Madhya Pradesh High Court
Prathmik Krishi Sukh Seva Sahakari ... vs The State Of Madhya Pradesh on 13 July, 2023
Author: Milind Ramesh Phadke
Bench: Milind Ramesh Phadke
1
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
ARBITRATION CASE No. 28 of 2021
BETWEEN:-
PRATHMIK KRISHI SAKH SEVA SAHAKARI
SANSTHA/SAMITI MARYADIT BAMAURA
KENDRA RAJPUR TEHSIL AND DISTRICT
ASHOKNAGAR (MADHYA PRADESH) THROUGH
ITS MANAGER
.....PETITIONER
(BY SHRI RISHIKESH BOHRE- ADVOCATE )
AND
THE COMMISSIONER, DIRECTORATE OF M.P.
FOOD, CIVIL SUPPLY AND CONSUMER
1.
PROTECTION, VINDHYACHAL BHAWAN
BHOPAL (MADHYA PRADESH)
THE COLLECTOR, DISTRICT ASHOKNAGAR
2.
(MADHYA PRADESH)
DISTRICT MANAGER M.P. STATE CIVIL
3. SUPPLY CORPORATION CENTRE
ASHOKNAGAR (MADHYA PRADESH)
M.P. STATE CIVIL SUPPLY CORPORATION
4. LTD. BHOPAL (MADHYA PRADESH)
THROUGH ITS MANAGING DIRECTOR,
MANAGING DIRECTOR, MADHYA PRADESH
5. RAJYA VIPRHAN SAHAKARI SANGH
MARYADIT BHOPAL (MADHYA PRADESH)
ZILA VIPRHAN ADHIKARI MADHYA
PRADESH RAJYA VIPRHAN SAHAKARI
6.
SANGH MARYADIT GUNA (MADHYA
PRADESH)
7. TRANSPORTER/ CONTRACTOR, RAKESH
KUMAR JAIN, NEW RAKESH ROAD LINES
ISHAGARH ROAD ASHOKNAGAR (MADHYA
2
PRADESH)
.....RESPONDENTS
(BY SHRI VIJAY SUNDARAM- ADVOCATE FOR R-5 AND SHRI
VIKAS TIKHEY- ADVOCATE FOR R-3)
AND
ARBITRATION CASE No. 29 of 2021
BETWEEN:-
MANAGER, PRATHMIK KRISHI SAKH SEVA
SAHAKARI SANSTHA/SAMITI MARYADIT
RIJAUDA, TESHIL AND DISTRICT ASHOKNAGAR
(MADHYA PRADESH)
.....PETITIONER
(BY SHRI RISHIKESH BOHRE- ADVOCATE)
AND
THE COMMISSIONER, DIRECTORATE OF M.P.
FOOD, CIVIL SUPPLY AND CONSUMER
1.
PROTECTION, VINDHYACHAL BHAWAN
BHOPAL (MADHYA PRADESH)
THE COLLECTOR DISTRICT ASHOKNAGAR
2.
(MADHYA PRADESH)
DISTRICT MANAGER M.P. STATE CIVIL
3. SUPPLY CORPORATION CENTRE DISTRICT
ASHOKNAGAR (MADHYA PRADESH)
MANAGING DIRECTOR M.P. STATE CIVIL
4. SUPPLY CORPORATION LTD BHOPAL
(MADHYA PRADESH)
MANAGING DIRECTOR M P RAJYA VIPRHAN
5. SAHAKARI SANGH MARYADIT BHOPAL
(MADHYA PRADESH)
ZILA VIPRHAN ADHIKARI M P RAJYA
6. VIPRHAN SAHAKARI, SANGH MARYADIT
DISTRICT GUNA (MADHYA PRADESH)
TRANSPORTER/CONTRACTOR, RAKESH
KUMAR JAIN NEW RAKESH ROAD LINES,
7.
