"*•' IN THE HIGH COURT OF JUDICATURE AT BILASPUR (C.G.) M.C.C.No. -5 — OF 200^ INTHEMATTEROF- APPLICANT \^-^ ^^ ^- M/S VIMAL CONSTRUCTIONS, a partnership fu-m 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. '^"" NON-APPLICANT ^ ^J^ .^T"'A^} ^p^^ .^•G'" ^> <^ sS.' 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, JagdaJpur C.G. APPLICATION UNDER SECTION-lir6) OF ARBnTRATION AND CONCD.IATION ACT. 1996. The above named applicant begs to submit as under - ^i 4'' HIGH COURT OF CHHATTISGARHATMLASPUR MC.C. No. 327 2006 M/s. Vimal Constructions Versus State ofChhattisgarh & others Order post for S. { -12-2006 Sd/- Dhirendra Mishra Judge ^s' -r— ^ ^\' .\r HIGH COURT OF CHHATTI8GARH AT BILA8PUR MC.C. No. 327 2006 M/s. Vlmal Constructiotts VCTSUS State of Clihattisgarh & otliers Present: Shri P,K, Jaia, Adv, for fhe appUcaat. Shri V.V.S. Murthy, Dy. Advocate Greaeral for fhe State. ORDBR Per Dliirendra Mishra* J< The applicaat has preferred fhis appUcation under Sectton 11(6) offhe Arbitration aad Conciliation Act, 1996 for appoiatinent of Arbitration Tribunal for setflement of disputes arismg between parties out ofcontract agreexaent No. 1/2001-2002 vide Annexure A-8. 2. Case of the appUcaat is fhat fhe tiine aUowed for conipletion ofwork was 9 laonfhs iacludiag raiay season aad the same was to be reckoned froin fhe date of issue of work order ie, 10-11-2001, However during fhe course of execution of contracted work, non- appUcaB.ts coixumtted various latches aad breaches ofcontract and ultimately rescmded the contract oftiie applicaat vide memo dated 26-6-2003 of Annexure A-3. As a result of illegal rescission of contract by fhe non-applicaat, the applicant has suffered heayy finaacial losses aad he raised a claiai of Rs. 495,99,458,00 vide Annexure A-4. On failure of non-appUcaiit No, 3 io. paynient of above demaaded sum, arbitration clause No. 29 was iavoked vide appUcaat^s appUcation dated 3-2-2004 addrcssed to Superintendiag Engiaeer/rion-appUcaat No. 3 vide Annexure A-5. The Supermtendiag Engmeer rejected fhe subndssion of fhe applicaat aad, thercfore, aii appeal was preferred before the non- applicaat/ChiefEngmeer No, 2 vide appUcation dated 26-2-2004 of Annexure A-6. Siace fhe non-appUcaats did not take aay action on ffae appUcafion of Annexure A-6 by fhe appUcaat, fhe applfcaat vide its application dated 26-9-2005 of annexure A-7 rcquested for coustitution ofArbitration Tribunal, Siace fhe non-appUcaiits have decliaed to constitute Arbiteation Tribunal, fhis appUcation under Section 11(6) of Arbitration aiid ConciUation Act, 1996 has been filed for appoiatment of Arbitration Tnbunal for settlenient of fhe dispute arismg between the pardes, 3. In reply to fhe above, fhe non-applicaats have stated fhat as per Clause 29 of fhe agreement, if the party is iinsatisfied with fhe decision of fhe Chief Engineer, he caa refer such dispute for arbitration to arbitration tribiinal to be constituted by fhe State Goverament aad only on failure of fhe State Goverament ia constitutmg fhe arbitration tdbunal, fhe aggrieved party caa iavoke the Arbitration and ConciUation Act, 1996 aad siace the niatter at fhe iiistaace of fhe appUcant is pendiag before fhe Chief Engineer, fhe instarit application is preinature. It is further submitted fhat State of Chhattisgarh has constituted Chhatdsgarh Arbitration Tribiuial vide notification dated 1st March, 2005. The Tribuiial has already started functioniag with efiect from 2nd September, 2005, The mstant appUcation has been filed by the appUcaat on 14-12-2005 ie, after constitution of Arbitration Tribuiial under C.G. Madhyasthaai Adhikaran Adhioiyani, 1983 (hercuiafter referrcd to as fhe Adhiniyani of 1983), Sub-section (1) of Section 20 of fhe Adhmiyani of 1983 bars the jurisdiction ofCivil Court to entertabi or decide aiiy dispute under Arbitration Act 1940 or any other law of which cognizaace can be taken by fhe Tribunal under tihis AdTiiniyaai and, fherefore fhe mstaat application is not niabitaiaable. 