Sil INJHE HIGH COURT OF JUDICATURE AT BILASPUR (C.G.) M.C.C.No. 53 OF 200^' IN THE MATTER OF - APPLICANT '^ \^'"" NON-APPLICANT / ^^Q° ^y\ ^t^^ .0 ^ ^'^ o^ •^ M/S VIMAL CONSTRUCTIONS, a partnership firm represented by the partner Shri Vimal Chand Jain, aged 54 years, son ofLate Shri Manik chandji Jain, resident of22-B, South Avenue, Choube Colony, Raipur C.G. 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-llf6) OF ARBITRATION AND CONCILIATION ACT, 1996. The above named applicant begs to submit as under - .<..// t. HIGH COURT OF CHHATTISGARH AT BILA8PUR M.C.C. No. 33/2006 M/s. Vimal Coastructlons Versus State of Chhattla®arh& otjhers Order post for il -12-2006 Sd/- Dhirendra Mishra Judge '\/' ^ HIGH COURT OP CHHATTISGARH AT BILASPUR M.C.C. No. 33/2006 M/s. Vimal Constructlons Versus State of Chhattia^arh & otliCTS Present: Shri P.K. Jaia, Adv. for fhe applfcant. Shri V.V.S. Miirthy, Dy. Advocate General for the State. ORDBR Per Dhirendra Mishra* J. The appUcaat has preferrcd tihds application under Section 11(6} offhe Arbitration aad Conciliation Act, 1996 for appoiatment of Arbitration Tribunal for settiement of disputes adsiag between pardes out ofcontract agreement No. 4/2001-2002 vide Annexure A-8. 2. Case of the appUcaat is fhat the tinie aUowed for coxnpletion ofwork was 6 months excluding raiay season and the same was to be reckoned firom the date of issue of work order i.e. 13-3-2002 vide Annexure A-2. However during Uie course of execution of contracted work, non-applicaats resciaded fhe contract of fhe applicaat vide memo dated 5-2-2003 ofAnnexure A-3, As a result of iUegal rescission of conta^act by fhe non-appUcaiit, the applicaat has suifered heavy finaiicial losses aad he raised a claiai of Rs, 255,94/209.00 vide Annexure A-4, On failure of non-appUcaat No. 3 m payment of above demaaded siim, arbitration clause No. 29 was iavoked vide appUcaat's appUcation dated 3-2-2004 addressed to Superintendiag Engmeer/non-appUcaat No. 3 vide Aiuiexure A- 5. The Superintendiag Engineer rcjected fhe submission of fhe applicaat and, fherefore, aii appeal was preferred beforc the non- applicaiit/ChiefEngiaeer No, 2 vide appUcation dated 26-2-2004 of Annexure A-6, Siace fhe non-applicaats did not take any action on fhe application of Aiuiexure A-6 by the applicaat, fhe appUcaat vide its application dated 26-9-2005 ofannexure A-7 requested for constitution ofArbitration Tribunal. Smce the non-appUcaats have declmed to constitiite Arbitration Tribunal, fhis appUcation under --,/ • \.v Section 11(6) of Arbitration and ConeiUation Act, 1996 has been filed for appoiataient of Arbitration Tribunal for settlement of fhe dispute arismg between tfae parties. 3. In rcply to fhe above, tibie non-applicaats have stated that as per Clause 29 of fhe agreement, if fhe party is unsatisfied with fhe decision of fhe Chief Engiaeer, he caa refer such dispute for arbitration to arbitration tdbunal to be coastituted bv fhe State Govemnient aad only on failiire of fhe State Govemiaent io. constitutin.g fhe arbitoration tdbiinal, fhe aggrieved party can iavoke the Arbitration and Conciliation Act, 1996 aad smce fhe inatter at fhe iristance of fhe appUcaat is pending before fhe Chief Engiaeer, the iastant application is premature. It is furfher submitted fhat State of Chhattisgarh has constituted Chhattisgarh Arbitration Tribunal vide notification dated Ist March, 2005. The 'l'ribunal has already started functioniag with efifect fix>m 2nd Septeniber, 2005. The instaat appUcation has been j51ed by fhe appUcant on 14-12-2005 ie. after constltution of Arbitration Tribunal under C.G. Madhyastiiaai Adhikaraa Adhiniyam, 1983 (hereiaaffcer referred to as the Adhiaiyam of 1983). Sub-section (1) of Section 20 of fhe Adhimyam of 1983 bars the jurisdiction of Civil Court to entertam or decide aay dispute under Arbitration Act 1940 or aay other law of which cognizance can be taken by fhe Tribunal under fhis Adhiniyaai aad, fherefore fhe iastaat appUcation is not inaintainable. 