ISHAGARH ROAD, DISTRICT ASHOKANGAR
(MADHYA PRADESH)
.....RESPONDENTS
3
(BY SHRI VIJAY SUNDARAM- ADVOCATE FOR R-5 AND SHRI
VIKAS TIKHEY- ADVOCATE FOR R-3)
AND
ARBITRATION CASE No. 30 of 2021
BETWEEN:-
MANAGER, PRATHMIK KRISHI SAKH SEVA
SAHAKARI SANSTHA/SAMITI MARYADIT
TEHSIL AND DISTRICT ASHOKNAGAR (MADHYA
PRADESH)
.....PETITIONER
(BY SHRI RISHIKESH BOHRE- ADVOCATE)
AND
1. THE COMMISSIONER, DIRECTORATE OF M.P.
FOOD, CIVIL SUPPLY AND CONSUMER
PROTECTION, VINDHYACHAL BHAWAN
BHOPAL (MADHYA PRADESH)
2. THE COLLECTOR DISTRICT ASHOKNAGAR
(MADHYA PRADESH)
3. DISTRICT MANAGER M.P. STATE CIVIL
SUPPLY CORPORATION CENTRE
ASHOKNAGAR (MADHYA PRADESH)
4. MANAGING DIRECTOR, M.P. STATE CIVIL
SUPPLY CORPORATION LTD BHOPAL
(MADHYA PRADESH)
5. MANAGING DIRECTOR, M P RAJYA VIPRHAN
SAHAKARI SANGH MARYADIT BHOPAL
(MADHYA PRADESH)
6. ZILA VIPRHAN ADHIKARI, M P RAJYA
VIPRHAN SAHAKARI SANGH MARYADIT
GUNA (MADHYA PRADESH)
7. M/S RAJIV KUMAR SAHU,
TRANSPORTER/CONTRACTOR RAGHOGARH,
DISTRICT GUNA RAGHOGARH, GUNA
(MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI VIJAY SUNDARAM- ADVOCATE FOR R-5 AND SHRI
4
VIKAS TIKHEY- ADVOCATE FOR R-3)
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Reserved on 21/03/2023
Delivered on 13/07/2023
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This petition coming on for hearing this day, Hon'ble Shri
Justice Milind Ramesh Phadke passed the following:
ORDER
1. The present order shall also govern disposal of Arbitration Case nos. 29/2021 and 30/2021.
2. The present application under Section 11 of the Arbitration and Conciliation Act, 1996 had been filed for appointment of an arbitrator for the dispute which had arisen between the parties in pursuance to agreement dated 15.03.2012 entered for authorizing the petitioner's Society to purchase wheat from farmers on Minimum Support Price (MSP) within the area of its' Centre Rajpur Tehsil and District Ashoknagar. In pursuance to the said agreement the petitioners' Society purchased 20,632.50 quintal of wheat from farmers and got it stored in the authorized godown through the transporter and received acknowledgment in that regard. The petitioners' Society purchased and deposited the aforesaid quantity of 20,632.50 quintal of wheat which was worth Rs. 2,85,76,012.50/- out of which the respondent had paid an amount of Rs.2,84,17,942.45/- to the petitioners' Society, but rest of the amount i.e. Rs. 1,58,070 for 114.13 quintal of wheat was 5 not paid and because the said amount was not paid to the petitioners' Society even after making efforts, the petitioner, as per Clause 8 of the agreement dated 15.03.2012, filed a suit/dispute for recovery of said amount before the Arbitrator/Commissioner, Directorate of M.P. Food, Civil supply and Consumer Protection, Bhopal.
3. The Directorate of M.P. Food, Civil supply and Consumer Protection, Bhopal referred the dispute to the Collector, District Ashoknagar vide its letter dated 11.08.2014 and while another letter dated 28.06.2014 directed for speedy hearing of the said dispute. Thereafter, before the Collector, District Ashoknagar present respondent no.7 filed an application under Order 7 Rule 11 read with Section 151 of CPC mainly on the allegations that as per Clause 8 of the said agreement dated 15.03.2012, the Commissioner, Directorate of M.P. Food, Civil supply and Consumer Protection, Bhopal is the Arbitrator and he cannot delegate his powers to the Collector. The Collector, District Ashoknagar vide order dated 25.02.2019 allowed the said application and dismissed the dispute of the petitioner, being aggrieved the present petitioner moved an application under Order 47 Rule 1 read with Section 144 & 151 of CPC for review of the said order, but the said application was also dismissed vide order dated 23.09.2020 and since the dispute as raised by the present petitioner still remained unresolved, he had moved the present application under Section 11 (6) of the Arbitration and 6 Conciliation Act, 1996 invoking Clause 8 of the agreement dated 15.03.2012.