4. Learaed counsel for fhe applicant submits fhat a bare perusal of documents of Annexure A-5 aad A-6 clearly iadicates fhat even before constitution of fhe Arbitration Tribunal under the Adhiaiyaai of 1983, fhe aufhorily under Clause 29 was seized of fhe dispute arisiag out of fhe contract agreenient aad, fherefore, the bar under sub-section (1) of Section 20 of fhe AdhioiyamL of 1983 is not attracted as fhe same is saved by sub-sectlon (2) of Section 20 of the Adhiaiyaia of 1983. ReUance is placed ia fhe matter of State ofMadhwa Pradesh <uid others -v- M/s. Chahal ffnrf ^Afnfwmi reported in ?^^ ArTrLrRr ^T. "<<^, 5. I have heard learaed coiinsel for fhe pardes, 6, Relevaat pordon of Arbitration clause 29 of the C^ntract Agreenient ofAnnexiire A-8 is reproduced below:- "Clause 29- Except as ofherwise provided in fhis contract all question aad dispute relating to the meaamg of fhe specifications, designs, drawiags and instructions hereia before nientioned as to fhing whatsoever ia aiiy way adsing out of or relating to fhe contract designs, drawiags speci&cations, estimate, conceniiag fhe works, or the execution or faUiag to execute fhie saine, whefher arisiag dunng fhe progress of fhe work or after fhe conipletion of abandonment fhereof shall be referred to fhe Superintending Engiaeer ia writiag for his decision, withia a period of 30 days of such occurrence. Thereupon fhe Supenntendio.g Engmeer shaU give his written iastructions aad/or decisions wifhia a period of 60 days of such request This period caii be extended by lautual consent ofparties. Upon receipt of written instructions or decisions the parties shaU pi^mpfly proceed wifhout delay to compfy such iastructions or decisions. If fhe Superintending Engiaeer fails to give his instnictions or decisions m writing wifhm a period of 60 days or lautuaUy agreed tmie after beiag requested aad tf fhe partfes are aggrieved ^aiast fhe decision ofthe S.E. the parties may witiim 30 days prcfer an appeal to the Chief Engiaeer who shatl aSord an opportunity to fhe parties ofbeiag heard aad to ojffer evidence ia support ofhis appeal. The Chief Engiaeer wiU give his decision wifhia 90 days. If any party is not satisfied wifh fhie decision of tlie Chief Engineer he caa refer such disputes for arbitration to an Arbitration Tribunal to be constituted by the State Goverament, In case such aa arbitration Tribunal is not constitiited by the State Goverament, then fhe aggrieved party shatl mvoke Arbitration and Conciliation Act 1996- as amended tiU ftie date of such reference.^ 7. Thus from a bare perusal of fhe Arbitration Clause, it is observed that all questions and disputes arisiag out ofthe contract agreement are to be referred jBrstfy to fhe Supermtendmg Engiaeer wifhm 30 days of occurrence of such dispute, If fhe Supenntendiag Engiaeer faUs to give his tD^structions or decisions ia wrifhig wifhia a period of 60 days or inutuaUy agreed time after beiag requested, aa appeal inay be preferred witimi 30 days to fhe Chief Enguieer who has to give his decision withia 90 days after affordmg aii opportunity of hearing to the parties and to offer evidence ia support of his appeal. An unsatisfied party with the decision of the Chief Engnieer caa fhen refer such dispute for arbitration by an Arbitration Board to be constituted by fhe State Govemraent However, after preferring appeal under Clause 29 of tlie contract agreement, the Chief Engmeer has not given any iiistruction or decision in the appeal, The applicaiit has also not referred fhe dispute to fhe State Goveniment for appointoient of Arbitration Board for referrmg fhe dispute for arbitration. 