-2-2004 of Annexure A-6. Siace the non-appUcaats did not take any action on fhe appUcation of Annexurc A-6 by fhe applicaat, fhe applfcaat vide its application dated 26-9-2005 of aanexurc A-7 requested for constitution of Arbitration Tribuiial. Siace ftie non-appUcaats have^ ^ ,<.., •'^ decliaed to constitute Arbiteation Tribunal, fhis application under Section 11(6) of Arbitration and ConcUiation Act, 1996 has been filed for appomtnient of Arbitration Tribunal for settlement of fhe dispute adsiag between fhe parties. 3. In reply to fhe above, fhe non-appUcants have stated that as per Clause 29 of the agreement, if tfae party is imsatisfied wifh the decision of the Chief Engiaeer, he caa refer such dispute for arbitoration to arbitration tribunal to be constituted by fhe State Govenunent aad onfy on failiire of fhe State Govemxaent ia constituting tfae arbitration tribunal, the aggrieved party caa iavoke fhe Arbitration anid Conciliation Act, 1996 and smce the matter at ffaie iastaace of fhe applicant is pendmg before the Chief Engiaeer, fhe mstaat appUcation is prematnre. It is furdier submitted fhat State of Chhattisgarh has constituted Chhattisgarh Arbitration Tribunal vide notification dated 1st March, 2005, The 'l'ribiuial has already started functioning with eflect fix>m 2nd September, 2005. The instaiit appUcation has been filed by fhe appUcaat on 14-12-2005 ie. after constitution of Arbitration Tribunal under C.G. Madhyasfham Adhikaraa Adhmiyani, 1983 (hereiaafter referrcd to as fhe Adhiaiyam of 1983). Sub-section (1) of Section 20 of fhe Adhmiyam of 1983 bars the jurisdiction of Civfl Court to entertam or decide aay dispute under Arbitration Act 1940 or any other law of which cognizaace can be taken by fhe Tribunal under fhis Adhmiyain aad, therefore the mstant appUcation is not iaamtauiable< 4. Leamed counsel for fhe appUcaiit subniits that a bare perasal of documents of Annexure A-5 aad A-6 clearly mdicates that even before constitution of fhe Arbitration Tribunal under fhe Adhiniyam of 1983, fhe aufhority under Clause 29 was seized of fhe dispute adsiag out of fhe contract ^reement aad, fherefore, fhe bar under sub-section (1) of Section 20 of fhe Adhiaiyam of 1983 is not attoracted as fhe same is saved by sub-sectlon (2) of Section 20 of fhe Adhmiyam of 1983, ReUaace is placed in fhe matter of State ofSSadhua Pradesh cmd others -v- SS/s. Chfihal fffll^ Cpnipffnw rfaPrlrtfat^ 1n tOO^ A^T.T^R^ <S^T, ^r ,) 5. I have heard leamed counsel for fhe partieQ, 6. Relevant portion of Arbitration clause 29 of tihie Contract Agreement ofAnnexiire A-8 is repioduced below:- "Clause 29- Except as ofhenvise provided ia fhis contract all question and dispute relatmg to fhe meamng of the speci&cations, designs, drawiags and instructions herem before mentioned as to fhiag whatsoever in aay way adsing out of or relating to fhe contract designs, drawiags specifications, estimate, conceradng fhe works, or fhe execution or faiUng to execute fhe same, whefher adsiag during fhe progress of fhe work or after fhe comipletion of abaadoninent fhereof shaU be referred to fhe Superiatendiiig Engiaeer ia writing for his decision, wiftiin a period of 30 days of such occurrence. Thereupon fhe Superintendiag Engineer shaU give his written instructions and/or decisions wifhia a period of 60 days of such request. This period can be extended by mutual consent ofparties. Upon receipt of written ixistructions or decisions fhe parties shaU proniptly proceed wifhout delay to coniply such msta-uctions or decisions. If the Supermtending Engineer faUs to give his iastnictions or decisions m writuig wifhia a period of 60 days or mutaally agreed time after beiag rcquested aad tf fhe parties arc aggrieved agauist fhe decision of fhe S,E. the parties niay wifhia 30 days prefer aa appeal to fhe Chief Engiaeer who shall afford aa opportunity to fhe parties ofbeia^g heard and to ojffer evidence in support ofhis appeal, The Chief Engineer wiU give his decision wifhin 90 days. If aay party is not satisfied wifh the decision of fhe Chief Engineer he can refer such disputes for arbitration to an Arbiteation Tribunal to be constituted by the State Goverament. In case such aa arbifcration Tribunal is not constituted by fhe State Goveniment, fhen fhe