4, Leamed coiinsel for the appUcant submits fhat a bare perusal of documents of Annexure A-5 aad A-6 clearly indicates fliat even before constitution of fhe Arbitration Tribiinal iinder the Adhiaiyam of 1983, fhe aufhorily under Clause 29 was seized of fhe dispute arisiag out of fhe contract agreement aad, thercforc, fhe bar under sub-section (1) of Section 20 of fhe Adhiniyam of 1983 is not attracted as fhe same is saved by sub-sectlon (2) of Section 20 of fUe Adhioiyam of 1983. Reliance is placed in the matter of State ofMddhiia Pradesh emd others -v- M/s. Chahal and conwcuw reported ia 199S A.TJ/.i?. 537. 5. I have heard leanied counsel for the parties, f ^' 1. 6. Relevant portion of Arbitoration clause 29 of fhe Contract Agreexaent ofAnnexure A-8 is reproduced below:- "CIause 29- Except as ofhenvise provided m fhis contract aU question aad dispute relatiag to fhe laeaaiag of fhe speci&cations, designs, drawmgs aad instructions herem before mentioned as to fhiag whatsoever in any way arising out of or relatmg to titie contract designs, drawings speci&cations, estmiate, conceraiag the works, or the execution or failing to execute fhe same, whether arising during fhe progress of fhe work or afler the conipletion of abandonment fhereof shaU be referrcd to fhe Supenntendmg Engiaeer ia writing for his decision, wifhia. a period of 30 days of such occiirrence, Thereupou fhe Superintendiag Engiaeer shaU give his written instructions aad/or decisions withm a period of 60 days of such request This period caa be extended by mutual consent ofpardes. Upon receipt of written iastructions or decisions fhe parties shall prompfly proceed wifhout delay to comply such iastructions or decisions. If fhe Supermtendiag Ei^meer fails to give his mstructions or decisions ia writing wiftiin a period of 60 days or mutuaUy agreed tmie after beiag requested aad if ffae pardes are aggrieved agauaist the decision of the Superintendiag Engiaeer the pardes may wifhin 30 days prefer an appeal to fhe Chief Engiaeer who shail afford aa opportunity to fhe pardes of beiag heard aad to offer evidence in support ofhis appeal, The Chief Engiaeer wiU give his decision wifhia 90 days. If any party is not satisfied wifh fhe decision of the Chief Engiaeer he caa refer such disputes for arbitration to an Arbitoration Tribunal to be constituted by the State Goverament. In case such oa arbitration Tribunal is not constituted by the State Goveroinenf, fhen fhe agreeved party shaU invoke Arbitration and ConciLiation Act 1996- as amended tUl the date of such reference." <^ 7. Thus from a bare perusal of fhe Arbiteatbn Clause, it is observed fhat aU questions aad disputes ansiag out ofthe contract agreement are to be referred firstiy to fhe Superintendiag Engineer wiffaia 30 days of occurrence of such dispute, If the Supenntendiag Engiaeer faUs.to give his iastructions or decisions ia writing wifhia a period of 60 days or mutually agreed time after being requested, aa appeal may be preferred wifhia 30 days to fhe Chief Engiaeer who has to give his decision wifhia 90 days after ajBTordiag aa opportunity of hearing to fhe pardes aad to offer evidence ia support of his appeal. An iinsatisfied party wifh the decision of fhe Chief Engineer caa then refer such dispute for arbitration by aii Arbitration Board to be constituted by the State Govemineut. However, after preferring appeal under Clause 29 of fhe contract agreement, the Chief Engineer has not given aay mstruction or decision m ffae appeal. The applicant has also not referred fhe dispute to fhe State Govemment for appointment of Arbitration Board for referring the dispute for arbitration. 