8. Section 20 of the Adhiaiyaai of 1983 is reproduced as under:- -(20) Bar ofjurtsdictioa ofCl^l Court- (1) As fix>m the date of constitutions of the Tribunal aad notavifhstandiag aaythiag contained ia Arbitratlon Act 1940 (No. 10 of 1940) or aay other law, for fhe time being in force, or m aay ^reement or usage to the contrary, no civU court shall have jurisdiction to entertaui or decide any dispute of which cognizaace can be taken by fhe Tribunal under this Act. 1(104) Notwithstan.dmg anythiag contauied in sub-section (1), a civU Court may entertaui and decide aay dispule of fhe nature speci&ed ia the said sub section referred to it by a person ia fhe capacily of mdigent person, -——— / 1{::\ Explaaation- For the purpose of fhis sub-section "indigent person^ shaU have the xaeaaiag assigned to it ia the code of Civfl Procedure, 1908 (No. 5 of 1908)1. (2) Nofhiag ia sub-section (1) shaU apply to any arbitration proceediag eifher pending before aay arbitrator or unipire or before aay court or authonty iinder the provisions of Arbitration Act, or any ofher law relating to arbitration, and such proceediags may be contuaued, heard aad decided in accordaace with agreement or usage or provi$ions of Arbitration Act or any other law relating to arbita-ation ia all their stages, as iffhis Act had not coiae into force. 9. In the matter of State of JISadhua. Pradesh and others (supra), fhe question before the F^iU Bench of High Court of Madhya Pradesh was whefher aa appUcation under Section 20 of fhe Arbitration Act pendiag ia the Civil Court prior to ffae date of constitation ofArbitoration Tribunal i,e. 1-3-1985 would be saved by fhe provisions of Section 20(2) of fhe M,P, Madhyasfham Adhikaraii Adhmiyaai, 1983 aad answering fhe above question it was held fhat an appUcation under Section 20( 1) ofthe Arbitration Act which is pending prior to fhe date on which fhe Arbitration Tribunal was constitated inider fhe Adhiniyain of 1983 would be saved by sub-section (2) of Section 20 of fhe Adhiniyain of 1983,The above judgxnent has no application iii fhe preseut case as no appUcation is pending before aay Court or aufhorily under Arbitration Act, 10. In fhe mstaat case, we have already pointed out fhat fhe appUcant preferred aa appeal under Clause 29 of fhe contract agreement before fhe Chief Engiaeer, As per clause 29 of the agreement, the applicant caUed upon the non-appUcaiits to appomt their arbitrator vide fheir letter dated 26-9-2005 of Annexure A-7. It would be pertinent to mention here fhat on 26-9- 2005 Arbitration Tnbiiaal under fhe Adhiaiyaai of 1983 was already constituted aad functioning in fhe State of Chhatdsgarh, therefore, tiiere was a bar of Section 20(1) of fhe Adhiaiyam of 1983 and fhe onlv forum available to the applicaat was to refeiL / -^-: dispute to fhe Arbitration Tribuual constituted iinder Section 7 of fhe Adhiaiyam of 1983 aiid ffais Coiut is of fhe opiaion fhat cognizance of this appMcation caanot be taken by fhis Court. 12, In the result, the iastaat application is dismissed for fhe aforesaid reasons, i 1 SdA i Dhirendra Mishra Judge ^-12-2UUO