aggrieved party shaU invoke Arbitration and ConciUation Act 1996- as amended.tiU the date of such reference." ,<&< 7. Thus from a bare perasal of the Arbitration Clause, it is observed fhat aU questions aad disputes adsing out offhe contract agreeinent are to be referred firstly to fhe Supenntending Engineer withm 30 days of occurrence of such dispute. If fhe Supermtendmg Engineer fails to give his iastructions or decisions ia writing wifhin a period of 60 days or muttiaUy agreed time after beiag requested, aa appeal may be preferred wifhia 30 days to fhe Chief Engmeer who has to give his decision wifhin 90 days after affording aa opportumty of hearmg to fhe parti.es aad to offer evidence iu support of his appeal. An unsatisfied party wifh fhe decision of fhe Chief Engiaeer caa fhen refer such dispute for arbitration by aa Arbitration Board to be constituted by the State Govemment. However, after preferring appeal under Clause 29 of fhe contract agreement, fhe Chief Engiaeer has not given any instruction or decision m the appeal. The appUcaat has also not referred fhe dispute to fhe State Goveniment for appointment of Arbitration Board for refening fhe dispute for arbitration. 8. Section 20 of the Adhioiyam of 1983 is reproduced as under:- &(20) BarofjurlsdlctlonofClvilCourt- (1) As from fhe date of constitiitions of fhe Tribunal aiid notwifhstaiidmg aoythmg contabied ia Arbitration Act 1940 (No. 10 of 1940) or aiiy ofher law, for fhe tfcaie beiag in force, or ia aay agreement or usa^e to fhe contrary, no civil court shall have jurisdiction to entertaia or decide aay dispute of which cognizauce can be taken by the Tribimal under fhis Act. 1(104) Notwiftistaiidmg aayfhiag contaiaed m sub-section (1), a civa Court may entertam and decide any dispute offhe nature speci&ed ia the said sub section rcferred to it by a person ia fhe capacily ofindigent person, \-f ^. Explaaation- For tihie purpose of fhis sub-section "indigent person" shatt have fhe meaamg assj^ned to it m fhe code of Civfl Procedure, 1908 (No. 5 of 1908)1. (2) Nothiag in sub-section (1) shall apply to aay arbitration proceediag eifher pendmg before aay arbitrator or umpire or before any court or aufhority under the provisions of Arbitration Act, or aay other law relating to arbitration, aad such proceedmgs may be continued, heard and decided m accordance wifh agreement or usage or provisions of Arbitration Act or aay ofher law relating to arbitration ia all fheir stages, as iffhis Act had not come mto force. 9. In fhe matter of Stdte af Madhya Pradesh and ethers (supra), fhe question before fhe FuU Bench of High Court of Madhya Pradesh was whefher an application under Section 20 of fhe Arbitration Act pendiag in fhe Civfl Court prior to fhe date of constitution of Arbitration Tribunal ie. 1-3-1985 would be saved by fhe provisions of Section 20(2) of the M,P. Madhyasfham Adhikaraa Adhiaiyam, 1983 aad aaswermg fhe above question it was held that aa application under Section 20( 1) offhe Arbitration Act which is pendiag prior to the date on which the Arbitration Tribunal was constituted under fhe Adhiaiyani of 1983 would be saved by sub-section (2) of Section 20 of fhe Adhuiiyam of 1983.The above judgnient has no appUcation m fhe present case as no appUcation fe pendiag before aay Court or authorily under Arbitration Act, 10, In fhe iiistant case, we have already poiated out fhat the appUcaat preferred an appeal under Clause 29 of the contract agreement before the Chief Engiaeer. As per clause 29 of fhe agreement, fhe appUcaat caUed upon fhe non-appUcants to appoiat their arbitrator vide their letter dated 26-9-2005 of Annexure A-7. It wpiild be pertment to mention here fhat on 26-9- 2005 Arbitration Tribunal under fhe Adhiniyam of 1983 was already constituted aad functioniag ia fhe State of Chhattisgarh, fherefore, fhere'was a bar of Section 20(1) of tfae Adhiiiiyani of 1983 and fhe on]y forum available to fhe applicant was to refer dispute to the Arbitration Tribunal constituted under Section 7 of tfae Adhimyam of 1983 and fhis Court is of fhe opinion that cognizance offhis appUcation caaiiot be taken by this Court. 12. In fhe resiilt, fhe instaat application is dismissed for the aforesaid rcasons. SdA Dhirendra Mishra Judge G^ ^T-^r^-^uuo 1-- ^^,