8. Section 20 of fhe Adhiaiyam of 1983 is reproduced as under:- a(20) Bar ofjurisdictloa of Civil Court- (1) As from fhe date of constitutions of the Tribunal and notwifhstaading aayfhmg contained ia Arbitiation Act 1940 (No. 10 of 1940) or aay other law, for fbe time being in force, or ia aay agreement or us^e to fhe contraiy, no civil court shaU have jiuisdiction to entertaia or decide any dispute of which cognizance can be taken by fhe Tribunal under fhis Act. 1(104) Notwifhstaiiding anyfhiag contained ia sub-section (1), a civil Court may entertam and decide aay dispute of fhe nature specified ia the said sub section referred to it by a person in fhe capacity ofiad^ent person. /:•. •'.^ •(,. Explaaation- Por fhe purpose of this sub-section "iadigent person^ shall have fhe meaniag assigned to it ia fhe code of Civil Procedure, 1908 (No. 5 of 1908)1. (2) Nofhiag ia sub-section (1) shall apply to any arbitration proceeding eifher pendiag before aay arbitrator or unipire or before any coitrt or aufhority xinder fhe piDvisions of Arbitration Act, or aay other law relatiiig to arbitration, aad such proceedings may be contmued, heard and decided m accordaace with agreexnent or usage or provisions of Arbitration Act or aay other law rclating to arbitration in all fheir stages, as iffhis Act had not corae iato force, 9. In fhe matter of Sfxste of SSadhua Pradesh and ofhcrs (supra), fhe question before the FiiU Bench of High Court of Madhya Pradesh was whefher aa application under Section 20 of fhe Arbitration Act pending ia fhe CivU Coiirt prior to fhe date of constitution of Arbitration Tnbunal ie, 1-3-1985 would be saved by fhe provisions of Section 20(2) of fhe M,P. Madhyasfham Adhikaraa Adhiaiyam, 1983 and answering fhe above question it was held fhat aa appUcatton under Section 20( 1) ofthe Arbitration Act which is pendiag prior to the date on which fhe Arbitration Tribiiaal was constituted under fhe Adhiaiyam of 1983 would be saved by sub-section (2) of Section 20 of fhe Adhiniyam of 1983.The above judgnient has no application in the present case as no appUcation is pendmg before any Coiurt or authority under Arbitration Act, 10. In fhe mstaiit case, we have already pointed out that fhe appUcaat preferrcd aa appeal under Clause 29 of fhe contract agreement before fhe Chief Engiaeer. As per clause 29 of the agreement, fhe appUcaat called upon fhe non-applicaats to appoiat their arbitrator vide fheir letter dated 26-9-2005 of Annexure A-7. It would be pertiaeut to mention here fhat on 26-9- 2005 Arbitration Tribunal iinder fhe Adhiniyam of 1983 was already constituted and fiinctionmg ia fhe State of Chhattisgarh, fherefore, tihierevwas a bar of Section 20(1) of fhe Adhiaiyam of 1983 aad fhe only foruni avaUable to the appUcaat was to refer ./' 6 dispute to fhe Arbitration Tribuiial constituted under Section 7 of fhe Adhmiyam of 1983 aiid this Court is of fhe opinion fhat cognizaace offhis applfcation caiinot be taken by fhis Court, 11, In the result, the iastaat appUcaflon is dismissed for fhe aforesaid reasons. | Sd/- Dhirendra Mishra Judge ^f-12-2006 ^.'