4. Learned counsel for the petitioner had vehemently argued that though as per the Clause 8 of the agreement dated 15.03.2012 which provides for an arbitration in case of any dispute the Commissioner, M.P. Food, Civil supply and Consumer Protection, was held to be an arbitrator and it was incumbent upon the said authority to have decided the dispute as raised by the petitioner, but instead of resolving the said dispute, the matter was referred to the Collector on the pretext that vide letter dated 28.06.2014, the Managing Director in the meeting of the Directors of the Board held on 16.06.2014 on the basis of the decision taken therein had appointed Collectors as arbitrators in place of Commissioner, M.P. Food, Civil supply and Consumer Protection for resolving the disputes arising between the societies and the State and in turn the Collector while hearing an application under order 7 Rule 11 filed by respondent no.7 herein had dismissed the said reference vide order dated 25.02.2019 that vide agreement dated 15.03.2012 as the role of the arbitrator is to be exercised by Commissioner, M.P. Food, Civil supply and Consumer Protection, the delegation of the powers of arbitrator to the Collector could not have been made.
5. It was further argued that in the midst of these proceedings there was an amendment in the provisions of Section 12 of the Arbitration and Conciliation Act, 1996 and Sub-Section 5 was 7 inserted w.e.f. 23.10.2015 whereby any person whose relationship, with the parties or the counsel or the subject matter of the dispute, falls under any of the category specified in the 7 th Schedule shall be in-eligible to be appointed as an Arbitrator. It was further argued that vide proviso it was inserted that the parties may, subsequent to dispute having arisen between them, wave the applicability of this Sub-Section by any express agreement in writing and, therefore, in the light of the amendment in Section 12 of the Arbitration and Conciliation Act, 1996 after October, 2015 neither the Commissioner, M.P. Food, Civil Supply and Consumer Protection nor the Collector of the district could have acted as an Arbitrator as also no express agreement has been entered into between the parties waving the applicability of this sub-Section and thus, it was prayed that the application be allowed and an independent Arbitrator be appointed for settling/resolving the dispute between the parties.
6. Per contra, learned counsel for the respondent no. 3 and 5 while vehemently opposing the prayer made by the petitioner submitted that the present application is not maintainable and deserves to be thrown out at very threshold as the petitioner has not submitted the original or certified copy of the original arbitration agreement or duly certified copy thereof and in absence thereof the said application deserves to be dismissed. It was further argued that the present petition is also not maintainable on account of the petitioner not challenging the 8 order dated 25.02.2019 passed while deciding an application under order 7 Rule 11 of CPC read with Section 144 & 151 of CPC before appropriate forum and challenging the same in this petition is not sustainable and the petition, therefore, deserves to be dismissed on this count also.
7. It was further argued that earlier the petitioner had approached this Court inter-alia seeking a direction for the respondents to make payment of the dues to the petitioner on account of Commission for wheat procurement payable to the petitioner vide W.P. No. 1986/2016, but in wake of Clause 8 of the agreement dated 15.03.2012 the said petition was disposed of at the request of the counsel for the petitioner granting him liberty to approach the Commissioner, M.P. Food and Civil Supplies and Consumer Protection and the said authority was directed to adjudicate the dispute between the parties by a speaking order in a time bound manner. Thereafter, a review petition no. 154/2016 was preferred by the petitioner wherein at the behest of the petitioner since the power of Commissioner was delegated to all Collectors for the purpose of arbitration in the context of arbitration Clause 8 contained in the agreement, this Court directed that in place of the words Commissioner, M.P. Food and Civil Supplies and Consumer Protection, Bhopal used in the order dated 12.04.2016 in W.P. No. 1986/2016 word Collector, Sheopur shall be read and accordingly the matter was referred to the Collector, thus, now the petitioner has no right to ask for 9 appointment of an Arbitrator in wake of Clause 8 of the agreement. Thus, on the strength of the above argument it was submitted that the present petition be dismissed with cost.
8. Heard the counsels for the parties and perused the record.
9. Before adverting to the merits of the case it is necessary to analyze certain provisions of the Arbitration and Conciliation Act, 1996. Section 2 (1) (b) defines arbitration agreement, which means an agreement referred to in Section 7. Section 7 refers to arbitration agreement which is reproduced herein below:
Section:7. Arbitration Agreement-
(1) In this part, " arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in 10 writing if it is contained in-
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication [including communication through electronic means] which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.
10. As per Section 7 arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen and it may be in the form of an arbitration clause in the contract or in the form of separate agreement. Further, it lays down that the arbitration agreement shall be in writing and it 11 should be signed by the parties or may be gathered from in exchange of letters, telex, telegrams or other means of telecommunication or exchange of statements of claim and defence in which the existence of agreement is alleged by one party or denied by the other.
11. From the above provisions it is clear that the agreement dated 15.03.2012 entered into between the parties under Clause 8 which is reproduced herein below:
8. bl bdjkjukesa dh fdlh Hkh dafMdk dks ysdj fdlh izdkj dk fookn gksu ij izdj.k vkchZVsªVj ds le{k izLrqr fd;k tk;sxkA vkchZVsªVj dk fu.kZ; nksuks i{kksa ij ca/kudkjh gksxkA vk;qDr [kk| ukxfjd vkiwfrZ ,oa miHkksDrk lapkyuky; Hkksiky vkchZVªsVj gksaxsA Contains an arbitration clause in case of any dispute with regard to any of the terms and conditions of the said agreement and admittedly the petitioner who was party to the agreement and was authorized to purchase wheat from farmers on a Minimum Support Price (MSP) and had in fact purchased 20,632.50 quintal of wheat from farmers worth Rs. 2,85,76,012.50/- and was stored in the authorized godowns and was paid only Rs. 2,84,17,942.45/-
with a deficit of Rs.1,58,070 for 114.13 quintal of wheat, which fact has not been denied by the respondents, there was a "dispute" with regard to payment of the amount towards purchase of the wheat which was referable to the arbitrator.
12. A Preliminary objection has been raised by the counsel for 12 the respondents that since the original arbitration agreement or its certified copy has not been filed, the said application is not maintainable and deserves to be dismissed. The said objection has become redundant in the light of an application for taking the certified copy of the agreement dated 15.03.2012 on record filed on 01.04.2023.
13. With regard to the objection that as per the agreement since the Commissioner, M.P. Food, Civil Supply and Consumer Protection, Bhopal was the person authorized to conduct the arbitration and later on vide letter dated 28.06.2014 all the Collectors of the districts were authorized in place of the Commissioners to conduct the arbitration, the application moved by the petitioner under Section 11 (6) of the Arbitration and Conciliation Act, 1996 is wholly mis-conceived, does not appear to be plausible or forceful agreement for the simple reason that with the advent of amendment in Section 12 of the Arbitration and Conciliation Act, 1996 by adding sub-Section 5 right of conducting an arbitration by a person who is in any way related to the parties or even the counsel or the subject matter of the dispute as specified in the 7th Schedule shall be in-eligible and, therefore, since the Commissioner and the Collector who were in a way either in relation to either of the party i.e. State or were involved with the subject matter in dispute, could not have acted as an Arbitrator and, thus, their jurisdiction was ousted. It is also pertinent to mention here that even as per the proviso appended to 13 sub-Section 5 of the Section 12 of the Arbitration and Conciliation Act, 1996 no express agreement has been entered into between the parties to oust the applicability of this sub- Section. Thus, the Commissioner and the Collector has no jurisdiction to entertain the arbitration proceedings.
12. As the respondents have not raised any objection as to existence of any dispute due to the parties in specific words nor has denied the existence of the arbitration agreement, this Court deems it fit to allow the application for appointment of independent Arbitrator.
13. With regard to the fact that the matter when delegated to the Collector for deciding in pursuance to the letter dated 28.06.2014 vide order dated 22.11.2014 the matter only came to be decided by the Collector vide order dated 25.02.2019 when admittedly on that date provisions of Section 12 (5) of the Arbitration and Conciliation Act, 1996 was in vogue and, therefore, the order passed on an application under order 7 Rule 11 CPC is of no Consequence.
14. Thus, this Court while allowing the application, directs that Shri Justice N.K. Mody, Former Judge be appointed as an Arbitrator in the case, subject to the declarations made under Section 12 of the Arbitration and Conciliation Act, 1996 (as amended) with respect to the independence or impartiality of the Arbitrator, and the ability to devote sufficient time to complete the arbitration in the period specified in Section 29-A of the 1996 Act.
14The Arbitrator is at liberty to conduct the proceedings at a convenient venue as per the convenience of the Arbitrator and the parties if so required. The arbitrator will be paid the fees in accordance with the IVth Schedule of 1996 Act. Both the parties shall bear the cost of the arbitration equally.
15. Registry is directed to dispatch a copy of this order to Shri Justice N.K. Mody Former Judge for seeking consent at the following address Parakh Ji ka Bada, Lashkar, Gwalior.
16. List the case for consent of the arbitrator in the week commencing 24th of July, 2023.
(Milind Ramesh Phadke)
Judge
chandni/- 13/07/2023
CHANDNI
NARWARIYA
2023.07.13
16:11:52
+05'30'